After a two-year lawsuit, Muskegon County, Mich., must pay $230K to former contractor Ryan Leestma, who sued because the county shortchanged his company, Information Systems Intelligence of Grand Rapids.
(TNS) — Muskegon County, Mich., has been ordered to pay at least $230,000 in damages to a former contractor that the county claimed had engaged in a “civil conspiracy” with a former county official.
After a two-year legal battle, Ingham County Circuit Court Judge Joyce Draganchuk recently granted summary disposition in favor of Information Systems Intelligence, or ISI, of Grand Rapids, headed by president and businessman Ryan Leestma.
Leestma sued the county in February 2016, claiming that the county breached a contract and didn’t pay its bills.
Leestma’s lawsuit sought to recover from Muskegon County:
On Dec. 19, Draganchuck ordered the county to immediately pay Leestma for unpaid invoices plus a yet-to-be-determined sum for additional claims.
The county filed a counter-suit in April 2016 saying Leestma owed it $570,716 and possibly more for contract overages, duplicate payments, delivery of goods and work which the county alleged didn’t occur.
The county also sued former top county financial administrator Heath Kaplan, alleging that he breached his administrative responsibilities and engaged in a “civil conspiracy” with Leestma’s ISI group before leaving his post in 2014.
Leestma gave Kaplan $20,000 in cash, a personal loan of $27,950 and financial assistance with a mortgage, the county’s lawsuit claims.
Leetsma denied claims that he had given cash to Kaplan or help with a mortgage and acknowledged that the loan was paid off. The businessman also said the accusations were an attempt by the county to pull the focus off of its unpaid bills and “damages” to Information Systems Intelligence.
Draganchuk’s ruling cleared Leestma’s company of any wrongdoing and essentially threw out both of the county’s claims against ISI. The civil conspiracy claims lodged against Kaplan are still pending, but a hearing on a motion to dismiss the counter-suit is scheduled for Jan. 9.
Leestma, who shuttered ISI in 2016, said the ruling was an important step in clearing his name.
“At the end of the day, I did nothing wrong. I did my job. Everything the county accused me of doing was false — I was being fair and accurate in my dealings with them,” Leestma said in a prepared statement released on Thursday, Dec. 27. “In some ways, this is too little too late. It forced me to go into a different line of business, but I would (have) far preferred to have had ISI back without all the trauma and stress.
“Muskegon County ruined my good name and business reputation.”
Leestma began working for Muskegon County in 2010 after its auditors found flaws in the county IT system. Leestma and ISI secured an upgrade project to provide the county with a new server room and firewall protection.
A second contract was secured to replace outdated computers, which ultimately saved the county money. Leestma said it took two years to migrate data to the new system, which won the county a national IT award.
In 2013, ISI was selected for a five-year IT service management agreement with the county to provide ongoing network support.
According to a transcript of a final hearing held on Dec. 19, the county’s attorney, Doug Hughes of Williams Hughes PLLC, argued that ISI breached that 2013 contract with the county by billing $74,000 a month for its services, which was in excess of the contracted $66,000 a month fee.
However, county administrators did admit that ISI managers began working extra days at the request of the county. Those extra hours were given verbal approval by Kaplan and the heads of Muskegon County’s purchasing and accounting departments, according to court documents.
Since the contract included language about additional charges for extra work, the supposedly fraudulent charges didn’t breach the contract, Draganchuk said at the Dec. 19 hearing. She also said the county failed to provide enough evidence of fraud other than ISI’s attempts to bill the county twice, which the county admitted could have been made in error.
As to the alleged “conspiracy” between Leestma and Kaplan, Draganchuk said that the county failed to produce sufficient evidence that a real conflict actually existed.
Draganchuk said the pair should have disclosed their outside dealings, but they were not legally required to do so. She also said their concealment of their past dealings hardly amounted to a concerted effort to profit in a conspiracy against the county.
“The county makes a lot about the relationship between Mr. Kaplan and Mr. Leestma," she said. "It’s not only a financial relationship but a friendship and sort of a ‘You scratch my back, I’ll scratch yours’ kind of relationship it would appear ... There’s no showing of fraudulent billing or fraudulent anything under the contract. And therefore, there’s no showing of conspiracy to commit any kind of a fraud … there may have been a perception of pay-to-play, but in the end, there actually, and now we know after two years of discovery, was no pay-to-play.”
©2018 Muskegon Chronicle, Mich. Distributed by Tribune Content Agency, LLC.