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An arbitrator has awarded a former MonaVie top distributor $1.2 million, ruling that the Utah-based multilevel marketer of nutritional fruit juice had breached its contract when it locked out Joseph Licciardi.
MonaVie is appealing the decision.
The arbitration award was posted as part of a lawsuit in which MonaVie and Licciardi have been suing each other over his sudden dismissal in 2012 after he informed the South Jordan company that he planned to start working with another multi-level marketing (MLM) company.
MonaVie had claimed Licciardi breached its distributor agreement by soliciting members of his MonaVie downline to move over to his new company called Momentis. He, in turn, sued MonaVie, alleging he was improperly dismissed and that working for more than one MLM is allowed under the company's rules.
The competing claims were sent to arbitration by retired Utah District Court Judge Robert Hilder.
Hilder held that MonaVie breached the distributor agreement in hastily terminating Licciardi's distributorship and not allowing him any time to "cure" any possible violations.
"MV's breach of the express terms of the contract is compounded by its breach of the implied covenant of good faith and fair dealing," Hilder wrote.
As a result, the former judge said Licciardi was owed damages based on the fair market value of his distributorship.
Hilder found that Licciardi's average income from 2010 and 2011, minus expenses, was $405,000 and then multiplied that by three to come up with the award of $1.2 million for his loss.
Licciardi did not return an email seeking comment.
MonaVie spokesman Eric Eames issued a statement that says: "While we respect the arbitrator's authority, we believe the arbitration award was entered in error and have already noticed our right to appeal this award. We have full confidence that upon review the award will be reversed."
The company also is now facing another lawsuit over its employee stock ownership program.
Bankers Trust Co. of South Dakota, which administers the retirement program, says MonaVie is not paying the bank's legal bill as required under their contracts.
Those legal bills result from an investigation of the program by the U.S. Labor Department, which the complaint describes as routine, and a proposed class action lawsuit.
The latter lawsuit alleges MonaVie, with participation of Bankers Trust, greatly overvalued its shares when it sold them to the employee stock ownership plan (ESOP), and that they soon lost most of their value, leaving employees out of promised retirement rewards.
Besides it legal bills, Banker Trust wants a declaration that MonaVie is liable for any damages its assessed as part of the ESOP lawsuit.