WOODLAND - A Granite Bay couple was awarded a $1.45 million verdict for the loss of profit after they were denied the sale of four established dry cleaning businesses in Yolo County.
The verdict, plus attorney’s fees, was awarded in Yolo County Superior/Municipal Court Wednesday to Kip and Vicki Giro. They sued Enwald Enterprises Inc., a California Corporation, and Jerry Enwald for breach of contract and fraud after Enwald reportedly backed out of an agreement to sell them the shops in Dais and Woodland.
"Even though they never worked a day in the four cleaning establishments, they were entitled to the profit they would have earned over the next 10 years," said Jeffrey H. Ochrach of Roseville, their attorney.
Ochrach said his clients entered into a written agreement to purchase the businesses in May 1995. He said the defendant refused to complete the sale of the business in July - August of that same year.
"A deal is a deal. That was our theme," he said. "The defendant in court said he didn’t mean it. He said in a deposition you can always weasel out of a contract. The jury said, ‘No, you can’t.’"
Vicki Giro said the couple was really interested in buying a business together and getting the family involved.
"We’re pretty much interested in the dry cleaning business," she said. "We’re still looking for the right deal and right location."
She said her husband is still employed by the dental supply business he sold, and can’t open a similar business because of a condition of the sale.
"Buying a business isn’t easy," she said. "It takes time to check things out and come up with the finances. It usually involves an attorney to write up the contract and you want to verify the business and check out its books.
"I wish he would have performed on the contract. We tried to get him to perform and he would not. We went through a lot of time and expense."
Ochrach called the verdict a "very good lesson" to be learned by small businesses that form a corporation to protect themselves against liability if something goes wrong.
"We showed the jury that Enwald didn’t follow corporate formalities; therefore he should be personally liable for the contract, even thought the corporation was the party to the contract," Ochrach said. "The jury agreed. If a small business forms a corporation, it better follow all corporate formalities or it won’t be protected from liabilities."
Ochrach said the defendant thought he was protected by the corporation shield.
"He had little assets in the corporation," he said. "It was all under his name."
Ochrach added that the court clerk indicated the $1.45 million was the largest jury verdict she recalled in Woodland. Thomas E. Warriner was presiding judge.