The founder of a Twin Cities online hockey academy has been ordered to pay $300,000 to a fellow Air Force veteran who invested nearly half of his retirement savings into a failing enterprise that was presented to him as thriving.
John Coy, a retired Air Force lieutenant colonel living in Oregon, sued Shawn Black and two other former business partners in 2015 over an online high school that offered intensive hockey training. Coy said he loaned No Limits Education and Athletic Development, Inc., $200,000 after meeting with his partners in Minnesota in 2013 and reviewing financial details that he said were false.
After six days of testimony, a federal jury in St. Paul on Monday found that Black, who founded the Minnesota-based Achiever Academy, committed fraud, breach of fiduciary duty and breach of contract by misleading Coy and two co-defendants, who were also each awarded additional damages.
“This has been a tough situation for John, and he is pleased to put it behind him,” said Mark Johnson, Coy’s Minneapolis attorney.
Black’s attorney could not be reached for comment.
Jurors awarded Coy $200,000 in damages related to his investment and an additional $100,000 in punitive damages owed by Black.
Coy invested in No Limits after reviewing financial reports that projected the company to be “aggressively growing.” Coy believed his money would help expand the company’s online education service and said he was falsely told that No Limits secured a contract to bring 300 students from Ukraine to take courses and play hockey at facilities owned by No Limits. Coy said Black also falsely identified additional investors.
Yet by January 2014, No Limits sold “substantially all of its assets” to a third party without Coy’s knowledge. The new agreement made no provision for the repayment of Coy’s loan and Coy did not receive any of the payments Black promised, according to court filings. Johnson said Black opened another hockey school in Texas months after leaving Minnesota. That school, Texas Champions Academy, closed in January, according to state records.
Black, despite participating in the litigation for some months, surprised attorneys by not showing for the trial last week. Magistrate Judge Becky Thorson instructed jurors that they could take into account his failure to appear and “may decide that the testimony or evidence would have been unfavorable.”
In filings before trial, Black’s attorney said he planned to show that his client was forced out of his role at No Limits before its sale, and that he accepted a $1 buyout contingent on co-defendants Scott Branovan and Craig Woodcroft repaying Coy’s investment.
But Woodcroft, the school’s head hockey coach, successfully filed a cross-claim that Black and Branovan committed breaches of fiduciary duty against him. The jury awarded $250,000 in damages to Woodcroft.
Dennis Johnson, Branovan’s attorney, said he would soon begin discussions with Woodcroft and his attorney regarding the monetary judgment. Branovan is also owed $35,000 in damages by Black stemming from the breach of fiduciary duty.