Calif. Judge Overturns State Farm Trade Secrets Ruling

January 20, 2003

A Mendocino Country Superior Court judge has overruled the jury verdict in the case of two former State Farm agents vs. State Farm Mutual Automobile Insurance Company (IJ West, Sept. 2, 2002).

Richard Pyorre and John Wier, of Fort Bragg and Crescent City, Calif., respectively, were awarded a combined total of approximately $6.5 million for emotional distress damages and loss of commissions resulting from a lawsuit filed by State Farm, accusing the two agents of allegedly disclosing trade secrets from the company.

Pyorre and Wier filed a counter-suit claiming wrongfully termination and interference with their ability to provide insurance to their clients under different carriers.

The jury ruled in favor of defendants Pyorre and Wier, finding them not guilty of disclosing trade secrets, and State Farm guilty of interference with the agents’ contracts with Mercury Insurance.

However, on Jan. 17, Judge Richard Henderson overturned the jury’s ruling and ordered a new trial, reasoning, among other things, that the jury did not understand the terminology being used throughout the trial.

According to court documents, “In retrospect, the jurors may have been confused by the verdict question of trade secret ownership when the agency agreements clearly stated that trade secret information was the property of State Farm. It is also possible that some jurors were confused or, perhaps, improperly influenced by the substantial amount of testimony that was presented on the reasons and motives for the agency terminations before the court itself determined that the terminations were proper.

“Some of the determinations the jury made in answering the specific questions in the special verdict forms were not supported by evidence.”

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