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On April 4, 2019, the Court of Civil Appeals of the State of Oklahoma affirmed a judgment obtained for our clients through trial and briefing by Joe Farris and Paula Quillin. Our client, the Plaintiff, sued Defendants for fraud/deceit, conversion, tortious interference with contract, tortious interference with business opportunity, and breach of fiduciary duty.

            Plaintiff, with no previous manufacturing business, was a managing member and 2/3 interest owner in an LLC. The other 1/3 interest owner was a Defendant in this matter. Another Defendant in this matter was an independent contractor who was to be the “eyes and ears” of Plaintiff at the manufacturing facility and charged with acquiring new customers. During the course of business, Plaintiff bought equipment in the amount of $80,000 and provided $197,000 of working capital. Additionally, Plaintiff paid his independent contractor $1,000-$2,000/month.

            After a time, the business began to fail and Plaintiff later discovered Defendants had opened a secret bank account in the name of a separate company and began transferring checks from Plaintiff’s company into the secret bank account and/or having Plaintiff’s customers write checks directly to the secret bank account. An accounting of the secret account showed that not all of the money paid into the secret account made its way to Plaintiff’s company. Further, Defendants kept refunds paid by customers to cover personal expenses rather than returning those amounts to the company and kept amounts paid for scrap metal.

            When Plaintiff found out about the secret account, Defendants formed a competing company within the month, took 8 of Plaintiff’s 10 employees, and took all of Plaintiff’s customers. The competing company billed Plaintiff’s former customers in its first 2 months of operations and its gross billings for its first year of operations was over $1.2 million, more than any revenue ever earned while Defendants were supposed to be working for Plaintiff.

           The trial court, which was affirmed by the Court of Civil Appeals, awarded Plaintiff actual damages of $294,516.07 plus an additional $50,000 in punitive damages, finding Defendants liable on all grounds brought by Plaintiff.