Support Local Journalism. Join the Cleveland Scene Press Club.

Coffee Clash 

Angela Caruso hired a lawyer to protect her company. Instead, she claims, he helped his father take it over.

Even with all that's happened, Angela Caruso still savors her daily cup of coffee. Waking early one morning in August, Angela pads into the kitchen of her small Broadview Heights condominium. Still blinking the sleep from her heavy-lidded brown eyes, she brews a pot of dark roast.

"Coffee beans from Kenya tend to have a medium caffeine and acidity content," Angela explains to a listener. "It's aromatic and full-bodied, without that sharp bitterness you'd get from a French or Vienna blend."

She pauses to take a sip, then sighs approvingly.

"I've always been a coffee drinker," she says. "As a little girl, my dad used to give me a mug he'd fill half with coffee, half with milk. Then I'd get bread or a biscuit, and I'd dip it in the coffee and drink it . . ."

The words catch in her throat.

"I'm sorry," she says, tears forming in her eyes. "I don't mean to be so emotional. It's just that this is still so hard to talk about."

She's talking about the loss of her business, Berardi's, a coffee-bean roaster and supplier that's among the region's entrepreneurial success stories.

Twenty years ago, before Starbucks set up shop on every street corner, Angela started brewing coffee in a back room of her small kitchenware shop. She named the brand for her father, Dominic Berardi, who had nurtured her love of coffee since childhood.

In the late 1980s, as the commercial coffee industry exploded, Angela grew her humble operation into a burgeoning business. The second specialty coffee roaster in the state and one of only 200 in the country, Angela quickly cornered the Northeast Ohio market. By the beginning of the 1990s, Berardi's was a $4 million enterprise with 23 employees.

That's when the problems began. Her husband, whom she had brought in to serve as the company's president, filed for divorce. The domestic dispute turned into a tug-of-war for control of Berardi's. It was more than a business to Angela; it was her father's legacy. She hired a corporate attorney named David Leneghan to protect her interests.

But unbeknownst to Angela, Leneghan had interests of his own. His father, Patrick, was a wealthy businessman who was always on the lookout for new opportunities. David brought him on board to finance a buyout of Angela's husband's share of the business. She didn't realize that the complicated transaction would also cost her control of the company she'd worked so hard to build.

Now, in a pending lawsuit, Angela alleges that her lawyer secretly worked with his father to steal the company out from under her.

"My heart turns when I see a Berardi's truck go by," Angela says. "It hurts to know that my name is still associated with those people."

Coffee had been part of Angela's life for as long as she's been alive. She was born in Castiglione di Carovilli, a small farming town in southern Italy. Her parents, Dominic and Assunta Berardi, roasted their own coffee beans over open fires, swirling them in the pot to ensure that they wouldn't burn.

In search of a better life, the Berardis moved to North Hill, a blue-collar Italian community in Akron, when Angela was seven years old. Dominic went to work as a laborer, doing sewer maintenance, while Assunta found her calling in the kitchen. Although the new immigrants soon adapted to American culture, they never cottoned to the coffee, which tasted as flavorless as water.

Assunta rekindled the family recipe and began roasting her own beans. She brought home burlap sacks of green coffee beans from the local A&P and baked them in a small gas-powered oven in her kitchen. She crushed them with a grinder she had brought over from Italy and scooped the rich earthy grounds into the filter for brewing. When it was ready, Angela and her two sisters would sit around the kitchen table, sipping warm, homemade coffee from mugs as big as their hands.

As a child, Angela delighted in arranging her dolls classroom-style and playing teacher, replicating the lessons she'd learned in school. When it came time for college, she pursued a business-education major at Akron University. She graduated in 1970 and afterward took a job teaching at Midpark High School in Middleburg Heights.

It was there that she met her future husband. Soon after starting work, Angela fell in with a pack of teachers her age, who socialized together on weekends. A cute, curly-haired biology teacher named Mike Caruso caught her eye. In his spare time, he coached the high school wrestling team, and before long Angela found herself showing up at matches just to see him.

They seemed destined for each other. They had both come from Italian Catholic backgrounds, but where Angela was social, Mike was shy. "I could chatter on with everyone," Angela recalls. "Mike just kind of sat back and listened." After a few years of courting, Mike proposed. They were married in an elaborate Catholic ceremony.

Angela's father was happy to give his youngest daughter away. But he had always longed for a son to carry on his name.

"Don't worry, Daddy," Angela told him. "Your name won't die."

It was a promise she would honor twice over. When her first son was born, she named him Dominic, after her father. And years later, when it came time to brand her coffee, there was no question that it would be called Berardi's.

Unlike her mother, Angela was not suited for domesticity. She stayed home to raise her three sons, but she was eager to get back into the workforce.

Her opportunity came at a Jazzercize class, when Angela ran into an old sorority sister. When the friend mentioned that her ex-husband had started selling kitchenware, it occurred to Angela that she might sell products like his at house parties.

Here was a way that Angela could remain faithful to her family while still fulfilling her ambition. In short order, she decided to cut out the middleman and order the kitchenware herself. Soon she had raised a big enough stake to open her own storefront, a quaint Brecksville shop called the Kitchenry.

But with the bricks and mortar came unexpected challenges. She needed to diversify her stock; potato peelers and strawberry hullers would never generate enough money to keep her in business. She needed something consumable, something she could sell day after day to her loyal, upper-class customer base. She tried gourmet jellies, salad dressings, imported chocolate -- nothing worked.

Then one day she hit upon an idea that had been under her nose the whole time: coffee.

Angela bought a small roaster and began experimenting with different beans and blends. The rich aroma wafted into the street and attracted curious passersby. More often than not, they'd venture in and leave with a small, lunch-bag-sized package of freshly roasted beans.

Angela's big break came in 1983, when Acme supermarket moved to South Euclid. The store aimed to be a new-age lifestyle center, providing one-stop shopping, with a bank teller, bakery, and pharmacy all on-site. Angela realized that a coffee stand would fit right in, exposing her brand to an endless stream of harried housewives.

Word spread fast. Before long, she was fielding orders from the Stop-N-Shop chain and other markets.

But with the rapid success came new challenges. Her roaster could grind out only one pound of beans at a time, and she struggled to keep up with the demand. If her business were to continue growing, she'd need help.

She turned to her husband. The two discussed the ramifications of Mike joining the business full-time. It would mean giving up a steady job that provided the family's health care, risking his salary on a startup that could collapse overnight. But after much deliberation, Mike and Angela decided to take their chances. They shared the decision with their children.

"I remember -- will always remember -- we had a family meeting," recalls Dominic, the Carusos' oldest son. "My parents sat us down and said, 'Daddy's going to quit his job and go work with Mommy in the coffee business. If it fails, we're going to move in with Grandma.'"

The couple divided their responsibilities in accordance with their skills. Mike assumed the role of president, supervising production, while Angela handled marketing and sales. "As a science major and former biology teacher, he could relate to the seedlings in the ground, to how the gases escaped when coffee is roasted," Angela explains. "And I had a knack for marketing trends."

The gamble paid off. By 1992, Berardi's had grown into a $4-million-a-year company, with 23 employees and a sprawling roasting facility in North Royalton.

"I remember people by their coffee," says Kevin Sinnott, a former writer for The Coffee Companion, a trade newsletter. "Angie was a very good coffee roaster. Angie's coffee was never over-roasted. It had a sweet Italian quality to it. I liked it very much."

As the Carusos' business flourished, their marriage crumbled. If familiarity breeds contempt, more than a decade of seeing each other at work and at home provided ample room for grudges.

Angela felt that Mike played the employees against her. She was often out of the office on sales calls, away from the day-to-day operations of the company. If her opinions about the business happened to contradict Mike's, he would tell workers to ignore her, that she "didn't know what the hell she was talking about," she says. He even forbade them to pass along information without his OK. (Mike declined to comment for this article.)

Then there was the flirting. Mike had always been playful, but now his behavior began to cross the line. He often made crude jokes around the office -- Angela remembers one with a punch line that involved latex gloves. She also recalls a day when she heard a slap, then saw a female employee walk out of Mike's office, rubbing her bottom as if she'd just been spanked.

In 1998, they hired a new employee to work in the back room. From the beginning, Angela suspected that the woman had a thing for her husband. There was the long, hungry looks she gave Mike. A touch here, a lingering glance there. Then there was the way she would look at Angela. "I'd walk by her desk, and she'd have this guilty look on her face," Angela recalls. "She'd look at me, then kind of look away." Angela suspected that Mike was having an affair. She wanted confirmation.

One night, Mike told Angela that he was going to stop by his mother's house after work. From there, he was going to stop and get a drink.

It didn't sound like the Mike she knew. "Mike would never just go out for a beer," she says. So she decided to follow him. He drove right past the bar, to the front door of the condominium where the new employee lived.

Seeing him there nauseated Angela. She called a friend to meet her at the condo. Later, she hired a private detective to document the affair.

Mike insisted that Angela was just being paranoid. He said that her jealousy was costing them valuable employees. One worker claimed in her resignation letter that she was leaving because of Angela's cruelty.

"Ms. Berardi has been very rude and disrespectful," the employee wrote. "I believe she enjoys and takes pride at demeaning her employees. This is one of the reasons for my resignation."

The workers were divided in their loyalties. "We felt like one of the kids in a divorce," says Jim Sidari, the company's former sales representative.

Finally, Berardi's corporate attorney, Mike O'Neil, suggested that Angela and Mike hire separate attorneys. A friend suggested that Angela contact the law firm of Wegman, Hessler, Vanderburg, & O'Toole. She scheduled a meeting with Keith Vanderburg, one of the partners.

On a hot July morning in 1997, Angela walked into the downtown law office, expecting to meet Vanderburg, whom her friend had described as a tall, slender, soft-spoken attorney.

Instead, she found herself face to face with David Leneghan, a bookish 30-year-old and the firm's newest associate. Vanderburg was tied up with other cases, Leneghan explained.

Angela was wary of the fresh-faced attorney. But Leneghan knew something about family businesses. He told her that he had grown up in a house with six brothers, all of whom cut their teeth at North Shore Strapping, his father's manufacturing and packaging company in Cleveland.

That helped assuage Angela's anxieties. Besides, she scarcely had a choice. Her marriage was in its last throes, and the business was suffering. So she hired Leneghan as her corporate attorney.

"I didn't know I would be making the biggest mistake of my life," she says.

In April 1999, Mike filed for divorce, citing incompatibility. While divorces are often complicated, the joint ownership of the business made this one even more so. Both were unwilling to relinquish their share of the stock. Angela believed that she had the greater claim -- after all, the business was named for her father. "The company's name is Berardi's, not Caruso's," she ranted to friends.

By then, she says, David had told her that the company was valued at around $1.3 million. To buy out Mike's share, she would need $650,000. As she cast about for an investor, the name of Leneghan's father came up. Patrick Leneghan, a sturdy, self-assured man with a cloud of gray hair, was always on the lookout for new opportunities. When he heard of Angela's dilemma, he agreed to meet with her. "I'm always happy to look at anything," Patrick said.

In the fall of 1999, Angela and David met with Patrick at Chester's, a Rockside Road restaurant located at the top of a winding hill. The meeting was brief and to the point. "We talked about what the company was, what type of business it was," Patrick later testified in a deposition. (Both Patrick and David declined to comment for this article.)

Angela thanked Patrick for his time, but she didn't want to go into business with him, she says. If she was going to find a partner, she preferred someone in the coffee industry.

Over the next few months, she contacted several well-known national coffee suppliers, including S&D Coffee Inc., Berrie House Coffee Systems, and Superior Coffee. At one point, S&D Coffee proposed a $1.2-$1.4 million takeover, but the deal never went forward. David says that Angela rejected it, because she believed her company was worth more. Angela says that she never heard about the offer.

At the same time, Michael was making proposals of his own, offering as much as $800,000 for her share of the stock. But Angela wouldn't budge. "There are some things more important than money," she says. After receiving the bids, she ripped them up, leaving the shreds on Mike's desk.

As negotiations progressed, David Leneghan began to take a more hands-on role in the operations of the company. He scrutinized financial sheets, tax returns, and inventory records. He asked for print-outs of the company's recipes and formulas. He toured the facility, asking Angela to explain how a roaster worked and the differences between various types of beans.

To Angela, his interest seemed excessive. But when she asked about it, he reassured her: "Everything I'm doing is in your financial best interest," she remembers him saying.

Angela was inclined to believe him. With her marriage disintegrating and the future of Berardi's uncertain, David was the one anchor in her life.

"Everything out of her mouth during this time was 'I have to ask my lawyer first' or 'Let me see what my lawyer says,'" recalls Nancy Reddy, Angela's friend and a former Berardi's employee.

By March 2000, 11 months after divorce proceedings had begun, Judge James Celebrezze wanted the matter resolved. He decreed that by noon on March 13, Angela and Mike would each have to make a final written offer. He'd make the final call on who would get the business.

Angela's bid was presented first. She offered Mike $930,000 to walk away from the business and sign a three-year non-compete agreement. The lion's share of the money would be paid within two days, and if she reneged on the deal, Mike would get $111,000 for his troubles. Angela would obtain most of the money in the form of a loan from Provident Bank.

Mike's attorney, Roger Kleinman, vigorously objected to Angela's proposal. There's no proof, he argued, that the financing would be available within 48 hours. He argued that the Provident Bank loan came with all kinds of strings attached. "Their financing, Judge, is contingent on a bunch of things we don't know about yet," Kleinman said.

He argued that Mike's bid -- one million dollars in cash, available to Angela in 45 days, with no noncompete agreement -- was far more secure. "I don't know how these deals can even compare," he told the judge.

But Judge Celebrezze wanted to get the deal done as soon as possible. So Leneghan suddenly sweetened his offer: Angela would pay the whole $930,000 in two days, he said.

At the end of the hearing, the judge postponed his ruling. Two days later, Leneghan called Angela with the verdict. He congratulated her, she says. Judge Celebrezze had awarded her the business.

Her euphoria didn't last. Not long after, Angela says, Leneghan came to her home bearing bad news: The financing that he had guaranteed would be available in 2 days would actually take 15. Provident Bank needed additional time to assess the company's value before finalizing the loan, he told her.

Neither the court nor Mike's attorney was willing to give her the extra time, Leneghan allegedly said. Not only was Angela going to lose the business, she'd be out $111,000 for defaulting on her offer, according to the agreement David had made with the court.

"What am I going to do now?" she asked David, according to her account.

David told her that his father might still be interested in the business, she says. David offered to call him and ask whether he'd put up the money.

David called back later to tell her that his father had agreed to the deal, she says. She would repay the loan within three years with 12 percent interest. In the meantime, Patrick would hold the business as collateral. (In depositions, David offers a vastly different account. He claims that it was Angela who reneged on the deal with Provident Bank and that she contacted his father about financing the buyout.)

Whatever the case, neither the judge nor Mike's lawyer knew that the financing on the deal had changed. "I would have been in the courtroom protesting if I had known," Kleinman says. "I don't think the judge would have approved the deal if he had known the lawyer's father was purchasing the business." (Celebrezze did not return a call requesting comment.)

David's father's involvement raises clear conflict of interests, Kleinman adds. "There's the lawyer's duty to his client, which is totally unequivocal. But here, [David] Leneghan was negotiating with his own father to get into this financing deal. Whose interests are you protecting? It just doesn't smell right."

With the financing taken care of, the deal went forward as planned. Patrick Leneghan cut Angela a check for $850,000, which she deposited at Huntington Bank. She in turn wrote a check in the same amount to her estranged husband, sealing the deal.

"All I knew at this point was, I was 100 percent owner of the company," she says.

She couldn't have been more wrong.

The next day, Angela arrived at Berardi's to find Patrick Leneghan and his son, Brian, changing all the locks. Brian explained that it was a precaution to keep Mike from entering the business.

She found it odd at first, but "Then I thought, well, Mike and I were both upset about how things had fallen apart. It makes sense."

Other incidents couldn't be explained away so easily.

A few days later, Angela overheard her receptionist on the phone. "I'm sorry," the receptionist said, "you'll have to refer that question to our parent company, Ballycroy-Mayo."

Angela asked her receptionist where she had gotten that name.

The receptionist shrugged. That's what Patrick told her to tell people when they called, she said.

Angela would later learn that Ballycroy-Mayo was a shell company that Patrick Leneghan had set up to finance the Berardi's transaction.

Over the next few weeks, Angela started receiving phone calls from confused vendors. They told her that they had received calls from Patrick, who claimed he was now in charge.

It must be a misunderstanding, Angela told them. After all, she thought, Patrick was merely a financier, not the owner.

Angela wanted to straighten out the confusion. She left several messages on David's answering machine. But he didn't return her calls. When she finally got through, he was in no mood to chat. "You'll have to talk to my father about it," he told her.

With the Leneghans refusing to provide answers, Angela contacted the only other person who might be able to explain the transactions: her loan officer at Provident Bank. Over lunch, she asked him to explain why the bank had suddenly required 15 days before making the loan.

The loan officer told her she had it all wrong, she claims. "David called me and said you were no longer interested," he said, according to her account.

Over the next few months, Angela learned that what she had thought was a simple loan agreement actually gave Patrick Leneghan the unilateral right to take control of the company, she says. Her salary was cut in half, and her name was removed from the company's checking account.

Angela clung to her position for two more years. By the end, she rarely showed up to work. She says she was out on business calls, but the Leneghans claimed she abandoned her job. On January 30, 2002, Patrick Leneghan wrote a letter to inform her that she had been fired.

By then, Angela had already filed her lawsuit against David and Patrick Leneghan. The suit accuses David of professional negligence and breach of duty, and claims that he worked with his father to defraud her of Berardi's.

"It was unconscionable, what they did," Angela says.

The Leneghans, however, say that Angela knew what she was getting into. They call it a simple case of buyer's remorse.

To make their case, they point to an April 11, 2000 document signed by Angela. The five-page memo lays out the events that had transpired and absolves David of any issues stemming from a conflict of interests. "Since I do not represent my father and only represent you, there is no direct conflict of interest," David wrote, "but there is an appearance of a conflict and we have discussed this relationship on numerous occasions."

According to the memo, David had also urged Angela to accept Mike's $1 million offer to buy out her share of the company. "Despite my recommendation that you accept such an offer, you have indicated to me . . . that you are unwilling to sell your interest to your husband," David wrote.

The document explains that the deal with Patrick would give him two-thirds interest in Berardi's, which would make Angela "a minority shareholder."

"I know I have said this repeatedly and you have told me that I sound like a broken record," David wrote, "but I want you to make your decisions freely . . . without any recommendation on my part."

Although the fifth page of the memo bears her signature, Angela says that she doesn't recall signing it, and that if she did sign it, she didn't read it clearly.

Even so, legal ethicists say that the waiver might not stand up. "If the letter fails to alert her that the agreement she entered into will clearly cause her to lose control of the company, and it has not otherwise been explained to her, the letter seems clearly insufficient," says Arthur Greenbaum, a law professor at Ohio State University who specializes in professional responsibility and is not involved in the case.

Angela was in no position to ask questions, says Roger Kleinman, Mike's divorce attorney. "She was in this mortal battle with her husband for this business. I don't think she could evaluate anything rationally. I think she would have signed anything at that point," he says.

Even if she did sign the paper, the transaction should never have been allowed to occur, according to Bill Wuliger, a malpractice attorney Angela consulted. "When you waive a conflict of interests, you're assuming there's full disclosure of everything," he says, and David was far from up-front with his client.

For one thing, the clause allowing Patrick to take control of Berardi's is just one sentence buried in an encyclopedia of legalese that Angela claims was never explained to her. For another, David neglected to tell Angela that while he was working on her case, he was also defending his father from a federal lawsuit. An FBI investigation had revealed that steel strappings Patrick's company had sold to the Department of Defense had been "painted with a fake coating" to appear galvanized. Nongalvanized steel rusts more quickly when exposed to the elements, and one of the strappings broke, injuring a man at an Illinois army base.

"The question of him representing both his father and his client while there's a business deal involved presents a potential conflict of interests," says Greenbaum. "The lawyer has a duty to tell his client all the relevant facts in her case."

Ultimately, Judge Dick Ambrose will have to decide between two competing narratives. Was Angela an innocent victim, as she claims, whose lawyer tricked her into giving up her company? Or was she so angry at her husband that she sold Berardi's to keep him from gaining control? The case is scheduled to go to trial in October.

Ironically, Angela and her estranged husband now have a common enemy: the Leneghans. Two years ago, Mike and two of his sons started another coffee business, called Caruso's. "We didn't exactly feel bad competing against the Leneghans after what they did to our mother," Dominic says. He has taped a sign to his office window that says, "If you are a Leneghan and you can read this, fuck off!"

For the Leneghans, the feeling appears to be mutual. Patrick filed suit against Mike for allegedly violating the noncompete clause he signed when he took Berardi's buyout. The suit claims that Mike stole Berardi's recipe and employees to get his own business off the ground. That trial is slated to begin within the month.

In the meantime, the Leneghans are clearly enjoying their role as coffee barons. After a recent pretrial in the Caruso's Coffee lawsuit, the family strolled over to the Berardi's coffee stand on the first floor of the Justice Center. Dressed in a navy suit with brass cuff links, Patrick walked behind the counter, bent down to check the supply of sandwiches, then chummily slapped the barista on his back.

"This is my stand," Patrick proclaimed.

"How'd you get such a stellar location?" a young woman asked him.

"A lot of hard work," he answered, smiling.

One of Patrick's sons, Sean, offered to buy the woman a cup of coffee. She thanked him, then ordered a small cup of the hazelnut blend.

"Aren't you going to get one?" she asked, tearing open a packet of Splenda.

Both son and father begged off.

"We prefer water," said Sean.

We welcome readers to submit letters regarding articles and content in Cleveland Scene. Letters should be a minimum of 150 words, refer to content that has appeared on Cleveland Scene, and must include the writer's full name, address, and phone number for verification purposes. No attachments will be considered. Writers of letters selected for publication will be notified via email. Letters may be edited and shortened for space.

Email us at [email protected].

Support Local Journalism.
Join the Cleveland Scene Press Club

Local journalism is information. Information is power. And we believe everyone deserves access to accurate independent coverage of their community and state. Our readers helped us continue this coverage in 2020, and we are so grateful for the support.

Help us keep this coverage going in 2021. Whether it's a one-time acknowledgement of this article or an ongoing membership pledge, your support goes to local-based reporting from our small but mighty team.

Join the Cleveland Scene Press Club for as little as $5 a month.

Read the Digital Print Issue

January 5, 2022

View more issues

Most Popular

No recently-read stories.

Visit the archives…


Never miss a beat

Sign Up Now

Subscribe now to get the latest news delivered right to your inbox.


Staff Pick Events

  • NBA Rising Stars Game @ Rocket Mortgage FieldHouse

    • Thu., Feb. 17
  • Monsters vs. Grand Rapids Griffins @ Rocket Mortgage FieldHouse

    • Wed., Feb. 23
  • Monsters vs. Lehigh Valley Phantoms @ Rocket Mortgage FieldHouse

    • Fri., Feb. 25

© 2022 Cleveland Scene: 737 Bolivar Rd., Suite 4100, Cleveland, OH 44115, (216) 505-8199
Logos and trademarks on this site are property of their respective owners.

Website powered by Foundation