Elbow Room ownership files lawsuit against Ypsilanti nightclub's former manager
The ownership entity of Ypsilanti’s Elbow Room bar filed a five-count lawsuit this month against former manager Andy Garris, asking for the return of money and property allegedly taken from the bar.
The litigation offers details on the situation last summer as the popular manager’s departure resulted in the sudden closing of the downtown Ypsilanti nightspot.
Garris did not respond to interview requests for this article.
The lawsuit alleges Garris failed to deposit $217,381.21 in cash receipts; participated with others in taking personal property from the business, including its neon sign; converted bar funds for his own use; and didn’t fulfill his fiduciary duty or the sales contract.
The litigation, filed by attorney James Jackson on behalf of Flagship of Michigan Corp., also makes the claims against Garris Enterprises LLC.
The lawsuit follows the departure of Garris as operator of the bar on June 20, after a closing party.
However, news of the bar closing came as a surprise to Marion Campbell, the widow of longtime Elbow Room owner Art Campbell, Jackson told AnnArbor.com.
According to the lawsuit, Garris signed a contract on Nov. 15, 2006, to buy the assets of the bar, including its liquor license, for $55,000. On that same date, he and Art Campbell signed a management agreement calling for him to run the bar until the deal closed.
That agreement ended June 20, according to the lawsuit.
Until then, Garris — as the agent of Garris Enterprises LLC — was to pay all taxes, “operate in the best interest of the owner” and deposit all receipts in the owner’s name.
According to the lawsuit, no monthly sales tax payments were made to the state from June 2008 through November 2009, generating $6,075 in penalties and interest.
In addition, according to the filing, Garris used corporate funds for items unrelated to the business, including $1,000 in personal attorney fees, $1,040 in property taxes on an Ypsilanti Township condo, $4,046 in personal debts and $2,825 in Red Wings tickets.
He also failed to deposit $217,381.21 in cash receipts dating from 2008 to April 2010, failed to provide an accounting of funds, and made an unauthorized cash withdrawal of $19,868.94, according to the lawsuit. One withdrawal, totaling $5,013, was made two days after “he ceased performing services for the plaintiff,” according to the lawsuit.
Meanwhile, missing equipment from the bar totaled $15,000, and the company is seeking $45,000 to cover that, including costs and attorney fees.
In addition, the lawsuit claims Garris, while acting as an agent of the plaintiff, planned to divert the Elbow Room’s business to a competing bar. After leaving the Elbow Room, Garris became manager of The Savoy on North Washington. That club recently closed as its owner navigates a billing dispute with DTE Energy.
The Elbow Room reopened this fall under new management.
As of Monday, no response had been been filed to the lawsuit.