Medical marijuana was legalized in Michigan in 2008 and in December 2019 recreational marijuana became legal. Since that time, Cannabis has become big business in Michigan. HHBJS is actively involved in representing Cannabis businesses and their owners in disputes that arise in this burgeoning industry. In October 2021, HHBJS lawyers obtained a 19 million jury verdict in its client’s favor in an ownership dispute involving a cannabis provisioning center in Ferndale, Michigan. It was recently reported in Michigan Lawyers Weekly as the second largest jury verdict in the State of Michigan in 2021. HHBJS is especially suited to handle such disputes given its extensive experience in shareholder/member disputes and in trying bet the company cases.
HHBJS Attorneys Secure $19M Judgment for Clients
In June 2018, MSY Capital Partners, LLC entered into a partnership with LIV Wellness Center, LLC and two of its principals, Dennis Zoma and Duane Karmo, to develop and operate a cannabis provisioning center in Ferndale. The City of Ferndale issued municipal permits on a first-come, first-served basis. MSY had a first place in line at the City of Ferndale and also had an applicant pre-qualified by the State of Michigan. LIV had a lease at a location with the necessary buffers to house a cannabis operation. MSY and LIV used these assets to secure a municipal permit from the City of Ferndale to operate a provisioning center. MSY, among other things, helped to design the provisioning center, dedicated a construction manager to the project, and contributed more than $800,000 to develop the provisioning center. After the provisioning center opened for business in September 2019, LIV and Mr. Zoma and Mr. Karmo tried to lock MSY out of the business. MSY brought suit in Oakland County Circuit Court claiming a 50% interest in the Ferndale provisioning center.
MSY retained HHBJS attorneys Mark Hauck and Scott Seabolt to try the case. The case was tried to a jury in October 2021. Judge Michael Warren presided over the trial. MSY called seven witnesses to testify on its behalf, including one of MSY’s principals, MSY’s construction manager, one of LIV’s principals, one of LIV’s transactional attorneys, and a damages expert, Jeff Hauswirth. LIV called one of its principals as its only witness. Mark did opening statements, closing arguments and examined MSY’s damages expert, while Scott examined the primary fact witnesses. Just before trial, MSY and HHBJS discovered that there was a previously undisclosed pending transaction for defendants to sell the Ferndale provisioning center for $40 million.
The jury deliberated for approximately two hours and then returned a $19 million verdict in MSY’s favor. The jury found that a legal partnership existed among MSY, LIV, Mr. Zoma and Mr. Karmo. The jury found that LIV breached the partnership and owed MSY $18 million in damages. The jury also found that each of the defendants breached fiduciary duties to MSY and that Mr. Zoma and Mr. Karmo each owed MSY $500,000 in damages. Michigan Lawyers Weekly reported the case as the second largest jury verdict in the State of Michigan in 2021.