THE VIRGINIAN-PILOT
Copyright (c) 1995, Landmark Communications, Inc.
DATE: Monday, October 2, 1995 TAG: 9510020031
SECTION: LOCAL PAGE: B1 EDITION: FINAL
SOURCE: BY MARC DAVIS, STAFF WRITER
DATELINE: NORFOLK LENGTH: Long : 178 lines
When John P. Kuchta Jr. was fired this summer as vice president of the area's biggest tugboat company, he didn't just empty his desk and quietly leave.
Instead, Kuchta fired off a $6 million lawsuit against Moran Mid-Atlantic, claiming he was fired for refusing to comply with illegal acts in Moran's effort to take over the state-run ferry at Jamestown.
According to the lawsuit, Kuchta says company President Edmond J. Moran Jr. suggested bribing state officials to get the government contract. He also says a ferry official offered to help Moran get the contract in return for a ``finder's fee'' and a promise that he could keep his job.
Kuchta's lawyer, Thomas F. Hennessy, filed the lawsuit Aug. 23 in Norfolk Circuit Court.
``I was flabbergasted,'' Kuchta said, recalling how he heard of the ferry matter. ``I couldn't imagine why we would be pursuing this kind of work in that sort of manner. . . This didn't pass the smell test, in no way, shape or form.''
Now, Moran Mid-Atlantic has struck back with a $1 million lawsuit against Kuchta, painting him as a disgruntled former employee who tried to sabotage the company.
The countersuit, filed Sept. 22, accuses Kuchta of disloyal acts, misappropriating trade secrets and conspiring to injure the company.
Specifically, Moran said Kuchta poured salt water into a company computer to destroy its hard disk, stole confidential documents, and set up his own private company to compete with Moran while still working at Moran.
``There'd been bad blood between Kuchta and Ned Moran for some time,'' said Moran's attorney, William E. Rachels Jr. Kuchta's lawsuit, he said, is an act of revenge by a man who wants to embarrass his former employer.
In some ways, these tit-for-tat lawsuits are typical of dozens of lawsuits filed every year. A worker says he was wrongfully fired. A boss says the worker ripped off the company.
But in other ways, the lawsuits are extraordinary.
Kuchta's suit seeks huge damages and raises the possibility of dishonesty in the state's effort to privatize the ferry service. Moran's countersuit alleges outrageous acts of employee vandalism and dishonesty.
Who is telling the truth?
The answers will come as the two lawsuits work their way through Norfolk Circuit Court. A judge has said she will probably combine the lawsuits for one trial.
Kuchta, 44, of Virginia Beach, was vice president and general manager of Moran Mid-Atlantic. He ran the company's Norfolk operation, with 10 tugboats and 75 employees.
In his lawsuit, Kuchta said the operations manager of the Jamestown ferry, Capt. Ray Schaffer, approached the company in April with a proposal: I will help you get the ferry contract if you pay me a ``finder's fee'' or ``cash bonus'' and keep me on my job, Schaffer said.
Kuchta said Edmond Moran rejected the ``finder's fee'' but agreed to let the ferry captain keep his job, if the company won the ferry contract. This violated state laws on bribery and conflict-of-interest, the lawsuit says.
There is no criminal investigation of the matter.
State officials say the idea of privatizing the ferry, which crosses the James River between Jamestown and Surry County, came from a Florida company in January. The company proposed taking over the ferry, abolishing the $4 toll and saving the state money.
The Transportation Department said it might be interested and asked for a formal proposal. None has been received.
``We're certainly going to consider it,'' said department spokesman Don Jones, ``but it's certainly not a hot-ticket item.''
Three months later, in April, Moran Mid-Atlantic threw its hat into the ring with a letter that said it, too, might want to run the ferry. So far, it has not submitted a formal proposal, either.
In an interview last week, Schaffer, the ferry's operations manager, acknowledged that he called Moran Mid-Atlantic in April and suggested that the company make the bid.
``I knew they had the expertise and the maintenance people,'' said Schaffer, 62, who once worked for Moran.
In response, Schaffer said, a Moran official asked, ``What do you want?''
``I said, `If you get the contract, I want a finder's fee.' I didn't know if that was legal,'' Schaffer recalled.
A few days later, Schaffer said, the Moran official called back and said the finder's fee would be illegal. ``I said, `Well, I certainly don't want to do anything illegal,' '' Schaffer said. ``When they told me it was illegal, it was completely dropped.''
Schaffer said he told Moran he was still interested in keeping his job if Moran took over the ferry.
Kuchta said he objected to this arrangement, but Edmond Moran became angry and said the deal was OK with the company's lawyers. According to Kuchta, Moran said that while the ferry captain ``was clearly doing something unethical,'' the company was not.
Rachels, the Moran attorney, said the company did nothing wrong. ``Whatever happened, the company did not pursue anything that was improper,'' he said.
Schaffer said he did nothing wrong, either, because he is just a low-level state employee.
``I cannot help (Moran) get that contract,'' Schaffer said. ``It's nowhere near in my power. I have nothing to do with any contract.''
Kuchta disagrees: ``He would be crucial to anyone who felt like pursuing that business. He would be key.''
Kuchta's lawsuit makes a second allegation about the ferry matter. It says that Edmond Moran asked a lawyer in May if his law firm had contacts in Richmond who could ``help Moran in its quest for the ferry contract, and I don't just mean for information.''
Kuchta's suit says that the attorney, Mark T. Coberly of Norfolk, interpreted the remark to mean that Moran was ``prepared to bribe someone to get the contract.''
Rachels said the charge is ridiculous. He said Coberly clearly understood Moran to be asking if he had any ``political influence'' in Richmond, not suggesting a bribe. ``That's just a bunch of junk,'' Rachels said.
Coberly declined to comment.
Finally, there is the matter of a cryptic notation in a lawyer's bill that was sent to Moran in June, for work done on the ferry matter.
The bill is for $2,170. This represents 18 hours of work by five lawyers at Vandeventer, Black, Meredith & Martin. The bill includes a notation that part of the work was ``legal research regarding bribery issues.''
Hennessy, Kuchta's lawyer, called this ``an unfortunate thing to put in a bill.''
Rachels, however, said that while the bill may have been poorly worded, the legal work was simply routine research to prepare Moran's conversations with the ferry captain on the possible bid and avoid improprieties.
The lawyer bills could prove crucial to Kuchta's case. In his lawsuit, he says he was fired for refusing to pay them.
``The last thing I want to do,'' Kuchta said, ``is put myself in the way of some criminal act. The way we were doing it was crazy.''
Rachels, the Moran attorney, said Kuchta's entire case is overblown.
``The allegations never get to the point where anything ever happened wrong,'' Rachels said. ``It never came to fruition. He's not saying anyone did get bribed.''
Moran Mid-Atlantic, in its countersuit, offers a very different version of events.
The company's lawsuit paints Kuchta as a disgruntled employee who tried in various ways to hurt the business and steal secrets.
According to the lawsuit, the company let Kuchta return to the office on Aug. 16, two days after he was fired, to remove his personal belongings.
At one point, the lawsuit says, an employee watched as Kuchta poured a cup of salt water into the disk drive of his company computer. At another point, the same employee asked Kuchta to open his briefcase to see if he was taking confidential papers, but Kuchta refused.
Suspicious that Kuchta was destroying records, Moran hired an expert to restore his computer files. ``Moran Mid-Atlantic's worst fears were confirmed,'' the lawsuit states.
Among the files found were two letters Kuchta had written in December and January, soliciting job interviews with other companies, offering to provide ``financial performance records,'' according to the lawsuit. The company claims those records are confidential.
Moran says it also found Kuchta had set up his own company on the side and was secretly competing with Moran for contracts.
The company has filed in court two letters that Kuchta allegedly wrote in February, soliciting work for his own private company while Moran itself allegedly was trying to win the same work from the same firm.
Moran says it also has telephone and fax records showing that Kuchta was talking with a competing tug company when there was no business reason to do so.
``What else he's done, we're still looking for,'' said Rachels, Moran's attorney.
Kuchta's lawyer Hennessy, however, says his client took no confidential papers from the company. He said the job letters were simply that - letters seeking employment, with no intent to pass on confidential information.
He also denied that Kuchta poured salt water into a company computer. ``This was an emotional time for him and he threw a glass of water at the computer,'' Hennessy said.
Hennessy also said Kuchta was not competing with his own company, but had solicited business only after he knew Moran was out of the running for that particular job.
On Tuesday, Moran asked the court to ban Kuchta from divulging company financial records, and Judge Lydia Taylor agreed.
Finally, Moran's lawyers say Kuchta was fired for not supporting the company's effort to suppress worker unionization, not because of the ferry matter.
``He was working contrary to the efforts of the company,'' Rachels said. ``He was regarded as basically disloyal.''
To Kuchta's lawyer, the company's countersuit against Kuchta is a red herring to divert attention from the ferry issue.
``The allegations that Mr. Kuchta brought against Moran are pretty explosive and it's got them in an uproar,'' Hennessy said. ``I'm totally unconcerned about their allegations (against Kuchta) except that they confuse the issue somewhat.'' by CNB