Breach of Duty & Loyalty – Court Error

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WI Court of Appeals – District IV

Case Name: Ikaria, Inc v. Frederick J. Montgomery, et al

Case No.: 2015AP568

Officials: Lundsten, Higginbotham, and Blanchard, JJ.

Focus: Breach of Duty & Loyalty – Court Error

Ikaria, Inc. identifies itself as a “biotherapeutics company.” Ikaria sued four of its former employees and one individual Ikaria never employed, as well as NitricGen, Inc., a company that Ikaria alleges is its competitor. The suit claimed various causes of actions against the defendants and subsets of the defendants, including one cause of action alleging that all defendants conspired to “establish NitricGen for the purpose of using and exploiting confidential, non-trade secret information belonging to Ikaria.” Following a four-day bench trial, the circuit court dismissed all of Ikaria’s claims in a written decision. The court’s view was that Ikaria’s claims “involved much smoke but little demonstrated fire.” While all claims were dismissed, Ikaria appeals dismissal of only some, namely, the claims against: three former employees (Frederick Montgomery, Duncan Bathe, and Cory Casper), for breach of the implied duty of good faith and fair dealing and for breach of a non-compete clause; Bathe, for breach of a duty of loyalty; and the individual never employed by Ikaria (Tye Gribb), for aiding and abetting Bathe’s breach of the duty of loyalty. Ikaria argues that the court clearly erred in finding facts and erred in applying legal principles. For the following reasons, we affirm the judgment.

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Attorney Derek A. Hawkins is the managing partner at Hawkins Law Offices LLC, where he heads up the firm’s startup law practice. He specializes in business formation, corporate governance, intellectual property protection, private equity and venture capital funding and mergers & acquisitions. Check out the website at www.hawkins-lawoffices.com or contact them at 262-737-8825.