United States District Court, E.D. Pennsylvania
RANDALL R. BINVERSIE, et al.
DOMINICK DONOFRIO, et al.
matter is now before me on Plaintiffs' petition for
punitive damages. The question is whether they should be
awarded and if so, how much. I will explain in this memo my
a brief review of the facts.
sake of simplicity, I shall refer to the plaintiffs simply as
Binversie and the defendants as Donofrio. And I will
summarize rather than particularize. Starting in late January
of 2013, Binversie and Donofrio entered into a written
agreement under the terms of which Donofrio's company,
Windstar, would act as Binversie's agent in the search
for a business investment. Over the next sixteen months,
Binversie paid Donofrio $570, 400 in consulting fees. In
early 2014, Donofrio told Binversie that a Philadelphia
retail oil business, the Tioga Fuel Company and its related
holdings, could be purchased for $1, 850, 567.
was a lie - the actual price was $750, 567.
told Binversie that to avoid the need to pay a broker's
commission, he would have his company, Windstar, make the
purchase from the Tioga owners. Windstar would then convey
the Tioga holdings to Binversie. Actually, Donofrio's
purpose was not to avoid a broker's commission but to
conceal from Binversie the amount paid to the Tioga owners.
It worked. Windstar paid $750, 567 and then turned around and
sold to Binversie for $2, 050, 567, a secret markup of $1,
300, 000. As part of his payment to Windstar, Binversie
executed a mortgage for $1, 250, 000. Although this mortgage
has been cancelled, Binversie paid Windstar $136, 262 prior
to the cancellation.
the time of the negotiations with the Tioga owners, Binversie
paid Donofrio $246, 850 to act as his agent and in his best
interest. Binversie also paid Donofrio's attorney $39,
287 for services relating to the Tioga transaction. In
addition, while Donofrio controlled Tioga's bank account,
he paid himself $87, 625.
summary, while purporting to act as Binversie's agent,
Donofrio purchased a business and then resold it to Binversie
having made a secret markup of more than a million dollars.
their relationship, Binversie paid Donofrio consulting,
agency, and attorney's fees, totaling $1, 042, 399, and
Donofrio took $87, 625 from Tioga.
brought suit against Donofrio. Although Donofrio had ample
notice of the suit and ample time to respond, there was no
defense and eventually default judgment was entered against
Donofrio voiding the $1, 250, 000 promissory note, security
agreement and mortgage from Tioga Fuel Company to Windstar
Financial Services. Donofrio has not responded to the Court
in spite of being copied on the order of default judgment as
well as briefing and oral argument on the issue of punitive
damages. With those facts in mind, I make the following
First and foremost there was fraud, evil as Eve's apple
and as neatly hidden and accomplished as Houdini's best.
Well-planned, well-executed, and deliberate, it involved
large sums of money, before, after, and during the main
Donofrio was Binversie's agent and therefore owed
Binversie the highest duty of care and loyalty. As
Binversie's agent, Donofrio was obligated to put
Binversie's interests above his own.
fact that Donofrio was Binversie's fiduciary makes
Donofrio's multi-frauds that much more egregious.
Although I do not know what Donofrio did during the period
from late January 2013 to May 2014 in seeking an investment
opportunity for Binversie, I do know that Donofrio made no
suitable finding and for his unsuccessful effort was paid
$570, 400, an average of more than $35, 000 a month, 5.
Although I do not know what was involved in the negotiations
with Tioga, I do know that Binversie paid Donofrio $246, 450
for his ...