Judge Sorts Out TV-Worthy Nepotism Suit

By ADAM KLASFELD

MANHATTAN (CN) - In a case he called "worthy of a made-for-television movie," a federal judge refused to immediately punish a Mercedes dealership for firing the mourning lover of its late executive, or find that her employment constituted a theft of company resources.

Arthur "Kitt" Watson founded his self-named dealership Watson Enterprises, Inc., or WEI, in 1983 and operated it under the trade name Mercedes-Benz of Greenwich, Conn.

Twelve years later, he sold a 25 percent share of the company to Ronald Pecunies, who became romantically involved with a woman named Emel Dilek in early 2004.

They moved in together in October 2005, and Pecunies got Dilek a management job at the dealership. She regularly got sharp raises, side benefits and recommendations from the company.

But Watson says he never knew exactly what Dilek did, other than travel the world with Pecunies.

In 2010, Watson fired her three months after Pecunies died, sparking a breach of contract lawsuit and counterclaims for unjust enrichment and civil theft.

Neither side came out fully ahead in U.S. District Judge J. Paul Oetken's 32-page order, which opens with a quote from one of Dilek's emails:

"As you will see, it's not all about the money in life: it's about health, love, respect, happiness and then at some point about the money, which is the only thing that will survive all of us," Dilek wrote.

The judge pointed out that Watson sued Dilek for alleged behavior he apparently condoned for five years.
A portion of the ruling excerpts Watson's deposition:
"Q: When did you first become aware that Ms. Dilek was, in your words, misusing the company credit card?
"A: Pretty near from the start.
"Q: So from around 2005?
"A: Yes."
Watson's position on this issue is consistent throughout his deposition, as excerpted in the order.
"Q: You agree with the statement that in the five years that Ms. Dilek was employed by Watson Enterprises she provided no benefit whatsoever to Watson Enterprises?
"A: I don't believe she did.
"Q: You continued to pay her during that time period?
"A: It was Ron's girlfriend.
"Q: Is that a yes?
"A: Yes."
Another pas de deux reads:
"Q: Did you ever put Ms. Dilek on written notice of her abuse of fringe benefits?
"A: No. She was going out with Ron."
Watson answered four other questions about whether he questioned Dilek's salary, raises and management style with the refrain, "Ron's girlfriend," and in another instance, described her work duties as, "She used to sleep with Ron."
Pecunies' death caused a shift in Watson's thinking, Oetken said.
"When asked at his deposition what his basis had been for terminating Dilek, Watson answered, '[t]hat I don't want my ex-partner's girlfriend working for me. Or fiancee, excuse me,'" the order states.
Another snippet of deposition transcript in a footnote of the order, however, revealed that Watson had no problem with nepotism when it came to his wife, Diane:
"Q: Did [Diane] receive any paychecks from Watson Enterprises?
"A: Yes, she did.
"Q: For doing what?
"A: Because she's my wife."
Oetken appeared to relish tossing the dealership's "absurd" counterclaims.
"Defendant's defeat is well deserved," he wrote. "These counterclaims are not just long shots; as a group, they border on the absurd.
"On its counterclaims as to Plaintiff's wages, defendant would have the Court hold that a corporation may spend years reaping benefits from a clearly derelict employee, terminate that employee, and then win repayment of all compensation it paid to the employee. This cannot be and is not the law. If it were, any number of businesses would suddenly have a ready defense to any economic downturn."
Dilek succeeded in persuading Oetken to declare her employment contract valid, but the judge wanted more evidence before he concluded that Pecunies had the authority to make it binding.
Oetken said he also needs more information on whether she was a "valuable" or "worthless" employee.
"This evidence is enough to raise a genuine issue of material fact as to whether Pecunies was acting in WEI's interests to retain a valuable employee or against WEI's interests and in his own or Dilek's interests to do well by his fiancée," Oetken wrote.
"The Court cannot conclude as a matter of law either that Dilek was a worthless employee whose retention would necessarily be adverse to WEI's interests or that Pecunies was, in fact, acting in the Company's interests. Accordingly, no party is entitled to summary judgment on this point."
Lawyers for either party did not immediately return phone calls requesting comment.

Source: Courthouse News Service.

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