A boulder design company is suing former franchisees for allegedly using confidential information and property to create a competing business.
Boulder Designs Franchising LLC filed the lawsuit on Sept. 28 in the U.S. District Court for the Southern District of Illinois against Town & Country Lawn Care and Landscape Inc., doing business as T&C Custom Boulders, and Steve and Renee Palazzolo.
“Boulder Designs brings this action for breach of contract, violation of the Illinois Trade Secrets Act … and unfair competition as a result of Defendants’ failure to live up to the duties and obligations they owe Boulder Designs with respect to their contractual obligations and the use, retention and disclosure of Boulder Designs trade secrets and confidential information,” the suit states.
According to the complaint, the Palazzolos were acting as authorized agents of T&C when they allegedly executed a Boulder Designs Franchise Agreement effective March 31, 2017. The defendants were allegedly provided proprietary, trade secret, and confidential information in order to develop a custom boulder creation and installation business using Boulder Designs methods. They used the information to develop client relationships and sales opportunities. Prior to entering into the contract, the suit states that the defendants had no experience in creating boulders.
Then in May 2019, the parties entered into a Rescission Agreement “due to certain events that occurred with respect to Boulder Designs’ licensing in the State of Illinois at the time.”
“The purpose of the Rescission Agreement was to return the parties to the position they were in prior to entering into the Franchise Agreement,” the suit states.
Under the agreement, the defendants were required to acknowledge that the confidential information is the property of Boulder Designs, return the information to the plaintiff in exchange for the money paid in purchasing the franchise, promise not to disclose the information and promise not to solicit or recruit customers for two years.
Boulder Designs alleges the defendants retained confidential and proprietary methods, processes and other confidential information and began soliciting customers in violation of the agreement.
“Even more disturbing, Defendants surreptitiously launched and began operating a competing custom boulders business under the name T and C Custom Boulders, and whose website advertises photographs of custom boulders made by Defendants while bound by the Franchise Agreement and designed using proprietary Boulder Designs methods, processes, and equipment,” the suit states.
Boulder Designs claims the defendants are using its methods and processes to compete and illegally passing off the plaintiff’s custom boulders as the defendants’ own products. They are also accused of “disparaging Boulder Designs and discouraging other potential franchisees from purchasing a franchise from Boulder Design.”
The plaintiff seeks injunctive relief to allegedly prevent further injury.
Boulder Designs asks the court to enter an order compelling the defendants to return all Boulder Designs property, enjoining them from using confidential information and property and enjoining them from soliciting customers. The plaintiff also seeks compensatory and exemplary damages and attorney’s fees.
The plaintiff is represented by Kristine Argentine of Seyfarth Shaw LLP in Chicago.
U.S. District Court for the Southern District of Illinois case number 3:20-cv-992