Jury ruled that NeoCell Corp. officers conspired to dissolve the majority partner’s shares in the Irvine supplement company’s manufacturing arm.
A jury’s $5.4 million verdict against an Irvine, Calif. skincare company for trying to cheat a business partner was unanimously upheld by a three-justice panel of the California Court of Appeal in a decision released on April 5. Inventor Ahmad Alkayali sued NeoCell Corp. and his former business partners after they dissolved his 72% equity share in a collagen supplement factory without paying him or even informing him of the move.
“I am very pleased the Court of Appeal reached the right decision and upheld the jury verdict in all respects,” said Attorney Robert Tauler, of Los Angeles commercial litigation firm Tauler Smith LLP. Tauler obtained the verdict after 14 days of trial spanning three months. “It has been a long and difficult road to obtain this result, but the Court’s detailed opinion makes this all the more gratifying.”
The justices upheld the Riverside County jury’s earlier decision to award Alkayali $4.26 million in economic damages and $500,000 for emotional distress, plus $185,000 in punitive damages against Akram Quadri, one of his former business partners.
The dispute centered around collagen supplement manufacturer Healthwise Nutraceuticals, Inc., and sister company NeoCell, which marketed and sold the products. Alkayali owned most of Healthwise, and the defendants owned Neocell and 28% of Healthwise. Following a lawsuit over NeoCell, which Alkayali founded and sold, the defendants colluded to dissolve Healthwise and transfer its assets to NeoCell without informing or compensating Alkayali. The trial court reduced the jury verdict after trial, in portions of the final judgment that were not part of the appeal.
The appellants unsuccessfully argued that the final judgment was not supported by substantial evidence in various respects, including the eventual amount of damages awarded. “We disagree with (Appellant’s) characterization of the state of the evidence,” Justice Marsha G. Slough wrote in the April 5 decision. Justice Douglas P. Miller and Justice Carol D. Codrington concurred.
