Professional Audio Concepts, Inc. v. Vision Ventures, Inc.
Published: Dec. 5, 1998 | Result Date: Oct. 26, 1998 | Filing Date: Jan. 1, 1900 |Case number: 774452 Bench Verdict – $157,643
Judge
Court
Orange Superior
Attorneys
Plaintiff
H. James Keathley
(Keathley & Keathley LLP)
Defendant
Experts
Plaintiff
Joseph P. Badame
(technical)
Facts
Defendant Robert Kochan was an officer, director and is a 25 percent shareholder of plaintiff Pro Audio. Kochan is also an officer, director and shareholder of defendant Vision. Vision was a customer of Pro Audio from 1991 and 1996. Starting in Jan. 1, 1995, Pro Audio increased the costs of its speakers from $40 per speaker to $42.50 per speaker for customers to whom it extended credit. Vision was one of the customers to whom Pro Audio extended credit. This increase in cost was disclosed to Vision prior to taking effect, and Vision agreed to it. In mid 1996, a dispute arose between Kochan and Pro Audio concerning Kochan's ownership interest in Pro Audio, which resulted in a shareholder derivative action. A provisional director was appointed to be a director of Pro Audio by the court in the shareholder derivative action. During this period of time, Kochan alleged for the first time that Vision was being overcharged by Pro Audio by the sum of $2.50 per speaker. The provisional director retained an independent CPA to conduct an audit of Pro Audio to determine if Vision was being overcharged. Kochan agreed in writing to be bound by the result of the independent audit. At a board of director's meeting, Kochan agreed in writing to personally pledge his shares in Pro Audio to guarantee Vision's payment to Pro Audio if it turned out that the independent audit concluded that Vision was not being overcharged, and the amount claimed by Pro Audio was legitimate. The independent audit was conducted by an independent auditor selected by Kochan. The independent audit concluded that Vision was not being overcharged. However, when presented with the audit results, Kochan continued to deny that Vision owed any additional monies to Pro Audio, and specifically denied that Pro Audio was entitled to the disputed $2.50 per speaker. The plaintiff brought this action against the defendant based on several theories of recovery.
Settlement Discussions
Discussions regarding settlement were held immediately prior to the commencement of the trial. A settlement could not be reached.
Damages
The plaintiff claimed $146,000+.
Other Information
The verdict was reached approximately one year and six months after the case was filed. Plaintiff is pursuing foreclosure on Mr. Kochan's shares of stock. An appraisal of plaintiff's shares is being conducted and an evaluation hearing is scheduled in January 1999.
Length
three days (Bench Trial)
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