West Vancouver Mayor Mark Sager is suing alleged former business partners for $1,020,000 over claims they did not pay him for work done to help an American health-tech firm find a suitable location to establish a research and development facility.
His notice of civil claim, filed March 12 in BC Supreme Court, names Masimo Corp. [Nasdaq:MASI], Masimo Canada ULC, Keltic (Prior) Development LP, Keltic (Prior) GP Ltd. and Keltic Canada Development Co. Ltd. as defendants.
"Masimo Corp. did not compensate the plaintiff for the work," Sager said in his claim. "However, at all material times, it was understood that the plaintiff would receive a fee for the work once a suitable location for Masimo Corp.'s facility was located and acquired."
The facility in question was meant to address, among other things, fentanyl use and addiction.
Masimo has not yet filed a response to the notice of civil claim, and it sent an email to BIV saying that it would not comment on the lawsuit.
BIV emailed Keltic on Friday to see if it had a response to the notice of civil claim but did not get a response by press time.
Sager claims that the work he did included scouting numerous potential locations for the facility and then meeting with vendors of potential locations, or their agents, and negotiating the terms of a potential sale with them.
He also claims that he discussed the details of various locations and the potential terms of sale with Masimo founder Joe Kiani and the corporation itself.
This led to him "ultimately introducing Mr. Kiani and Masimo Corp. to a suitable location for the facility, which led to a binding agreement of purchase and sale," according to the lawsuit.
The property that Sager found was at 230 Prior St. in Vancouver, and was owned by Keltic (Prior) Development LP, he said. He then alerted Kiani to the property in October 2021, he added.
"Shortly thereafter, on or about October 8, 2021, Rachel Lei, the managing director and CEO of Keltic Canada Development Co. Ltd. offered the plaintiff a fee of one per cent of the eventual purchase price, which would compensate the plaintiff for the work he performed to set up the transaction for the benefit of the defendants," Sager wrote in his claim.
Sager said that he informed Kiani of the fee and Kiani agreed to proceed with the transaction, which incorporated the fee as an expressed term of the deal.
Masimo and Keltic then on Feb. 11, 2022, entered into a purchase-and-sale agreement for the property, Sager said.
The agreement held that Masimo Canada ULC would pay $123 million plus GST, Sager claimed.
"Masimo Canada ULC and Keltic (Prior) Development LP expressly acknowledged that 'Mark Sager will receive a commission of one per cent of the purchase price for arranging the transaction, which will be paid by the vendor,'" Sager claimed.
The parties had 30 days to remove subjects in order for the transaction to proceed, Sager wrote.
"Masimo Canada ULC had five business days following execution and delivery of the agreement to pay a deposit of $1 million and had five business days following the subject removal date to pay Keltic (Prior) Development LP a deposit of $20 million," Sager claimed.
“The balance of the money was to be paid 60 days after construction on the building was complete, or a certificate of completion was issued to the contractor, whichever was later," he said.
Sager claims that the parties removed subjects, making the transaction binding. He said in February and March 2022, Masimo paid the initial and second deposits to Keltic, as per the agreement.
When the second deposit was paid, Keltic paid Sager $210,000 plus GST, representing one per cent of the initial and second deposits, he said.
"All parties understood and expected that Keltic (Prior) Development LP would pay the plaintiff the remaining $1.02 million of the fee once the balance of the purchase price was paid,” according to the lawsuit.
Company representatives then assured Sager of this during the next 2.5 years, he said.
Sager said he then learned in late 2024 that Masimo intended to negotiate a termination of the agreement because it was going through corporate governance changes, which was something that it eventually did.
In August 2022, Politan Capital Management, a New York-based hedge fund bought a nine-per-cent stake in Masimo, he said.
Politan later successfully launched a proxy contest for two seats on Masimo's board of directors during its 2023 annual shareholders meeting, Sager claimed.
After it gained those two seats, Politan sought to replace two more board members, including Kiani, at Masimo's 2024 shareholder meeting, he said.
"As a result, on or about Sept. 19, 2024, Politan effectively gained control of Masimo Corp.'s board of directors," he wrote.
The new board sought to withdraw from the agreement that Sager helped put together, he said, and Keltic agreed to release Masimo from its "binding obligations," Sager wrote.
Sager claims that he reached out to representatives of the parties to confirm that the money owed to him would be paid but, in December, Keltic told him that it did not intend to pay him the remaining $1.02 million that Sager said he is owed.
"To date, despite the plaintiff's extensive efforts and his role in introducing the property to Masimo Corp. and facilitating the agreement, the plaintiff has not been paid the remaining $1.02 million of the fee," he wrote.
None of Sager's allegations have been tested in court.
Sager was first elected to West Vancouver council in 1986, at age 29, as the youngest council member in the district municipality's history. He then became the youngest mayor in the municipality's history in 1990. He served six years as mayor before leaving politics to work as a lawyer.
He tried to regain the job in 2018, losing by 21 votes to Mary Anne Booth. He then ran and won as mayor in 2022.
Last month, a special prosecutor ruled out criminal charges against Sager following an investigation into campaign finance irregularities. Elections BC has also closed its own investigation on the matter.
