Hobson Mould Works Inc. won a court battle against former employees who set up BLM Molds Inc., a rival blow molds business in Waverly, Iowa.
A jury in Butler County District Court in Iowa awarded a total of $820,000 to Hobson Mould — $500,000 for breach of contract, $300,000 for misappropriation of trade secrets and $20,000 for punitive damages. Hobson Mould of Shell Rock, Iowa, announced the decision Sept. 22, 12 days after the verdict.
The court did not order BLM to cease its mold business, according to Tim Hamann, a lawyer for Hobson Mould. Hamann said a court hearing is set for Oct. 17 for two motions brought by BLM, probably to request a new trial or to overturn the recent verdict.
Hobson Mould's case named Douglas Madsen, Wayne Brocka and Aaron Lease, all former Hobson Mould employees, and BLM Molds, which they formed in early 1995 to offer mold design, production and management services. Lease declined comment when reached by telephone and his lawyer could not be reached by press time.
Hobson Mould President Gerald Hobson said in a telephone interview that the lawsuit and trial ``were the most gut-wrenching experience'' because they involved people he worked with for many years. His firm began losing orders within two months of BLM starting its operation. He said he became suspicious of BLM's methods when its sales grew quickly, to $1.4 million in BLM's first year, in Hobson's estimation. He thought such growth was unrealistic for a start-up company.
Hamann said Madsen, Brocka and Lease, while employed at Hobson Mould, signed agreements not to participate in a conflicting business while working for the company. Hamann said there was evidence that the employees set up BLM while still at Hobson Mould.
A key witness was John Wessel, whose company, Wessel Pattern Co. of Rock Island, Ill., built many of BLM's molds. Wessel became an employee of BLM, but he soon ``parted ways'' and his firm stopped doing business with BLM, according to Hamann. Wessel testified that Madsen, Brocka and Lease possessed Hobson Mould trade secrets.
Hobson said he is confident that the ordeal is over and he thinks the verdict is ``fair, considering the damage done to our company.''
Hobson Bros. Aluminum Foundry & Mold Works Inc. changed its name to Hobson Moulds after employees bought the firm from Essef Corp. of Chardon, Ohio, in late 1996.
Another Hobson Mould lawyer, Jim Walsh, said in a news release that ``Hobson Mould Works Inc. is now an employee-owned company and it was necessary to pursue this action to protect the employee owners' interests.''