SAN DIEGO – A federal court jury rejected efforts by Charles Matthew Erhart to obtain punitive damages from the online bank that terminated his employment as an auditor.
The jury ruled unanimously on Aug. 26, 2022, that BOFI Bank (now Axos Bank) did not act with malice when it terminated Erhart. The jury also ruled the bank did not act with malice when it accused of Erhart of being incompetent at his job.
The jury’s repudiation of Erhart’s claims marked the second significant legal blow for the former auditor in the past few weeks. Three weeks ago, a San Diego state court judge said Erhart must pay more than $1.3mm in attorney’s fees to cover the legal expenses of the bank’s CEO after a jury found that Erhart stole confidential records from him.
Then legal fees award came after Erhart lost a state court trial, with jurors finding that Erhart stole the confidential records from Gregory Garrabrants, the CEO of Axos Bank.
In the latest case, jurors were asked to determine whether BOFI acted with malice against Erhart, and if so whether the bank should be required to award him punitive damages. Because it found that BOFI did not act with malice, Erhart was not entitled to punitive damages.
Erhart could not be reached for comment.
Erhart had claimed that he was fired not for incompetence, as the bank stated, but because he made allegations about the bank to third parties. The bank issued a statement that said Erhart’s allegations were untrue.
“Independent auditors and government regulators — all with full knowledge of all such allegations — have consistently issued clean audit opinions, passed examinations and granted further regulatory approvals that require evaluation of Axos’s regulatory compliance and compliance infrastructure among other aspects of Axos’s operations,” the bank said in a statement published by NBC News.
After three days of testimony in U.S. District Court in San Diego – Erhart and Garrabrants were among those who testified – the jury ruled that Erhart was not entitled to monetary punitive damages because the bank did not act with malice.
The case is Erhart vs. BOFI Federal Bank, Case No. 15-cv-02287-BAS-NLS.
