A complex trial over unfair business competition ended late last year with a $7.5 million verdict when jurors agreed that former employees of a general contracting company breached their duty of loyalty when they started a similar business and allegedly diverted employees and customers to their new venture.
Jurors in Maryland federal court awarded the first company, Modern Remodeling Inc., $6.1 million in lost profits, $700,000 in compensatory damages and $665,000 in punitive damages, court records show.
The lawyer for MRI, Donald E. English Jr., wrote about the case in an article for the National Law Review.
“This trial was challenging for both sides because there were so many claims, parties, documents and emotions involved,” English said in an email. “It was important for our trial team to stick to the basic themes of disloyalty and unfairness to help the jury understand what this case was about. Our client feels vindicated and relieved that the jury held all of the defendants accountable.”
Lawyers for the defendants did not return phone messages requesting comment.
MRI’s general manager, Steven Trancucci, alleged that his business partner and childhood friend, Patrick Boyle, began planning to start a competing business in 2018, while he was still working at MRI.
MRI is a general contractor that focuses on insurance restoration in the mid-Atlantic region. Trancucci started the company’s Maryland office in 2008, according to the National Law Review.
MRI presented evidence that Boyle and MRI’s sales manager, Mike Kimball, stole documents from the company and pushed MRI employees to join their new competing businesses, High Mark Construction LLC, Strong Wall Construction LLC, and Tripod Holdings LLC.
MRI’s lawsuit also included as defendants four former sales employees. According to English, the defendants left MRI as a group in 2019, causing significant damage to MRI’s profits. But Boyle remained with MRI and “concealed his involvement with the competing companies,” English wrote for the National Law Review.
While still working for MRI, the plaintiff alleged, Boyle pushed MRI customers and job candidates to the competing businesses and deleted information from MRI’s computer system.
At trial, the plaintiffs had to present evidence that the defendants had restrictive covenant agreements with MRI because the agreements went missing from the employees’ personnel files shortly before they left MRI. The case involved evidence about MRI’s pattern and practice of using restrictive covenant agreements and eyewitness testimony about the existence of the agreements.
U.S. District Judge Catherine C. Blake also granted a request for sanctions in the case based on allegations that the defendants destroyed evidence, including emails and text messages. MRI was allowed to present evidence of the destruction to the jury, and jurors were instructed to presume the destroyed evidence was harmful to the defendants.
The verdict came in on Nov. 22, after a four-week trial.
The defendants have asked Blake to alter the verdict or grant a new trial, court records show. Blake has not ruled on the requests.