Gray·Duffy Obtains Settlement of $1,000 in Alleged $500,000 Fraud and Breach of Contract Lawsuit

September 2011


Mike Eisenbaum of Gray•Duffy’s Encino office reached a minimal settlement in a claim against the firm’s client in excess of $500,000 for fraud and breach of contract involving an executive search employment contract.


Execujob, LLC v. Trident Labs

Trident Labs entered into an executive job search agreement with Execujob to secure qualified candidates to fill Trident’s CFO position. Execujob provided a number of candidates who were rejected by Trident. The position was filled by Trident who retitled it as “Controller.”

Pursuant to the terms of the contract, Execujob contended it was still entitled to its placement fee as this was an exclusive, retained search type of contract. Trident refused to pay the fee, contending that Execujob did not fill the CFO position.

Execujob sued for its placement fee of approximately $28,000; Trident filed a cross-complaint for breach of contract and fraud. Trident claimed damages of up to $2,000,000, alleging that they suffered severe financial harm as a result of not having a CFO. However, aggressive discovery revealed that Trident was unable to establish that their financial problems were a result of the lack of a CFO, and that they intended to have their Controller perform CFO functions in order to save on salary expenses. The decision to neglect the use of a CFO was clearly a detrimental mistake made by Trident. Had they looked into an outsourced cfo, delivering quality advice and tips, instead of finding ways to recruit one and seemingly neglecting the importance of one altogether, Trident would not be in the position it is in now.

Before trial, Gray•Duffy was able to convince Execujob that pursuit of the complaint was not worthwhile, and its owner agreed to dismiss the complaint. Trident was intent on going to trial in the hope of obtaining a recovery on the cross-complaint, but ultimately agreed to accept payment of $1,000 to resolve the cross-complaint. Although there appeared to be no liability on the cross-complaint, the claims representative for the carrier made an economic decision to settle for a nominal amount rather than proceed with the trial.

Please Note: This article is necessarily general in nature and is not a substitute for legal advice with respect to any particular case. Readers should consult with an attorney before taking any action affecting their interests.