On October 28, 2024, following a two-week jury trial, Baker Botts secured a verdict of over $43 million in compensatory and punitive damages in a partnership dispute related to cannabis cultivation in Santa Barbara County.

Baker Botts has been representing Ms. Francine Shulman—a now 72-year old farmer and businesswoman—and her two sons, Dr. Brandon Shulman and Randall Shulman, over the past five years in a lawsuit that Ms. Shulman filed against her former business partners, Medical Investor Holdings LLC dba Vertical Companies (“Vertical”) and Vertical’s CEO, Todd Kaplan.

In 2017, the parties had entered into an agreement governing the cultivation of cannabis on Ms. Shulman’s land, with the parties agreeing to split the profits 50-50. The parties also discussed expanding the cannabis cultivation onto an adjoining property, which Ms. Shulman had the rights to purchase. During the course of the partnership, Vertical failed to comply with the terms of the cultivation agreement, engaged in self-dealing, and misrepresented and concealed key financial information. At the same time, Mr. Kaplan attempted to purchase the adjoining property without Ms. Shulman.

Ms. Shulman, and related entities, asserted eight claims of fraud, breach of contract related to the cannabis cultivation agreement, intentional interference with an agreement to purchase a related property, and elder financial abuse. Mr. Kaplan and Vertical brought counterclaims against Ms. Shulman and her sons, alleging breach of contract, intentional interference, and conversion.

Following a two-week trial in Los Angeles Superior Court, a 12-person jury found in favor of Ms. Shulman and against Vertical and Mr. Kaplan on all claims and awarded Ms. Shulman over $20 million, plus pre-judgment interest, and $15 million in punitive damages based on Mr. Kaplan’s and Vertical’s actions. The jury’s verdict totaled over $43 million for Ms. Shulman. Baker Botts also secured a take nothing result on all of the counterclaims.

The Baker Botts trial team included: Cheryl Cauley (Partner, Palo Alto), Sterling Andrew Marchand (Partner, Washington D.C.), Karan Singh Dhadialla (Senior Associate, San Francisco), Julia Wu (Senior Associate, San Francisco), Christina Romak (Associate, New York), and Elizabeth Renda (Associate, Washington D.C.).

ABOUT BAKER BOTTS L.L.P.
Baker Botts is an international law firm whose lawyers practice throughout a network of offices around the globe. Based on our experience and knowledge of our clients' industries, we are recognized as a leading firm in the energy, technology and life sciences sectors. Since 1840, we have provided creative and effective legal solutions for our clients while demonstrating an unrelenting commitment to excellence. For more information, please visit bakerbotts.com.