Fed. Sec. L. Rep. P 98,249 Homer E. Stephenson and Freda Lois Stephenson, His Wife v. Calpine Conifers Ii, Ltd., a Limited Partnership

I Facts.

This case arises out of Homer and Freda Stephenson’s $20,000 investment in a California limited partnership, Calpine Conifers II (hereinafter Calpine II). The Stephen-sons were told about Calpine II by Ethel Jaquess, an investment counselor. Ms. Ja-quess was the individual general partner in Calpine II until her death in April of 1976. Until shortly before she died, Ms. Jaquess was the only representative of Calpine II with whom the Stephensons had any contact.

Calpine II was formed for the purpose of planting and selling Christmas trees. The Stephensons allege that at the time they made their initial $15,000 investment in Cal-pine II in October of 1975 and again in March of 1976, when they made a $5,000 capital contribution to the partnership, they were misled as to the success of Calpine II’s tree planting program. In particular they claim that in October of 1975 Ms. Jaquess represented to them that approximately 80 acres of trees had been successfully planted by Calpine II and that the operation was on schedule. They also point to a February 20, 1976 letter from Ms. Jaquess in which she informed them that while she was seriously ill:

Neither the February 20, 1976…