Excerpt from the Dayton Business Journal
An attorney for Ron Wine, a former Wright State consultant who is suing the university for breach of payment, is urging the two sides to come together to settle the dispute.
Ken Ignozzi, of Dayton law firm Dyer Garofalo Mann & Schultz, told me he has requested that all university-related partners meet in the same forum to negotiate a "fair and reasonable settlement or trial in the case."
The request follows more than two years of discovery and depositions among Wright State and Wine, whose consulting group was under contract with the school to secure federal and state contracts for Wright State Applied Research Corp. (WSARC) and Wright State Research Institute from 2009 to 2016. Wine's lawsuit claims the university still owes him $4.5 million for his services through his company, Ron Wine Consulting Group (RWCG).
According to a lawsuit prepared by Ignozzi, Wine says he had an agreement with the university's top officers that he would be paid a performance-based contingency fee of 5 percent of all new research-related revenue brought in as a result of his efforts.
The lawsuit states that from 2009 to 2016, Wine's work led to the school landing $150 million in federal, state and private contracts. But Wine's attorney says the university stopped paying him after an investigation into the contract, even though it found "no evidence" of law violations. The lawsuit says the school paid more than $2 million for the work, but that $4.5 million is still owed.
WSU has denied there was a 5 percent performance-based fee associated with Wine’s work, and dismissed essentially every allegation from Wine. Wright State did not immediately respond to requests for comment Thursday, though a university spokesperson said previously they do not comment on pending litigation.
Ignozzi says the WSU board of trustees has refused to accept any financial responsibility in the matter or participate in negotiating a settlement to date. The WSU Board has cited "jurisdictional laws that may allow the university to delay the case and attempt to hide behind WSARC," according to Ignozzi.
Technically, a portion of the RWCG engagement was directed by WSU through an affiliate corporation, the Wright State Applied Research Corporation, a private entity. That specific contract paid RWCG on an hourly basis for only some of the work, Ignozzi says, and has a provision for binding arbitration to settle any contract disputes.
"However, during the RWCG engagement, WSU and WSARC were all the same people," Ignozzi stated. "Namely the WSARC board was comprised of nearly all WSU executives and WSU board members; all the board officers were WSU executives, all the staff were WSU employees and the WSARC and companion organization Wright State Research Institute all reported to the university through the president’s office and executive staff."
Ignozzi added that Wine's consulting group was paid through all three organizations based on the 5 percent compensation arrangement.
Depositions in the case, particularly the one from Ryan Fendley, who was directed to manage the RWCG compensation arrangement, show the WSU president, provost and senior executives established the 5 percent performance-based compensation system to incent RWCG to bring research and workforce development funding to WSU, its affiliates and partners.
In the deposition, Fendley, who no longer works at Wright State, confirmed Wine was initially paid a retainer, and then moved to the performance-based compensation. However, Fendley said the 5 percent performance bonus was not based on the ceiling of a contract, but was based on actual dollars that were received by Wright State.
Ohio Attorney General Mike DeWine, whose office has a special counsel defending Wright State as a state-funded institution, led investigations into the matter and cleared Wine of any wrongdoing. The matter is being adjudicated by the Ohio Court of Claims.
Despite the AG's Office clearing Wine of wrongdoing, an Inspector General report found $1.8 million of the $2.3 million Wine was paid by Wright Sate were "overpayments, unsupported payments, unauthorized payments or questionable payments." In February, Ignozzi called this report into question, saying the state office did not consider "critical information" before releasing the report, including "thousands of pages" produced by Wine and WSU, as well as depositions conducted by pertinent witnesses.
Further complicating matters is the funding Wine's consulting group secured for WSU went to all three entities, WSU, WSRI and WSARC. In addition, there were many interfund transfers and bookkeeping disagreements about those funds within the three organizations during that time.
