On January 30, 2013, after two weeks of trial, and two days of deliberations, an eight-member jury empaneled in the Federal District for the Southern District of California rendered a unanimous verdict in favor of Pinnacle Fitness and Recreation Management, LLC on all nine of Pinnacle’s claims that were submitted to the jury, including breach of contract, fraud, and conspiracy to commit fraud. The jury awarded Pinnacle $2.5 million in compensatory damages and $1.1 in punitive damages against the defendant, a family trust owned by billionaire Jerry Moyes (owner of Swift Transportation and former owner of the Phoenix Coyotes NHL hockey team).
In 2007, Pinnacle entered into a joint venture with the Jerry and Vickie Moyes Family Trust to form MFC Investments and to fund and investigate the financial health of a group of health clubs located in Phoenix, Arizona. From August 2007 through March 2008, Pinnacle invested more than three million dollars into the venture. In early 2008, Pinnacle learned that the Moyes Trust had changed the names of the health clubs to affiliate them with the Coyotes hockey team without Pinnacle’s consent and thereafter, experienced problems with the Trust. In April 2008, when the parties were unable to reach an accord on the growing number of disputes on how MFC should be managed, the Trust offered to buy Pinnacle’s interest in MFC, only to turn around days later and refuse to honor the agreement. In July of 2008, Pinnacle filed suit to enforce the buy-out agreement. After engaging in discovery, however, it became clear that the Trust not only breached its agreements with Pinnacle, but that the Trust had secretly planned all along to take over the venture . Pinnacle amended its complaint to add fraud claims and in the end, it was able to recover its entire investment into its venture with Mr. Moyes.