Smith v. Walter E. Heller & Co.

Plaintiffs United States Overseas Airlines, Inc., Ocean Air Tradeways, Inc., Ocean Air Tradeways, a partnership, Airpower Overhaul, Inc., Canamex Corporation, C & J Aircraft Leasing, a partnership, and the trustees in bankruptcy of some of them, commenced what we shall term the “California action” against the several defendants to whom, for convenience, we shall refer in the singular, as Heller. One Dr. Ralph Cox, who otherwise appears to have played a prominent part in that and related litigation, was not named as a plaintiff.

The California action alleged “willful fraud and deceit” and “conspiracy to defraud.” By it, the plaintiffs sought to recover from Heller compensatory damages of $130 million, and punitive damages of $250 million. It was one of many such actions commenced by Dr. Ralph Cox and the instant plaintiffs, or some of them, or affiliated entities or persons, against Heller in relation to a 1962 loan of $1.7 million made by Heller to plaintiff United States Overseas Airlines, Inc., upon security or guaranties of the other plaintiffs or most of them, and Dr. Ralph Cox. An abbreviated history of those proceedings may be gleaned from the following excerpts…