(b) $ 2,500, the amount paid to Mr. Christopher Moss to prepare amended tax returns for the Williams;
(c) $ 3,000, the amount paid to Mr. Gary Lu to prepare amended California state tax returns;
(d) $ 21,000 for the penalties and interest owed to the IRS as a result of the improper tax returns filed by Mr. Hunt;
(e) $ 4,300 for the penalties and interest owed to the California state government as a result of the improper tax returns prepared by Mr. Hunt;
(f) $ 3,000 in attorney's fees incurred by the Williams to address the problems created by Mr. Hunt's activities;
(g) $ 500 for Mr. Moss's expert witness fee; and
(h) $ 3,000 for the costs of this litigation.
The Williams may not collect tax savings they claim they might have enjoyed had they received legitimate financial advice. It would be too speculative to assume post hoc what investments they might have chosen and what savings they might have received.
Plaintiffs have not sustained their burden against Ms. Neeley. She was present at the Williams initial meeting with Mr. Hunt, and she did sign the checks disbursing the $ 50,000. However, the Court credits her testimony in which she said that she did not know the money was being misappropriated nor did she have any definitive knowledge of the transaction between Hunt and the Williams. Most significantly, none of the $ 50,000 can be traced to Mrs. Neeley. In other words, Mrs. Neeley received none of the proceeds from the Williams' transaction with Mr. Hunt.
Finally, plaintiffs seek punitive damages. The Court finds that they are warranted in this case. Mr. Hunt's egregious behavior was utterly unworthy of someone who calls himself a professional. His fraudulent conduct put the plaintiffs at risk of committing tax fraud. In recognition of these facts, the Court will award $ 50,000 in punitive damages, an amount that reflects the $ 50,000 down payment that was misappropriated and that was the basis for the grievous errors made on the Williams tax returns and caused them to incur substantial costs and expenses. The District of Columbia Court of Appeals has found it appropriate "to assess [punitive] damages . . . in proportion to the sum hoped to be gained by the fraud." See Harris v. Wagshal, 343 A.2d 283 (D.C.App. 1974).
II. Conclusions of Law
1. The defendant, Mr. Hunt, breached his contract with the plaintiffs. He should have returned their $ 50,000 and did not.
2. The defendant has defrauded the plaintiff in that he
(a) took money under false pretenses;
(b) misappropriated the money; and
(c) prepared improper tax returns.
The defendant, Mr. Hunt, is liable to the plaintiffs who are entitled to the return of their $ 50,000.
3. The preparation of the improper and illegal tax returns was a direct and proximate cause of substantial expenses and costs incurred by the Williams in the sum of $ 37,300.
4. Defendant Hunt's conduct toward the Williams was intentional, willful, and egregious therefore the plaintiffs are entitled to punitive damages in the amount of $ 50,000.
5. Clara Neeley is not liable to the plaintiffs under either contract or fraud theories.
Judgment shall be entered for plaintiffs in the amount of $ 137,300.