Ge Bezt

GE BETZ, INC., Plaintiff, v. R.C. CONRAD, Robert Dodd, Benjamin Lukowski, Barry Ownings, and Zee Company, Inc., Defendants.

Court: Court of Appeals of North Carolina.

Date published: Dec 3, 2013

Facts

Appeals by individual defendants and Zee Company, Inc. from judgments entered 25 July 2011 and 23 May 2012 by Judge Phyllis M. Gorham in New Hanover County Superior Court. Appeal by additional appellants from orders entered 18 and 22 June 2012 by Judge Gorham in New Hanover County Superior Court. Heard in the Court of Appeals 11 September 2013. Ellis & Winters LLP, Raleigh, by Matthew W. Sawchak, Stephen D. Feldman, and Zia C. Oatley, for individual defendants-appellants. Robinson Bradshaw & Hinson, P.A., Charlotte, by John R. Wester and Jonathan C. Krisko, for defendant-appellant Zee Company, Inc.
Graebe Hanna & Sullivan, PLLC, Raleigh, by Mark R. Sigmon, for additional appellants.

McGuireWoods, LLP, Charlotte, by Bradley R. Kutrow and Monica E. Webb, and Ward and Smith, P.A., by Jenna Fruechtenicht Butler and John M. Martin, for plaintiff-appellee GE Betz, Inc.

Issue

Decision

Because the trial court correctly interpreted “indirect solicitation” and “supervisory responsibility” in individual defendants’ employment contracts, GE presented sufficient evidence to show individual defendants breached the confidentiality provisions in the employment contracts, and GE was not equitably estopped from penalizing Lukowski for breaching his contract, we affirm the trial court’s judgment as to individual defendants’ employment agreements. Additionally, because GE sufficiently established causation independent of evidence that GE lost customers for other reasons, we affirm the trial court’s exclusion of that evidence. Finally, because GE sufficiently identified the misappropriated trade secrets, and individual defendants acted in concert, we affirm the trial court’s ruling that joint and several liability and section 75–1.1 liability were appropriate. Thus, we affirm the trial court as to all issues on individual defendants’ appeal.

As to Zee’s appeal, we find that the trial court did not impermissibly change the measure of damages as a Rule 37 sanction. However, we do find that the entry of punitive damages against each defendant individually was in error given the Supreme Court’s ruling in Rhyne, and that the trial court’s assessment of attorneys’ fees did not consider whether the fees billed by Paul Hastings’s attorneys were reasonable in the context of the community in which the action was litigated. Therefore, we affirm the trial court’s measure of compensatory damages and remand the issues of punitive damages and attorneys’ fees.

Finally, because the trial court did not follow the proper statutory procedures in holding Almy in criminal contempt of court, that order must be reversed and will not be remanded for further proceedings. See Cogdell, 183 N.C.App. at 290644 S.E.2d at 264 (reversing the court’s judgment without remand where it failed to indicate that the reasonable doubt standard was used in a criminal contempt proceeding). Accordingly, we remand for a redetermination as to Almy’s pro hac vice revocation in light of this decision. We find that the court did not abuse its discretion in revoking the admission pro hac vice of Dombroff, because the discipline that he withheld from the trial court fell under the definition of the term as it is used in section 84–4.1.

AFFIRMED in part, REVERSED in part, and REMANDED in part.

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