SMETHPORT – The former owners of McCormack Ambulance Service are
suing current owner Brian Gustafson for failure to make payments
after buying the business – and Gustafson is countersuing, alleging
Bradford City Fire Chief Bill McCormack intentionally set out to
“destroy” his business.

In a lawsuit filed in McKean County Court, Bill and Joan
McCormack of 18 Gates Hollow allege that Gustafson of Route 46,
Smethport, has failed to maintain payments of $1,250 per month
since September. The McCormacks are represented by Stan Pecora.

“On June 10, 2005, (Gustafson) made and delivered to
(McCormacks) a promissory note, in the amount of $128,875, calling
for payments of $1,250 a month, beginning July 10, 2005, with a
balloon payment of $75,000 being due on July 10, 2010,” the
McCormacks’ lawsuit reads.

Gustafson, represented by Jay Paul Kahle, has filed an answer
and counterclaim, saying he is making the payments – just not to
the McCormacks.

“… payments have been made to an escrow account pending
resolution of a dispute concerning the amount of money owed,”
Gustafson’s answer reads.

Gustafson had been the owner of a private ambulance service,
Priority Care, and had purchased McCormack Ambulance Service and
merged the businesses.

Gustafson’s suit explains that the promissory note was for the
sale of McCormack Ambulance Service to him. In the sales agreement
between the parties, the McCormacks explained that the ambulance
service was an “ongoing business … involved with the emergency and
non-emergency transportation” of people to and from medical
facilities and nursing homes, the suit reads.

“Plaintiff William McCormack, who is also the Chief of the
Bradford City Fire Department, stated that the Bradford City
Ambulance service was involved only with the emergency
transportation within the city and surrounding township
municipalities, while McCormack Ambulance exclusively handled all
non-emergency transportation calls within the city and surrounding
township municipalities.”

And as another part of the sales agreement, McCormack signed a
non-competition agreement and agreed to promote Gustafson’s
business, the suit alleges.

“Within several months of the sale, (Gustafson) began to
experience difficulty in obtaining transportation trips from those
agencies which had previously used McCormack’s Ambulance Service,”
the suit reads.

It was then that Gustafson learned “the City of Bradford
Ambulance was seeking to establish itself as the exclusive
ambulance service to provide emergency and non-emergency
transportation of individuals from and to various medical
facilities and nursing homes within the area in which McCormack
Ambulance Services had, according to Plaintiff William McCormack,
exclusively provided non-emergency transportation.”

The suit alleges that McCormack “was not only the individual who
was spearheading the effort to secure exclusive transportation
rights for the Bradford City Ambulance service, but that
additionally, the (McCormacks) then engaged in a campaign to
destroy the business that … Gustafson had acquired … as part of an
attempt to secure all of the transportation business within the
City of Bradford and the surrounding townships for the City of
Bradford Fire Department.”

The suit also alleges that Bill McCormack “specifically maligned
and slandered” Gustafson’s professional abilities; that McCormack
knew when he sold the private ambulance service to Gustafson that
“said business would not be a viable business within a year”
because of the city’s intent to take over all ambulance
transportation in the area; and that McCormack’s failure to
disclose that information “was an intentional non-disclosure of a
material fact which amounts to fraud in the execution of the
contract.”

Gustafson is asking for the contract to be declared null and
void because of the alleged fraud, and is asking for a return on
all payments already made to the McCormacks. The total purchase
price, according to the agreement of sale attached as an exhibit to
the lawsuit, was $428,875. In addition to the amount in dispute,
the total purchase price included a $1,000 deposit and a $299,000
payment at the time of closing.

Gustafson is also seeking punitive damages for “McCormack’s
actions in maligning, degrading and slandering (Gustafson)
individually, the business of Priority Care Ambulance Service and
McCormack Ambulance Service.”

The suit reads that as a direct result of McCormack’s actions,
Gustafson has experienced a great loss of business, the suit
states.