Cnty. Materials Corp. v. Ind. Precast, Inc.
| Decision Date | 12 April 2022 |
| Docket Number | Court of Appeals Case No. 20A-PL-1683 |
| Parties | COUNTY MATERIALS CORP. and Central Processing Corp., Appellants/Cross-Appellees/Plaintiffs, v. INDIANA PRECAST, INC., Ryan S. Gookins, and Richard A. Rectenwal, III, Appellees/Cross-Appellants/Defendants. |
| Court | Indiana Appellate Court |
Attorneys for Appellants/Cross-Appellees: Thomas S. Reynolds II, Jessica C. Mederson, John P. Shanahan, Danielle M. Nardick, Hansen Reynolds LLC, Milwaukee, Wisconsin, John R. Maley, Barnes & Thornburg LLP, Indianapolis, Indiana
Attorneys for Appellees/Cross-Appellants: Robert L. Burkart, Clifford R. Whitehead, L. Katherine Boren, Ziemer, Stayman, Weitzel & Shoulders, LLP, Evansville, Indiana
[1] County Materials Corporation ("County") and Central Processing Corporation ("Central") (collectively, "the Purchasers") appeal the trial court's denial of their motion to correct error and motion for relief from judgment following the entry of final judgment and an award of attorney's fees in favor of Indiana Precast, Inc. ("Precast"), Ryan S. Gookins ("Gookins"), and Richard A. Rectenwal, III ("Rectenwal") (collectively, "the Precast parties").
[2] This is the second time this case has come to this Court. We initially affirmed the trial court's judgment. Cnty. Materials Corp. v. Ind. Precast, Inc. , 176 N.E.3d 526 (Ind. Ct. App. 2021) (" County I "). The Indiana Supreme Court vacated that opinion and remanded the case to this Court for reconsideration. Cnty. Materials Corp. v. Ind. Precast, Inc. , 177 N.E.3d 433 (Ind. 2021) (" County II "). We now affirm the trial court's judgment in part and reverse in part.1
[3] The Purchasers raise two issues, which we restate as:
[4] County is a Wisconsin corporation, and Central is incorporated in Florida. County produces precast concrete structures, such as utility access structures, for construction projects. Central is a "management services corporation" that provides workers for several businesses, including County, under contract. Appellees’ App. Vol. 6, p. 103. All of County's workers, including its executive officers, are in fact employees of Central who have been assigned to County. The Purchasers are owned by members of the same family and share office space in Wisconsin.
[5] Independent Concrete Pipe Company ("ICPC") made precast concrete structures, along with concrete pipes and related equipment. It owned plants in Indianapolis and Maxwell, Indiana. Gookins and Rectenwal were both long-time ICPC employees. Gookins was a salesperson, and Rectenwal drafted diagrams that ICPC's production teams used to make the concrete structures.
[6] In December 2014, County purchased ICPC's assets, including tangible property (such as inventory) and intangible assets (such as customer lists). County became the operator of ICPC's Indianapolis and Maxwell plants.
[7] At the time of the purchase, ICPC terminated its employees, and Central hired many of them. On December 10, 2014, Gookins, Rectenwal, and Central's other new employees appeared at the Maxwell plant for an employee onboarding process. On that day, Gookins and Rectenwal executed confidentiality agreements with Central. The agreements identified County as the company for whom Gookins and Rectenwal were assigned to work by Central and further stated that they would be County's agents. In addition, the agreements provided that during their employment and for a twenty-four-month period afterwards, Gookins and Rectenwal would not disclose to others confidential information that would be detrimental to County's business interests. Finally, the agreements stated that when Gookins’ and Rectenwal's employment at Central ended, they would be barred for twenty-four months from soliciting Central's employees to quit working for Central.
[8] Rectenwal also executed a non-competition agreement with Central that barred him from selling or marketing a product in competition with County's products for up to twelve months after his employment ended. In addition, the non-competition agreement contained a provision stating that after Rectenwal's employment ended, he would be barred for a twenty-four-month period from soliciting Central's employees to quit their jobs. Central also directed Gookins to sign a non-competition agreement, but he declined.
[9] Rectenwal was a "Tech Admin 2" for County, continuing to draft diagrams for production teams just as he had done for ICPC. Appellants’ App. Vol. III, p. 22. Central paid him a salary that was lower than ICPC's salary. Rectenwal resigned from Central in early February 2015, after less than two months of work. He went to work for Underground Pipe and Valve in South Bend, Indiana, where he worked in sales and sold products to numerous companies, including County. In addition, Rectenwal did drafting work for County as an independent contractor for several months after he quit.
[10] Central hired Gookins to be County's head of sales for Indiana. He complained to his supervisor and others about County's production processes, claiming that they were inefficient and alienated ICPC's former customers. Gookins quit Central in April 2015 and took a sales job with Utility Pipe Sales of Indiana ("Utility Pipe"). In that capacity, Gookins occasionally purchased products from County for resale.
[11] Subsequently, Gookins approached Bill Zausch, a co-owner of Utility Pipe, about entering the precast concrete structures industry. In the summer of 2015, Zausch joined Gookins and Rectenwal on a site visit to the Columbus, Indiana property of Horn Precast, a precast concrete structure manufacturer that was in bankruptcy. Zausch and others later purchased Horn Precast's assets. In January 2016, Zausch, Gookins, and Rectenwal, among others, incorporated Indiana Precast, a business that would make and sell precast concrete structures for construction projects. Zausch became Precast's president. Gookins became Precast's vice-president and owned a small amount of stock in the company. Rectenwal began working at Precast on February 8, 2016. He was Precast's general manager and also owned a small amount of stock in the company.
[12] In 2016, the Purchasers’ managers noted that several key employees, including production supervisors, had quit working at the Maxwell facility and were working at Precast. County's productivity suffered during this time, and the Purchasers attributed this slowdown in part to the loss of these employees. The Purchasers also became concerned that Precast may have unfairly poached County's customers.
[13] In February 2017, the Purchasers sued the Precast parties, beginning this case. The Purchasers raised the following claims against each party:
Tr. Ex. Vol. I, pp. 34-40. The Purchasers further alleged the Precast parties had joined in a civil conspiracy to improperly solicit the Purchasers’ employees and customers. Finally, the Purchasers requested an award of punitive damages against each of the Precast parties and an injunction prohibiting future solicitation of Central's employees.
[14] In April 2017, the Precast parties filed a motion to dismiss the Purchasers’ complaint. The trial court denied the motion after a hearing.
[15] Next, the parties exchanged discovery requests and repeatedly accused each other of violating discovery rules. They filed cross-motions to compel discovery and for sanctions.4
[16] In December 2017, the Purchasers served nonparty discovery requests on Utility Pipe. On January 10, 2018, one of the Precast parties’ attorneys notified the Purchasers that he also represented Utility Pipe. The attorney asked for a thirty-day extension to respond to the nonparty discovery requests, and the Purchasers agreed.
[17] On January 29, 2018, the Precast parties filed motions for summary judgment. Next, on February 16, the Precast parties moved to stay the Purchasers’ nonparty discovery requests until after the trial court ruled on their motions for summary judgment. In turn, the Purchasers filed a cross-motion for partial summary judgment. The trial court granted the Precast parties’ motion to stay nonparty discovery.
[18] On September 7, 2018, the trial court denied the parties’ cross-motions for summary judgment. The jury trial was scheduled to begin on October 8, 2018. The Purchasers requested leave to serve nonparty discovery, and the court granted that request.
[19] On October 3, 2018, the Purchasers filed a motion to continue the trial and for sanctions, claiming they had just received documents from Utility Pipe that the Precast parties also had in their possession and should have disclosed in discovery months ago. Among other documents received from Utility Pipe, the Purchasers received emails from Gookins that he had sent from the same email account and at the same time as other emails that he had previously produced. The Precast parties objected to...
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