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. . . . . . . . . .
11. Henry C. Tager hired defendant Gordon
Turner in or around 1960, and defendant Gordon Turner worked for or with
Henry C. Tager and the various Hub Group Companies for approximately 37
years until the death of Henry C. Tager.
12. Gordon Turner was the trusted employee and business associate
of Henry C. Tager and the Hub Group for 37 years. Gordon Turner, who
acted as the chief financial person for the Hub Group, was terminated
shortly after the death of Henry C. Tager when a review of the
accounting records of The Hub of I-40 disclosed Gordon Turner had a)
altered numerous checks to suppliers and "cashed" the checks (after
completing the checks in erasable ink and causing Henry Tager to sign
them); b) forged the name of company President Henry C. Tager and Vice
President Kent Tager on checks and then cashed the checks; and c)
otherwise engaged in dishonest conduct to the detriment of Henry Tager,
The Hub of I-40, and other Hub Group Companies.
13. Defendant Gordon Turner, while an employee of plaintiff The Hub
of I-40 and a trusted associate of Henry Tager, and while employed as
the Accounts Payable Manager of The Hub of I-40, on numerous occasions
completed checks to suppliers and vendors to plaintiff The Hub of I-40
and prepared and completed checks for the signature of President Henry
Tager or Vice President Kent Tager. After company checks to suppliers
and vendors were completed by defendant Gordon Turner and signed by
Henry Tager or Kent Tager, defendant Gordon Turner would thereafter
erase the name of the supplier or vendor, pen in the word "cash", cash
the check at Central Carolina Bank & Trust Company ("CCB"), and then
convert the funds to his own use by retaining the cash, or by using the
funds to pay personal or household expenses, or for other personal,
family purposes or for purposes of defendant Gordon Turner's other
business interests.
14. Based on the competent evidence received during the trial of
this action, and based further upon information and detailed records of
altered checks, the statements of employees and other individuals who
reviewed the records, and based in substantial part on Gordon Turner's
own admissions to the investigating Certified Public Accountant, in
depositions, in response to Request for Admissions, and at trial, the
Court makes the following:
Findings of Fact
a. Altered Checks – Gordon
Turner altered numerous checks of The Hub of I-40, Ltd. (owned 100%
by Henry Tager) made payable to suppliers and after they had been
signed by Henry Tager, changing the name of the payee from that of a
supplier to "cash" and then cashing the same and using the monies to
pay his personal family credit card bills and the like;
b. "Second Check" – In a number of instances
Gordon Turner's alteration of a check was coupled with a "second
check" whereby Gordon Turner forged the name Henry Tager and paid an
invoice to avoid detection. Thus a lawful bill was paid twice, but
one check never made it to the supplier.
c. Forged Signatures on Company Checks – Gordon Turner
forged the signatures of Henry Tager and Kent Tager on a number of
company checks that he then cashed, using the cash proceeds for
paying personal family credit card bills and the like;
d. Personal Credit Card Bills – Gordon Turner used
company assets to purchase money orders from CCB which were then
used to pay certain personal, family American Express credit card
bills;
e. Personal Expenditures – Gordon Turner made
unauthorized, undisclosed payments of company funds for personal
expenses.
f. Theft by Use of Credit Card – Defendant Gordon
Turner fraudulently "returned" merchandise to The Hub and "back
charged" his personal credit card in amounts of approximately
$500.00 on a number of occasions. However, on said occasions, there
was no prior sale, simply an improper "back charge" used to offset
Gordon Turner's personal family expenses.
15. The Court finds that the majority of Gordon
Turner's testimony regarding disputed facts was simply not credible. His
testimony was inconsistent. Defendant Turner demonstrated selective
recall with good memory when it served his purpose. Defendant frequently
asserted a total inability to recall facts concerning sizable cashed
checks and altered checks. After denying any knowledge of numerous
altered or cashed checks for over three (3) years, and so stating under
oath at depositions, in affidavits, in sworn responses to plaintiffs'
interrogatories, and in sworn answers to plaintiffs' Request for
Admissions, defendant Gordon Turner at trial testified in detail about
certain checks he altered or cashed. He initially denied in Court that
he cashed any check that was not endorsed by him, but later admitted in
Court that he was able to cash such checks and did on numerous occasions
cash checks without endorsing them. Similarly, his testimony about
forming a corporation in 1995, the actions he took in forming the
corporation, and the reasons he formed the corporation were inconsistent
with later testimony that the corporation was his wife's corporation.
For these and other reasons, the Court finds that defendant Gordon
Turner's testimony was not credible as to many, if not all, disputed
facts.
. . . . . . . . . .
18. Competent evidence at trial established
the following regarding the assets of Gordon Turner:
. . . . . . . . . .
f) Gordon Turner is the owner of Gordon's Menswear,
Ltd., a men's store located at 3702 Lawndale Drive, Greensboro,
North Carolina and incorporated on October 12, 1995 as Turner
Enterprises of Greensboro, Inc. The Court's finding is based on the
following facts established by credible evidence:
i) the retail outlet bears the name "Gordon"
rather than "Turner";
ii) Gordon Turner has been employed in retail clothing since
1960 and his wife is employed as a Registered Nurse;
iii) the corporation was set up in October of 1995 by Gordon
Turner with no involvement by Rebecca Turner;
iv) Gordon Turner is the President of the corporation;
v) Gordon Turner has control of the business;
vi) Gordon Turner receives all the profits and benefits from the
business;
vii) Gordon Turner has an expense account/company credit card
and Rebecca Turner exercises no control over his salary or
expenses;
viii) The Court concludes from the evidence that the
organizational minutes, stock shares, and by-laws of Gordon's
Ltd. were back-dated, the Certificate of Incorporation having
been mailed to the Secretary of State on October 10, 1995, filed
with the Secretary of State the afternoon of October 12, but all
minutes and by-laws are dated October 12, 1995. The by-laws of
Juicy Lucy's, Ltd., dated September of 1997, are identical in
all respects to those of Turner Enterprises of Greensboro, Ltd.
except for the names, leading the Court to conclude neither set
of by-laws existed prior to September of 1997, notwithstanding
that the by-laws of Turner Enterprises of Greensboro, Inc.
purports to be signed on the same date it was incorporated,
October 12, 1995. The Court finds that the testimony of Gordon
Turner and Rebecca Turner that all minutes and by-laws were
signed on the date indicated, October 12, 1995, is simply not
credible.
. . . . . . . . .
21. The following described checks of The
Hub of I-40, Ltd. were improperly cashed by defendant Gordon Turner, and
defendant Gordon Turner repeatedly failed properly to account for the
funds under circumstances that establish to the satisfaction of the
Court that defendant Gordon Turner converted the funds to his own use:
CHECK # PAYEE
AMOUNT
4321
Cash
$ 500.00
4459
Cash
$ 753.00
3246
Cash
$ 2,000.00
4619
CCB
$ 2,261.63
4835
CCB
$ 2,031.34
4862
Cash
$ 458.67
4374
Cash
$ 500.00
TOTAL $ 8,504.64
22. The following described checks of The
Hub of Friendly, Ltd. then owned two-thirds by Henry Tager, were
improperly altered by defendant Gordon Turner. Defendant Gordon Turner
cashed or otherwise negotiated the checks, and defendant Gordon Turner
repeatedly failed properly to account for the funds under circumstances
that establish that defendant Gordon Turner converted the funds to his
own use:
CHECK # PAYEE
AMOUNT
5958
American Fashions $1,501.10
6493
Arden
$ 500.00
6484
Gitman Bros.
$ 600.00
6804
TRT
$ 583.00
TOTAL $3,184.10
23. The following described checks of The
Hub of Friendly, Ltd., then owned two-thirds by Henry Tager, were
improperly cashed by defendant Gordon Turner. Defendant Gordon Turner
has repeatedly failed properly to account for the funds under
circumstances that establish to the satisfaction of the Court that
defendant Gordon Turner converted the funds to his own use:
CHECK # DATE
PAYEE AMOUNT
5504
Cash
$ 300.00
6213
Cash
$ 1,050.36
6382
Cash
$ 1,000.00
6800
Cash
$ 750.00
6801
Cash
$ 750.00
6802
Cash
$ 1,502.05
5948
Cash
$ 642.87
5528
Cash
$ 580.00
6740
Cash
$ 750.00
6767
NationsBank $ 750.00
6547
Cash
$ 1,500.00
6744
Amex
$ 1,058.44
6745
Amex
$ 1,622.52
TOTAL $12,256.24
24. The following described check of United
Hub Enterprises, Ltd. a management company for the Hub Group companies,
then owned two-thirds by Henry Tager, were improperly altered by
defendant Gordon Turner. Defendant cashed or otherwise negotiated the
check, and defendant Gordon Turner repeatedly failed properly to account
for the funds under circumstances that establish that defendant Gordon
Turner converted the funds to his own use:
COMPANY NAME
CHECK # PAYEE
AMOUNT
United Hub Enterprises
5469
J. Rivenbark $1,000.00
(Attorney)
Attorney James Rivenbark was called as a witness by
defendant at trial. He testified, and the Court so finds, that he never
received the $1,000.00 from the check and he was never aware of any
policy or practice by Henry Tager or the Hub Group Companies of altering
the payee on checks or cashing large checks without adequately
accounting for the use of the funds.
. . . . . . . . . .
26. Defendant Gordon Turner improperly and
without authority to do so used funds of The Hub of I-40, then owned
100% by Henry Tager, to pay personal expenses of defendant Gordon
Turner, defendant Gordon Turner's wife, and defendant Gordon Turner's
daughter, resulting in costs and expenses which were charged on Gordon
Turner's personal American Express Credit Card No. 3728-622750-22005. In
addition, defendant Gordon Turner made improper "charge backs" to The
Hub of I-40, Ltd. all resulting in damages to The Hub of I-40, Ltd. in
an amount equal to $2,931.00.
27. Defendant while acting as the Accounts Payable Manager for The
Hub of I-40, Ltd. and The Hub Group, received a salary of $60,000.00 a
year. While receiving the $60,000.00 a year salary, defendant breached
his fiduciary duty to his employers and engaged in conduct in direct
violation of the interest of his employers. Throughout calendar years
1996 and 1997 the defendant persistently and repeatedly breached his
fiduciary duty to his employer by committing the act found herein.
Defendant Turner in 1996 and 1997 received a salary at the annualized
rate of $24,000.00 per year ($2,000.00 per month) from The Hub of I-40,
Ltd. and $36,000.00 a year ($3,000.00 per month) from The Hub of
Friendly, Ltd.
. . . . . . . . . .
30. The conduct of defendant Gordon Turner constitutes egregiously
wrong acts as defined in N.C.G.S. Sec. 1D-1, and punitive damages are
appropriate to punish the defendant for such acts and to deter the
defendant from committing similar wrongful acts. Defendant Gordon Turner
has the ability to pay substantial punitive damages based on evidence of
his revenues and net worth, and the Court has determined the amount of
punitive damages by considering only that evidence that relates to the
factors set forth in N.C.G.S. Sec. 1D-35(2).
. . . . . . . . . .
CONCLUSIONS OF LAW
Based on the foregoing Findings of
Fact, the Court makes the following Conclusions of Law.
1. Defendant Gordon Turner is liable to The Hub of I-40, Ltd. for
compensatory damages for conversion of monies and breach of fiduciary
duty/constructive fraud in the following amounts for:
a)
improperly altering checks:
$ 11,782.52
b) improperly
cashing checks:
$ 8,504.64
c) forfeited salary
$ 34,000.00
d) improper charge
backs on credit card: $ 2,931.00
$ 57,218.16
2. Defendant Gordon Turner is liable to
plaintiff Peggy Tager, as executrix of the Estate of Henry C. Tager, as
the surviving two-thirds shareholder of The Hub of Friendly, Ltd. for
compensatory damages under the legal theories of conversion of monies
and breach of fiduciary duty/constructive fraud in the following amounts
for:
a)
improperly altering checks: ($3,184.10 x 2/3) $
2,122.73
b) cashing checks:
($12,256.24 x 2/3)
$ 8,170.82
c) forfeited salary:
($51,000 x 2/3)
$ 34,000.00
$ 44,293.55
3. Defendant Gordon Turner is liable to plaintiff
Peggy Tager, as executrix of the Estate of Henry C. Tager and as the
surviving two-thirds shareholder of The United Hub Enterprises. Ltd.,
under the legal theories of conversion of monies and breach of fiduciary
duty/constructive fraud in the following amounts for:
a)
improperly altering checks: ($1,000.00 x 2/3)
$ 666.67
b) improper cashing
checks: ($691.40 x 2/3)
$ 460.93
4. Plaintiffs are entitled to recover
punitive damages from defendant for defendant Gordon Turner's
egregiously wrong acts as defined by N.C.G.S. Section 1D-1, and punitive
damages based on evidence of his revenues and net worth, and the Court
has determined the amount of punitive damages by considering only that
evidence that relates to the factors set forth in G.S. 1D-35(2).
5. All claims by defendant Gordon Turner against third party
defendant Kent Tager should be dismissed with prejudice.
6. Plaintiffs are entitled to an award of reasonable attorney's
fees and expenses for failure of defendant Gordon Turner to comply with
the requirements of Rule 36.
7. Plaintiffs are entitled to costs equal to filing fees of $65.00,
service fees of $10.00, mediation costs of $715.00, deposition costs and
expert witness fees.
. . . . . . . . . .
This the 4th day of January, 2001.
_________________________________
The Honorable Peter M. McHugh,
Superior Court Judge Presiding
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