ATI Engineering Services, LLC v. Millard
| Decision Date | 07 August 2018 |
| Docket Number | NNHCV186079777S |
| Court | Connecticut Superior Court |
| Parties | ATI Engineering Services, LLC v. Brian W. Millard |
UNPUBLISHED OPINION
Judge (with first initial, no space for Sullivan, Dorsey, and Walsh): Pierson, W. Glen, J.
This action was brought by the plaintiff, ATI Engineering Services, LLC, against a former executive, the defendant Brian W. Millard. In its verified complaint, the plaintiff alleges claims in breach of contract; breach of the covenant of good faith and fair dealing; breach of fiduciary duty tortious interference with business relations; violation of the Connecticut Unfair Trade Practices Act, General Statutes § 42-110a et seq. (CUTPA); and unjust enrichment.
According to the plaintiff, it is the successor entity to Avionics Technologies, Inc., a Connecticut corporation with a principal place of business located in Woodbridge, Connecticut. In approximately August 2007, Avionics Technologies, Inc. assigned its business and accompanying agreements to the plaintiff.[1]
The defendant resides in Portage, Pennsylvania. He is a Federal Aviation Administration (FAA) Designated Engineering Representative (DER) and, as such, is subject to regulatory guidelines promulgated by the FAA and the federal government.
The plaintiff claims that on May 31, 2007, the plaintiff and the defendant entered into an employment agreement whereby the defendant was engaged as its Vice President and Chief Operating Officer (COO). Pursuant to the agreement, the defendant was responsible for estimating project costs, preparing proposals, submitting bids, staffing projects, project management, cost reporting, and customer interface. In exchange for the performance of these professional services, the defendant received a base salary, together with medical and dental insurance benefits. The defendant also received a bonus based upon corporate performance and was paid profit sharing comprised of fifty percent of the plaintiff’s annual operating profits for each year. The plaintiff alleges that the defendant earned the following amounts, by year: approximately $505,000 in 2014; approximately $380,000 in 2015; approximately $248,000 in 2016; approximately $226,000 in 2017.
The plaintiff claims that in executing the employment agreement, the defendant acknowledged that the plaintiff’s confidential information is of incalculable value to the plaintiff. Further, the defendant agreed that he would not at any time during or after the termination of the agreement, either directly or indirectly, use the plaintiff’s confidential information except and to the extent required to carry out his employment duties. The plaintiff further claims that pursuant to the employment agreement, during the term of the agreement and for three years thereafter, the defendant would not directly or indirectly solicit, interfere with or endeavor to entice away any person who was a client of the plaintiff during the period of his employment, for the purpose of providing applied engineering services, sales representation, or any services of a similar kind or nature.
The plaintiff contends that under the employment agreement, a breach by the defendant of the covenants contained in the agreement, including those relating to confidentiality and competition, would cause irreparable harm to the plaintiff Accordingly, in the event of a breach or threatened breach by the defendant, the plaintiff would be entitled to obtain, without bond, a temporary or permanent injunction to be issued by any competent court of law or equity, enjoining and restraining the defendant from any breach or threatened breach of any covenant contained in the employment agreement.
The plaintiff alleges that the defendant was in a position of trust and was a fiduciary with respect to the plaintiff, both as a result of his position as an officer and his execution of the employment agreement. It further alleges that the defendant was highly compensated. The plaintiff claims that, despite the defendant’s position of trust, his fiduciary obligations, and his explicit agreement not to compete with the plaintiff, or divert business opportunities from the plaintiff, the defendant used the plaintiff’s time and resources to compete unlawfully with the plaintiff, to its detriment. More specifically, the plaintiff contends that on or around January 29, 2018, the plaintiff became aware of certain email communications that "unequivocally demonstrate[d]" that the defendant used company time and resources to perform personal work for the plaintiff’s customers, thereby diverting business opportunities from the plaintiff.
The plaintiff claims that it began investigating the defendant’s conduct to determine whether he was diverting its business opportunities for his own personal gain, which conduct might also violate the plaintiff’s "teaming agreements" with its customers and is prohibited by "industry ethical standards." It further claims that, upon information and belief, the defendant set up a "Dropbox" electronic storage unit, solely accessible to him, into which he moved company and customer files.
On or about April 3, 2018, the plaintiff claims that its president and chief executive officer, Jamie Lecker, confronted the defendant with his findings and sought an explanation for the diverted emails and customer contacts. According to the plaintiff, the defendant "initially denied his actions" but, after being informed that Lecker had evidence in the form of the defendant’s email activity, the defendant "admitted that he had been working with [the plaintiff’s] customers individually and for personal gain." The defendant allegedly offered as an excuse that Lecker had "orally authorized" the defendant to engage in such activity. The plaintiff denies that Lecker ever gave the defendant authorization to work with its customers individually, and for personal gain, contending that such authorization would have been unlawful, contravened the plaintiff’s business interests, and jeopardized the integrity of Lecker’s contacts with the plaintiff’s customers. The defendant’s employment was terminated.
The plaintiff alleges that on or about April 4, 2018, the defendant sent Lecker an email confirming that the defendant had been terminated by Lecker the day before. This email allegedly contained the following statement: "I’m cleaning some personal material off of my laptop this morning and copying my DER files that I have to maintain per FAA regulations." The plaintiff goes on to allege that the defendant deleted more than 3,600 emails "in an apparent effort to destroy evidence of his unlawful conduct," but that that many of the foregoing emails have been recovered and are important company files. The plaintiff claims that the recovered emails corroborate the defendant’s purported self-dealing and unlawful conduct. The plaintiff also claims, upon information and belief, that the defendant attempted to change his Dropbox account, thereby restricting access to and blocking the plaintiff from obtaining materials stored on that platform.
In Count One, the plaintiff claims a breach of contract, alleging that the defendant violated the employment agreement by using company time and resources to perform work for the plaintiff’s customers, on a personal basis, thereby diverting business opportunities from the plaintiff and causing it to suffer damages. In Count Two, the plaintiff alleges a breach of the covenant of good faith and fair dealing implicit in the employment agreement, by competing with the plaintiff, thereby diverting its business opportunities. In Count Three, the plaintiff alleges a breach of fiduciary duty, claiming the existence of a fiduciary relationship between the parties arising from the defendant’s position as a corporate officer; and based on a relationship characterized by a unique degree of trust and confidence, as well as on the defendant’s superior knowledge, skill or expertise, which the defendant had an obligation to use to represent the plaintiff’s interests. The plaintiff further alleges that the defendant’s actions, as described above, were in his own self-interest, and that he engaged in a pattern of self-dealing, diversion, misapplication and waste of corporate assets, all to the defendant’s detriment and harm to its business reputation. In Count Four, the defendant alleges a claim of tortious interference with business relations, claiming that the defendant interfered with the plaintiff’s contractual and/or business relationships by acting in his own self-interest, and engaging in a pattern of self-dealing, diversion, misapplication and waste of corporate assets. In Count Five, the plaintiff alleges that the defendant’s conduct violated CUTPA. In connection with this claim, the plaintiff contends that by unlawfully competing with the plaintiff and diverting its business opportunities, the defendant engaged in unfair methods of competition and/or deceptive acts or practices in the conduct of trade or commerce, and further, that the defendant’s conduct offended public policy, was immoral, oppressive, unethical and unscrupulous, and caused substantial injury to the plaintiff, including an ascertainable loss. Finally, in Count Six, the plaintiff asserts a claim in unjust enrichment, alleging that as a result of the actions complained of, the defendant has been or will be unjustly enriched, to the plaintiff’s detriment, by benefitting financially from the diversion, misapplication and waste of the plaintiff’s corporate assets.
In its verified complaint, the plaintiff seeks compensatory damages common-law and statutory punitive damages...
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