As with many such lawsuits, how the case is viewed depends on the perspective. Although Young lost the original case and the appeal to the Alabama Supreme Court, he believes that it wasn’t a fair outcome and said a proper appeal to the supreme court was not successful because there was no transcript or recording of the original trial proceedings. 

Young, however, did receive a favorable settlement in a malpractice case against the attorney that represented him.

Here is a look at the case as well as Young’s point of view on the issue:

The complaint

In 2020, a lawsuit was filed in an Alabama circuit court by a Birmingham man, Ross Gagliano, against Young, his company Torch 13 and his son Shawn Young seeking damages for an unpaid loan Gagliano claimed he had given to Shawn Young to help finance Torch 13, the Alabama based house-flipping operation he and David Young were sharing profits on.

Gagliano said Shawn and David Young met him in person to persuade him to provide funding and showed him several homes their company owned as part of the operation. Gagliano claimed that Shawn Young assured him the loans would be low risk.

The complaint states that after Shawn Young agreed to sign a promissory note for each loan and the terms of the loans were approved by David Young, Gagliano provided loans totaling $200,000.

The complaint also states that aside from a partial interest payment made by David Young, the loan was unpaid and outstanding. It accused the Youngs of fraud, claiming that “statements and affirmations were false and … made to induce him to extend the requested loans to these defendants.”

In their official response to the complaint, David and Shawn Young denied the claims.

David Young told the Daily Herald he had met Gagliano once at Shawn Young’s house in Alabama but did not have a relationship with him and was unaware of any loan until Gagliano called him to say Shawn Young owed him $140,000.

“If he called me up and said, ‘Hey, do you think I should do this with Shawn?’ … I would have told him no, absolutely not,” David Young said. “Shawn’s working for me. He’s running Torch 13. I don’t want him off running side deals like this.”

David Young also denied the existence of any fraud, stating it was a civil disagreement between his son and Gagliano that he was brought into because he had “deep pockets.” 

“I’m 69 years old. I’ve never gotten a private loan on any business deal ever,” he added. “We flipped 60 houses through that Torch 13 entity. I funded that entire thing. It wasn’t like I was going door to door looking for loans from people.”

The judge’s order

The judge found the Youngs “extremely lacking in credibility” and said they were often “very evasive in their answers to even the simplest questions.”

He determined from testimony that Torch 13 was set up to be a house-flipping business operated by Shawn Young in Alabama, and that while David Young was in charge of authorizing major expenditures, he had authorized Shawn Young to sign closing documents on behalf of the LLC.

The judge determined that Shawn and David Young acted as partners in the business, despite David Young’s argument that his son was an “independent contractor” and he was the sole member of Torch 13.

Because of this, the judge found that loans made to Shawn Young were, in fact, made to Torch 13, stating that David Young confirmed this when he wired $50,000 to Gagliano from Torch 13 in 2018 as partial repayment. The judge determined that because David Young had wired money to Gagliano and knew of the loans, David Young had the duty to inform Gagliano that Shawn Young had “misappropriated and gambled away the loan proceeds.”

In his order, the judge said David Young “wantonly and with conscious and reckless disregard for the rights of others” did the following:

• Sent Shawn Young to Alabama for the “house-flipping” venture with authority to engage in financial activities.
• Failed to supervise Shawn Young’s activities and prevent him from soliciting money “under the guise they would be loans to Torch 13” despite knowing Shawn Young’s propensity to misuse funds.
• Failed to warn Gagliano against loaning money to Shawn Young.
• Fraudulently suppressed and failed to disclose to Gagliano that Shawn Young had a severe gambling addiction and was financially incompetent.

The judge added that Shawn Young engaged in “fraudulent misrepresentation” when he induced Gagliano to loan him money and that David Young was equally liable because he was acting as Shawn Young’s “de facto partner.”

The judge determined total compensatory damages were $339,235.88. Then, because of “wantonness and fraud” by the Youngs, the judge added double punitive damages to the amount of $678,417, for a total of $1,017,706.88.

Asked about the wiring of $50,000 to Shawn Young, David Young told the Daily Herald he split profits with Shawn for the business 50-50 but did not give him the money directly because of his gambling issues. Instead, David Young said he would hold it, then allocate it to him for his expenses.

David Young said Shawn Young requested $50,000 to pay back Gagliano, and that David Young sent the money from Torch 13 to Gagliano.

“It was Shawn’s money that we were controlling, and if he had a request of where he wanted his money to go, then we would just meet that request,” David Young said.

David Young also dismissed the notion that he did anything with a reckless disregard for others.

“It’s a civil disagreement between two parties,” David Young said. “And it was a loan. And the whole thing about fraud, if you walk through the facts of the case, that’s a made-up word. There was no fraud. It’s like two people, my son and the guy agreed to do a loan together, and then my son paid him for a while, and then he wasn’t able to pay him. So I guess every time someone can’t pay a loan back, that’s fraud? That doesn’t make any sense.

“It felt like the attorney for the other side and the judge were best friends, and they just did whatever they wanted to do. … They took this $140,000, which was the real issue, and made it a million dollar judgment against me.”

The Youngs appealed the decision to the Alabama Supreme Court, but the court affirmed the lower court’s decision in 2023 with no opinion.

“The case has been over and done, and Mr. Gagliano has been paid and satisfied,” the attorney who represented Gagliano told the Daily Herald.

The appeal and malpractice suit

David Young said the new attorneys he worked with told him it would be a “super heavy lift” to appeal the decision without the trial being recorded, but they said it’s worth submitting to the Alabama Supreme Court because it was “egregious.”

The judge’s office told the Daily Herald they could not find any information of a court recorder assigned to the case but said that it is always at the attorney’s discretion to request one.

“No transcript, no record. That should be foundational to a trial, right?” David Young said. “Because if anyone makes a mistake, the general idea is the judge can go through and he can do his best, but you always have to have a right to question it or appeal it. That’s the way the system is built. But the second you take the transcript out of it or the recording, now all of a sudden there’s no record. So now the only thing you have is whatever the judge decides.”

David Young filed a malpractice suit against his attorney in the Gagliano case in Jefferson County, Alabama, in May 2023, accusing him of failing to comply with the Alabama Legal Services Liability Act for the following reasons:

• He failed to make a jury demand.
• He asserted to the Young party that the claims made against them were “frivolous.”
• He failed to attempt to settle the case after the court denied cross-motions for summary judgment.
• He failed to request a court reporter attend trial and transcribe the record, which would “undoubtedly doom Plaintiffs’ chances on appeal of overturning the judgment reached in the Underlying Case in whole or in part.”

In December 2024 the case was settled and jointly dismissed with prejudice.

David Young said the case was resolved in his favor with a “very large financial settlement.”

“To be able to get that kind of judgment against an attorney in Alabama, just to be able to do that speaks volumes to me, because it really shows the whole process didn’t work,” he said. “And so if I’m going to be compensated for what went on in that process with my attorney, it just shows there were some major problems with that entire trial, but no one will ever know, because there’s no transcript.”

David Young’s attorney from the first lawsuit declined to comment.

David Young also filed a lawsuit against Gagliano in Provo District Court, which he said was against Gagliano’s team for colluding in the Alabama suit.

The case was dismissed this year.

“After all of that was done and he paid my client, David Young sued Mr. Gagliano out there in small claims court,” the attorney who represented Gagliano said. “We had to go out there, hire an attorney to defend that, which we won, and he lost again.”

David Young said they chose to stop pursuing the case after getting “some resolution on some things.”