Exterior Systems, Inc. v. Noble Composites, Inc

175 F. Supp. 2d 1112 (2001)

Purchase the Printed Copy at bsmsphd.com

Nature of the Case

To access this section all you need to do is click here and register.

Facts

Welter's present counsel, Cynthia Gillard, is a member of a firm, Warrick & Boyn, that has represented Welter since 1972. Welter founded Fabwel, Inc. (Fabwel) to make fiberglass panels used in recreational vehicles. Welter served as Fabwel's majority shareholder, president, and chief executive officer until he sold the company to ABF Investors, Inc. (ABF) in 1987. Welter continued as president and chief executive officer of Fabwel under ABF's ownership. Gillard continued to serve as counsel for Fabwel. Gillard represented Fabwel in the purchase of Master Fab, Inc., a company owned and controlled by Farver. Gillard prepared numerous contracts and other acquisition documents on behalf of Fabwel, including a February 10, 1988 non-competition/non-disclosure agreement between Fabwel and Farver. Welter established the Executive Benefit Plan for executives of Fabwel. Gillard drafted an amended Plan agreement between Fabwel and Welter. In July 1992, Welter and twenty other minority investors bought Fabwel back from ABF. Among the twenty minority employee investors were Stout, ESI's current President; Farver, and Gardner, Fabwel's Chief Financial Officer until 1999 when he left and became a shareholder of Noble Composites. Welter continued as chairman of the board of directors and chief executive officer of Fabwel. Welter's counsel, including Gillard, continued as counsel for Fabwel. Gillard represented Fabwel in its initial public offering. In 1994 and 1995, she assisted Fabwel with its purchase of ITI Tuco, Inc. She prepared non-competition/non-disclosure agreements on behalf of Fabwel in conjunction with the ITI acquisition. Welter and the other shareholders sold Fabwel to Fibreboard Corporation. Welter signed a consulting and non-competition/non-disclosure agreement with Fabwel. Welter and Fabwel also signed a May 5, 1997 amendment to the Executive Benefit Agreement. Gillard represented Welter and some of the other shareholders during these transactions, including Stout, Gardner, and Larry Farver. Fabwel and Welter signed a second non-competition agreement. The second agreement enabled Welter to receive early retirement benefits as described by the Executive Benefit Agreement. Gillard represented Welter during this transaction. Owens Corning bought Fibreboard and thus Fabwel. Owens Corning merged Fabwel into P, which is a subsidiary of Fibreboard, which is a subsidiary of Owens Corning. Fabwel is now operated as a division of P. Since the sale, Owens-Corning has hired Warrick & Boyn on three matters, all unrelated to the present dispute. In November 1997 Owens Corning asked for a copy of the Indiana statute relating to bribery, blackmail, and extortion. In January 2000 Owens-Corning contacted Warrick & Boyn about a possible collections case that was never filed. Finally, in March 2000 Warrick & Boyn appeared in Elkhart Superior Court in a case involving a fire at Fabwel in 1998. The suit was settled and dismissed in June 2001. Ds left to form Noble (D). P filed suit claiming breach of the non-competition/non-disclosure agreements, misappropriation of trade secrets, intentional interference with employment relationships, and other claims. P alleges that D manufactures the same products as P and that Farver and Welter breached their non-competition/non-disclosure agreements and raided P's workforce. P terminated the benefit plan and ceased paying Welter. In part Welter sought a judgment declaring the most recent non-competition/non-disclosure agreement was null and void once P stopped paying Welter's early retirement benefits in breach of the Executive Benefit Agreement. P moved to disqualify Gillard.