Judge May Alter Advisory Opinion : $52.4-Million Verdict Returned Against Bank

Times County Bureau Chief

A jury delivered a $52.4-million advisory verdict Monday in favor of a Garden Grove woman and her son, ruling that Security Pacific National Bank acted wrongly in handling a trust set up by the woman's parents.

Superior Court Judge Lloyd Blanpied Jr., who conducted the five-week trial and used the jury in an advisory capacity, can overturn or modify the verdict at a hearing starting next month, attorneys said.

1933 Purchase

Arthur Hews, attorney for the victorious plaintiffs, Laura Obarr and her son, Robert, said Laura's parents bought 10 acres of property on 17th Street near Magnolia Avenue in Westminster in 1933 for $4,000.

In 1959, the parents leased the property to a dairy for $1,000 per month for 60 years, with no provision for an increase in rent. Four years later, when the now-deceased owners were in their 80s, they made the bank the trustee of the property, Hews said.

"At the time they turned it over, the bank was also acting as the executor of (the estate of) one of the deceased partners in the dairy, so (the bank) had a conflict of interest," Hews said. "During the next year the bank had several opportunities to attempt to cancel the lease and failed to do so."

The attorney said that at the time the trust was established, the dairy owed the bank $82,000, "and the cancellation of the lease could have resulted in Security not collecting their loan."

Hews said the property now is worth $4.4 million, but the rent paid by a mobile home park on the land remains at $1,000 per month.

The jury voted to award $4.4 million in general damages and $48 million in punitive damages for the Obarrs, who charged the bank with breaching its duty as trustee.

"The jury has spoken, and we obviously disagree with the jury," said Andrew Guilford, attorney for the bank.

"This is an advisory verdict," Guilford stressed. "It's not a judgment, it's a verdict. We will still have an opportunity to present our position to the judge himself, who will have the final say."

'Enforceable Lease'

Guilford said the bank's position was that the lease on the Obarrs' land "was an enforceable lease and we had to retain it."

Hews said the verdict was the second largest ever delivered in Orange County, trailing only a 1978 verdict of $127.8 million to Richard Grimshaw, who was 13 years old when a Pinto automobile in which he was riding was involved in a collision near San Bernardino. The car's gas tank exploded and Grimshaw was critically burned over 90% of his body.

A judge ordered the award against the Ford Motor Co., maker of the Pinto, reduced to $6.6 million two weeks after the trial. Hews was Grimshaw's attorney.

Robert Obarr, 30, an assistant manager at a fast-food restaurant, said after the jury's verdict in his case, "I'm so tired and overwhelmed, I don't even know quite what I'm feeling just yet."

He noted that the judge "could reverse the whole decision if he wanted to."

"My goal was to restore the money I felt my family lost, and that's been my theme through all this," Obarr said. "I'm overwhelmed that the jury was so convinced."

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