Lewis Rice Obtains $4.5 Million Judgment for Petter Packaging
After a four-day bench trial in St. Clair County, Illinois, and extensive post-trial briefing, Lewis Rice attorneys R. Bradley Ziegler and Matthew J. Haas obtained a $4,579,664.05 judgment for their client, Petter Packaging, LLC (“Petter Packaging”), in a case involving claims for breach of fiduciary duties and breach of a covenant not to compete. The award included $2,250,000 in punitive damages.
Brad and Matt represented Petter Packaging, a packaging supply company, in a lawsuit against its former President, Charles Hutchcraft (“Hutchcraft”), and five other defendants (collectively “Defendants”) in which Petter Packaging alleged, among other things, (1) the Defendants diverted a profitable business deal away from Petter Packaging for themselves while Hutchcraft was operating as Petter Packaging’s President; and (2) the Defendants began competing with Petter Packaging after Hutchcraft’s termination in violation of a covenant not to compete. The evidence at trial established that Petter Packaging hired Hutchcraft as President of Petter Packaging under the terms of an employment agreement and covenant not to compete in 2002. Petter Packaging later discovered that Hutchcraft and the other Defendants (his wife and several companies) acted in concert to divert a new, lucrative business opportunity away from Petter Packaging to a company owned and operated by Hutchcraft in violation of his fiduciary duties and the covenant not to compete. Hutchcraft diverted that opportunity in 2006 and concealed his breaches until just prior to his termination in 2010. Immediately upon his termination, Hutchcraft and Defendants began competing against Petter Packaging.
Judge Stephen Rice presided over the trial and found in favor of Petter Packaging. In his Order, Judge Rice awarded damages for Hutchcraft’s breach of his fiduciary duties owed to Petter Packaging and, despite Defendants’ arguments that the covenant not to compete was no longer in effect at the time of Hutchcraft’s termination and that it was too restrictive, enforced the agreement as written and awarded damages for breach of the covenant not to compete. Judge Rice awarded Petter Packaging compensatory damages, including lost profits and reasonable attorneys’ fees, expert fees, and costs, in the total amount of $2,329,664.05. Judge Rice found that punitive damages were warranted and awarded $2,250,000. Significantly, Judge Rice found all Defendants acted in concert in causing the breaches of fiduciary duties and breaches of the covenant not to compete and found Defendants jointly and severally liable for all damages awarded. Three of the Defendant companies, which were formed by Hutchcraft after his termination, were found to be nothing more than alter egos of Hutchcraft and were found to be jointly and severally liable for all damages.
Click under "Resources" below to view a copy of Judge Rice’s order.
The Lewis Rice Team
Lewis Rice Member Brad Ziegler primarily handled the lawsuit for Petter Packaging and was the lead trial attorney. Matt Haas second-chaired at trial and assisted Brad with pre-trial matters and post-trial briefing. Jack Martin assisted the team with research and briefing throughout the case, including with the argument to enforce the covenant not to compete as written. Geralyn Spacher assisted the team before and during trial. Finally, Rubin Brown Partner Thomas Zetlmeisl served as Petter Packaging’s expert witness at trial. Judge Rice found his opinion regarding damages to be logical and consistent.