Contract interference and stealing trade secrets rejected

In 1996, Predrag Vukovich worked for International Magnaproducts Inc. (IMI), an Indiana company that sells industrial magnets and owned by Donald Coleman.

In 1996, Predrag Vukovich worked for International Magnaproducts Inc. (IMI), an Indiana company that sells industrial magnets and owned by Donald Coleman. Coleman mentored Vukovich, who became his right-hand man. In 1999, Vukovich signed a noncompete agreement with IMI.

At the end of 2001, Vukovich left IMI and became a principal in two other ventures — Alliance LLC and Alliance Motors LLC. Coleman was one of several investors in Alliance Motors, which marketed brushless DC motors to industrial customers. To generate revenues for Alliance Motors, Coleman assigned 23 of IMI' s magnet customers to Alliance for Vukovich to service. IMI and Alliance split profits on the 23 customers, and Coleman leased space to Alliance and Alliance Motors.

Problems arose within a few months of Vukovich's departure. Coleman believed his former employee was diverting revenue from IMI to Alliance. Coleman decided to sell IMI to Wally Radjenovic, but Radjenovic would not buy unless Vukovich executed a covenant not to compete with him. Vukovich refused to do so. In early June 2002, Coleman locked Vukovich out of the offices he had rented to Alliance. Vukovich and some associates entered the offices through another door and retrieved equipment and records.

In the ensuing litigation, Coleman and IMI charged Vukovich with tortious interference with his contractual relations and with violating his covenant not to compete. The Indiana trial court granted a temporary injunction for Coleman, but the Court of Appeals held that the covenant not to compete Vukovich signed in 1999 was not valid because it contained no geographic limitations. On remand, the trial court granted summary judgment for Vukovich on most of his claims.

Coleman appealed to the Indiana Court of Appeals, arguing he had reached the basics of an agreement to sell IMI to Radjenovic, but that Radjenovic would not complete the deal unless Vukovich signed a covenant not to compete. Although Coleman argued that Vukovich's conduct interfered with his contract with Radjenovic, the court concluded: "Coleman's claim fails because there was no valid and enforceable contract between him and Radjenovic. Moreover, Vukovich was under no duty to agree not to compete with Radjenovic."

The court also rejected Coleman's claim that Vukovich had stolen his trade secrets by taking information on IMI's customers. According to the court, Coleman had failed to show that he had taken sufficient steps to maintain the secrecy of the information, since customer information was available to all IMI employees.

Coleman v. Vukovich,
825 N.E.2d 397
(Ind.App. 2005),
Ind Appeals,
April 12, 2005.

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