Lamorte Burns & Co. v. Walters

Lamorte Burns & Company (plaintiff), an insurance-claims adjusting firm, hired Michael Walters (defendant) in 1990 to build its protection-and-indemnity claims business, under an employment agreement barring him from disclosing confidential client data learned on the job. In 1996, Walters recruited his subordinate Nancy Nixon (defendant) to start a competing business, incorporating The Walters Nixon Group (WNG); while still employed at Lamorte, the two compiled detailed information on about 30 Lamorte clients - names, contacts, and claim details - onto Walters's personal computer. The day after resigning in 1997, they faxed solicitation letters to 33 Lamorte clients using that compiled information, and all 33 ultimately moved their claim files to WNG. Lamorte sued for breach of Walters's employment agreement, breach of the duty of loyalty, and misappropriation of confidential information; the trial court granted Lamorte summary judgment on all claims, the appellate division affirmed the contract claim but reversed on the tort claims, and the state supreme court took up the case.