Facts

This case stems from defendant DC Shoes' buyout of plaintiff Clayton Blehm's 30 percent interest in the company as part of a $15 million settlement of a wrongful termination suit Blehm had filed against DC Shoes for his termination as chief financial officer in 2002, to which DC Shoes had cross-complained.

After Quiksilver acquired DC Shoes in May 2004, and Blehm was paid the balance of the settlement, Blehm brought the present lawsuit against DC Shoes, its founders Kenneth Block and Damon Way, and its former general counsel Brian Wright, asserting claims for breach of contract, fraud, and breach of fiduciary duty.

PLAINTIFF'S CONTENTIONS:
Blehm alleged that the defendants had defrauded him in connection with the August 2003 settlement and sale of his DC Shoes stock by not disclosing that DC Shoes had been in discussions with a potential investor to acquire a minority interest in the company at the time of the settlement.

Damages

Blehm sought $25.5 million in damages on his fraud and breach of fiduciary duty claims, and another $2.5 million on his breach of contract claim. He also sought punitive damages against all defendants.

Result

Verdict in favor of defendants DC Shoes, Kenneth Block, Damon Way and Brian Wright on all claims.

Other Information

Following the plaintiff's case, San Diego Superior Court Judge David Brown granted a non-suit on the fraud claim against Wright and on the punitive damages claim against all of the individual defendants. At the close of evidence, Judge Brown directed a verdict in favor of Block and Way on Blehm's fraud claim, and in favor of DC Shoes on Blehm's claim for punitive damages. Thus, the jury was left to decide solely on damages claims against the company for breach of contract and fraud. On Dec. 4, 2007, after deliberating less than four hours, the jury returned its verdict for DC Shoes. The jury rejected Blehm's claims on all counts, finding that DC Shoes did not breach the parties' settlement agreement and did not defraud Blehm when it bought out his 30 percent interest in the company as part of the August 2003 settlement. Judge Brown then dismissed Blehm's claim for breach of fiduciary duty. FILING DATE: Aug. 17, 2006.

Deliberation

3.5 hours

Length

nine days