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Claims dismissed in one AriZona Iced Tea suit

Co-founders of the Woodbury-based maker of AriZona Iced

Co-founders of the Woodbury-based maker of AriZona Iced Tea products, Beverage Marketing USA, are fighting in court over hundreds of millions of dollars. (March 21, 2012) Credit: Newsday / Alejandra Villa

An appellate court has dismissed the claims brought by one co-founder of the AriZona Iced Tea brand against the other, in one of several legal actions pending in this bitter corporate divorce.

During an 18-day trial in April, co-founder Domenick Vultaggio’s lawyers argued before Nassau County Supreme Court Judge Timothy S. Driscoll that co-founder John Ferolito had allegedly broken his contractual and fiduciary obligations to provide equal financing to the Woodbury-based Beverage Marketing USA, the privately held maker of AriZona Iced Tea products. He sought about $287 million in damages.

In a unanimous decision, the state Supreme Court’s appellate division in Brooklyn said that Nassau County Supreme Court should have granted Ferolito’s request to dismiss claims against him alleging unjust enrichment and breach of his contractual and fiduciary duties. “The parties’ remaining contentions are without merit,” wrote the panel of four judges.

A separate claim in Manhattan will determine the value of the company and how much Vultaggio will have to pay to buy out Ferolito’s stake in the company. Ferolito also has a lawsuit in Manhattan seeking some $600 million in damages from Vultaggio.

Although the Appellate Division dismissal of the remaining Nassau County case came after the trial was held, Ferlito’s attorney said it was not a waste of time.

“Although we went forward with an 18-day trial with 11 witnesses and thousands of exhibits, a lot of the testimony and evidence introduced at the trial are pertinent to the valuation hearing, which is going to be scheduled soon,” said Nicholas Gravante Jr., of Boies, Schiller & Flexner, who is representing Ferolito. " .?.?. A lot of the evidence is admissible and doesn't need to be repeated at a valuation hearing.“

However, Vultaggio’s attorney, Louis M. Solomon of Cadwalader, Wickersham & Taft, did not interpret the Appellate Division’s decision as a complete dismissal of the Nassau County case. The division did not address his client’s allegations that Ferolito had employed numerous tactics to “wage war against the company” to force the company to sell to a third-party.

“It doesn’t wipe out the whole case,” Solomon said.

 

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