Reynolds Frizzell wins complete defense trial victory on behalf of long-time private equity client in a case where plaintiff was seeking more than $50 million in alleged actual damages on various claims involving alleged disclosure of proprietary information. A federal judge dismissed all claims and entered judgment in favor of Reynolds Frizzell’s client, which faced claims for over $50 million in alleged compensatory damages, $100 million in punitive damages, and significant injunctive relief for alleged breaches of a non-disclosure agreement brought by a well-known national drywall contractor. Jean Frizzell, Elizabeth Wilkerson, Thallia Malespin, and senior paralegal Misty Davis secured the defense judgment after a 2-week bench trial in the U.S. District Court for the District of Arizona.
The contractor claimed $50.7 million in damages (plus punitive damages) for alleged violations of a non-disclosure agreement (NDA) arising out of our client’s contemplation of acquiring the contractor for a national drywall platform in the summer of 2021. After conducting due diligence, our client stepped away from the potential acquisition, and the contractor sued for breach of the NDA, alleging that our client wrongfully misused and disclosed the contractor’s confidential information to pursue the national drywall platform without the contractor. In addition to the breach of contract claims, the contractor brought Arizona trade secrets, unjust enrichment, breach of the covenant of good faith and fair dealing, breach of fiduciary duty, and unfair competition claims and sought a declaratory judgment, specific performance, and injunctive relief in addition to monetary damages.
The successful defense included securing the dismissal of the contractor’s trade secrets claims, breach of fiduciary duty claims, and unjust enrichment claims before trial. At trial, the District Court rejected the remaining claims of breach of contract, breach of the covenant of good faith and fair dealing, and unfair competition and concluded the contractor was entitled to no damages, dismissing all claims and entering judgment in our client’s favor. Pursuant to the NDA, our client, as the prevailing party, is entitled to payment of its attorneys’ fees and other costs at the conclusion of the case, including any appeals.