Question: Should Mary Silver attempt to settle the matter with Louis Matthew before he files a lawsuit? If so, what would be the recommended monetary amount of the settlement? Be sure to include all of the statistical and legal issues involved as well as any strategic and ethical issues.

ALL STAR COMPUTER SERVICES Lawrence Thomas, Service Department Manager for the Hometown, Gould store of All Star Computer Services (ASCS), sat at his desk contemplating his next move. All Star Computer Services is a subsidiary of Logan Enterprises, Inc., a large media conglomerate. ASCS owns more than 200 stores throughout the world. Thomas has been assigned to handle a negligence matter involving Louis Matthew, a customer at the local store. Thomas looked over several letters from Matthew that told his story In January of 2012, Matthew purchased a PC (Marine Computer) system from ASCS. The computer performed extremely well until October of 2014 when the hard drive "crashed." Matthew took the unit to the repair department at the ASCS store in Hometown. Matthew explained that he thought the hard drive in the computer was defective and sought to have it repaired. In addition, Matthew asked the service technician if he could have his old hard drive back after the repairs were made on the computer. The technician assured Matthew that the service department would return to Matthew any computer parts that would be replaced The hard drive was defective and was replaced at no charge to Matthew. When Matthew picked up the repaired computer, he was also given what was presumed to be the original hard drive that was removed from the unit. Matthew told the repair manager that he was interested in attempting to retrieve the contents of the old hard drive. Matthew asked if ASCS could provide this service. The manager indicated that ASCS did not provide such a service. However, he provided Matthew with the telephone number of Markus Isaac. The manager indicated that Isaac might be able to help Matthew. Matthew left the store with his repaired computer and the old hard drive and went directly home because he was anxious to contact Isaac. Matthew contacted Isaac and was told that it would cost $800 to attempt to recover the contents of the hard drive and that there were no guarantees as to the extent of the recovery if any. After several days of deliberation, Matthew decided to spend the $800 and hope for the best. Isaac went to work on the hard drive and was very successful. Isaac was able to recover about 95% of the contents of the hard drive. Isaac phoned Matthew with the good news. Matthew immediately drove to Isaac's shop, reclaimed the hard drive and the recovered contents, and paid the $800. Matthew then rushed home and viewed the recovered materials. To Matthew's amazement, the recovered materials were not his. What had happened? Matthew concluded that ASCS's repair department had not returned to him his "crashed" hard drive. Instead, he surmised, he was given someone else's hard drive. In reviewing the recovered materials, Matthew was able to discover the name and telephone number of the true owner of the hard drive he had been mistakenly given. Matthew called the owner, Colin Barry, and related what he thought had happened. As a result of the conversation, Matthew discovered that he and Colin Barry both had the same computer, that each had experienced a crash of the hard drive that both had purchased their computers from ASCS and had, on the same day, returned the computers to ASCS for repair. Matthew also learned that Colin Barry had asked for and received from ASCS what he, Colin Barry thought was his original hard drive. Lastly, Matthew, hoping that their respective hard drives had merely been switched between the two of them, asked Colin Barry if he still had the hard drive. Colin Barry indicated that he had discarded the hard drive. What could Matthew do? He had spent $800 to retrieve materials from a hard drive that was not his. The owner did not need the materials and was not interested in paying Matthew $800 for the retrieved information. In addition, Colin Barry had discarded the "crashed" hard drive he had been given by the repair department at ASCS. Thus, even if Colin Barry had received Matthew's hard drive, that hard drive was no longer available to Matthew because it had been thrown out by Colin Barry. What a mess. Matthew had been through the rollercoaster of emotions. Down when his hard drive had crashed, up when he learned that Isaac had been successful in recovering information, and back down upon discovering the information was not his and that Colin Barry had discarded the hard drive that was, presumably, from Matthew's unit On December 1, 2014 Louis Matthew wrote a letter to ASCS describing his situation and requesting reimbursement of the $800 that was wasted on the recovery of information from a hard drive that was not his. Thomas, the service manager, wrote the reply shown in Exhibit 1. After reading the letter from Thomas, Matthew responded by sending the letter shown in Exhibit 2. After receiving the second letter from Matthew, Thomas contacted Mary Silver, the director of the risk management department at corporate headquarters. Following their short conversation, she said that she would look into the matter. Mary Silver was aware of the results of a recent survey of 850 past negligence cases in the State of Gould. In 75% of these cases, the plaintiff was awarded damages. On average the amount awarded was approximately 50% of the amount requested by the plaintiff, excluding punitive damages, which were not included in the study. Mary Silver, on behalf of ASCS, is contemplating settling this case out of court and has asked your legal team to write a report. She is seeking your legal and statistical evaluation of the problems facing ASCS. EXHIBIT 1 December 21, 2014 Mr. Louis Matthew 582 Jay Street Chester, Gould 41414 Dear Mr. Matthew Your letter of December 1, 2014 has been received. After careful consideration, it has been determined that All Star Computer Services has no responsibility for any expenses that you may have incurred as a result of this unfortunate situation. Normally, every effort is made to keep track of parts that are replaced on computers that are being repaired. However, during the first two weeks of October 2014, our service department experienced a large volume of hard drive replacements to the Marine Computer. Due to the large number of hard drive replacements, the service department was unable to maintain its procedure for keeping track of replaced computer parts. It is also noted that computer owners are continually reminded of the necessity to "back up" a copy of the hard drive on their computers. Your failure to take this easy and painless precaution has been the primary contributor to your loss. However, All Star Computer Services is happy to offer you a $100 gift certificate towards the purchase of any merchandise in the store. Sincerely, Lawrence Thomas Lawrence Thomas Manager, Service Department All Star Computer Services EXHIBIT 2 December 26, 2014 All Star Computer Services, Inc. clo Mr Lawrence Thomas Electronic Repair Department 123 M Street Chester, Gould 41413 Dear Mr. Thomas I understand you position regarding backing up my computer hard drive. I had instructed my son numerous times to do this for me and he would tell me "sure Dad, no problem, I will do that first thing tomorrow." Unfortunately, first thing tomorrow never came for me or my son. Nevertheless, I am confident that, if you had returned my crashed" hard drive to me, Mr. Isaac would have been able to recover the materials from my hard drive. Your offer of a $100 gift certificate is appreciated but is wholly inadequate as a settlement in this case.! would make the following proposal to All Star Computer Services: 1. A payment of $800 as reimbursement for the unnecessary expenditure to Mr. Isaac 2. A payment of $5,000 to cover the cost of my time to reconstruct lost materials used in my consulting job: 3. A payment of $10,000 in the form of punitive damages for your behavior in the handling of this matter. Sincerely, Louis Matther Louis Matthew Required: Write a report, using the Bus. 302 guidelines found on the course website. Be sure to consider business law key concepts 2 and 9 and statistics key concepts 3, 5, and 6. ALL STAR COMPUTER SERVICES Lawrence Thomas, Service Department Manager for the Hometown, Gould store of All Star Computer Services (ASCS), sat at his desk contemplating his next move. All Star Computer Services is a subsidiary of Logan Enterprises, Inc., a large media conglomerate. ASCS owns more than 200 stores throughout the world. Thomas has been assigned to handle a negligence matter involving Louis Matthew, a customer at the local store. Thomas looked over several letters from Matthew that told his story In January of 2012, Matthew purchased a PC (Marine Computer) system from ASCS. The computer performed extremely well until October of 2014 when the hard drive "crashed." Matthew took the unit to the repair department at the ASCS store in Hometown. Matthew explained that he thought the hard drive in the computer was defective and sought to have it repaired. In addition, Matthew asked the service technician if he could have his old hard drive back after the repairs were made on the computer. The technician assured Matthew that the service department would return to Matthew any computer parts that would be replaced The hard drive was defective and was replaced at no charge to Matthew. When Matthew picked up the repaired computer, he was also given what was presumed to be the original hard drive that was removed from the unit. Matthew told the repair manager that he was interested in attempting to retrieve the contents of the old hard drive. Matthew asked if ASCS could provide this service. The manager indicated that ASCS did not provide such a service. However, he provided Matthew with the telephone number of Markus Isaac. The manager indicated that Isaac might be able to help Matthew. Matthew left the store with his repaired computer and the old hard drive and went directly home because he was anxious to contact Isaac. Matthew contacted Isaac and was told that it would cost $800 to attempt to recover the contents of the hard drive and that there were no guarantees as to the extent of the recovery if any. After several days of deliberation, Matthew decided to spend the $800 and hope for the best. Isaac went to work on the hard drive and was very successful. Isaac was able to recover about 95% of the contents of the hard drive. Isaac phoned Matthew with the good news. Matthew immediately drove to Isaac's shop, reclaimed the hard drive and the recovered contents, and paid the $800. Matthew then rushed home and viewed the recovered materials. To Matthew's amazement, the recovered materials were not his. What had happened? Matthew concluded that ASCS's repair department had not returned to him his "crashed" hard drive. Instead, he surmised, he was given someone else's hard drive. In reviewing the recovered materials, Matthew was able to discover the name and telephone number of the true owner of the hard drive he had been mistakenly given. Matthew called the owner, Colin Barry, and related what he thought had happened. As a result of the conversation, Matthew discovered that he and Colin Barry both had the same computer, that each had experienced a crash of the hard drive that both had purchased their computers from ASCS and had, on the same day, returned the computers to ASCS for repair. Matthew also learned that Colin Barry had asked for and received from ASCS what he, Colin Barry thought was his original hard drive. Lastly, Matthew, hoping that their respective hard drives had merely been switched between the two of them, asked Colin Barry if he still had the hard drive. Colin Barry indicated that he had discarded the hard drive. What could Matthew do? He had spent $800 to retrieve materials from a hard drive that was not his. The owner did not need the materials and was not interested in paying Matthew $800 for the retrieved information. In addition, Colin Barry had discarded the "crashed" hard drive he had been given by the repair department at ASCS. Thus, even if Colin Barry had received Matthew's hard drive, that hard drive was no longer available to Matthew because it had been thrown out by Colin Barry. What a mess. Matthew had been through the rollercoaster of emotions. Down when his hard drive had crashed, up when he learned that Isaac had been successful in recovering information, and back down upon discovering the information was not his and that Colin Barry had discarded the hard drive that was, presumably, from Matthew's unit On December 1, 2014 Louis Matthew wrote a letter to ASCS describing his situation and requesting reimbursement of the $800 that was wasted on the recovery of information from a hard drive that was not his. Thomas, the service manager, wrote the reply shown in Exhibit 1. After reading the letter from Thomas, Matthew responded by sending the letter shown in Exhibit 2. After receiving the second letter from Matthew, Thomas contacted Mary Silver, the director of the risk management department at corporate headquarters. Following their short conversation, she said that she would look into the matter. Mary Silver was aware of the results of a recent survey of 850 past negligence cases in the State of Gould. In 75% of these cases, the plaintiff was awarded damages. On average the amount awarded was approximately 50% of the amount requested by the plaintiff, excluding punitive damages, which were not included in the study. Mary Silver, on behalf of ASCS, is contemplating settling this case out of court and has asked your legal team to write a report. She is seeking your legal and statistical evaluation of the problems facing ASCS. EXHIBIT 1 December 21, 2014 Mr. Louis Matthew 582 Jay Street Chester, Gould 41414 Dear Mr. Matthew Your letter of December 1, 2014 has been received. After careful consideration, it has been determined that All Star Computer Services has no responsibility for any expenses that you may have incurred as a result of this unfortunate situation. Normally, every effort is made to keep track of parts that are replaced on computers that are being repaired. However, during the first two weeks of October 2014, our service department experienced a large volume of hard drive replacements to the Marine Computer. Due to the large number of hard drive replacements, the service department was unable to maintain its procedure for keeping track of replaced computer parts. It is also noted that computer owners are continually reminded of the necessity to "back up" a copy of the hard drive on their computers. Your failure to take this easy and painless precaution has been the primary contributor to your loss. However, All Star Computer Services is happy to offer you a $100 gift certificate towards the purchase of any merchandise in the store. Sincerely, Lawrence Thomas Lawrence Thomas Manager, Service Department All Star Computer Services EXHIBIT 2 December 26, 2014 All Star Computer Services, Inc. clo Mr Lawrence Thomas Electronic Repair Department 123 M Street Chester, Gould 41413 Dear Mr. Thomas I understand you position regarding backing up my computer hard drive. I had instructed my son numerous times to do this for me and he would tell me "sure Dad, no problem, I will do that first thing tomorrow." Unfortunately, first thing tomorrow never came for me or my son. Nevertheless, I am confident that, if you had returned my crashed" hard drive to me, Mr. Isaac would have been able to recover the materials from my hard drive. Your offer of a $100 gift certificate is appreciated but is wholly inadequate as a settlement in this case.! would make the following proposal to All Star Computer Services: 1. A payment of $800 as reimbursement for the unnecessary expenditure to Mr. Isaac 2. A payment of $5,000 to cover the cost of my time to reconstruct lost materials used in my consulting job: 3. A payment of $10,000 in the form of punitive damages for your behavior in the handling of this matter. Sincerely, Louis Matther Louis Matthew Required: Write a report, using the Bus. 302 guidelines found on the course website. Be sure to consider business law key concepts 2 and 9 and statistics key concepts 3, 5, and 6