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$4.5-million awarded for lost fund

Jurors include $3-million in
punitive damages against
the lawyer who handled the
family's money.

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CLEARWATER - A Pinellas jury sent a message Thursday to lawyers, bankers and anyone else who manages inheritance trusts: Don't mess with other people's money.

The jury awarded $4.5-million to the children of Richard N. Baumgardner, who founded the sprawling Kapok Tree restaurant, once a Clearwater landmark.

Baumgardner, who died in 1979, had left about $800,000 in a trust for his three adult children. But Clearwater lawyer Joe R. Wolfe, as trustee, "invested" the money in his own businesses and in loans to himself.

When his finances took a dive a few years ago, the trust money all but disappeared.

After a four-day circuit court trial, a six-member jury determined that Wolfe breached his duty as trustee and fraudulently concealed his misdeeds.

A University of South Florida finance professor testified that the trust would be worth about $1.5- million today had Wolfe invested prudently in stocks and bonds. So the jury awarded that amount as compensating damages. Then jurors tacked on $3-million in punitive damages, allowed under Florida law to punish reckless and wanton behavior.

It was a whopping verdict by Pinellas standards.

Wolfe, whose mishandling of the trust earned him a three-year suspension from the Florida Bar, was unavailable for comment. But his attorney, Lou Kwall, lamented the punitive damages.

"A man is entitled to be judged on his whole life, not just one unfortunate part," Kwall said. "Jody has represented a lot of people in' the last 30 years - corporations and some major people. I don't hear any of these people complaining."

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At trial, Wolfe testified that he shifted the Baumgardner money out of traditional investments because he did not trust the stock market. He said he thought a clothing business he started with an ex-girlfriend was a good investment, even though it lost money and quickly failed.

When he loaned himself money from the Baumgardner trust, "I promised myself I would pay it back" at a good interest rate, he said.

But two years ago, Wolfe's real estate ventures and personal finances fell into disarray. He couldn't make annual disbursements from the trust and the three children discovered that their inheritance had been decimated.

One of the children, William Baumgardner, hired lawyers Wil Florin and H. Dennis Rogers, and sued. His siblings, Richard and Margaret, also will share in the verdict, although it remains to be seen how much they will collect.

Two years ago, when trying to convince the children that he could repay the missing money, Wolfe estimated his net worth at $4-million. At trial, he pegged it optimistically at $250,000.