An employee of a wine-making company was sued by his former employer for starting a competing business while he was still serving as the company’s president. The company also alleged that he misused his position as president to sell the same wine under the company’s brand and the brand of his new company, while assigning lower prices to the wine from his new brand, thereby siphoning sales away from the winemaker. After a trial, a jury found in favor of the company but awarded it no damages. The company appealed, arguing that the jury’s verdict was inconsistent with its findings regarding liability. The appellate panel disagreed, finding that the jury could reasonably have concluded that though the ex-employee was liable, his actions did not cause the company any significant financial harm. The panel upheld the verdict and the judgment of the district court.
Gerald Forsythe formed Indeck-Paso Robles, LLC for the purpose of creating and managing a wine-grape vineyard. In 2006, Indeck purchased Shimmin Canyon Vineyard in Paso Robles, California. Forsythe later established Continental Vineyard LLC, as a wholly-owned subsidiary of Indeck, for the purpose of operating Shimmin Canyon. Forsythe appointed himself chairman and CEO and named Randy Dzierzawski president. Dzierzawski was in charge of all of Continental’s day-to-day operations.
Though the two originally intended for Continental to only operate as a grape-growing enterprise, they eventually decided that they wished to branch out into winemaking. Continental then hired Chris Cameron, and experienced vintner, as Director of Winemaking. In 2010, Cameron and Dzierzawski, on behalf of Continental, met with Mark Esterman, a wine buyer for the Meijer grocery store chain to discuss developing custom wine for the store. Dzierzawski brought the opportunity to Forsythe, but Forsythe declined to pursue it, finding it to be a money loser. Continue reading ›