PHOENIX (CN) — A jury awarded the founder of an Arizona-based health care staffing firm $27.6 million on federal claims that his former partner campaigned to take control of the company and oust him.
Marc Wichansky, former president of Zoel Holding Co., filed suit against David Zowine in Phoenix Federal Court in 2013, claiming his former partner retaliated against him after Wichansky found he was bilking governmental clients out of hundreds of thousands of dollars in fraudulent invoices through a Zoel subsidiary, MGA Home Healthcare (HHL).
"Zowine hatched a plan to gain ownership of Wichansky's shares, oust him from employment and management, and thereby suppress the investigation," the complaint claimed. "The plan involved manipulating Wichansky to believe the company could no longer function with the two of them at the helm, i.e., that management was deadlocked."
Before the dispute, Zoel had more than $40 million in gross revenues, hundreds of clients, and offices in five states, the lawsuit said.
According to Wichansky, Zowine and a number of HHL employees secretly set up a satellite office, then trespassed on Zoel property and "removed the workstation computers of the sales and billing personnel, looted the office, and took the computers to Zowine's secret satellite office."
Wichansky filed to dissolve Zoel, but "it was not until several months later that Wichansky realized that the conduct that induced him to seek dissolution was perpetrated in retaliation for Wichansky's role in the investigation and attempts to change the billing process in HHL, to distract Wichansky from further investigation, and to oust Wichansky before he discovered the full extent of the billing scheme and Zowine's role in it," the complaint said.
Wichansky tried to fire Zowine, but an Arizona state court said he lacked the authority. He eventually sold his shares in Zoel to Zowine, but said he was denied the full market value of his 50 percent of Zoel because Zowine presented the court with "false or misleading information relating the financial health of Zoel."
The lawsuit also said Zowine assaulted Wichansky, grabbing him by the neck, throwing him across his office and punching him. He also verbally abused and threatened Wichanky in front of employees.
On April 20, a jury awarded $11 million in damages and $14.375 million in punitive damages against Zowine for breach of fiduciary duty and breach of shareholder duty.
The jury found that Wichansky was assaulted and battered by Zowine, but it did not award him damages on those claims.
"Zowine initiated destabilizing and abusive conduct, which included harassment, intimidation, private and public humiliation, a death threat, and physical violence," Wichansky's attorney Sean Callagy said in a statement. "Zowine carried this out by enrolling others in his campaign. We are grateful the jury saw through this behavior."
The jury also came down against other MGA employees who aided Zowine in his plan, awarding $1.5 million against Charles Johnson, $750,000 against Patrick Shanahan and $500 against Martha Leon.
In a statement, MGA said it plans to appeal the findings and the jury damages.
"We are surprised and dismayed at the liability findings and the damages awarded by the jury," the company said. "The evidence at trial established Mr. Wichansky's claimed damages were the product of his own actions and a very calculated legal strategy, devised with the advice of attorneys - two of which he sued for malpractice. The evidence also revealed that Mr. Wichansky received from the state court decision exactly what he wanted — to be bought out for $5 million."
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