TIG Awarded $10.9 Million From Rival FusionStorm After Court Battle


A $10.9 million jury award for solution provider Technology Integration Group (TIG) in a court battle with rival VAR 500 power FusionStorm could have far reaching implications for the channel.

The jury award on July 15 came after a six-week California Superior Court trial in San Francisco in which FusionStorm and former TIG executives were found liable for among other things misappropriation of trade secrets, breach of fiduciary duty and breach of loyalty.

The jury awarded TIG a total of $9.36 million in compensatory damages and $1.525 million in punitive damages from FusionStorm and six individuals at the center of the case.

The final judgment in the case is expected to come next week. The judge in the case signed a judgment but agreed not to enter that judgment for two weeks, said Arturo Gonzalez, partner at Morrison & Foerster and the lead attorney for TIG.

The trial pitted two VAR 500 behemoths against one another. TIG ranked 155 on the VAR 500 with $267 million in sales, while FusionStorm ranked 115 at $436.8 million.

The ruling stems from San Diego-based TIG's accusations in early 2007 that San Francisco-based FusionStorm, several of its top executives, and some of its own former employees, engaged in unethical business practices related to FusionStorm's move to set up a Tampa, Fla. branch office.

FusionStorm declined to comment for this story.

However, Michael Souza, vice president of sales at FusionStorm, wrote in a statement, "We disagree with the outcome, but it will have no effect on our business. We continue to be one of the best IT solutions providers across the country. The breadth and depth of our technology solutions, IT consulting, management and support solutions are best in breed.”

Included in the list of FusionStorm executives who were found liable in at least some of the charges were: CEO and Chairman John Varel; Tim Tonges, the company's former COO; and Brad Thompson, its former vice president of sales.

Former TIG employees found liable include Michael Dragoni, Randy Barber, and Charles King, according to TIG and to a copy of the Special Verdict Form which was examined by CRN.

Varel, Dragoni, Barber, and Thompson all declined to comment for this story. Varel remains CEO and chairman of FusionStorm. Dragoni left FusionStorm in November, and is currently CEO of Fortis Data Systems, a Clearwater, Fla.-based solution provider. Barber, a former senior account executive at both TIG and FusionStorm, is now an enterprise account executive at Fortis. Thompson is currently the executive vice president of sales and marketing at Bear Data Systems, a San Francisco-based solution provider. Neither Tonges nor King could be reached for this story.

 

Next: TIG's Allegations Against FusionStorm