Dowd & Dowd, Ltd. v. Gleason

816 N.E.2d 754 (2004)

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Nature of the Case

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Facts

P is a law firm. In 1975 Allstate, retained P for advice on insurance coverage of claims that were being made against Allstate's policyholders for injuries arising from exposure to asbestos products. D joined P in 1977 as an attorney and for the next 13 years became the primary person handling the Allstate account. Following the appointment of Patrick Dowd to partner, Ds began investigating the possibility of establishing a new, separate law firm. They decided to take preliminary steps to form that firm and by December 1990, had located office space, ordered furniture and equipment, and initiated a banking relationship with the Harris Bank. On December 31, 1990, Ds resigned and started the GMS law firm. P brought this action against Ds seeking imposition of a constructive trust on the new firm's fee income, an accounting, compensatory and punitive damages for breach of fiduciary duty, breach of contract, and other theories of recovery. Ds filed a counterclaim, seeking amounts due under a stock repurchase agreement and sanctions. Eventually, a bench trial was had and the trial court entered a judgment order, finding in favor of P on the following counts: count I, breach of fiduciary duty; and count III, tortious interference with prospective economic advantage. The trial court found that P failed in its burden of proof as to count VII, wilful and wanton conduct. The trial court awarded damages for lost profits, and for breach of fiduciary duty. D appealed.