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OREM — An Alabama court has awarded a $1 million civil judgment against Orem Mayor David Young and other defendants, concluding that a man was defrauded of an investment in a real estate venture.

Young, his son Shawn D. Young and Torch13 LLC, a company founded by David Young, were sued on allegations that they failed to repay transactions described as loans intended to fuel the defendants’ house-flipping business in Alabama.

The plaintiff, Ross Gagliano, loaned $285,000 in several installments in 2017 and 2018, of which $239,000 remains unpaid, said Jefferson County, Alabama, Circuit Court Judge Pat Ballard in a May 23, 2022, ruling after a two-day trial.

With interest, Gagliano is owed $339,235 in compensatory damages, the judge said. Further, “because of the clear and convincing evidence of wantonness and fraud,” the defendants must pay Gagliano $678,471 in punitive damages, for a total of $1,017,706.

The judge blasted the Youngs in his ruling, saying they were “extremely lacking in credibility” and that they were “frequently very evasive in their answers to even the simplest of questions.” He said both Youngs started their testimony “by admitting that they had deceived the court regarding their vaccination status” at the start of the trial.

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In an interview Thursday, David Young strongly objected to the judgment and denied all allegations of fraud against him. He said his son’s dealings with Gagliano were not connected to Torch13 or him.

“He was trying to take what we had built and peel off a part of that for himself,” David Young said of his son.

Young said he “didn’t even know” about Gagliano’s apparent initial demands to Shawn Young to pay back the money. “Ross calls me up, says can you pay it back,” David Young said. “I said I don’t know anything about this and I’m not in the habit of paying my son’s bills. Next thing I know I got this lawsuit served.”

He said the lawsuit was “just a big money grab.” Young and Gagliano’s attorney, G. Daniel Evans of Birmingham, both confirmed that the case is now on appeal to the Alabama Supreme Court.

In an interview, Evans described the trial and the determination of the compensatory and punitive damages against the Youngs as a thorough process that documented “the reprehensibility of their actions.” He said that “none of it is at all flattering.”

Evans said none of the judgment has been paid or a bond posted to promise payment. Alabama court records show writs of garnishment have been issued against the Youngs.

In his order of judgment, Ballard laid out his determination of David Young’s liability in the allegations. He said that while David Young characterized his son as an independent contractor, the extensive use of Torch13 funds for Shawn Young’s personal expenditures “shows that, if anything,” the two “acted like partners in the business.”

Ballard said all of the loans Gagliano made were to Torch13, not Shawn Young, and that this was confirmed when David Young, in 2019, wired Gagliano $50,000 as partial payment of the 2017 loans.

The judge found that David Young had a duty to inform Gagliano that Shawn Young “had misappropriated and gambled away the loan proceeds.”

In addition, the judge wrote that David Young, knowing of his son’s gambling addiction and “resulting incompetence, wantonly and with conscious and reckless disregard for the rights of others,” sent Shawn Young to Alabama to operate the house-flipping venture, clothed with the authority of Torch13.

After the initial $85,000 loan, and before Gagliano made more loans totaling $200,000, David Young “fraudulently suppressed” from Gagliano the knowledge that his son had a severe gambling addiction and was financially incompetent, the judge wrote. Shawn Young fraudulently induced Gagliano to make the loans that were supposed to generate 12% interest per annum, the judge added.

But David Young said his son and Gagliano were friends, and a court deposition filed by the Youngs’ trial lawyer said Gagliano was aware that Shawn Young gambled. David Young said there were no written agreements for the transactions. The judge, however, said the loans were valid verbal agreements and that promissory notes that Shawn Young drafted well after the loans were made were invalid.

David Young said his son went through an “ugly” divorce that “turned his life upside down.” He said Shawn Young told Gagliano “he was planning on making good on it once he got his life back in order.”

David Young said the lawsuit was “completely frivolous” and that regarding the dealings with Gagliano, “I had nothing to do with it.”

“This is a fantasy, the most crazy homer situation I’ve ever seen in my life,” David Young said. He said the judge took a case of $140,000 owed “and magically expanded it to a million-dollar judgment.”

He also complained that Gagliano’s “very aggressive law firm is harassing us to collect this bogus, fantasy judgment.”

David Young, who operates an investments company in Utah County, said he has run numerous businesses. “I’ve never been sued in my life,” he said.

The mayor was asked if news of the civil case would affect him politically. “Who knows? I’m not a politician,” he said. “I ran to just specifically make Orem a better place to live and return to a lot of our family values here.”

Efforts to contact Shawn Young were not immediately successful. Matthew Hornsby, the Youngs’ trial attorney in Birmingham, declined to comment on the civil case. Jay Porter, an attorney representing the Youngs in the supreme court appeal, did not return a phone call.

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