Net Gain SEO, Vetta Spa reach out-of-court settlement in lawsuit

A 2022 lawsuit against Oro-Medonte-based Vetta Spa for more than $4 million has been settled out of court.

The amount of the settlement is confidential.

“We have amicably settled the dispute for an undisclosed amount,” said Drew Dekker, managing partner of Net Gain SEO Inc. Dekker added he was “satisfied with the amount” and “looking forward to moving forward.”

Eric Harkonen, founder and president of Vetta Spa, echoed Dekker’s sentiment.

“We’ve talked about it, went through a legal discussion and kind of came to a realization that this is not as big as what it was, but let’s get this thing resolved and move forward,” Harkonen said.

While Harkonen couldn’t reveal the settlement figure, he said it was “nowhere close” to the $4 million originally sought.

As previously reported in January 2023 by BarrieToday, Net Gain SEO Inc. filed a statement of claim against Vetta Spa and Harkonen for more than $4 million for breach of contract, “damages for unjust enrichment and breach of its security system and theft of intellectual property” on July 7, 2022.

Net Gain, which offers search-engine optimization and web development services, claimed that on or around March 1, 2019, Harkonen, on behalf of Vetta, agreed to retain Net Gain to provide web and digital marketing services as Vetta prepared to open its spa facility, located on Line 3 North in Oro-Medonte Township, about 20 minutes northeast of Barrie.

The claim stated that in the agreement, Vetta would pay Net Gain $6,000 per month for a period of 10 months, for a total of $60,000, for pre-operation advertisements, and $8,000 per month for continued online advertisement services for a three-year term following the commencement of Vetta’s operations.

The statement of claim said that when COVID-19 began, there were subsequent delays in construction, which lengthened the timelines of Net Gain’s service term.

The claim stated Vetta asked Net Gain in September 2020 that there be a reduction in monthly amounts in order to help with cash flow.

It was alleged in the claim that Vetta, Harkonen and Net Gain verbally agreed Net Gain would temporarily reduce its monthly invoice to $1,500 until Vetta was able to either secure more financing or improve its cash flow following the commencement of its operations.

The claim also stated Vetta would retain Net Gain’s services for post-opening operations at the cost of $6,000 per month.

The claim stated that on or around the middle of October 2021, it “became apparent to Net Gain that Vetta was having significant issues with paying its reduced invoices in a timely fashion.”

An example given was that Vetta had allegedly lapsed in more than 80 days in unpaid invoices and had only made a small payment.

The claim stated Net Gain sent numerous emails over 2021 expressing concern with the lack of payments being made, until an email sent on or around Dec. 30 was responded to by Harkonen, in which the Vetta president allegedly “simply advised Net Gain that he did not have the time to dedicate to its concerns and that the construction issues associated with Vetta took priority.”

With regard to the security breach portion of the statement of claim, Net Gain alleged Vetta had previously asked on at least three occasions where the passwords were located for its social media sites.

The claim stated that on Jan. 5, 2022, Net Gain noticed unusual activity on the Vetta social media accounts' passwords. At the time, Net Gain believed Vetta was changing the passwords in order to block it from accessing the accounts without having to pay for the benefit of the same. Net Gain said it immediately changed all passwords.

The claim stated that on or around April 5, 2022, Net Gain received an email from Harkonen advising the Vetta website had been “moved to another server.” Net Gain understood this to mean Vetta had “illegally accessed” Net Gain’s server where the website was hosted and copied the files, content and intellectual property, and that Vetta, or an agent of Vetta, “gained illegitimate access” to Net Gain’s servers in order to benefit from products and services for which it has not paid.

The claim stated Net Gain hired IT professionals and determined there were numerous attempts by an outside party to gain access to Net Gain’s servers.

In its 22-page statement of claim, Net Gain alleged "the account balance currently due and outstanding is $425,943.60 exclusive of HST."

Vetta Spa previously settled two lawsuits with Leading Edge Earthworks out of court. The settlement amounts of those lawsuits are also confidential.