IBJNews

Cousin wins minor damages in Mike's Carwash lawsuit

Back to TopCommentsE-mailPrintBookmark and Share

A Hamilton County judge has ruled that a former co-owner of Mike’s Carwash Inc. receive just $140,000 in damages in a civil case that sought close to $30 million.

Judge William Hughes of Hamilton County Superior Court 3, in a decision released Thursday, ordered CEO Bill Dahm to pay $140,000 in punitive damages to his cousin Jerry Dahm. The judge ordered the payment because Bill Dahm had backdated two corporate documents. Hughes did not order the other defendant, Bill's brother Mike Dahm, to pay anything.

"Obviously, [the decision] is a complete success by Mike's Carwash and its owners, and the decision vindicates each of them from wrongdoing," attorney Michael Wukmer of Ice Miller, who represented Bill and Mike Dahm in the case, said in an email to IBJ.

Jerry, once a 35-percent owner and executive vice president of operations for Mike’s Carwash, had sued his cousins and business partners. He claimed his cousins fired him after 30 years in the business and forced him to sell his shares in the company in 2010 at an “unfairly low” value of $17.1 million.

Jerry Dahm was seeking an additional $3.3 million for his ownership in Mike’s, plus another $26.2 million from Bill and Mike Dahm for his share of Dahm Property,  which owned the car wash properties and leased them to Mike's Carwash.

Hughes, however, declined to order Bill and Mike to buy out Jerry's interest in the real estate, saying doing so "would be an unwarranted intrusion into Indiana's strongly pro-management business rule." In addition, he found most of Jerry's claims were unfounded. He said the brothers "had legitimate reasons for terminating Jerry Dahm."

Problems began in 2008, when Jerry sought an emergency distribution to cover back taxes, which Bill and Mike considered a sign of “out of control spending.”

Bill and Mike lost their trust in their cousin’s ability to help run the company, and in 2009 they began trying to buy out his shares. Negotiations broke down.

Jerry was fired in early 2010.

Per terms of a shareholder agreement, Bill and Mike acquired most of Jerry’s shares for $17.1 million, or 35 percent of the $49 million that the company was valued at as of 2008.

In his lawsuit filed in late 2010, Jerry sought an additional $3.3 million by arguing that his cousins pushed him out of the company and unfairly valued the shares they bought from him.

Jerry also disclosed in court documents that he wanted the court to force his cousins to buy out his stake in Dahm Property for $26.2 million.

Jerry’s attorney, Brent Taylor of Faegre Baker Daniels LLP, argued in written closing statements that Bill and Mike cut rent payments to Dahm Property, reducing the value of the company Jerry still partly owned.

“The rents were set above market level for a reason, and they were being reduced to market level for a sinister reason—to send Jerry a message that Bill and Mike could strip value from [Dahm] Property LLC and Jerry was powerless to stop it,” Taylor wrote.

Attempts to reach Taylor for comment Friday were unsuccessful.

While the court ruling did not force Bill and Mike to buy out Jerry’s shares in the real estate firm, Hughes did order Bill to pay punitive damages because he backdated two notices of nonrewal for car wash leases. The leases would automatically renew unless he provided the notification at least six months before the expiration date. The backdating made it appear he had complied with that requirement when he actually had not.

Hughes called Bill's action "at the very least reckless" and said he breached his fiduciary duty to Jerry Dahm, Mike Dahm and Dahm Property.

"The actual damages which resulted to [Dahm Property], and to Mike and Jerry Dahm were rectified shortly before trial, however, when the wrongfully terminated leases were reinstated and the lost rent was paid with interest.”

The trial, which Hughes heard without a jury, began March 12 and lasted nine days.
 

ADVERTISEMENT

Post a comment to this story

COMMENTS POLICY
We reserve the right to remove any post that we feel is obscene, profane, vulgar, racist, sexually explicit, abusive, or hateful.
 
You are legally responsible for what you post and your anonymity is not guaranteed.
 
Posts that insult, defame, threaten, harass or abuse other readers or people mentioned in IBJ editorial content are also subject to removal. Please respect the privacy of individuals and refrain from posting personal information.
 
No solicitations, spamming or advertisements are allowed. Readers may post links to other informational websites that are relevant to the topic at hand, but please do not link to objectionable material.
 
We may remove messages that are unrelated to the topic, encourage illegal activity, use all capital letters or are unreadable.
 

Messages that are flagged by readers as objectionable will be reviewed and may or may not be removed. Please do not flag a post simply because you disagree with it.

Sponsored by
ADVERTISEMENT

facebook - twitter on Facebook & Twitter

Follow on TwitterFollow IBJ on Facebook:
Follow on TwitterFollow IBJ's Tweets on these topics:
 
Subscribe to IBJ
  1. Uh, sorry Johnnie, but you are incorrect. Despite the assertions by yourself and various defenders and captains, sports attendance is NOT off significantly at most sporting events in the US. Variances in attendance has been in the range of single digits, both + & - for years now. MLB has had most of its best overall attendance nubers in the last decade, and that trend has been consistent for most major sporting events. The number one issue cited by most fans when asked about attendance is the overall cost of attending. The presence of HD and big screen televisions in home doesn't even register, as a factor for not attending an event. VALUE in the product is the key, and apparently is something lacking in the current ICS. What other explanation is there when with what is routinely touted as the "best" racing on the planet, fans are staying away in DROVES. A "close" title battle into the last event at Fontana, with the "cars and stars" of the ICS, and who showed up? MAYBE 8K. Sorry, but HD TV isn't to blame for that kind of fan apathy.

  2. Do you need finance to establish your business ? Are you interested in getting a loan at 3% from our private company? If so please Email: suntrust_oil@blumail.org

  3. If she was worth the $ the public outcry over direct tv dropping them would have kept them on their dishes as we have seen with other companies. I too quit watching channel 13 after she showed up since I left channel 8 because of her all show rather than production results. When Randy on 8 corrected her she had a big head and incorrectly challenged his correction for pronunciation of a city. Other antics while she matures was too much for me with her very inaccurate forecasts. All the forecasters were predicting rain until Thursday except Chris. They predicted sunny on Thursday but instead of rain until Thursday upon which the sun would finally make it out in full glory Chris was right on the money just as I too predicted looking at the radar on weather.gov. One thing I love about Angela is the fear you can see in her every time it thunders in the winter. It far exceeds the entertainment value of her body language (high heel noise drags, depression, etc) when her forecasts are so incorrect. Her hair stands on end, you have to see it!!!

  4. Good Day, Apply For A Loan I am Mr Fernadez Antonio, a private Loan lender and a cooperate financial for real estate and any kinds of business financing. I also offer Loans to individuals, Firms and cooperate bodies at 3% interest rate We offer any kind of loans. email us via fernadezloaninvest@outlook.com LOAN APPLICATION FORM First name:......................... Middle name:......................... Last name:........................................ Date of birth (yyyy-mm-dd):....................... Gender:........................................... Marital status:................................... Total Amount Needed............................... Loan Duration.................................... Address:.......................................... City:............................................. State/province:................................... Zip/postal code:.................................. Country:.......................................... Phone:............................................ Fax:.............................................. Mobile/cellular:.................................. Monthly Income.................................... Occupation:....................................... Best Regard, Mr Fernadez Antonio.

  5. i will love to share my testimony to you all the people in world i got married to my husband about 2 year ago we start having problems at home like we stop sleeping on the same bed,fighting about little things he always comes home late at night,drinking too much and sleeping with other women out side i have never love any man in my life except him. he is the father of my child and i don't want to loose him because we have worked so hard together to become what we are and have today .few month ago he now decided to live me and the kid,being a single mother can be hard sometimes and so i have nobody to turn to and i was heart broken.i called my mom and explain every thing to her,my mother told me about DR.okoro how he helped her solve the problem between her and my dad i was surprise about it because they have been without each other for three and a half years and it was like a miracle how they came back to each other. i was directed to DR. okoro on his email:okorospell@gmail.com and explain everything to him,so he promise me not to worry that he will cast a spell and make things come back to how we where so much in love again and that it was another female spirit that was controlling my husband he told me that my problem will be solved within two days if i believe i said OK So he cast a spell for me and after two days my love came back asking me to forgive him i Am so happy now. so that why i decided to share my experience with every body that have such problem contact Dr okoro the great spell caster on his email addresses spellcasterforlove@outlook.com

ADVERTISEMENT