## Facts

- ITI operated an internet-based “load board” matching truckers with freight-hauling jobs and later expanded into freight factoring, eventually creating a factoring division called FactorLoads.
- Darren Brewer joined ITI as marketing director and later became its president, overseeing daily operations and assisting with software and website development.
- Pat Hull owned a competing load-board company, GetLoaded.com, LLC (GetLoaded). Brewer met Hull and discussed ways to link ITI to GetLoaded’s platform, but Hull declined.
- Hull instead formed FreightCheck, LLC, an internet-based factoring business that competed directly with ITI’s FactorLoads.
- Brewer became a 50% co-owner of FreightCheck with Hull and shared management and operational responsibilities.
- While still ITI’s president, Brewer operated FreightCheck from the same building as ITI, used the same software, and directed ITI employees to perform concealed work for FreightCheck.
- Within about a year, FactorLoads’ revenues fell. Brewer then urged ITI’s founder/owner, Gary Aliengena, to sell ITI to GetLoaded.
- Before the transaction closed, an ITI employee informed Aliengena that Brewer co-owned and ran FreightCheck. Aliengena fired Brewer and ITI sued Brewer, Hull, GetLoaded, and FreightCheck.
- After earlier appellate proceedings involving other defendants, Hull, GetLoaded, and FreightCheck settled with ITI for \$1.7 million, leaving Brewer as the only defendant to proceed to jury trial.
- The jury found Brewer liable for breach of fiduciary duty and misappropriation of corporate opportunity, awarding \$395,000 in compensatory damages, \$650,000 in punitive damages, and \$355,000 in attorney’s fees.

## Issues

1. Whether the trial court erred in denying Brewer’s directed verdict motion on the misappropriation-of-corporate-opportunity claim.
2. Whether the trial court’s jury instructions on “corporate opportunity” misstated Georgia law or improperly affected the verdict.
3. Whether the punitive damages award had to be reduced to \$250,000 under O.C.G.A. § 51-12-5.1(g), or whether the “specific intent to cause harm” exception applied.
4. Whether Brewer was entitled to a setoff or credit against the verdict based on ITI’s \$1.7 million settlement with the other defendants.

## Decision

- The Court of Appeals of Georgia affirmed the judgment in full.
- Directed verdict: The record contained “any evidence” supporting the jury’s finding that Brewer took a corporate opportunity and breached fiduciary duties, so denial of a directed verdict was not error.
- Jury instructions: The trial court’s charge used the Georgia formulation for corporate opportunity (including financial ability, same line of business, practical advantage, and interest or reasonable expectancy) and substantially covered the concepts Brewer requested; no reversible error was shown.
- Punitive damages: The \$650,000 award was not capped at \$250,000 because the evidence supported the jury’s finding that Brewer acted with specific intent to cause harm to ITI.
- Setoff: Brewer was not entitled to an automatic reduction of the verdict based on the \$1.7 million settlement with other alleged joint tortfeasors; the trial court properly refused a setoff.

## Legal Principles

- Corporate officers owe duties of utmost good faith and loyalty and may not secretly compete with their corporation while serving as current officers.
- Under Georgia law (as applied through the two-step framework described in McCrary v. Pruitt), misappropriation of corporate opportunity requires proof that (a) the opportunity rightfully belonged to the corporation and (b) the officer’s conduct in taking it involved a breach of fiduciary duty.
- A “corporate opportunity” may be found where the corporation is financially able to pursue it, the opportunity is in the corporation’s line of business, it offers practical advantage, and the corporation has an interest or reasonable expectancy in it.
- Jury instructions are reviewed as a whole; refusal to give a requested instruction is not error when the given charge substantially covers the same principles, and reversal requires both error and harm.
- Georgia’s general punitive-damages cap does not apply when the factfinder determines the defendant acted with specific intent to cause harm.
- A non-settling defendant is not entitled to a settlement credit merely because other defendants settled; entitlement depends on Georgia’s rules governing allocation and credits, and the defendant bears the burden to show a valid basis for setoff.

## Conclusion

The Court of Appeals upheld a verdict against ITI’s former president for secretly co-owning and operating a competing factoring business using ITI’s personnel and resources, affirming liability for breach of fiduciary duty and misappropriation of corporate opportunity, sustaining punitive damages above the statutory cap based on specific intent to cause harm, and rejecting any reduction of the judgment based on other defendants’ settlement.


Brewer v. Insight Technology, Inc., 689 S.E.2d 330 (2009)