Atty Wants Claims Over Failed $57M Mask Deal Tossed
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Law360 (July 23, 2020, 8:28 PM EDT) — A California attorney and the CEO of a Los Angeles asset management company say they can’t be sued in Florida by Adventist Health Systemover a soured deal to buy 10 million N95 masks for $57.5 million, because they personally have no connection to the deal or Florida.
Michael H. Weiss of Michael H. Weiss PC asked a Florida federal court on Wednesday to dismiss AdventHealth‘s claims that he and his firm are liable for a missing $2 million that the Florida health care system says wasn’t refunded from an escrow account when its bulk ventilator mask purchase fell through.
Separately, the head of asset management firm Tomax Capital Management Inc., which was supposed to deliver the masks and which AdventHealth says may have the missing cash, argued Florida doesn’t have jurisdiction over him.
Weiss says he can’t be sued individually for signing the deal, because he was acting in his capacity as his law firm’s president, and that the firm was the party in the escrow agreement, not him. Weiss says he also has no personal connection to Florida and that his firm’s dealings in relation to the botched mask purchase took place in California.
“The complaint alleges no facts demonstrating that Weiss is the alter ego of the law firm or that there is any basis to pierce the corporate veil and hold him personally liable for acts he took on its behalf,” Weiss said in his motion.
Tomax CEO Yehoram T. Efrati made a similar argument to avoid the litigation, saying he has no ties to Florida. Efrati and Tomax also argue that AdventHealth has failed to provide evidence backing its claim that the company might have the missing escrow funds.
Tomax allegedly failed to deliver the 10 million N95 masks it had agreed to provide AdventHealth for $57.7 million.
AdventHealth claims that after it was refunded $55.5 million held in escrow by Weiss’ law firm, the firm told it that Tomax had the remaining $2 million. The health system suedafter it allegedly got the runaround from both parties with no sign of its missing cash.
Efrati argued he personally had nothing to do with the deal and that AdventHealth has failed to prove any of its claims against him or Tomax, including breach of contract and fiduciary duty, conspiracy, conversion and theft.
“Plaintiff does not plead any facts that establish Tomax had or has control of any amount of the escrow funds,” Efrati said in his motion.
Weiss’ firm has separately sued Tomax and Efrati in California state court, claiming they refused to pay back the $2 million upon the firm’s request, leaving the firm on the hook for the unrecovered funds. Weiss, representing his firm in the California case, has since requested that the suit be dismissed without prejudice, although court filings don’t reveal why.
The Florida case was referred to mediation on Wednesday.
Laurence J. Pino of Pino Nicholson PLLC, an attorney representing Tomax and Efrati in the Florida litigation, told Law360 on Thursday that he has no view at this time as to whether mediation will be successful.
Pino said he doesn’t represent Tomax or Efrati in the California litigation.
Counsel for AdventHealth declined to comment on Thursday.
AdventHealth and counsel for Weiss did not immediately respond to requests for comment.
Weiss and his firm are represented by David R. Keller of Keller Landsberg PA.
Tomax and Efrati are represented by Laurence J. Pino and Sean M. Southard of Pino Nicholson PLLC.
AdventHealth is represented by Mayanne Downs, Jason A. Zimmerman and Joshua A. Bachman of GrayRobinson PA.
The case is Adventist Health System Sunbelt Healthcare Corp. v. Michael H. Weiss PC et al., case number 6:20-cv-00877, in the U.S. District Court for the Middle District of Florida.
–Editing by Nicole Bleier.
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