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Member Services, et. al. v. Security Mutual Life Insurance Company of New York, et. al.

Case Conclusion Date: 10.13.2011

Practice Area: Intellectual property

Outcome: $26 Million dollar Jury Verdict, $10 Million of which is Punitive Damages

Description: Just months after their precedent setting $24 million judgment against Home Depot, Tripp Scott attorneys Peter Herman and Alexander Brown have obtained another substantial jury verdict, $26 million, in a trade secret misappropriation and unfair competition case that again pitted a small business against a larger corporate Goliath. The verdict received widespread media attention from publications including The Daily Business Review, Charlotte Business Journal, Law360 and the New York Press & Sun Bulletin. In this case, Peter and Alex represented Member Services, a small Charlotte, North Carolina-based insurance agency. The lawsuit centered on an automated computer system that Member Services had developed and agreed to confidentially share with Security Mutual, a Binghamton-based insurance agency in exchange for underwriting a life insurance product for employees of Lowe’s Home Improvement Stores. During a transition period, Member Services alleged that Security Mutual misappropriated its proprietary technology, upgraded its own system and returned to Member Services an unusable system. As a result of this, Member Services lost momentum in growth and hurt its image with Lowe’s. Peter and Alex sued Security Mutual for trade secret misappropriation, unfair competition, fraud, unjust enrichment and punitive damages. The case was originally filed in September, 2006 and went to trial before a jury from Monday, September 26, 2011 through Thursday, October 13, 2011. The jury found Security Mutual liable on all counts and awarded Member Services $16 million in compensatory damages and $10 million in punitive damages.

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