LiMandri & Jonna LLP Clients Prevail in 5-Week Bench Trial

LiMandri & Jonna LLP Clients Prevail in 5-Week Bench Trial

Mark Arabo ordered to pay $248,000 back to the NMA and step aside from operations

SAN DIEGO, Calif. – After two years of hard-fought litigation, and a 5 week bench trial, Judge Richard E. L. Strauss of the San Diego Superior Court ruled in favor of the plaintiffs in the case of A&B Market Plus, Inc., et al v. Neighborhood Market Association, et al. The case was brought as a derivative action on behalf of members of the Neighborhood Market Association (“NMA”), a trade association of convenience stores led by Mark Arabo. The lead trial attorneys for the plaintiffs were Charles S. LiMandri and Paul M. Jonna of LiMandri & Jonna LLP.

The Court granted nearly all of the relief requested by the plaintiffs. Shortly after closing arguments, Judge Strauss made his ruling from the bench and began with the following remarks: “This is one of the most unusual cases I’ve had in my 22 years on the bench. I’ve never heard so much fiction under oath. It’s really unbelievable. I don’t even know where to start.” The Court then addressed a number of striking credibility issues on the part of the defendants and their witnesses and ruled as follows:

Mark Arabo must pay back the $210,000 “bonus/commission” he received after the NMA sold its Friars Road property. The NMA Board had paid the commission because it was falsely led to believe (by Mark Arabo) that Mr. Arabo was responsible for obtaining a much higher purchase price. After hearing the testimony and reviewing the evidence, the Court concluded that Mr. Arabo misrepresented his efforts in connection with the sale of the building to the NMA Board. This was particularly concerning to the Court in light of the dire financial condition of the NMA at the time.

Mark Arabo must pay back the $38,000 in alleged “reimbursement” for travel expenses. Mr. Arabo falsely told the NMA Board that he paid for these expenses using his own funds. In fact, Mr. Arabo used the NMA credit card and “double-dipped” – receiving $38,000 for funds that he never actually spent.

A Receiver, likely Richard Kipperman, will administer the NMA until such time as there is a fair and open election run by an Independent Election Inspector. The Court will determine the full scope and duties of the Receiver and Election Inspector during a subsequent hearing. However, the Court specifically stated that it has no confidence in the current administration with Mark Arabo and his new company, Refined Management. The Court remarked, “the current [NMA] administration is not properly treating the association or the members or even the board as it stands now.”

All NMA Members running for election are entitled to a copy of the NMA membership list, provided that it only be used for election purposes.

A&B Market Plus, Inc., which was improperly terminated as an NMA Member after it requested access to the books and records and membership list, is reinstated with full access to the books, records, and membership list (for election purposes).

The trial was covered by Greg Moran of the Union Tribune, who published this article shortly after the ruling was announced.

The plaintiffs will be filing a post-trial motion to recover the substantial attorneys’ fees and costs they were forced to incur in prosecuting this action, which was for the benefit of all NMA members and the public at large. All of the damages recovered will be restored back to the NMA. Fortunately, the funds will be in the safekeeping of a Receiver and not Mr. Arabo or his associates. The plaintiffs anticipate that the Receiver will also be responsible for ensuring that the NMA takes necessary steps to address its substantial present tax liabilities. The plaintiffs proved at trial that, under Mr. Arabo’s leadership, the NMA committed a number of very serious tax violations – resulting in potentially hundreds of thousands of dollars in present tax liabilities. Mr. Arabo also received another $200,000 plus of improper expense reimbursements that the Receiver will be better equipped to sort through and recover on behalf of the NMA.

The three business owners that brought this action and sacrificed their time and treasure to save the NMA are Arkan Somo, Samir Salem, and Basil Zetouna. They filed this case on behalf of all NMA members and relentlessly fought against a team of lawyers funded by a large insurance company – all for the sake of truth and justice. They released the following joint statement:

“Our goals from the beginning were to save the NMA and to expose Mr. Arabo’s serious misconduct. We are very pleased with this ruling. Justice was served, and the Court was able to see through a significant amount of lies and deception. Mr. Arabo has no place running the NMA or any other nonprofit, and we are confident that the Receiver and Independent Election Inspector will bring some order and sanity into this organization that we love and which Mr. Arabo has run into the ground.”

The case is A&B Market Plus, Inc., et al. v. Neighborhood Market Association, et al., Case No. 37-2015-00032389 (Superior Court of the State of California, County of San Diego).

LiMandri & Jonna LLP has recovered tens of millions of dollars in verdicts and settlements on behalf of clients in complex business litigation and serious personal injury and wrongful death cases. The firm has extensive trial experience and provides aggressive and ethical representation for clients in a variety of civil disputes. Learn more about the firm at www.limandri.com.