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Sterling Business Forms Inc. v. Thorpe

filed: July 2, 1996.

STERLING BUSINESS FORMS, INC., APPELLANT,
v.
RICHARD E. THORPE, ELIZABETH THORPE, LEE LAMPSON, LIBERTY BUSINESS FORMS, INC., AND DAWN INGRAM, DEFENDANTS, WILLY SCHUMACHER, RESPONDENT.



Appeal from SUPERIOR COURT SPOKANE COUNTY. Superior Court No: 91-2-02824-3. Date filed in Superior Court: 12/23/94. Superior Court Judge signing: MARCUS KELLY.

Author: Philip J. Thompson. Concurring: Dennis J. Sweeney & Ray E. Munson

Author: Thompson

THOMPSON, J. --Sterling Business Forms, Inc. (Sterling) appeals the summary dismissal of its conspiracy claim against Willy Schumacher. It contends there were material issues of fact precluding summary judgment. We reverse and remand for trial.

FACTS AND PROCEDURAL HISTORY

Sterling commenced this action against Liberty Business Forms, Inc. (Liberty), Richard Thorpe, Elizabeth Thorpe, Lee Lampson, Dawn Ingram and Willy Schumacher. With the exception of Mr. Schumacher, the individual defendants were former Sterling employees. Sterling alleged several causes of action against Liberty, including a claim that Mr. Schumacher conspired with Sterling employees to obtain confidential information regarding Sterling's methods and customers and to improperly solicit clients for the benefit of Liberty and to the detriment of Sterling.

After considerable discovery was completed and after an earlier motion for summary judgment was denied, Liberty and the former employee-defendants moved for partial summary judgment. Mr. Schumacher joined the moving parties in requesting a dismissal of the conspiracy claim against him. The trial court granted Mr. Schumacher's motion and Sterling filed this appeal.

FACTS

The pleadings and materials submitted by the parties in the summary judgment proceedings establish the following.

Sterling operates a business forms production and distribution plant in Spokane. Mr. Thorpe was Sterling's Spokane plant manager and part of Sterling's management team. Mr. Lampson was its production manager. As the highest ranking employees in Sterling's Spokane operation, both had access to the company's financial information, customer lists, and other detailed information about business operations. Both signed confidentiality agreements whereby they agreed not to use or disclose customers, sales, and other information regarding the business.

At some point in late 1990, Mr. Thorpe and Mr. Lampson began to make plans to leave Sterling and establish their own business forms plant. In February or March 1991, Mr. Thorpe contacted Dennis Hubbell of Business Forms, Inc. (BFI) about investing in the venture and provided him with a packet of information. Mr. Hubbell passed the information on to Mr. Schumacher. Mr. Hubbell and Mr. Schumacher each owned 50 percent of BFI stock and BFI was a Sterling customer.

Mr. Schumacher found the information about the new venture incomplete and said he was not interested. However, some time later Mr. Thorpe provided him with a 1,000-page packet of information. After reviewing the material, Mr. Schumacher agreed to loan the new venture $150,000 and become a majority shareholder once bank financing was approved.

Mr. Schumacher helped obtain bank financing for Liberty.*fn1 One bank was told Mr. Thorpe and Mr. Lampson were planning an "insider takeover" of Sterling's Spokane operation. Another bank was told that (a) Sterling was moving its Spokane plant "south and beginning to concentrate in the California forms market," (b) almost all of Sterling's customers had expressed a willingness to do business with Liberty, and (c) BFI would buy 60 percent of its forms from Liberty and guarantee the bank loan.

Bank financing for Liberty was approved in April 1991. As required by the bank, Mr. Schumacher loaned Liberty $150,000 in several increments from April through July 1991. He and BFI also guaranteed the bank loans. Mr. Schumacher's loan to Liberty was unsecured and subordinated to the bank's line of credit. Mr. Schumacher also acquired a 51 percent interest in Liberty for $11,000 and became its president.

In April, Liberty leased a building and ordered equipment and phones. According to a Sterling employee, Liberty was taking orders from customers by the end of May. ...


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