Blog / For Businesses

Civil Litigation Wins a Sign Company Showdown

October 13, 2015

It was a deal a couple of years in the making, and nobody dreamed it would end up in civil litigation.

BriteTech Sign Company* developed a new type of LED signage that was an improvement on the message boards you see in lots of places nowadays. But having the signs only got them so far. While they had the hardware, they did not have the business relationships to commercially sell the hardware or develop software to run the signs.

Enter our client Universal*, which had been cultivating a relationship with a major national restaurant chain for two years. Universal brokered a lucrative deal to install BriteTech’s new signs in the chain’s restaurants and coordinate software that would run the signs. Under the terms of the deal, Universal would pay a royalty to BriteTech, and BriteTech would do the installations at the restaurants. Universal would stay in place to manage the relationship and the service contract.

That’s what was supposed to happen, anyway.

When some problems cropped up during testing, BriteTech claimed—falsely—that the problems were Universal’s responsibility. The restaurant chain backed out of the deal and BriteTech went on to capture a far bigger payday by contracting to do all the work themselves, cutting out Universal entirely.

More than Just Numbers

The blow to Universal’s business was severe. The company was forced to lay off software engineers and other employees who would have done the work that Universal was cheated out of doing. Universal needed civil litigation lawyers, so they contacted us.

People sometimes have misconceptions about business deals that go bad. They think deals like these involve only numbers on a balance sheet. But there’s a very human side, too. It’s never easy to look your employees in the eye and lay them off. And when your long-established business teeters on the brink, it can feel like watching a loved one fight for their life. When Universal called us, it was clear that this case was personal to them. Thus, it became personal to us.

Breaking Down the Details

The core facts of the case were simple: Universal had a written contract with BriteTech to service the signs in the restaurant chain’s stores. In fact, BriteTech never would have had the deal with the chain in the first place were it not for Universal’s contacts within the restaurant industry.

For their part, BriteTech claimed that the breakup of the deal with the chain wasn’t their fault. The chain made the call, they said, and there was nothing they could do about it.

We went to the restaurant chain’s headquarters and deposed a company representative. It was a bit of a risky move: we didn’t know what he would say, so we had to be well-prepared and flexible enough to take our questioning in a number of possible directions.

When we confronted him with information that the problems in the testing were BriteTech’s fault, not Universal’s, he was quite surprised. We knew then that the restaurant chain truly didn’t know about the game BriteTech was playing. That deposition was critically important to our case and led to Universal receiving a multi-million dollar judgment.

Not the Wild West Anymore

Some people will tell you that what BriteTech did was just business. To succeed in business, they’ll say, you have to fight hard, and sometimes a bit dirty.

But the truth is this: if what BriteTech did was right, then we were headed back to the Wild West, where the whims of individuals were more important than the law. We don’t believe that’s true. Fortunately for Universal, the jury didn’t either.

After the litigation, Universal was able to build up its business, hire more employees, and support its growing community and industry. We’re glad to have played a part in helping right this wrong—and in keeping business law from returning to the wild frontier.

The outcome of any client’s case will depend on the particular legal and factual circumstances of the case.

*Names in this article have been changed to protect our client’s privacy.

 

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