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Washington court orders new trial in dispute over customer list allegedly used by car salesman

By Chandra Lye | Jan 8, 2019

SEATTLE (Legal Newsline) – The Court of Appeals for the state of Washington has overturned a lower court decision in a case over allegations of misuse of trade secrets, stating that the trial court erred and that a new trial is needed.

“(Appellant Larson Toyota) argued the exclusion of the four witnesses he failed to identify in his joint statement was error. He submitted declarations from the witnesses indicating they would have testified that they bought cars from Larson for reasons unrelated to the misappropriation and that they were not contacted or solicited prior to purchasing cars. We conclude a new trial is warranted,” the Dec. 31 appeals court decision stated.

In the case, the defendant, David Butler, was a salesman who allegedly composed a list of customers while he worked at Nordstrom selling shoes. In 2003, Butler left the store and began selling cars for Burien Toyota. 

“In March 2011, Butler left Burien Toyota and began selling cars at Larson Toyota. Butler took a 2009 version of the customer list with him. Butler contacted the customers to announce he was working at Larson. On April 4, 2011, Burien Toyota sent a cease and desist letter to Butler and Larson, alleging the customer list was Burien Toyota's trade secret,” the court decision explained. 

In response, Larson flagged the customers on the list as "dead clients" and did not contact them any further, according to the opinion. 

Burien Toyota sued Larson on April 25, 2011, “alleging breach of contract, unjust enrichment, breach of the duty of loyalty, violation of the UTSA, and tortious interference with business relationships,” the court decision stated. 

However, the Uniform Trade Secrets Act claim was the only one that went to trial. 

During discovery, “Burien Toyota produced a list of 200 matches between its customer database and Larson's sales list,” the decision stated. 

The trial ended with a jury finding that Larson did misappropriate the list but that it did not cause financial damage to Burien Toyota. The case was remanded for a new trial on unjust enrichment damages.

During discovery in the second trial, Burien Toyota produced a list of 412 customers that matched the new list that Larson allegedly had. 

“Burien Toyota claimed $4,305.66 in unjust enrichment damages per customer, totaling $1,773,934.96,” the court decision noted. 

That trial ended with a jury deciding “Larson was unjustly enriched and $12,496.12 of Larson's profits on sales were ‘attributable to the use of a trade secret,'" the decision stated. 

As a result of the jury finding Larson acted willfully and maliciously, it doubled the award and added attorney fees. 

However, Larson appealed, arguing that it had not been permitted to have four witnesses give testimony during the trial.

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