Meritage Homes wins $111M from former exec

Meritage sued Greg Hancock in 2004, alleging he violated terms of a deal he made to act as a division president after Meritage bought Hancock’s homebuilding firm, Hancock Communities, for $80 million in 2001.

Meritage accused Hancock of committing fraud by engaging in side deals that resulted in the loss of millions of dollars of business opportunities and corporate goodwill while he was working as president of Meritage’s Phoenix division.

The U.S. District Court jury in Phoenix ordered Hancock to pay $57 million in damages and $54 million in punitive damages on Thursday, the company said in a news release issued after close of trading on Friday. Stock in Scottsdale, Ariz.-based Meritage rose 57 cents to $25.54 in Friday trading.

The jury found Hancock liable on nine counts including breach of fiduciary duty, breach of contract and fraud.

Hancock attorney, Robert Frisbee, didn’t immediately return messages seeking comment by The Associated Press on Saturday.

Meritage’s deal to buy Hancock Communities included an agreement by Hancock to remain with Meritage for three years, through May 2004. But he quit in March 2003, said Phoenix attorney Dan Goldfine, who represented Meritage.

The acquisition price included $11 million for the use of the Hancock name and the value of the name through May 2007, Tim White, Meritage’s executive vice president and general counsel, told the East Valley Tribune.

“And by him quitting ... halfway through the three-year term and by him then allowing his brother Rick Hancock to use the Hancock name violated his obligations to us,” White said.

After Hancock left, Meritage renamed the division. Hancock now owns another Phoenix home-building business, also called Hancock Communities.

Meritage noted that the verdict is not final and could be overturned on appeal. The company primarily builds single-family homes in the South and Southwest.