Representative Case: NuVasive, Inc. v. Kormanis
Practice Area: Business Law, Employment Law
Our Charlotte-based law firm is equipped to and experienced in handling a variety of business law cases. We are able to represent firms, based here and internationally, who do business in Charlotte, as well as represent individuals going head-to-head with large companies. In this case, our firm was retained to defend an ex-employee against claims of breach of contract, tortious interference with contract, North Carolina Unfair and Deceptive Trade Practices act, and Common Law Unfair Competition and Civil Conspiracy.
The suit of NuVasive, Inc. v. Kormanis claimed damages totaling $15,967,743. Mr. Kormanis retained Mathew Flatow, Managing Partner, and Arcangela Mazzariello, Of Counsel, to represent him in this case. Through the team’s work on behalf of Mr. Kormanis, four causes of action were dismissed and NuVasive’s damages expert was excluded from the case.
To get a clear picture on what our client faced, we’ll reference N.C. GEN. STAT. § 75-1.1 and several definitions in the law that are important to understand.
Interested in reading the full financial stakes in this case?
See case summary here.
Definitions for the Case
Breach of Contract
What it is: A legal cause of action available when a party to an agreement fails to abide by the agreement’s terms.
Why it matters: Remedies come in the form of injunctions (requiring a party to act or refrain from taking action) and monetary damages. An injunction will often prohibit certain conduct for a specified length of time. Monetary damages can be wide-ranging and depend upon both the terms of the agreement and the type of harm suffered.
In this case: Breach of contract was the main cause of action in this case, and NuVasive was asking for both an injunction (to prohibit our client from working in a certain territory) and monetary damages (to compensate for business they alleged to have lost). If this claim had been proven, our client may have been liable for over $5 million in compensatory damages.
Tortious Interference with Contract
What it is: A cause of action available when an individual has knowingly caused a party to an agreement not to adhere to their contractual obligations. This cause of action is brought against a third party, not the contracting party, and may accompany a breach of contract claim.
Why it matters: This is a way of bringing as many parties into contract litigation as possible, even if they were not parties to the contract itself. A plaintiff may be able to recover damages for breach from the breaching party itself, but also from anyone who knowingly caused the party to breach the contract. This can carry potentially serious consequences, particularly where multiple business associates are sued for breaching their individual contracts.
In this case: NuVasive brought a claim for tortious interference with contract against our client in order to recover damages flowing from the breach of an entirely separate agreement to which our client was not a party. NuVasive had settled with the other individual and released those claims, and used this cause of action to seek damages it may have otherwise recovered from the other individual from our client instead.
North Carolina Unfair and Deceptive Trade Practices Act
What it is: Just as its name implies, the North Carolina Unfair and Deceptive Trade Practices Act is a state statute that declares acts in or affecting commerce (“trade practices”) that are anti-competitive (“unfair”) or have a tendency to mislead the public (“deceptive”) to be illegal. The statute expressly provides a cause of action and also provides civil remedies for business practices deemed by a court to be in violation of the statute.
Why it matters: The most important consequence of this Act is its treble damages section, which states that compensatory damages awarded are to be tripled. This drastically increases the stakes of litigation, as the potential damages for which a defendant may be liable is significantly increased. Claims under the Act are becoming increasingly common in North Carolina for this reason alone–something the North Carolina Business Court has called a “regrettable trend.”
In this case: NuVasive attempted to use this act to triple the compensatory damages reported ($5,322,581). The SeiferFlatow team challenged the expert’s reporting methodology; their success at this particular deposition led to exclusion of the damages expert’s testimony & findings.
Common Law Unfair Competition and Civil Conspiracy
What it is: Common law unfair competition, as its name implies, does not come from a statute, but from the common law. It is a claim that is not appreciably different from a claim under the North Carolina Unfair and Deceptive Trade Practices Act. Civil conspiracy is a cause of action available in cases where two or more individuals agree to either commit an unlawful act or to commit a lawful act in an unlawful way, and where at least one of the individuals commits an act to advance the agreement.
Why it matters: This cause of action is a way of seeking additional monetary damages from defendants because the claim is asserted alongside another cause of action, such as breach of contract or unfair and deceptive trade practices. It may also be used to bring more defendants into a case, even if those defendants did not commit the act that gave rise to the core cause of action, such as breach of contract.
In this case: Common law unfair competition was dismissed at summary judgment because it is essentially the same claim as a claim under the North Carolina Unfair and Deceptive Trade Practices Act. Because that claim had already been dismissed, the Court also dismissed the common law claim. With respect to civil conspiracy, NuVasive alleged that Mr. Kormanis and various other third parties formed a plan and acted in concert to engage in unfair and deceptive trade practices by breaching Mr. Kormanis’ employment agreement and unlawfully competing with NuVasive. This cause of action was dismissed at summary judgment because the Court had dismissed NuVasive’s claim for unfair and deceptive trade practices, and correctly held that civil conspiracy is not a standalone cause of action and must be related to another valid cause of action.
Interested in reading the full financial stakes in this case?
See case summary here.
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The Bottom Line
This case involved depositions across the country and resulted in the filing of over 15 extensive briefs. A big win in the case came from a successful deposition in Nashville whereby our firm’s work led to the filing of a motion to exclude the expert’s testimony and findings.
After substantial written briefs and a hearing before the Honorable United States District Judge Catherine Eagles, an Opinion was issued by the Court on March 17, 2019. The Court dismissed NuVasive’s claims for Unfair and Deceptive Trade Practices, Common Law Unfair Competition, Civil Conspiracy and part of NuVasive’s Breach of Contract claim. In a separate Order issued on March 17, 2019, the Court found that NuVasive had not met its burden to show that their expert’s opinions are admissible. Prior to trial, the parties reached a mutually-beneficial resolution of all outstanding matters.
SeiferFlatow works for each and every client to secure the best possible outcome. We are ready, willing, and prepared to take a case to trial whenever necessary, however we also realize the value of coming to resolution before trial when possible and in the best interest of our client.
If you are a business or individual needing representation for non-compete issues, breach of contract, or other employee or contractual concerns, we are ready to help.
