ASM founding member, Laurence Schor, was lead counsel on the team representing Paul Morrell, Inc. d/b/a The Event Source (“TES”), against several Kellogg, Brown & Root entities (collectively, “KBR”). TES served as a subcontractor to KBR in Iraq under KBR’s LOGCAP III prime contract with the U.S. Army to provide civilian logistical augmentation and support for the war. Under its subcontract with KBR, in 2003 and 2004, TES established and operated six (6) major dining facilities in Bagdad and Mosul, Iraq, feeding thousands of service members daily with distinction. TES later asserted several claims against KBR, including breach of contract for wrongful termination and for KBR’s interference with subcontractors, and fraudulent misrepresentation. The latter allegation was based on KBR’s fraudulent inducement of TES to accept $12.4 million less than what KBR rightfully owed it for the work performed. Basically, KBR management lied to TES management in telling TES that the Government had mandated that KBR only pay a certain/smaller amount than what TES believed it was rightly owed. After claims negotiations stalled, Mr. Schor filed suit on behalf of TES in the United States District Court for the Eastern District of Virginia seeking the $12.4 million plus punitive damages for the fraudulent misrepresentation.
From May 7 through June 2, 2009, Judge Anthony J. Trenga heard the complicated evidence in a bench trial. Almost eight (8) months later (January 29, 2010), Judge Trenga issued his decision, entering judgment in favor of TES for $18,975,641. Although Judge Trenga found that KBR had not breached the contract, he did find that TES had proved its fraud claim by the higher “clear and convincing” evidence standard. Accordingly, he awarded TES its principal damages, pre-judgment interest, and $4 million in punitive damages for the total award of just under $19 million. The court’s decision is contained in a 47-page Memorandum Opinion. Dennis Ehlers of ASM was also a member of the team preparing the case for trial.
For more information, please contact: Larry Schor