Columbus concrete company prevails in dispute with competitor, former employer

A ruling for concrete-industry employees in a breach of confidentiality dispute with their former employer has been affirmed by the Indiana Court of Appeals.

Wisconsin-based County Materials Corp. and Florida-based Central Processing Corp. had a partnership in which Central provided workers under contract for County’s precast concrete structure business. County later purchased Independent Concrete Pipe Company — which owned plants in Indianapolis and Maxwell, Indiana — acquiring ICPC employees Ryan Gookins and Richard Rectenwal.

Both men quickly quit under County’s employment, however, after having signed confidentiality agreements with Central. Those agreements provided that during their employment and for the two-year period after, Gookins and Rectenwal could not disclose to others confidential information that would be detrimental to County’s business interests. When their employment came to an end, the agreement also stated that they would be barred for two years from soliciting Central’s employees to quit.

Rectenwal also executed a noncompetition agreement with Central that barred him from selling or marketing a product in competition with County’s products for up to 12 months after his employment ended. Gookins, however, did not.

Gookins took a job with Utility Pipe Sales of Indiana. Then, he and Rectenwal enlisted Bill Zausch, a co-owner of Utility Pipe, and incorporated Indiana Precast in Columbus.

Meanwhile, several key employees left the Maxwell facility and moved to Precast, prompting County and Central to sue for breach of confidentiality and tortious interference with contractual and business relationships.

The Hancock Superior Court granted the Precast parties’ motion for judgment on the evidence for all of Central’s claims and on County’s punitive claims, and a jury eventually ruled for the Precast parties on County’s remaining claims.

County and Central hit another roadblock when they were denied a motion to correct error and a motion for relief from judgment. Although the trial court granted three separate attorney fee awards to the Precast parties, it vacated the orders due to the pending appeal.

But when the Indiana Court of Appeals dismissed the appeal in May 2019, the trial court once again granted the Precast parties attorney fees in the amount of $655,642.66. It determined County and Central were jointly and severally liable and that their claims were frivolous, unreasonable and groundless.

In January 2020, County and Central filed another motion to correct error and motion for relief from judgment, basing their request for relief on documents they had received from the Precast parties in connection with a pending federal lawsuit.

Once the trial court denied those motions, County and Central again unsuccessfully appealed in County Materials Corp. and Central Processing Corp. v. Indiana Precast, Inc., Ryan S. Gookins, and Richard A. Rectenwal, III, 20A-PL-1683.

“None of the newly discovered evidence attached to the motion for relief from judgment demonstrates Central suffered any damages as a result of the Precast parties’ alleged wrongdoing. Thus, Central failed to establish a meritorious claim, as required by Trial Rule 60(B)(3), and the trial court did not abuse its discretion in refusing to set aside the final judgment as to Central,” Senior Judge Ezra Friedlander wrote for the COA.

The appellate panel came to a similar conclusion on County’s request to set aside the jury’s verdict against it, and its arguments that the Precast parties unfairly hid evidence in the form of more than 100 pages of emails and attachments sent and received by Gookins, Rectenwal, other Precast personnel and outside parties.

“We are not convinced … that the Precast parties’ failure to produce the evidence prior to trial prevented the Purchasers from fully and fairly trying their case. Many of the emails are cumulative of other evidence that was admitted at trial,” Friedlander wrote, also affirming the denial of Central and County’s request for relief from the attorney fees award.

As for Precast’s cross-appeal seeking additional attorney fees, the COA found that while County and Central’s claims were unsuccessful, they were reasonable in light of the Precast parties’ failure to timely produce the emails and attachments at issue prior to trial.

The COA denied the Precast parties’ request, finding any shortcomings in County and Central’s briefs on appeal insufficient to support a fee award. It also denied their alternative claim that the Precast parties were entitled to appellate attorney fees under Indiana Code § 34-52-1-1.

Attorneys Kathleen A. DeLaney of DeLaney & DeLaney LLC and Paul L. Jefferson of McNeely Law served as amicus for Attorneys for Open Courts.