Litman Intelligence — Damages Model Update

Three-Tier Damages Model — April 2026 Update

Three independent anchors converge in the defensible band; faithless servant unlocks 100% fee disgorgement

1. Three Converging Defensible Anchors

Three independently-sourced calculations of Litman's 20% share converge inside a single $424K – $2.4M defensible band, reconciled to within 0.4% of NGM's own defendant-produced figures.

Anchor	Source	Value
A — NGM-Produced Totals	22/24-month totals × 20% (Finding #49) $2,108,387 (22-mo) / $2,412,428 (24-mo)	$424K – $928K
B — Time-Series Reconciliation	21-month fee time-series × 20% (Finding #66) Mean ratio 1.009 / stdev 0.025	$1,731,898
C — Uncle's Reconstructed Total	Validated within 0.4% of NGM production Underlying source document pending Bates stamp	$2,403,125.66
Convergence band — all three anchors sit within		$424K – $2.4M

2. KFU Damages Universe

Cross-reference: MSJ Point III, Section H. The KFU slice is the single largest documented client diversion.

Billing & Receivables

$27.68M total KFU billed
$24.68M received
$2.05M outstanding (KFU Receivables)

Trust Account 36372

$12.22M total deposits
$2,440,513.80 = 20% share

Exhibit A Reconstruction (Uncle)

Unbilled fees	$9,693,000
Unpaid 20% RCL share	$1,601,660.80
Trust balance owed	$2,648,000
Total KFU recovery	$13,933,000

Corroborating Findings

2,457 KFU dockets without matching invoice = $1.02M (Finding #63)
All 69 reconciled trust-to-operating transfers marked "Uncredited" to RCL (Finding #64)

3. Faithless Servant Doctrine — 100% Disgorgement

Cross-reference: MSJ Point III, Section J. Under NY faithless-servant doctrine, an employee/agent who breaches the duty of loyalty forfeits all compensation earned during the period of disloyalty — not merely the amount of the diversion. [VERIFY CITATIONS WITH COUNSEL]

Doctrinal Hook

Murray v. Beard line of New York cases [VERIFY]
Disgorgement runs to the entire pool of Litman-originated fees during the disloyal period, regardless of what portion was actually diverted

Disgorgement Universe

21-month firm-wide Litman-originated fees: $8,607,872
Extended 34-month post-arbitration period: ~$14M – $20M+ disgorgement universe

Triggering Acts of Disloyalty

Name misappropriation (16 POAs personally signed post-arbitration)
KFU diversion ($9.89M unallocated / $1.98M unpaid 20% — Finding #51)
July 2025 Payment Allocation Report active concealment (Finding #50)
June 11, 2025 & July 2025 written admissions of KFU liability (Finding #53)
RPC 1.15 trust accounting violations
July 18, 2025 email account retaliation / spoliation (Finding #23)

4. Three-Tier Recommendation

Tier	Range	Theory
Floor (defensible)	$424K – $928K	NGM-produced totals × 20%
Mid (KFU full)	$13.93M	Exhibit A reconstruction
Aspirational ceiling	$14M – $77.9M+	Faithless servant disgorgement + § 51 deck-of-cards

5. Recommended Settlement Bands

Walk-away minimum	$928,000	Top of defensible-floor anchor; below this, trial EV exceeds settlement
Reasonable target	$4M – $6M	Clears KFU unpaid share plus modest disloyalty premium
Aggressive opening demand	$13.93M – $30M	Anchored to Exhibit A total recovery + faithless-servant multiplier

6. Consequential Damages

COBRA out-of-pocket health insurance: $2,867.11/month escalating to $2,895.54/month — concrete recurring special damages tied to NGM's termination/retaliation pattern (cf. health-insurance leverage over Cheryl's Crohn's care).

Email account spoliation: litman@4patent.com and rlitman@nathlaw.com eliminated July 18, 2025 — one day after litigation threat. Separate damages bucket + spoliation inference. (Finding #23)