 |
 |
to fill out a simple form to connect to Personal Injury Lawyers in your area.
|
|
|
|
|
Dejonghe v. Hutton9/24/1991
Defendants E.F. Hutton & Co., Inc. (E.F. Hutton), Shearson Lehman Hutton, Inc., John David Glasgow, and Laura Pendleton-Miller appeal from jury verdicts rendered in favor of plaintiffs Nina A. DeJonghe and Anne M. McDonough in this action based upon negligent supervision and civil RICO (Racketeer Influenced and Corrupt Organization). For the reasons set forth below, we affirm.
FACTS
Viewing the evidence in the light most favorable to sustaining the verdict, Paul Schoonover, Inc. v. Ram Construction, Inc., 129 Ariz. 204, 205, 630 P.2d 27, 28 (1981); Koenen v. Royal Buick Co., 162 Ariz. 376, 379, 783 P.2d 822, 825 (App.1989), the facts are as follows. Nina DeJonghe was born in 1920 and Anne McDonough in 1899. Both women are widows on fixed incomes. DeJonghe's livelihood consists of social security payments and life insurance proceeds. McDonough receives social security benefits and pension fund payments. Both women have only a high school education and are of limited financial investment sophistication. Both were active as oblates for a monastery in St. David, Arizona. As oblates, they were involved in support activities for the monastery and attended meetings at the Benedictine Convent in Tucson. There they met defendant David Glasgow, a stockbroker. Glasgow's associate was Laura Pendleton-Miller. Glasgow has a master's degree and attended the Wharton School of Finance. Pendleton-Miller holds a bachelor's degree from Georgetown University and a master's degree from Columbia University. Both plaintiffs testified that Glasgow assumed responsibilities as their stockbroker during 1981. At that time, Glasgow worked with fellow broker Pendleton-Miller for Bache, Halsey, Stewart & Shields, Inc. (Bache).
In August 1982, Glasgow and Pendleton-Miller left their previous employ for positions
with E.F. Hutton. At that time, DeJonghe's investments had a value of $40,000, with annual dividends of approximately $4,000. McDonough's account had a value of $80,000, and earned approximately $9,300 a year in dividends. Their portfolios consisted of low-risk, established, dividend-paying securities. Both ladies agreed to retain Glasgow and Pendleton-Miller as their brokers.
After Glasgow and Pendleton-Miller changed employers, they proposed alternative investments to DeJonghe and McDonough. Commencing in September of 1982, Glasgow and Pendleton-Miller radically changed the nature of the two portfolios. Both women signed forms agreeing to growth investments. Growth connotes aggressive, high risk transactions. Although the brokers claimed to have explained these alternatives, both women denied this and said they simply trusted Glasgow and Pendleton-Miller. The brokers, acting under the supervision of Burt Struthers, disposed of plaintiffs' conservative holdings and replaced them with stocks and stock options which were neither safe nor dividend-paying. Four of the five DeJonghe stocks paid an average of 13% interest when Hutton acquired the account. The stocks selected to replace them paid a dividend yield of 2%. McDonough's stocks averaged a 12.8% annual yield. After E.F. Hutton acquired this account, these stocks were replaced with stocks paying nominal or zero dividends. The brokers' strategy included selling calls and puts. Both plaintiffs denied understanding the nature of these types of transactions, but agreed to them based upon the representations of the brokers that these investments would maximize their profits.
After Glasgow and Pendleton-Miller became employed by E.F. Hutton, plaintiffs' accounts became ex
Page 1 2 3 4 5 Arizona Personal Injury Attorneys
Personal Injury Lawyers
|
| |
to fill out a simple form to connect to Personal Injury Lawyers in your area.
|
|