Facts

Plaintiff New Century Title Co. hired defendants George Willard and Tony Becker to be managing agents. Defendants both resigned in September 2004 and started working for defendant Financial Title Co., a subsidiary of defendant The Mercury Companies Inc. More than 30 employees from plaintiff New Century subsequently resigned to follow defendants Willard and Becker to defendant Financial Title.

Plaintiff New Century and related entities filed suits against defendants, and obtained injunctive relief against them, prohibiting them from soliciting any more of plaintiffs' employees. Plaintiffs alleged unfair competition, breach of fiduciary duty, fraud, conversion, interference with prospective economic relationships, conspiracy, misappropriation of trade secrets, and fraudulent concealment and misrepresentation.

PLAINTIFFS' CONTENTIONS:
The plaintiffs contended that defendants Becker and Willard served as agents for defendant Financial Title while they were still employed with plaintiff. Defendants solicited business by using plaintiff's reports. Employees of plaintiff testified they overheard defendants Becker and Willard discussing their plans to transfer their business to defendant Financial Title even though they were still working for plaintiff. As a result of their scheme, plaintiff was left under-staffed; it did not even have a receptionist to accept incoming phone calls. Further, under implied contract principles, defendants were prohibited from engaging in business with a competitor while still working for their employer.

DEFENDANTS' CONTENTIONS:
The defendants contended that employees who left their jobs at plaintiff's company were at-will employees, and thus free to seek outside employment at any time. They were not under any contractual obligation to plaintiff. Further, defendants did not participate in a conspiracy to transfer business relationships from plaintiffs' companies to defendants' companies.

Damages

The plaintiffs sought lost profits sustained during the last two months defendants Becker and Willard worked for plaintiff. With regard to their fraud, conspiracy and conversion claims, plaintiffs sought an unspecified sum for punitive damages. In addition, they sought to recover eight years of additional lost profits resulting from the adverse effects of defendants' unfair business practices.

Result

Defendants Willard and Becker were found liable for breach of fiduciary duty, as they made fraudulent misrepresentations to their employer and concealed information. The jury also found defendants Financial Title and the Mercury Companies Inc. liable for unfair competition. The jury found against plaintiffs in favor of defendants on, among other grounds, claims for misappropriation of trade secrets. The jury found in favor of defendants Alliance Title, Stacy Neves, Stephanie Howard and Christina De'Martini and against plaintiffs on all claims. The jury found against plaintiff United Title on all claims. The plaintiffs were awarded close to $2 million in past and future lost profits damages. The jury awarded plaintiffs close to $15 million in punitive damages. The award of punitive damages was reduced by the court as a result of post-trial motions to a total of $5.8 million.

Deliberation

10 days

Poll

10-2

Length

three months