BFV Perspectives, Noncompete & Trade Secrets, | Nov 04, 2011

Georgia Court of Appeals Affirms Jury Verdict on Conversion Claim and Permanent Injunction based on Deceptive Trade Practices Claim

Trotman v. Velociteach Project Management, LLC,  — S.E.2d. –, 2011 WL 2697042 (Ga. App. July 13, 2011), involved misconduct by a former instructor of Velociteach Project Managements, LLC (“Velociteach”).

Velociteach offers project management training courses to students seeking a Project Management Professional credential.  Mr. Trotman was a former instructor for Velociteach.  When Mr. Trotman left Velociteach, he executed a confidentiality agreement.  This agreement required him to return and/or delete all course materials and electronic presentation slides.  It also prohibited him from soliciting Velociteach customers for a period of three (3) years.  When Mr. Trotman left, he told Velociteach staff that he had returned or deleted all teaching materials.

After executing the confidentiality agreement, Mr. Trotman asked Velociteach if he could buy instruction kits to teach the classes on his own.  Velociteach declined his request.  Shortly thereafter, he formed his own company and began teaching training courses on his own.  A year later, Velociteach’s founder discovered that Mr. Trotman’s company’s website listed Velociteach customers and also contained marketing copy that the founder had written for Velociteach.  He also observed similarities between the two companies’ course details.

Velociteach filed suit against Mr. Trotman and his new company alleging a host of claims.  The case was tried to a jury which awarded $13,750 against Mr. Trotman and $134,000 against CertiFi (Mr. Trotman’s new company).  The trial court, based on the verdict, entered a permanent injunction requiring Mr. Trotman to return all Velociteach materials and to abstain from using Velociteach’s customer list.

On appeal, Mr. Trotman and CertiFi raised several enumerations of error.  Mr. Trotman appealed the permanent injunction under the Deceptive Trade Practices Act which the trial court entered based on the jury’s verdict.  Reviewing this enumeration, the Court of Appeals recited the various evidence introduced at trial which supported the injunction.  Mr. Trotman had created a misleading advertisement stating that CertiFi had developed course content over a four year period, which would have included time he was with Velociteach and not CertiFi.   Mr. Trotman also solicited former Velociteach students by referencing the Velociteach course and by falsely holding himself out as properly certified.  Mr. Trotman also published a list of Velociteach customers and falsely represented them to be CertiFi customers.  This evidence supported a jury finding that he violated the Deceptive Trade Practices Act, and the trial court did not abuse its discretion awarding injunctive relief based on this verdict.

The Georgia Court of Appeals also rejected Mr. Trotman’s arguments that the scope of the injunction was an abuse of the trial court’s discretion.  The injunction was limited to the use of Velociteach’s course materials and customer list.  It did not prohibit him from engaging in other teaching activity.  The monitoring aspects of the injunction were also not an abuse of discretion.  The scope of the injunction was thus reasonable, according to the Court of Appeals.

The Georgia Court of Appeals also reviewed CertiFi’s appeal of the judgment against it based on Velociteach’s conversion claim.  CertiFi argued that because Mr. Trotman’s Confidentiality Agreement required him to return or destroy any training materials, Velociteach had “abandoned” those materials.  Thus, according to CertiFi, by virtue of this alleged “abandonment”, the conversion claim was barred given the absence of Velociteach’s right of possession.  The Court of Appeals rejected this argument, finding that the confidentiality agreement in fact evidences Velociteach’s attempt to remain in exclusive control and possession of its confidential information, and not to abandon that information.

CertiFi also challenged the sufficiency of the evidence on Velociteach’s unjust enrichment claim.  CertiFi argued that the damages awarded for Velociteach’s unjust enrichment claim were not supported by any evidence in the record from which it could be determined to a reasonable certainty that CertiFi had realized any gain.  The Court of Appeals rejected this argument.  The Court of Appeals pointed to evidence that Mr. Trotman had unsuccessfully requested to purchase the instruction kits from Velociteach.  As the kits were valued at $1,000 each, the jury could have concluded that Mr. Trotman avoided paying $1,000 in costs for each kit that he used to teach CertiFi students.  It was undisputed that Mr. Trotman taught more than three hundred students on behalf of CertiFi.  As such, there was sufficient evidence to authorize the jury’s damages award on the unjust enrichment claim.

The trial court also rejected CertiFi’s appeal of certain evidentiary rulings and its objections to certain jury charges, although the Court of Appeals did reverse an attorney’s fees award against CertiFi because it was not properly apportioned to the sanctionable conduct.

This case serves as a good reminder of the injunctive relief potentially available under the Uniform Deceptive Trade Practices Act in competition-related cases with appropriate facts.

BFV Perspectives, Noncompete & Trade Secrets, | Nov 04, 2011
Neal F. Weinrich
Neal F. Weinrich

Neal Weinrich knows noncompetes and trade secrets inside and out. A shareholder at Berman Fink Van Horn, Neal counsels clients in all industries on matters involving restrictive covenants, trade secrets and other competition-related issues.