Lydall, Inc. v. Ruschmeyer

919 A.2d 421, 282 Conn. 209, 25 I.E.R. Cas. (BNA) 1633, 2007 Conn. LEXIS 171
CourtSupreme Court of Connecticut
DecidedApril 24, 2007
DocketSC 17612
StatusPublished
Cited by29 cases

This text of 919 A.2d 421 (Lydall, Inc. v. Ruschmeyer) is published on Counsel Stack Legal Research, covering Supreme Court of Connecticut primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Lydall, Inc. v. Ruschmeyer, 919 A.2d 421, 282 Conn. 209, 25 I.E.R. Cas. (BNA) 1633, 2007 Conn. LEXIS 171 (Colo. 2007).

Opinion

*213 Opinion

PALMER, J.

The defendant, Walter A. Ruschmeyer, appeals 1 from the judgment of the trial court, following a bench trial, enjoining him from disclosing or using information deemed by the trial court to be a trade secret and awarding compensatory and punitive damages and attorney’s fees to the plaintiff, Lydall, Inc. (Lydall). The trial court concluded that Ruschmeyer had breached employment agreements with Lydall and had violated the Connecticut Uniform Trade Secrets Act (CUTSA), General Statutes § 35-50 et seq., and the Connecticut Unfair Trade Practices Act (CUTPA), General Statutes § 42-110a et seq. Ruschmeyer raises numerous claims on appeal. We conclude that the trial court (1) properly found that a specific item of information that Ruschmeyer had disclosed was a trade secret, (2) correctly determined that Ruschmeyer had violated CUTSA by disclosing that information but improperly determined that Ruschmeyer’s conduct in planning to purchase and restructure Lydall on the basis of his knowledge of Lydall’s business violated CUTSA, (3) correctly determined that Ruschmeyer had threatened to disclose additional components of Lydall’s strategic business plan that might constitute trade secrets but improperly enjoined Ruschmeyer from disclosing all individual components of Lydall’s strategic business plan, (4) correctly determined that Ruschmeyer had breached his employment contracts, (5) improperly determined that Ruschmeyer wilfully and maliciously had violated CUTSA and improperly awarded punitive damages and attorney’s fees to Lydall, (6) improperly determined that Ruschmeyer had violated CUTPA, (7) improperly awarded compensatory damages to Lydall in light of the fact that Lydall had failed to assert a *214 claim for damages at trial, and (8) improperly enjoined Ruschmeyer from bringing an indemnification action against Lydall in the state of Delaware. Accordingly, we reverse in part the judgment of the trial court.

The record reveals the following relevant facts and procedural history. Lydall is a diversified, publicly traded corporation engaged in the business of designing and manufacturing specialty engineered air and liquid filtration media, automotive thermal and acoustical barriers, industrial thermal and insulating products and medical filtration and biopharmaceutical processing components. It is comprised of three main divisions, 2 each of which, in turn, is divided into numerous business units. Those units produce hundreds of different products. *215 vided in relevant part that Ruschmeyer would “devote his full business time and attention and best efforts to the affairs of [Lydall] and its subsidiaries and his duties as Executive Vice President-Finance and Administration, Chief Financial Officer . . . .” It further provided that Ruschmeyer “expressly agrees that [Lydall] shall be entitled to injunctive and other equitable relief without bond or other security in the event of such breach in addition to any other rights or remedies which [Lydall] may possess or be entitled to pursue.”

*214 Ruschmeyer is Lydall’s former executive vice president of finance and administration and chief financial officer. In connection with his employment with Lydall, Ruschmeyer executed two employment agreements. The first employment agreement contained the following language: “I will not, directly or indirectly, during or at any time after the period of my employment by Lydall, use for myself or others, or disclose to others, any confidential information, no matter how such information becomes known to me, unless I first obtain Lydall’s written consent.” 3 The second agreement pro-

*215 In May, 2002, all of Lydall’s business units began preparing strategies and plans for future business development. After developing preliminary plans, representatives of those business units met with Ruschmeyer and Christopher Skomorowski, Lydall’s chief executive officer, to review the plans. Each business unit then generated a set of “action plans” that, together with a financial analysis, was submitted to Ruschmeyer, Skomorowski and Hui Jing Shi, Lydail’s director of financial analysis and planning. On the basis of these materials, Ruschmeyer and his department prepared for presentation to Lydall’s board of directors five year strategic plans for each business unit and for the company as a whole. 4

In January, 2003, Lydall’s board of directors asked its chairman, Roger Widmann, to review Ruschmeyer’s job performance. In carrying out this assignment, Widmann spoke to those employees of Lydall who reported directly to Ruschmeyer. They all told Widmann that Ruschmeyer had treated them with disrespect and had destroyed the collegiality that previously had existed within the company. Widmann then met with Ruschmeyer, reported these statements and told Ruschmeyer that he had ninety days to address the various issues *216 that the employees had raised and to correct the problems.

On March 20, 2003, Ruschmeyer met with Stephen Curley, an attorney with the law firm of Mintz, Levin, Cohn, Ferris, Glovsky and Popeo, P.C., and a specialist in mergers and acquisitions, and with investment bankers Robert Arnold and Felicia Rosenzweig. One purpose of the meeting was to discuss whether Lydall would be a “viable candidate for [a management buyout].” The meeting took place without Lydall’s knowledge at the home of Ruschmeyer’s mother. Over the next several weeks, Ruschmeyer sent several e-mails to Curley attaching various versions of a document entitled “talking points,” in which he set forth his ideas for purchasing and restructuring Lydall.

In late March or early April, 2003, Widmann again spoke with the employees who reported to Ruschmeyer. They told Widmann that Ruschmeyer had not mended his ways and that he had become very withdrawn, spending hours in his office with the door closed. Widmann decided at that time to terminate Ruschmeyer’s employment with Lydall but did not inform Ruschmeyer of his decision.

On April 8, 2003, Ruschmeyer went to the office of Mary Tremblay, Lydall’s general counsel. He was angry and told Tremblay that, if the company made him angry enough, he would take it over. Ruschmeyer also told Tremblay that several members of Lydall’s board of directors wanted to terminate her employment and identified the members by name. Thereafter, Skomorowski and a member of the board of directors learned of Ruschmeyer’s statements to Tremblay. On April 16, 2003, Lydall terminated Ruschmeyer for cause.

The next day, Ruschmeyer sent to Curley an updated version of his talking points document. On April 30, 2003, Rosenzweig sent Ruschmeyer an e-mail attaching *217 a document entitled “Hoover,” 5 which set forth several questions and observations about Lydall’s business and suggested potential strategies for acquiring Lydall.

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Bluebook (online)
919 A.2d 421, 282 Conn. 209, 25 I.E.R. Cas. (BNA) 1633, 2007 Conn. LEXIS 171, Counsel Stack Legal Research, https://law.counselstack.com/opinion/lydall-inc-v-ruschmeyer-conn-2007.