DiPasquale & Summers secures $3 million dollar jury verdict against former owner of waikikibeachrentals.com

On Friday, May 13, 2022, a Federal Jury returned a $3 million dollar verdict against the former owner of waikikibeachrentals.com for breach of contract, fraud and civil conversion (theft), awarding the Plaintiff over $1.5 million dollars in fraud and punitive damages. James D. DiPasquale of DiPasquale & Summers, LLP, represented the Plaintiff.

In the case of Daniel Oliver v. Scott Merlo and WOFR LLC (Federal Court, District of Hawaii, Case No. 1:20-cv-00145 WRP), in mid-2008, the Defendant, Scott Merlo, was approached by various owners of rental condominium units at the Ilikai Hotel for advice and assistance in saving their units from potential foreclosure. To help the unit owners, Merlo conceptualized the idea of an online vacation rental website for various condominium units at the Ilikai Hotel, and he engaged Plaintiff, Daniel Oliver, to design, program and maintain the website in exchange for 10% of the Company’s net profit, including the proceeds from any eventual sale of the website.

Between May 2014 through October 2019 (when the assets of WOFR LLC were ultimately sold) Defendants underpaid the Plaintiff an amount just shy of $800,000. It was initially believed that Defendants accomplished this by claiming inaccurate and outright fraudulent deductions to reduce the “net profit” of WOFR LLC and correspondingly, Plaintiff’s share of net profits.  However, Mr. Merlo testified during the trial that he employed no such tactics.  Rather, he simply paid Mr. Oliver what he [Mr. Merlo] felt he [Mr. Oliver] was worth.  No machinations, no consideration of their agreement, nothing.  He merely paid Mr. Oliver what he felt he was worth, and then allowed the Plaintiff to believe that honest calculations were being performed.           

Defendant Merlo argued throughout trial that no actual written contract existed between the parties, but his testImony was belied by the complete lack of evidence, and in reaching their verdict, the jury (after trial) disclosed that it was Mr. Merlo’s callus disregard for Mr. Oliver that prompted their decision to issue the large punitive damages award.

The Defendants sold the website in 2019 for $5,500,000.