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$1.5 Million Awarded in Business Dispute

  • Published: December 24, 2012

The owner of testing lab, Universal Oral Fluid Laboratory LLC, William Hughes, was ordered to pay $1.5 million to Michelle McEldowney. Hughes and McEldowney were partners in the company until they had a disagreement in 2010, according to court records.

The panel ordered Hughes to give McEldowney $1.4 million in damages for breach of contract, along with another $110,000 for lost wages.

Pittsburgh attorney David Strassburger claimed that McEldowney is Hughes’ niece. McEldowney and Hughes created a partnership in 2009 to take advantage of the profitable saliva-testing field for medical diagnosis, according to the suit. Under the terms of the agreement, McEldowney’s task was to open the company, as well as take care of its financial records.

McEldowney had a feeling that Hughes was operating a phony corporation and was being financed by a silent partner who had a lifetime ban from submitting bills to Medicare following a conviction for fraud, according to court records. McEldowney claimed that her criticism of the “seed money” given by the investor resulted in her being fired by Hughes.

Additionally, she questioned Hughes’ practice of paying consulting fees to physicians who referred tests to the laboratories, which is against state and federal anti-kickback laws, court records show.

The pair signed an agreement in 2001, that Hughes would buy out McEldowney by reimbursing her $10 for every saliva test done by the company over the next five years. In exchange, McEldowney said she would give up any share of the business. However, Hughes did not honor the agreement, and that is the reason that the case ended up in court.

Business disputes can be costly when one party does not uphold his end of a contract. Business dispute cases do not always have to end up being solved in court. We are happy to offer a free initial consultation to discuss your business litigation needs and will do our best to resolve disputes in an informal fashion outside the courtroom.