Burton Kahn v. Helvetia Asset Recovery, Inc.
04-14-00569-CV
| Tex. App. | Apr 20, 2015Background
- Plaintiff Helvetia Asset Recovery, Inc. sued defendant Burton Kahn and Paradiv Corporation related to funds and business conduct involving sales of lots in the Key Largo subdivision.
- Trial was to a jury in Bexar County; jury empaneled May 12, 2014; verdict returned May 21, 2014. The Court entered final judgment adopting the jury findings.
- Jury found Kahn breached fiduciary duties, held and misappropriated funds belonging to Helvetia, and engaged in other wrongful acts (including filing fraudulent claims and slander of title); Paradiv was found responsible to the extent it was used by Kahn to perpetrate fraud.
- Judgment awarded Helvetia: $854,166 in actual damages (with credit for $291,453.61 previously disbursed from the registry), daily pre‑judgment interest from Nov. 4, 2013, and $900,000 in exemplary (punitive) damages against Kahn.
- The court also awarded attorney’s fees ($280,000; additional appellate fee awards if successful on appeal), costs, post‑judgment interest, permanent injunctions prohibiting Kahn from conducting business under Helvetia’s name or interfering with its business, and ordered Kahn to deposit previously ordered registry sums.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Did Kahn breach fiduciary duty to Helvetia? | Kahn owed fiduciary duties to Helvetia and placed personal interests above Helvetia’s, causing loss. | (Pro se Kahn contested claims at trial; Paradiv did not appear through counsel.) | Jury answered Yes; court entered judgment for Helvetia. |
| What are damages for fiduciary breach/misappropriation? | Helvetia sought actual damages for misappropriated assets and lost profits plus pre‑judgment interest. | Kahn disputed liability/amounts. | Jury awarded $854,166 actual damages, credited $291,453.61 from registry; prejudgment interest from Nov. 4, 2013. |
| Is Paradiv liable for Kahn’s conduct? | Helvetia argued Paradiv was used by Kahn to perpetrate fraud for his direct benefit. | Paradiv (nominally a defendant) did not appear through counsel; Kahn was sole appearing officer. | Jury found Paradiv liable jointly and severally with Kahn for all non‑exemplary amounts. |
| Are exemplary (punitive) damages warranted and in what amount? | Plaintiff argued Kahn acted maliciously/fraudulently/grossly negligently meriting exemplary damages. | Kahn denied or contested culpability. | Jury found conduct proven by clear and convincing evidence and awarded $900,000 exemplary damages against Kahn. |
| Did Kahn file fraudulent court records or slander title to Key Largo lots? | Helvetia alleged Kahn filed fraudulent claims and disparaged title, causing lost sales and damages. | Kahn contested the allegations. | Jury found in favor of Helvetia on these claims and awarded damages for slander/fraudulent filings as reflected in the verdict. |
| Remedies: injunctive relief, fees, and enforcement | Helvetia sought injunctions, attorneys’ fees under Declaratory Judgment Act and Tex. Civ. Prac. & Rem. Code ch. 12, costs, and enforcement mechanisms. | Kahn opposed or disputed scope. | Court permanently enjoined Kahn from doing business in Helvetia’s name or interfering with its business; awarded $280,000 attorneys' fees (plus appellate fee add‑ons if successful), court costs, and authorized enforcement writs. |
Key Cases Cited
- No official reporter case citations appear in the provided opinion excerpt.