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$5.2M award in dispute over competing medical equipment business

On July 11, 2008, Kight’s Medical Corp. (“KMC”) filed a lawsuit in the Superior Court of Wake County against Ginger Kight Pickett (“Pickett”), the former manager of KMC’s Chesapeake, Va., branch; and Atlantic Home Medical (“AHM”), the durable medical equipment company that Pickett subsequently created to compete with KMC.   

 Pickett was employed by KMC as a branch manager for approximately two years. When she was hired, she had virtually no experience in the durable medical equipment industry. KMC provided her with training on how to operate a branch, including cultivating customers and referral sources, inventory management and billing procedures.

KMC filed the lawsuit after Pickett opened a competing durable medical equipment company in Chesapeake, Va., within hours after leaving the employ of KMC. In the lawsuit, KMC sought damages from Pickett for breach of a non-compete agreement for owning and operating a competing durable medical equipment company and soliciting KMC’s customers. KMC also asserted a claim for breach of a confidentiality agreement arising out of Pickett’s unauthorized use of KMC’s proprietary and confidential material to compete directly with KMC.

KMC pursued claims for Pickett’s tortious interference with KMC’s contractual rights with insurance companies and KMC’s prospective contractual rights with patients. KMC also alleged that Pickett was liable for conversion by virtue of her improper use KMC’s funds, inventory, policies and procedures, and billings and receivables.

KMC asserted claims against Pickett and AHM for violation of the N.C. Unfair and Deceptive Trade Practices Act (“UDTPA”) for using KMC’s inventory, equipment, funds, customers, and business systems to operate a durable medical equipment company that competes directly with KMC. In its UDTPA claim against AHM, KMC also alleged that AHM placed AHM stickers over the KMC label on durable medical equipment in KMC patients’ homes. Pickett asserted counterclaims against KMC for breach of contract, fraud and violation of the UDTPA, and third-party claims against John Kight (CEO of KMC) for breach of contract, fraud and UDTPA.

Michael D. DeFrank and Lee M. Whitman tried this case to a jury for seven days. On May 4, 2010, the jury returned a verdict in favor of KMC on all counts and awarded KMC $1,066,244 for conversion and $1.328 million for UDTPA, for a total of $2,394,244 in damages. The jury found against Pickett on all counterclaims asserted against KMC and John Kight. On June 9, 2010, the trial judge trebled the damages for Unfair and Deceptive Trade Practices pursuant to N.C. law, and entered a final judgment for KMC in the amount of $5,220,843.

Pickett filed a motion for JNOV that has been fully briefed and argued but as of this date remains pending before the trial judge.


Verdict Report


Type of action: Commercial (contract, fraud, conversion, unfair and deceptive trade practices)

Case name: Kights Medical Corp. v. Ginger Kight Pickett and Kight’s Medical of Virginia, Inc.

Case number: 08 CVS 12075

Court: Wake County Superior Court

Judge: Hon. Shannon R. Joseph

Verdict or settlement: Jury verdict

Date: May 4, 2010

Amount: $5,220,843

Offer: None  

Insurer: None  

Experts: None

Were liability and/or damages contested? Yes

Was the opposing party represented by legal counsel? Yes

Has the plaintiff been successful in actually collecting the judgment? Judgment docketed, but collection proceedings correctly stayed.

Plaintiff’s attorney: Lee M. Whitman and Michael D. DeFrank, both of Wyrick Robbins (Raleigh)

Editor’s note: The information in Lawyers Weekly’s verdicts and settlements reports was submitted by the counsel for the prevailing party and represents the attorney’s characterization of the case.

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