Latshaw

I. Background

Latshaw hired Trainer Wortham & Company, Inc., an investment management firm, to manage approximately $1.65 million of her assets. Robert Vile, a Trainer portfolio man- ager, was responsible for handling Latshaw’s account. Latshaw claims that defendants Trainer and Vile failed to fol- low her stated investment instructions and objectives, ulti- mately causing her to sustain substantial financial losses.

Latshaw commenced an action in Los Angeles Superior Court, claiming over $800,000 in damages. Latshaw was rep- resented by a Missouri-based attorney, Diane Nygaard, and local California counsel, David Harrison. Latshaw’s claims included breach of oral and written contract, breach of fidu- ciary duty, fraud, constructive fraud, negligence, and negli- 7502 LATSHAW v. TRAINER WORTHAM & CO. gent supervision. The defendants removed the action to federal district court.

Six weeks later, the defendants served Latshaw with a $15,000 offer of judgment under Rule 68. The events follow- ing the defendants’ offer and leading up to Latshaw’s accep- tance of the offer are in some dispute.1 Latshaw contends that she and her two attorneys initially considered the…