The duo bought the bar, located at 1075 E. Main in Visalia, in January 2022 – but just 18 months later, Cary served Gayer with a lawsuit on June 6th as Gayer arrived to work at the bar.
Gayer, in turn, served Cary with a cross complaint in July.
Cary is represented by Michael L. Farley of the Farley Law Firm. Through his lawsuit, Cary is asking for the dissolution of the corporation and monetary damages allegedly caused by Gayer.
In response, Gayer – represented by Anthony W. Trujillo, of the law firm Trujillo & Winnick LLP – filed a cross-complaint. In it he accuses Cary’s behavior as, “despicable, base, vile, depraved and contemptible, in that it was the product of intentional and systematic attempt to deprive Cross-Plaintiff [Gayer]of his rights; and malicious, in that the conduct was done with willful and conscious disregard for the rights of Cross-Plaintiff.”
“Cary acted with oppression, fraud and malice, and Plaintiff is accordingly entitled to punitive damages. Gayer is entitled to an award of damages to punish CARY because Cross Defendant’s conduct was oppressive, in that it resulted in cruel and manifestly unjust hardship to Gayer while seeking to enrich himself alone,” Gayer’s lawsuit continues.
Both sides are suing for lawyers’ fees and damages.
Cary: Gayer operates corporation as if it’s in a “classified environment”
Cary and Gayer owned an equal 50/50 ownership of the Pump House when the corporation was established. Gayer assumed the role of CEO, while Cary undertook the duties of CFO and secretary.
Cary’s suit alleges that “On or about October 20, 2022, Defendant Jacob held an “annual meeting” whereby Defendant Jacob, unilaterally, “voted unanimously” to reduce Plaintiff’s shares of ownership from 50% to 20% and Defendant Jacob transferred an additional 30% ownership to himself (for a total of 80%.)”
“This was done without Plaintiff’s consent,” according to Cary’s suit.
Gayer’s cross-complaint claims that because of the unequal division of labor, with Gayer doing most of the work in 2022, he proposed to buy out Cary’s shares in the corporation. The suit claims an agreement was reached and a meeting place chosen to sign the paperwork.
According to Cary, the transfer of stock never happened, even though Gayer’s cross-complaint claims it is true.
But according to Cary, the transfer of stock never actually happened.
As a result of Gayer taking over 80% of the stock, Cary says in his suit that he only receives information regarding the corporation’s activities “on a need-to-know basis as if Defendant Corporation is and/ or was operating in a classified environment.”
“Defendant Jacob has ‘corporate meetings’ without proper notice to Plaintiff whereby Defendant Jacob takes detrimental actions against Plaintiffs share of ownership from 50% to 20%; failing to account for revenue and expenses; and harassing and bullying Plaintiff,” Cary’s suit reads.
Cary’s suit continues saying that, “judicial intervention is necessary to prevent further mismanagement and protect the rights of Plaintiff (Cary). As such, involuntary dissolution of Defendant Corporation is necessary to prevent any further harm to Plaintiff.”
In addition Carey alleges that Gayer increased his monetary distributions to himself while decreasing Cary’s. Cary accuses Gayer of only working one day a week but charging the corporation for 90 hours.
Cary also accuses Gayer of drinking on the job and getting so drunk that on one occasion that he left the door open to the safe.
Gayer claims Cary has compromised work performance because of drug abuse
In Gayer’s cross-complaint, he describes how he and Cary agreed to refinance or sell Cary’s home to buy half of the bar. This financial set up appears to be a central part of both lawsuits.
In addition to the financial dispute concerning Cary’s house, Gayer accuses Cary of making an “illegal withdrawal of $900 from the corporate account for personal use, followed by another unauthorized cash withdrawal of $1000 in June 2022.”
Gayer also alleges that Cary’s heavy drug use affected his work performance and resulted in a loss of income for the bar.
The suit states, “in December, tensions resurfaced over CARY’s increasing liability to the company. On December 28, 2022, CARY confessed to a severe drug problem and requested a third opportunity to rectify his conduct.”
According to Gayer’s counter-claim, they agreed that Cary could resume working at the bar after he completed a 30 day rehab program and that the company would pay Cary while he was in recovery.
But according to Gayer’s filing, “CARY prematurely ended his rehabilitation program on January 9, 2022, after only 13 days, but concealed this fact for an additional 17 days. This act appeared as an attempt to defraud the company, as he continued to falsely claim payment for the full 30-day period, even impersonating a rehab patient over the phone to assure payment. In February 2022, further disputes arose over CARY’s lack of contribution to the company and his continued negligent decision-making.”
The suit also alleges that Cary provided false information to an insurance inspector that caused the bar’s policy to be dropped and future premiums to rise steeply.
“CARY hired his brother for B-1 construction work and paying him in cash, without a receipt. This forced the bar’s temporary closure and caused subsequent repair costs and Cary’s personal drug-related issues forced the closure of the bar during peak business hours,” said the suit.
Gayer also alleges that, “While responsible for holding bar deposits, CARY’S wife reportedly stole from the Company. CARY admitted to this on multiple occasions, even in the presence of impartial witnesses, said the suit.”
In addition, Gayer accuses Cary of assaulting customers, giving out free beer, and hiring alleged drug dealers to work behind the bar.
Despite the lengthy list of complaints on both sides of the aisle, Gayer’s lawyer, Trujillo, said that he is optimistic that both parties will resolve the case through mediation.
“This is just about money. Once that is dealt with the rest will fall into place,” he told the Valley Voice.
The court has ordered both sides to set a date for mediation which will most likely happen in October.
