David Ahl v. Fairholme Capital Management Lawsuit

IN THE ELEVENTH JUDICIAL CIRCUIT COURT IN AND FOR J\UAMI-DADE COUNTY, FLORIDA

Case No.: 10-59549 CA 06

DAVIDAHL, I 1;; ;~; W;If\iI\L "!i I i) Ill.,l:

Plaintiff, v. ? iI 2U1l

FAIRHOLME CAPITAL MANAGli1MENr:r",t};clVI; OF a foreign limited liability company," J. I. ;[,,.!/ U/\UF CO., H.

Defendant.

--------------------------~/

AMENDED COMPLAINT

Plaintiff, David Ahl, sues Defendant, Fairholme Capital Management, L.L.C., a foreign

limited liability company, for disability discrimination and retaliation pursuant to the Florida

Civil Rights Act, § 760.10 of the Florida Statutes (the "FCRA").

Pal'ties, Jul'isdiction, Venue

1. Plaintiff, a current resident of Annandale, Virginia, was employed by Fairholme

Capital Management, L.L.C. ("Fairholme") in Miami, Florida. He is an employee within the

meaning of the FCRA.

2. Defendant, Fairholme, is an employer within the meaning of the FCRA.

3. Fairholme is a foreign limited liability corporation with more than fifteen

employees that operates and does business in Miami-Dade County, Florida.

4. Jurisdiction is proper because this is an action at law in excess of $15,000. Fla.

Stat. § 26.012.

5. Venue is propel' because defendant resides, and the cause of action accrued,

within Miami-Dade County, Florida. Fla. Stat. § 47.011.

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Facts Common to All Counts

6. Plaintiff, David Ahl, is a 58 year old financial analyst who was first retained by

Defendant as an outside consultant on March 1, 2003. He worked as an outside consultant until

July I, 2006 when he began full time employment with Defendant as an analyst. This

employment continued uninterrupted until January 23, 2009, when he was terminated.

7. Plaintiff began his career as a financial analyst in 1982, and given his insight and

reputation, Plaintiff's opinions and views were sought by the media. He was quoted in various

financial publications such as the Wall Street Journal, Fortune, Rocky Mountain News, Austin

American Statesman, Chicago Sun Times, etc and interviewed on business channels such as

CNBC. His writings were distributed to high government officials in Japan.

8. As a result of work related stress and other factors, Plaintiff suffered a complete

psychiatric breakdown and was treated by a psychiatrist from 1996 until 1999 concluding with 6

months of intensive cognitive therapy during which time he was diagnosed with Post Traumatic

Stress Disorder. "PTSD" is a qualifying disability.

9. At the conclusion of his therapy, Plaintiff's treating physician advised him that

although he would never be the same, there was some chance that he could regain some portion

of his prior productivity if he carefully managed the stress in his environment. He was told that

any progress would be gradual and vulnerable to relapse. He was cautioned that undue stress and

confrontation could trigger a relapse and that any relapse would diminish his potential recovery

and raise the possibility of permanent disability. While the severity of his symptoms ebb and

flow, Plaintiff has consistently had trouble maintaining a normal sleep cycle, focusing and

managing stress.

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10. Beginning in 1999, at the conclusion of his therapy, Plaintiff started working

again. Bearing in mind the admonitions he had received from his treating doctor, Plaintiff chose

to work as an independent consultant so that he could work the hours and schedule that his

condition pennitted without undue stress.

11. The job duties and schedule of an independent consultant were better suited to

Plaintiff's condition. Plaintiff worked from his home as his condition permitted focusing on a

limited number of individual companies.

12. By 2003, Plaintiff had established himself as an independent consultant focusing

on telecom securities. His views and opinions were again quoted in the media.

13. Defendant Fairholme is an SEC-registered investment advisor that provides

investment management selvices to the Fairholme Fund, four private partnerships and a

Managed Accounts Program for large individual and institutional investors. Defendant is paid a

fee of 1% per annum on the assets of the Fairholme Fund and assets in the Managed Accounts

Program and receives a management fee of I % or 2% on the assets of the private partnerships

and 15% or 20% of the net realized capital gains depending on the partnership.

14. Since its inCel)tion, Fairho1me has been managed by Bruce Berkowitz.

15. In February 2003, nfter seeing Plaintiff's comments and opinions quoted in The

Tulsa World, Defendant made contact with Plaintiff in order to consult with him concerning

Defendant's investment in WilTel.

16. Berkowitz interviewed Plaintiff by phone in Virginia. During tllis interview,

Berkowitz asked Plaintiff why he had not been employed full-time in the securities industry

since 1996. PlaintifffbIly disclosed his medical condition, and the constraints that the condition

put on his functions. Plaintiff explained the nature of his disability, the danger that undue stress

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presented to him and the importance of limiting the stress in his environment. Plaintiff told

Berkowitz that he couldn't be expected to write detailed research reports.

17. Berkowitz understood and accepted these limitations and on March I, 2003

retained Plaintiff as an outside consultant at the rate of $1,000.00 per month. The next month,

Plaintiff had his first face to face meeting with Berkowitz and another Fairholme analyst in

Virginia. During the meeting Berkowitz asked Plaintiff if he had other stock recommendations.

Plaintiff provided Berkowitz with four recommendations. Subsequently Plaintiff expanded the

consulting services provided to Fairholme to include not only research on Wiltel, but the

development of new investment ideas. Over the next three years, Plaintiffs retainer was

gradually increased to $30,000 per quarter.

18. Upon information and belief, Plaintiff was the first outside consultant ever hired

by Fairholme. Defendant knew of Plaintiffs psychological condition, and Plaintiff never kept

the condition, or his occasional sttuggles with it, a secret.

19. For the next three years, the consulting relationship went smoothly. Plaintiff

worked from home, on his own schedule. He managed his stress, save for a minor relapse during

2004. Berkowitz and other Fairholme employees were aware of this relapse.

20. Between 2003 and 2006, Plaintiff also worked as a consultant for a number of

other clients and by the summer of 2006 was earning a substantial income as an independent

financial analyst. Although, Plaintiff had recovered to the point that he was able to work longer

hours and was even able to tmvel on occasion, he remained unable to prepare the type of detailed

research reports he had prepared prior to his disability.

21. Beyond telecommunications stocks like Wiltel and Mel, Plaintiff generated

numerous other investment ideas which he recommended to his clients including Defendant,

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such as Williams Companies, KCS Energy, Duke Energy, Canadian Natural Resources and Penn

West Energy Trust.Def end ant began to accept and follow Plaintiff s recommendations in energy

and utility stocks and then later mining and mineral stocks.

22. The stocks that Plaintiff analyzed and recommended were among the most

profitable in Fairholme's portfolio. Berkowitz told Plaintiff that he was very pleased with his

performance and invited him to Fairholme's Christmas Party in February, 2006 where Berkowitz

introduced Plaintiff to the Board of Directors.

23. A strong personal relationship developed between Berkowitz and Plaintiff and

Berkowitz began to rely more heavily on Plaintiff's research, analysis and stock

recommendations. Throughout 2006, Defendant became increasingly committed to Plaintiff's

ideas. Canadian Natural Resources (CNQ), Penn West Energy Trust (PWE), Ensign Energy

Selvices, Phelps Dodge and Duke Energy grew to more than 30% of the Fairholme Fund's

portfolio by November 30,2006. Like the Fairholme Fund, Defendant's otller clients also made

significant investments in ideas generated by Plaintiff and realized substantial gailis.

24. By early 2006, Plaintiff's retainers from his other client's exceeded those he was

receiving from Defendant. Berkowitz became determined to employ Plaintiff full time to prevent

him from sharing his ideas, research, analysis and recommendations with others. Berkowitz told

Plaintiff that he wanted Plaintiff to work for Defendant exclusively and that his principal

responsibilities would be to generate new brilliant ideas and follow them, which were the same

terms on which LP and KT had joined Defendant previously.

25. Berkowitz set out to convince Plaintiff that he should give up his other clients and

work exclusively for Defendant. Berkowitz pointed out to Plaintiff that Defendant's clients had

made vast fortunes off Plaintiffs research, stock selection and analytical work.

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26. Berkowitz told Plaintiff that as an analyst for Defendant his compensation would

be many times wllat he would earn as a consultant as he would be entitled to the same incentive

arrangements as KT and LP.

27. Despite the strong personal relationship that had developed between Plaintiff and

Berkowitz, Plaintiff was concerned about the stress of fulltime regular employment. He was

concerned about the effect that undue stress could have on the progress that he had made in

recovering from his disabllity since 1999.

28. Plaintiff again explained to Berkowitz that he had to carefully manage stress, he

could not work a standard set of hours and he could not undertake the commuting that work in an

office required and that he needed the independence that independent consulting from home

afforded, in particular the ability to set his own hours and work only as much as his condition

allowed.

29. Berkowitz assured Plaintiff that he could work from home, on his own schedule,

on his own projects, as his condition permitted. Berkowitz assured Plaintiff that he would report

directly to Berkowitz. Berkowitz urged Plaintiff to accept full time employment as of July 1,

2006. He told Plaintiff that if he started on July 1 that he would receive a substantial bonus in

2006 because of the success of his investment recommendations and that starting in 2007, his

first full year working exclusively for Defendant, he wO\1ld be paid 011 the same basis as the

Defendant's other analysts LP and KT.

30. Beca\1se of Defendant's promise to accommodate for his disability and the

promised compensation, Plaintiff ceased working for other firms and began working exclusivoly

for Defendant on July I, 2006.He received a performance bOllus for the last 6 months of2006 of

$447,000. As a full time employee Plaintiff generated numerous other new investment ideas such

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as Phelps Dodge, Mercator Minerals, Quadra Mining, Augusta Resources and Fortescue Metals

Group while continuing to follow his earlier recommendations.

31. Plaintiff was surprised when in late 2006, Berkowitz moved to Miami-Dade

County, Florida, and opened an office in Miami. In April 2007, Defendant told Plaintiff and

Defendant's other 3 analysts LP, KT and GG that they needed to move to Florida.

32. Plaintiff was extremely reluctant to move to Florida. He had been living a quiet

life in Annandale,V irginia for many years. Although the trajectory was not perfectly straight, his

condition had been gradually improving and he was concerned about the impact of moving to a

new environment and the stress of the move. Berkowitz assured Plaintiff that he understood his

concerns and that he would be sensitive to the stress in Plaintiff's environment.

33. Berkowitz promised Plaintiff that in Florida, he could still work from home, on

his own schedule, as his condition permitted and reporting directly to Berkowitz.

34. Plaintiff began working temporarily in Florida in the summer of 2007 and at

Berkowitz's urging found a condominium that he was interested in purchasing in Coconut

Grove. Berkowitz assured Plaintiff that if Plaintiff purchased the condominium that Defendant

would make certain that Plaintiff would never suffer a loss on his condominium purchase.

35. In September 2007, Plaintiff applied for a mortgage on the condominium and

Defendant doubled his base to $500,000 per year and Berkowitz wrote a letter to Bank of

America stating that based on Plaintiff's performance "to date, he would receive a year end

bonus of between $1.2 and 1.6 million." Based upon this letter, Plaintiff's application was

approved and in September 2007 Plaintiff closed on the condominium, putting down 20% with

his equity investment totaling $615,000. At that point, Plaintiff was the only analyst who had

followed Berkowitz to Florida.

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36. In August 2007, Berkowitz began asking Plaintiff to work on and analyze stocks

that Plaintiff did not hand pick. In contravention of their oral agreement, Plaintiff was asked to

work on projects that did not involve his own investment ideas. Because of the increase in work

hours, travel demands, and work assignments, Plaintiff suffered a relapse in August 2007. Aside

from the relapse, Plaintiff suffered from intense muscle spasms. Berkowitz told Plaintiff to take

some time off and seek treatment, if needed, so that he could get well and return to work.

37. In October 2007, Defendant retained Charles Fernandez ("Fernandez"), as an

outside consultant for $25,000 per month and agreed to pay him a bonus based on the

performance of his investment ideas.

38. Approximately one month later, Defendant hired Fernandez full time as an analyst

agreeing to compensate him on the performance of his investment ideas. Defendant also named

Fernandez as its Chief Operating Officer (and later as President) and placed him in charge of a!!

of the finn's analysts and consultants both internal and external. In these positions, he acted as

Plaintiff s supetvisor.

39. Plaintiff was more qualified to be the head of research but the position was not

advertised or offered to him. On information and belief, Fernandez has no background,

experience or expertise as a securities analyst; he has never been employed as a portfolio

manager or by a mutual fund or investment adviser.

40. Until Sept 1995, Fernandez was an Executive Vice President of Heftel employed

by Viva America Media. Viva America Media operated four radio stations and was owned 49%

by Heftel and 51 % by Mambisa Broadcasting Corporation, of which Fernandez was a co-owner.

Fernandez "employment was terminated" on Sept. 7, 1995 when Heftel "acquired the remaining

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51% of the Viva America Media Group." Femandez obtained no experience or expertise in

either securities analysis or pOl1folio management at Viva America.

41. Beginning in 1996, Fernandez was the Chairman, CEO and President of

Continucare until November I, 1999 when he resigned as CEO find President. For the fiscal year

ending June 30, 1999 a "going concern" statement was issued by the company's independent

auditors. Continucare was a provider of out-patient health services. Fernandez obtained no

experience or expeltise in either securities analysis or portfolio management at Continucare.

42. Beginning in November 1999, Fernandez was the President and CEO of Big City

Radio (BCR) until 2002 when he resigned as BCR was forced into liquidation. BCR was an

operator of radio stations. Fernandez obtained no experience or expertise in either securities

analysis or portfolio matlagement at BCR.

43. Fernandez was a director of Ivax from June 1998 to June 2003. Ivax was a

pharmaceutical company. Fernandez obtained no experience or expertise in either securities

analysis or portfolio management at Ivax.

44. From 2003 to 2007, Fem!\ndez was the President of Lakeview Health Systems

LLC. Lake View Health Systems was a psychiatric and rehabilitation facility. Fernandez

obtained no experience of expertise in either securities analysis or portfolio management at

LVHS.

45. Plaintiff was more qualified by background and experience to be a securities

analyst but received disparate pay, compensation and other benefits of employment than that

provided to Fernandez. Plaintiffs job was to come up with brilliant new ideas for Berkowitz,

and he did so for years, the result of which was enormous profits for Berkowitz and Fairholme.

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46. Fernandez was well aware of Plaintiffs condition, made clear through

communications to Fernandez by Berkowitz and Plaintiff.

47. After Fernandez came aboard, Plaintiff was instructed by Defendant to greatly

increase his work load. Specifically, Plaintiff was asked to do detailed research on various

companies that Plaintiff did not himself find, despite Berkowitz's statements when inducing

Plaintiff to work exclusively for Defendant that he would not be asked to perform such tasks.

Moreover, Fernandez told Plaintiff to work at Fairholme's office on a regular schedule as

opposed to working from home, and to report directly to and take assignments from Fernandez.

rather than Berkowitz.

48. Plaintiff was subjected to even greater stress when on March 1, 2008. while

discussing his 2007 bonus, Fernandez told Plaintiff that he was due no fmiher compensation for

work he did in2007,buti n fact owed money to Defendant.

49. Plaintiff appealed directly to Berkowitz and told him that there must be a mistake

of some kind. Plaintiff also asked if he had been credited with all his ideas. since Plaintiff

believed that he was due a substantial bonus, per his discussions with Berkowitz in September

2007 and thereafter.

50. Berkowitz, in Plaintiff's presence, gave instructions that the performance bonus

calculations should be rerun and that Plaintiff should get credit for CNQ. PWE. Ensign. half

credit for Fortescue and full credit for the other 10 companies for which Plaintiff was the

responsible analyst.

51. On March 6. Berkowitz told Plaintiff that his performance bonus had been

recalculated; that there had been a mistake and that Plaintiff did not owe Defendant for any lack

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of perfomlance in 2007 but rather that Plaintiff had earned a performance bonus of more than

$500,000,00.

52. Berkowitz had instructed Fernando Font, an employee of Defendant to ensure that

the performance bonus calculations properly credited Plaintiff with all of the stocks for which

Plaintiff was responsible. Berkowitz assured Plaintiff that the new calculations properly credited

Plaintiff with all his stocks and (hat Plamtifi's properly calculated performance bonus for 2007

was $552,569.00.

53. In fact the calculations performed by Fernando Font and attached to his March 06,

2008 e-mail show on their face that Plaintiff was not credited with CNQ,PWE,ESIand half

credit for Fortescue.

54. Plaintiff was the only one of Defendant's five analysts, LP, KT, DA, GG and

Fernandez, who did not receive credit for all his stocks. None of the other analyst either had or

was regarded as having any disability. Had Plaintiff been properly credited for all his stocks, his

performance bonus would have been almost $1.5 million higher than the bonus he was paid.

55. Berkowitz at that time also told Plaintiff that he did not have to work out of

Defendant's offices or report to Fernandez, that Plaintiff could continue to work out of his house

on his own schedule as his condition permitted and to find, analyze and follow his own ideas and

that Plaintiff would report to Berkowitz,

56. On information and belief, Plaintiff was not properly credited with his ideas even

after the recalculation and was not compensated for his 2007 work on the same basis as

Defendant's other four analysts.

57. In March 2008, Berkowitz instmcted Plaintiff to develop detailed financial

models for four health care companies that had been recommended by Fernandez, including

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Wellcare in which Fairholme had already purchased a near 10% stake. Plaintiff was surprised by

this request as in October 2007, Berkowitz had told Plaintiff that Fernandez had significant

experience in healthcare, accounting and finance as a result of his extensive experience in

mergers and acquisitions. Plaintiff told Berkowitz that this contravened the previously agreed

upon accommodations and that he needed to work independently, and that he needed to find,

research, analyze and report on his own ideas, on his own schedule as his condition permitted,

just like he did as an independent consultant and as agreed upon with Berkowitz when he came

to work full time. Berkowitz insisted that he provide detailed financial models for the ideas

generated by Fernandez, while continuing to do his own work.

58. In late April 2008, Berkowitz introduced new arrangements which governed the

division of work responsibilities among the analysts, including how the work was to be

accomplishe(l and how compensation was to be paid. Under the new division of responsibilities,

each analyst was assigned particular companies to follow with Plaintiff being assigned all oil and

gas and mineral and mining stocks. The new arrangements called for the establishment of a

"performance bOl\\]s pool" that would alllount to 15% of the Fairholme's profits to be divided

among the five analysts Fel'l1andez, LP, KT, DA and GG according to their relative performance.

59. In spite of the promised new accommodations concel'l1ing work assignments,

scope of work and how work was to be performed, throughout 2008, Plaintiff was nevertheless

charged with working on stocks that were assigned to others under the April division of

responsibilities and Berkowitz continued to give Plaintiff numerous "one offs" which Plaintiff

undertook with positive results. In essence Plaintiff had two jobs, his own work of finding and

following his own new brilliant ideas and the additional job of researching and following ideas

generated by others. Most significant from Plaintiirs perspective was the fact that he was now

12

expected to perform all of these jobs without reference to the limitations imposed on him by his

disability.

60. During the course of 2008, Plaintiffwas tasked with analytical work on more than

20 companies including St. Joe, Wellcare, Wellpoint, United Healthcare, Healtlmet, Mohawk,

Dish, Clear Channel, Sallie Mae, Americredit, Berkshire, Sprint, Sears Holding, Northrup, Hertz,

Conoco Phillips, Boeing, Leucadia and Jeffries in addition to following his oil and gas and

mining and mineral stocks.

61. . The majority of these stocks had been specifically assigned to other analysts

under the April division of responsibilities. Plaintiff was tasked with doing detailed work on

Fernandez's healthcare companies even as the April 2008 division of responsibilities was being

promulgated. Plaintiff was told by Berkowitz to perform these tasks because he was better at it

than Fernandez.

62. Fairholme has in its possession contemporaneous evaluations of Plaintiff's work

in the fonn of responsive e-mails from Berkowitz showing that Plaintiff's work was well

received.

63. The Fairhohne llund's Semi-annual repOlt for the period ending May 31 2008

shows that the top three contributors to Fairholme's gains during the period were CNQ, Ensign

and Leucadia for each of which Plaintiff was wholly or partially responsible. The gains from

these stocks were approximately $525 million, assuming purchases and sales were evenly

distributed across this period.

64. By the end of the 2008 fiscal year, the Fund's holdings of Plaintiff's stocks had

decreased from over 28% to about 10% of the Fund's total holdings. The large cash "cushion"

13

which set the stage for Defendant's success in 2009 and 20 I 0 was largely derived from the

profitable liquidation of Plaintiffs stocks.

65. On December 27, 2008, Berkowitz called Plaintiff to ask him to prepare a write-

up on several investments to include in a letter to investors. Berkowitz did not give Plaintiff a

deadline to complete the letter.

66. On January 11,2009, Berkowitz called Plaintiff and told him that the investment

letter had been mailed to investors and that lIe was extremely disappointed that he had not

received the write-ups and that he wanted Plaintiff to leave Fairholme and return to his role as an

outside consultant.

67. Berkowitz prepared a one-year consulting contract for Plaintiff in January 2009,

but the contract did not include the 2008 performance bonus that Plaintiff was due, and made no

provision concerning Plaintiff's condominium as had been promised by Berkowitz. It offered a

one-year severance payment rather than the two·year severance payment offered to other

departing analysts LP and KT. Furthermore the termination package contained onerous

restrictions on Plaintiffs ability to resume a cftreer as a consultant to films other than Fairholme.

68. Plaintiff tried to speak with Berkowitz. Berkowitz did not answer his phone and

would not answer a call placed through the office. Plaintiff then em ailed Berkowitz, explaining

that he wished to speak further about the termination from full·time employment and shift to

consultant status, as well as the bonus, severance and expense issues. Plaintiff reminded

Berkowitz of his strong llerfOlmance over his years, and his loyalty in moving to Florida. He

reminded Berkowitz of his condition, the stress that he had been under lately, and his wish to be

returned to the position he was in prior to his move to Florida. Berkowitz replied via a short e-

14

mail that more talk will do no good, that it was a take-it-or-Ieave-it offer and urged Plaintiff to

"seek professional help."

69. Plaintiff retained an attorney to assist him with his contractual issues with

Defendant. The attorney drafted a January 22, 2009 letter expressing Plaintiff's wish to act as an

outside consultant and resolve compensation issues, past bonuses due, and adjustment of an

overbroad non-compete clause.

70. On January 23, 2009, the day after the attorney's letter was received, Berkowitz,

on behalf of Defendant, terminated Plaintiff, took the consulting offer off of the table, and

withdrew his severance pay offer.

71. Of the five analysts who were to share in the 15% 2008 performance bonus pool

only Plaintiff and Fernandez were employed by Defendant at the end of 2008. Plaintiff received

no portion of or accounting for the 2008 performance bonus pool despite the fact that Fairhohne

Fund's semi-annual report for May 31,2008 shows that the top three contributors to Fairholme

Fund's gains were CNQ, Ensign and Leucadia National for all of which Plaintiff was partially or

wholly responsible;

72. Defendant's revenues from the Fund for 2008 were reported to be in excess of

$78 million. Defendant's total revenues for 2008 are believed to be approximately $100 - $120

million, which includes management fees from the Fund, Managed Accounts and the

Partnerships and net capital gains from the sale of assets in the partnerships. Defendant's pre-tax

margin for 2007 was 77% as shown in the calculations of Plaintiff's 2007 performance bonus.

For 2008 Defendant's pretax margin is estimated to be at least 77% and likely over 80% due to

the large economies of scale ill the investment management business.

15

73. Although Plaintiff never received any part of or accounting for the 15% analyst

performance pool, it is reasonably believed to be in the range of $10 to 14 million. On

information and belief, Fernandez received the entire pool in addition to other benefits of

employment.

74. Plaintiff is a fully qualified experienced financial analyst unlike Fernandez who

had no background, experience or expertise in securities analysis 01' portfolio management.

FUither, Plaintiff performed more analytical work on more companies in 2008 than Fernandez

and Plaintiff's stocks provided much greater gains.

75. On a relative performance basis with Fel'llandez, Plaintiff should have received a

substantially larger portion of the 2008 15% performance pool than that paid to Fel'llandez.

76. Plaintiff received disparate treatment in pay, compensation and other benefits of

employment in 2008 than that received by Fernandez.

77. Following his termination, Plaintiff has done all that he could to regain

meaningful employment and mitigate his damages, but these efforts have been hampered by his

psychological condition which was exacerbated due to Defendant's actions.

78. On March 25, 2009, Plaintiff filed a charge of disability discrimination, age

discrimination, and retaliation, with the Florida Commission on Human Rights. More than 180

days have passed since the filing of the charge and no action has been taken.

79. Plaintiff has retained counsel and is obligated to pay a fee for services rendered.

Count I - Florida Civil Rights Act (Disability Discrimination· TCl'lllinRtioll)

80. Plaintiff incorporates and adopts paragraphs 1 - 79.

81. Plaintiff is an "employee" and the Defendant is an "employer" within the meaning

oftheFCRA.

16

82. Plaintiff has a qualifying disability within the meaning of the FCRA. Defendant

knew of the Plaintiff's disability.

83. To the extent it is determined that he does not have a qualifying disability, then

the Plaintiff alleges, alternatively, that he was regarded as having a disability within the meaning

of the FCRA.

84. Plaintiff was qualified for his position with the Defendant. Berkowitz considered

Plaintiff to be brilliant.

85. Plaintiff was initially provided reasonable accommodations by the Defendant to

permit him to work as an employee for the Defendant.

86. Plaintiff was performing extremely well as an employee with the Defendant.

87. Plaintiffs reasonable accommodations were systematically removed by the

Defendant in an effort to force Plaintiff to resign.

88. Plaintiff was terminated because of his disability, in violation of the FCRA.

89. Plaintiff suffered damages as a result of the Defendant's violation ofthe FCRA.

COllnt II - Florida Civil Rights Act (Disability Discriminatioll- Pay Disparity)

90. Plaintiff incorporates and adopts paragraphs 1-79.


of the FCRA.



93. To the extent it is determined that he does not have II qualifying disability, then

the Plaintiff alleges, alternatively, that he was regarded as having a disability within the

meaning of the FCRA.

17

94. Plaintiff was qualified for his position with the Defendant. Berkowitz considered

Plaintiff to be brilliant.

95. Plaintiff was initially provided reasonable accommodations by the Defendant to

permit him to work as an employee for the Defendant.


97. Plaintiffs reasonable accommodations were systematically removed by the


98. Plaintiffs pay, specifically his performance bonus pay, in earlier years was

significantly higher than in his later years as an employee. This disparity, and this reduction in

his performance bonus pay, was a direct result of the Defendant's attempt to use Plaintiffs

disability against him to encourage him to resign.

99. Plaintiffs pay, specifically his performance bonus pay, was disproportionately

lower than other financial analysts employed by the Defendant who did not have a disability

and was calculated on a different basis.

100. Plaintiff was also offered a severance package in exchange for a release of any

employment related claims. The offered severance package was disproportionately lower than

other financial analysts employed but terminated by the Defendant and who did not have a

disability.

101. Plaintiff suffered damages as a result of the Defendant's violation of the FCRA.

COllllt III - Flol'ida Civil Rights Act (Retaliation)

102. Plaintiff incorporates and adopts paragraphs I - 79.


of the FCRA.

18



105. To the extent it is determined that he does not have a qualifying disability, tllen


of tile FCRA.

106. Plaintiffwas qualified for his position with the Defendant.

107. Plaintiff was provided reasonable accommodations by the Defendant to permit

him to work as an employee for the Defendant.


109. Plaintiffs reasonable accommodations woro systematically removed by the

Defendant in an effOit to force Plaintiff to resign.

110. In January 2009, Plaintiff discussed a severance package with the Defendant that

would facilitate his departure from Fairholme. This followed similar severance packages that

Defendant entered into with other financial analysts. As of January 2009, Fairholme's only

remaining "analyst" (other than Berkowitz) was Fernandez, despite his utter lack of

qualifications to be a securities analyst.

111. In late January 2009, Plaintiffs attorney sent a letter to Berkowitz regarding the

severance package. The severance package contained several oppressive, unlawful and unusual

provisions that would have sevcrcly restricted Plaintiff s life and work opportunities. Upon

information and belief, other non-disabled, departing financial analysts did not have these

additional terms in their severance agreements. Plaintiff's attorney's letter raised several issues,

including Plaintiff's claims of disability discrimination and a hostile working environment. In

19

response to the letter, Berkowitz immediately withdrew the severance package and terminated

the Plaintiff.

112. Plaintiff was terminated in retaliation for his objection to Fairholme's

discriminatory treatment of him and for complaining that the terms and conditions of his

employment were materially affected because of his disability.

113. Plaintiff suffered damages as a result of tIle Defendant's violation of the FCRA.

COllllt IV - Florida Civil Rights Act (Hostile WOI'ldng Envir'onment)

114. Plaintiff incorporates and adopts paragraphs I -79.


oflheFCRA.


knew ofthePlaintiff's disability.

117. To the extent it is determined that he does not have a qualifying disability, then


of the FCRA.

118. pJaintiffwas qualified for his position with the Defendant.

119. Plaintiff was provided reasonable accommodations by the Defendant to permit

him to work as an employee for the Defendant.


121. Plaintiff's reasonable accommodations were systematically removed by the


122. Plaintiff was forced to endure a hostile working environment by his supervisor,

Fernandez. Fernandez, knowing that Plaintiff suffered from a psychiatric disability, increased

20

Plaintiffs job assignments and was overly critical of his work. Initially, Berkowitz overruled

Fernandez to a Jimited degree but over time the terms and conditions of Plaintiffs employment

steadily deteriorated. Fernandez continued to abuse the Plaintiff as his influence over Berkowitz

increased.

123. Fail'holme's withdrawal of the reasonable accommodations provided to Plaintiff

constituted an unlawful hostile working environment.

124. Fairholme knew of Plaintiff's disability and pmposefully took advantage of his

disability to create a miserabJe working environment.

125. Plaintiff suffered damages as a result of the Defendant's violation of the FCRA.

126. Plaintiff has engaged the undersigned counsel and has agreed to pay them a

reasonable fee for their services.

Demand for Jury Trial

Plaintiff demands a trial by jury on all issues so triable.

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Prayel. for Relief

Plaintiff demands judgment against Defendant, Fairholme Capital Management,L.L.C.,

for compensatory damages in excess of $15,000, for back pay, economic and noneconomic

damages (including pain and suffering), front pay, and punitive damages, reinstatement and

reasonable attorneys' fees and costs together with such other and further rclief as to this COlllt

seems just and proper.

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Respectfully submitted, .. /I.

Seth Sarelson, Esq. Fla. Bar No. 888281 Max M. Nelson Fla. BarNo. 84532 SARELSON LAW FIRM, P.A. 1401 Brickell Avenue, Suite 510 Miami, Florida 33131 305·379·0305 800·421·9954 (fax) [email protected] [email protected]

Richard E. Berman, Esq. Fla. Bar No. 254908 Jose Riguera, Esq. Fla. Bar No. 860905 BERMAN, KEAN & RIGUERA, P.A. 2010 W. Commercial Blvd., Suite 2800 FI. Lauderdale, Florida 33309 954·735·0000 954·735·3636 (fax) [email protected]

Jeffrey I. Kavy, Esq. Pro Hac Vice to be filed Clemens & Spencel', PC 112 E. Pecan Suite 1300 San Antonio, Texas 78205 210·227·7121 210·227·0372 Fax [email protected]

Certificate of Service

I HEREBY CERTIFY that on JanUa~2011, I served a copy of this document via

facsimile and U.S. Mail to Guy A. Lewis, Esq., and Michael R. Tein, Esq., Lewis Tein, PL, The

Offices at Cocowalk, 3059 Grand Avenue, Suite 340, Coconut Grove, Florida 33131, fax (305)

442-6744.

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Documents

David Ahl v. Fairholme Capital Management Lawsuit