On May 28, 1999, Dr. Allan Wachter and two of his family-owned companies filed a lawsuit in Phoenix, Arizona against, among others, John Lezdey, a patent lawyer, and both of Mr. Lezdey's sons, Darren and Jarett. Dr. Wachter is a Board Certified Internist and Allergist with additional training in molecular biology, and he is a leading authority on the clinical use of certain drugs known as "protease inhibitors" for dermatological indications. In addition to operating his own allergy clinic, Dr. Wachter formerly served as the Senior Medical Advisor for Arriva Pharmaceuticals, Inc., a privately held bio-pharmaceutical company focused on the development of recombinant protease inhibitors for the treatment of persons suffering from respiratory diseases, including children and other patients diagnosed with hereditary emphysema.

Together with John Lezdey, Dr. Wachter is the co-inventor of fifteen issued U.S. Patents on the treatment of pulmonary and dermatological diseases with alpha 1-antitrypsin and other protease inhibitors. Dr. Wachter and Mr. Lezdey formed two companies that were owned and controlled equally by the Wachter and Lezdey families -- Sonoran Desert Chemicals L.L.C. and Protease Sciences, Inc. Ownership of the patents was transferred to Sonoran Desert Chemicals, which appointed Protease Sciences as its agent to further develop and market the patented drugs and related health care products. Protease later entered into an exclusive License Agreement with Arriva Pharmaceuticals (then known as "AlphaOne" Pharmaceuticals) to use the inventions described in the patents in certain fields.

In his lawsuit, Dr. Wachter alleged that John Lezdey, with the assistance of his sons, committed a number of intentional breaches of fiduciary duty by (i) seeking to disrupt the licensing arrangements between Protease Sciences and Arriva Pharmaceuticals, and (ii) attempting to usurp control over Protease Sciences and Sonoran Desert Chemicals by, among other things, fabricating corporate records and other documents which falsely indicated that Dr. Wachter had been removed and/or resigned from his management positions with both companies. Unfortunately, the ensuing litigation between Dr. Wachter and the Lezdeys became unduly protracted and contentious, and resulted in a number of inaccurate accusations and reports, some of which have found their way onto the Internet. Because this litigation has, to some extent, thus become a matter of public interest, Dr. Wachter has established this web site to post certain of the key rulings that have been made by the Arizona Superior Court 2nd Court of Appeals. All of these rulings have been scanned, without alteration, from the actual public records of the Court, and they are being presented here without editorial comment, so that those who wish to learn the unvarnished truth about this case -- as determined by the judicial system -- may do so.

The first such ruling is the Preliminary Injunction that was issued against the Lezdeys on February 2, 2000, after a two-day evidentiary hearing in December 1999. Among other things, this ruling upheld the validity of the License Agreement between Protease Sciences and Arriva Pharmaceuticals, and prohibited the Lezdeys from interfering with Arriva's business operations and from "acting or speaking, or purporting to act or speak, on behalf of Protease or Sonoran without Plaintiffs' express consent." The Preliminary Injunction contains 69 separate findings of fact, which detail the willful breaches of fiduciary duty committed by the Lezdeys.

On November 27, 2000, the Arizona Superior Court amended its Preliminary Injunction when it learned that the Lezdeys and one of their attorneys had formed their own pharmaceuticals company known as "AlphaMed," and then "without corporate authority to do so, caused there to be created a purported License Agreement from Protease Sciences, Inc., to AlphaMed Pharmaceuticals, Inc., related to certain patents which were then licensed to Protease from Sonoran Desert Chemicals Limited Liability Company." In that Amended Injunction the Court further found that John Lezdey "testified untruthfully" in a November 22, 1999 deposition that "he was not on the Board of Directors of AlphaMed and that AlphaMed did not then (purport) to have a License Agreement from Protease," and that Mr. Lezdey otherwise "concealed" these facts from Dr. Wachter's attorneys until later depositions were taken on August 14, 2000. The Court consequently supplemented its Preliminary Injunction to prohibit the Lezdeys "from taking any actions in any capacity to give effect to (or draw for themselves or any entity, including, but not limited to AlphaMed Pharmaceuticals, Inc. any benefit from) the purported License Agreements between Protease Sciences, Inc., and AlphaMed Pharmaceuticals, Inc." 

In a related October 12, 2000 Minute Entry ruling, the Arizona Superior Court further specifically found that "a fraud has been committed on the Plaintiffs and on this Court by the concealment of the September 2, 1999 [license] agreement between Protease and AlphaMed." The Court also sanctioned John Lezdey for his acts of "indirect civil contempt" in "failing to tell the whole truth in his November 22, 1999 deposition," disobeying a prior court order to appear for his deposition, and "evading" another deposition date "by advising Plaintiffs' counsel prior to the deposition that he was too ill to attend then, on the day scheduled, appearing for his deposition in [a related] bankruptcy case." 

After several postponements, the trial of Dr. Wachter's lawsuit was set for January 15, 2002. On January 14, 2002, however, John Lezdey filed a personal bankruptcy petition in Florida, resulting in an automatic stay of the Arizona claims against him. The trial nevertheless proceeded against Darren and Jarett Lezdey, resulting in both a Judgment for damages and a Permanent Injunction against them which paralleled and supplemented the findings of fact and conclusions of law made in the earlier Preliminary Injunction (as amended), including a finding that the conduct of the Lezdey brothers "was fraudulent and done as part of a conspiracy to assist another (John Lezdey) to commit fraud which breached his fiduciary duties to Plaintiffs Wachter" and "constituted willful and malicious injury" to the Plaintiffs. Dr. Wachter and the other Plaintiffs were awarded $11,629,966 in compensatory damages for the breaches of fiduciary duty found by the Court, as well as punitive damages in the total sum of $5,813,983. In addition, as reflected in the January 15, 2002 Trial Transcript, the Arizona trial judge explained his rationale for the assessment of punitive damages as follows:

"The Court finds that the actions of John Lezdey, an attorney licensed to practice law are beyond outrageous. They're difficult for this court to comprehend both from an economic point of view in that he appears to be dead set to kill the goose that may lay the golden egg, but he's also used this position as an attorney to abuse the plaintiff, to abuse the plaintiffs' associates, and beyond, just abuse the legal process, he's abused them by -- he and his family have abused them by incredibly outrageous acts of threatening death to Dr. Wachter's wife and children. Certainly, one would hope that every judge of this court would agree with me that that type of conduct cannot be tolerated by any litigant, much less a litigant who is an attorney.

"In addition, the evidence has shown that Mr. John Lezdey has continually lied in this court, he's violated earlier orders in this court, and he has the nerve, apparently, to leave this court and -- leave this very courtroom and go to the branch bank of Wells Fargo and wipe out the company's bank account, in violation of the Court's injunction. In addition to all that, many of the documents that Mr. Lezdey and the other defendants have put forth both to Dr. Wachter and prospective investors have been false. There's been evidence of forgery. There's been severe evidence of breach of fiduciary duty by John Lezdey and there's very strong evidence that Darren and Jarett Lezdey have cooperated with it. 

"In 30 years of law practice in the commercial law arena, I've seen some shocking things, but nothing comes close to the conduct of the defendants in this case."

Darren and Jarett Lezdey filed an appeal from the Superior Court's Judgment and Permanent Injunction, alleging eleven types of reversable error. In a 15-page Memorandum Decision filed on June 17, 2003, however, a three judge panel of the Arizona Court of Appeals unanimously affirmed the trial court's rulings against both Lezdey sons and J.L. Technology, a limited partnership owned by the Lezdey family. Although the Court of Appeals reversed the judgment against John Lezdey's wife, Noreen, it concluded that "the trial court heard clear and convincing evidence that Darren and Jarett Lezdey conspired with John Lezdey in the actions that breached John's fiduciary duty to Wachter." The Court of Appeals further concluded that the evidence "demonstrated that Darren and Jarett knew that their actions would benefit themselves financially and would cause harm to the plaintiffs," and that Darren and Jarett Lezdey acted with an "evil mind." Darren, Jarett, and J.L. Technology also appealed the Court of Appeals' decision, but their petition for further review was denied by the Arizona Supreme Court in an Order dated March 17, 2004. 

While the Arizona Superior Court's February 22, 2002 Judgment and Permanent Injunction were not entered against John Lezdey because of his bankruptcy case (which was later dismissed on April 28, 2004), he remained bound by the Court's Preliminary Injunction (as amended), and by another Superior Court Order filed February 26, 2002, John Lezdey was held in contempt for a second time as a result of certain acts the Court found to be in "willful violation" of that Preliminary Injunction. As part of this Order, the Court also levied an "amplified sanction" in the form of $125,000 in fines payable to the Superior Court Clerk for Mr. Lezdey's continuing failure to comply with the Court's first contempt ruling of October 12, 2000. 

After three days of evidentiary hearings, John Lezdey was again found in contempt of court for the third time on September 3, 2003. In its Under Advisement Ruling, the Arizona Superior Court identified five separate instances of willful civil contempt for which "defendant John Lezdey remains unrepentant," including four distinct violations of the amended Preliminary Injunction. The Court further ordered Mr. Lezdey to purge all of these instances of contempt by no later than 12:00 p.m. on October 28, 2003, and if he did not do so, Mr. Lezdey was ordered to "surrender himself to the custody of the Maricopa County Sheriffs Office ... to begin serving an indeterminate jail sentence until such time as he has purged said contempt citations ... ." Mr. Lezdey was also ordered to begin making monthly payments of $50,000 each to the Court Clerk in satisfaction of the prior contempt fines that had been assessed against him (which, by then, totaled more than $143,000). 

The Arizona Superior Court subsequently scheduled a hearing for November 10, 2003, to discuss whether Mr. Lezdey had complied with the September 3, 2003 contempt ruling. After determining that he had not, the Court issued a Minute Entry filed November 18, 2003, ordering that a Bench Warrant be issued for John Lezdey's arrest, and that "upon apprehension, he shall be held without bond pending further order of this Court." To the best of Dr. Wachter's knowledge, Mr. Lezdey has still not complied with the September 3, 2003 contempt ruling, even after he unsuccessfully appealed that ruling to the Arizona Court of Appeals.

Instead, on February 27, 2004, thirty-two days before the long postponed trial of Dr. Wachter's claims against him was scheduled to begin, John Lezdey filed a motion to dismiss Dr. Wachter's Complaint in the Arizona Superior Court or to disqualify the law firm representing Dr. Wachter in that lawsuit, based upon various allegations of purportedly criminal and unethical conduct, including accusations that Dr. Wachter and his attorneys "orchestrated" and "perpetrated" through the use of a private investigation firm known as Spinelli Corporation "repeated burglaries and thefts" of documents from AlphaMed's offices in Florida "since the inception of this lawsuit."  Following three more days of evidentiary hearings, the Superior Court issued an Under Advisement Ruling filed August 30, 2004 (that was later clarified in a Minute Entry filed December 6, 2004), denying Mr. Lezdey's motion "in its entirety," with a finding that "[t]his Court does not believe that Spinelli, its agents or employees were responsible for any break-ins into Lezdey businesses or residences." 

Subsequently, pursuant to a motion filed by Dr. Wachter, the Superior Court dismissed John Lezdey's counterclaims in the Arizona lawsuit because of his continuing status as a fugitive from the arrest warrant issued against him on November 10, 2003.  In its Under Advisement Rulings filed November 16, 2004 , the Court held that "this is an extreme case warranting application of the [fugitive disentitlement] doctrine based on a fairly simple premise:  To protect and preserve the integrity of the judicial system, Defendant should not be permitted to press claims in the Court while openly defying its authority."

In the meantime, John Lezdey filed an appeal from the Arizona Superior Court's Under Advisement Ruling of August 30, 2004, which was rejected by the Arizona Court of Appeals in an Order filed February 2, 2005.  As a result of Mr. Lezdey's unsuccessful appeal, however, the trial of Dr. Wachter's breach of fiduciary duty claims against Mr. Lezdey was postponed. Following several more postponements due to related litigation between Arriva and Alphamed, trial was rescheduled to begin on July 6, 2009.

On June 19, 2009, however, Mr. Lezdey agreed to stipulate to the issuance of a Permanent Injunction against him, which was signed and entered by the Arizona Superior Court on June 25, 2009. Mr. Lezdey further agreed to waive any right he may have had to appeal that Injunction, thus ending the Arizona lawsuit between Dr. Wachter and the Lezdeys after more than ten years of litigation.

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