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Court erred in barring expert witness in decade-old software suit

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A trial court erred when it excluded the expert testimony of a witness who sought to address damages for a software company whose former employees allegedly violated non-compete clauses.

In the latest chapter of litigation dating to 2002, the Indiana Court of Appeals on Tuesday reversed the Porter Superior Court’s grant of a motion to exclude economic and business valuation testimony of an expert for the plaintiffs in Think Tank Software Development Corp. d/b/a Think Tank Networking Technologies Group, et al. v. Chester, Inc., Mike Heinhold, John Mario, Joel Parker, Thomas Guelinas, et al., 64A05-1205-PL-270.

Mike Heinhold, John Mario,Joel Parker, Thomas Guelinas and other former employees of Think Tank who years earlier went to work for Chester wanted to exclude the testimony of an expert whose qualifications and reliability of scientific principles were disputed. The trial court granted the motion.

In reversing, Senior Judge John Sharpnack wrote that once an expert’s scientific theories are determined to be reliable under Trial Rule 702, cross-examination is the means of exposing dissimilarities between actual evidence and an expert’s theories.

Sharpnack also clarified potential damages in the 17-page order. “Stated simply, four of Think Tank’s claims survived summary judgment: breach of a covenant not to compete, breach of a covenant of confidentiality, misappropriation of trade secrets, and tortious interference with contract. In Think Tank I, (64A03-1003-PL-172) we noted, ‘The proper measure of damages for breach of a covenant is the plaintiff’s lost net profits,’” Sharpnack wrote.

“Finally, to the extent that (the expert’s) profit erosion analysis is based solely on the departure from Think Tank of the defendant employees and their subsequent employment by Chester, the analysis may be inadmissible because the defendant employees were free to leave and become employees elsewhere. They committed no wrong, contractually or otherwise, against Think Tank merely by leaving,” the court said.




 

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