A Pennsylvania appeals court has upheld nearly $7 million in compensatory and punitive damages awarded to an insurance brokerage, B.G. Balmer & Co. Inc. The brokerage firm had sued a group of former employees for trying to lure clients to a competing agency in violation of their nonsolicitation agreements (NSAs). A three-judge Superior Court panel agreed that punitive damages were warranted based on extensive evidence about brazen efforts to lure both employees and clients of Balmer to Frank Crystal & Co. Inc. (FCC) as FCC opened its first office in the Philadelphia area. The court ruled:
When a company hires essentially all of the sales [and] marketing staff of one agency, the purpose in doing so is to induce the clients of that agency to move their business with that sales force. FCC Philadelphia’s first year business revenue of approximately $300,000.00 was received all from Balmer Agency clients. Based on the foregoing facts, we cannot conclude that the trial court abused its discretion in awarding punitive damages.
Among those approached was Wellington Investments, which the Superior Court said had a 26-year relationship with Balmer and was the agency’s most lucrative client. Balmer sued FCC and its former employees in the Chester County Court of Common Pleas in December 2003 seeking damages for tort claims including breaches of fiduciary duty, tortious interference, unfair competition, and conspiracy. NSA violations were also alleged.
Balmer is represented by Thomas Riley Jr. of Riley Riper Hollin & Colagreco PC and Jeanette Warren of Hinman Howard & Kattell LLP. The case is B.G. Balmer & Co Inc. v. Frank Crystal & Co. Inc. et al. in the Superior Court of the State of Pennsylvania.
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