Nashville At Law: Area firm hit with $110M suit alleging non-compete breach

Monday, August 18, 2008 at 1:01am

A Knoxville company has filed a complaint against Nashville-based Randa Solutions and its owner Martin Reed, accusing them of violating a non-compete agreement and asking for more than $100 million in damages.

The suit by Business Information Group was originally filed in a Knoxville court and was moved last week to Davidson County Chancery Court.

While the dollar amount is high, the claim is fairly simple. At issue in the case are high-dollar state information technology contracts — specifically, the deal to manage a database for the State of Tennessee’s standardized testing programs.

Business Information is now managing that database. According to its lawsuit, Randa Solutions is contracted with the Knoxville company and subject to a non-compete.

The complaint alleges that Reed bid on a recent state contract for which Business Information was also in the mix. According to Business Information, Randa possessed “proprietary and confidential information of [Business Information], lending them an unfair competitive advantage in the bidding process.”

Randa was awarded the contract in question, but Business Information wants an injunction preventing the Nashville company from entering into, negotiating or otherwise executing any contract with the State of Tennessee. It also is asking for punitive damages of $110 million in addition to actual damages decided by trial.

The suit was filed by Knoxville attorney Keith D. Stewart.

Sea-Monkey business

Another notable suit filed last week involves a favorite bit of ’80s nostalgia — Sea-Monkeys.

Local toy company Big Time Toys has filed a lawsuit in Davidson County Chancery Court against California resident George Atamian, claiming he attempted to sour the company’s agreement to make and sell everyone’s favorite brine shrimp product.

According to the complaint, Transcience Corp., which owns the methods for producing Sea-Monkeys, had a licensing agreement with California-based Educational Insights Inc. to make and sell Sea-Monkeys.

Educational Insights’ deal was set to expire at the close of 2007 and Nashville’s Big Time was eager to take over. Big Time claims that, as part of the pending deal, it was encouraged to hire Atamian, at the time an employee of EI. Big Time agreed and said it would pay Atamian $140,000 a year.

But, according to Big Time, the arrangement began to sour toward the end of 2007 as Atamian demanded his compensation be hiked to some four times that amount. Big Time, allegedly seeking to compromise, offered $150,000, which Atamian rejected.

Big Time claims Atamian then sought to retaliate by attempting to sour the company’s relationship with Transcience Corp. and “frustrate BTT’s attempts to market and sell Sea-Monkey’s products unless and until BTT hired Atamian.”

Sea-Monkey orders fell behind schedule and eventually Big Time received a letter from Transcience CEO Yolanda von Braunhut, saying all its orders would remain on hold. It also said Transcience would not cash a check sent by Big Time for the component parts for the company’s first order until it was assured that Atamian was joining Big Time.

Due to the continued delays since signing the Transcience deal — now about one year — Big Time claims it has missed out on at least $2.5 million. Filing its lawsuit are Salvador Hernandez and Russell Taber, both of Riley Warnock & Jacobson.

Other recent cases of note:

Davidson County Circuit Court

• Scott Michael Sanders v. The Cadillac Ranch, Sky Lounge, et al. Sanders has filed suit in circuit court claiming that as he sat at the bar, two bouncers from the bar approached him and, following an argument over fallen glasses, punched him “to the floor,” dragged him down the stairs, and heaved him on the pavement. As a result of his injuries, Sanders had to be placed on a stretcher and taken to the hospital. The lawsuit filed by Radford H. Dimmick seeks unspecified damages.

Davidson County Chancery Court

• David E. Danner esq. v. Nancy S. Jones, chief disciplinary counsel, Board of Professional Responsibility of the Tennessee Supreme Court.

A case of lawyers lawyerin’. Attorney David Danner claims the BPR improperly disciplined him for “admonishing a client via an email to be truthful in litigation which is required by the rules of legal ethics.” The petition for judicial review asks that the agency reverse its decision to issue a “private informal admonition.”

Providence Crossing LLC v. Crews Investment Properties of Tennessee LP, Crews Crossings LLC and Mike Slatterly.

• In 2004, Arkansas-based Providence Group contracted to buy 25 acres in Antioch for $1.4 million with plans to develop low-income housing. According to the complaint, Crews Investment Properties promised to build the access road.

Now, after a couple years and much ado, Providence now claims “Crews never had any intention of constructing the road.” Further, the company claims Slatterly was hoping to buy the property when the development failed due to the lack of access.

The lawsuit filed by Gregory H. Oakley of Soper & Oakley asks for a judgment of $15 million against Crews, along with compensatory damages of $15 millions and punitive damages of $45 million.

Filed under: City Business
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