(August 1, 2006. Manchester, NH.) - The New Hampshire Supreme Court affirmed a judgment in favor of two Sheehan Phinney Bass + Green clients, Team Mortgage, LLC and Signature Mortgage Consultants LLC, and their principals, Joseph C. Davey and Steven Michael Carbone, respectively, who were each accused of trade secret misappropriation and misuse of alleged confidential information by their former employer, The Mortgage Specialists Inc. The Court also reversed a substantial post-trial award of monetary sanctions against the two companies and their principals. Sheehan Phinney attorneys Christopher Cole and Robert Lucic represented the defendants.
The Mortgage Specialists Inc. originally claimed that the two defendants had violated federal financial privacy laws, the New Hampshire Uniform Trade Secret Act and a host of common and statutory causes of actions, when they retained certain client information upon the termination of an independent contractor arrangement.
Before the trial, Cole and Lucic convinced the Court to dismiss all claims aside from the alleged trade secret misappropriation claim, convincing the trial court that the Trade Secret preempted all additional claims. The Mortgage Specialists Inc. had also alleged claims of breach of fiduciary duty and violation of the Consumer Protection Act, among others, against Davey and Carbone.
During the course of a six-day trial, however, Cole and Lucic convinced the jury that the information retained by the defendants did not qualify as trade secrets. Lucic and Cole stressed that their clients had never been asked to sign non-competition or non-disclosure agreements; that The Mortgage Specialists Inc. did not otherwise adequately protect the confidentiality of the information; and, therefore, The Mortgage Specialists Inc. had not taken reasonable steps under the circumstances to protect their information.
The Supreme Court affirmed the jury's verdict that The Mortgage Specialists Inc. had failed to demonstrate the existence of trade secrets. Establishing new law in New Hampshire, the Court also adopted Cole and Lucic's argument that the Trade Secret Act preempted the other claims to the extent such claims were based on the alleged misappropriation of confidential business information.
The July 26, 2006 decision can be viewed at: www.courts.state.nh.us/supreme/opinions/2006/index.htm.
Sheehan Phinney Bass + Green is a regional business law firm with offices in Boston, MA, and in Manchester, Concord and Lebanon, NH. The firm provides a broad range of sophisticated legal services to businesses and institutions in traditional and emerging areas of the law. Its diverse client base includes local and regional organizations, as well as national and international businesses with interests in the Northeast.
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