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Tort/Negligence – Conversion – Damages – Unfair Trade Practices – Branch Office Takeover

Knight’s Medical Corp. v. Pickett (Lawyers Weekly No. 12-16-0285, 12 pp.) Appealed from Wake County Superior Court (Shannon R. Joseph, J.) N.C. App. Unpub. Full-text opinion.

Holding: A brother hired his sister to start up a branch office – intended to be a franchise, eventually – of his durable medical equipment business. Years later, the brother fired the sister; despite a non-compete agreement, the sister started running her own durable medical equipment business from the branch office location. The brother’s evidence of what it cost to set up and run the branch office supported the trial court’s award of damages for the sister’s conversion of the branch office.

We affirm judgment for plaintiff.

At trial, plaintiff offered a spreadsheet (exhibit 43) that illustrated the expenses it incurred in establishing the Chesapeake branch from 2006 through the time it was converted by the defendant-sister in June 2008. The brother testified that exhibit 43 showed “the total expenses that Kight’s Medical has spent on … developing [the Chesapeake] branch” and that exhibit 43 included money spent on “all of the equipment and supplies that were purchased for that particular branch….” This evidence was sufficient to furnish a basis for the jury to determine the fair market value of the Chesapeake branch.

Plaintiff also presented sufficient evidence to support the jury’s award of damages for unfair competition. The brother testified that plaintiff sustained significant losses associated with “having to start the Chesapeake branch back up….” Some of these losses were again illustrated by exhibit 43. The brother explained that exhibit 43 showed “what it cost Kight’s Medical to rebuild that branch” after it was converted by the sister in June 2008. In addition, he testified, “We [also] had to go out and build new referral sources for the business” which was “part of the cost . . . [we] had to incur due to [the sister’s] actions….”

Plaintiff also admitted into evidence its profit/loss statements (exhibit 49).  Referencing exhibit 49, the brother testified that the Chesapeake branch turned a profit of approximately (1) $35,000 in January 2008, (2) $24,500 in February 2008, (3) $8,800 in April 2008, and (4) $21,599 in May 2008, but after June 2008 “the trends were all losses….” We conclude that the sum of this evidence provided the jury with a sufficient basis to determine the damages plaintiff suffered as a result of the sister’s wrongful competition.


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