ZipBy LLC v. Parzych

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ZIPBY USA LLC, TMA GROUP OF COMPANIES LIMITED, and TMA CAPITAL AUSTRALIA PTY LTD, Plaintiffs, v. GREGORY PARZYCH, Defendant.

Civil Action No. 1:20-cv-10926-IT

United States District Court, D. Massachusetts

April 19, 2024

MEMORANDUM & ORDER

Indira Talwani United States District Judge

Plaintiffs ZipBy USA LLC, TMA Group of Companies Limited, and TMA Capital Australia Pty Ltd. (collectively, the “ZipBy entities” or “ZipBy”) brought claims against Defendant Gregory Parzych for breach of fiduciary duty (Count I), breach of contract (Count II) misappropriation of trade secrets under state and federal law (Counts III and IV), trademark infringement under state and federal law (Count V and VII), and false designation (Count VI). Following a five-day jury trial, the jury returned a verdict in favor of Plaintiffs as to all counts, awarding $1,500,000 in compensatory damages and $1,000,000 in exemplary damages. Verdict [Doc. No. 373].

Parzych brings three motions challenging the jury verdict. For the reasons set forth herein, Parzych's Motion for a New Trial on Damages [Doc. No. 391] and Motion for a New Trial Pursuant to Rule 59 [Doc. No. 390] are DENIED, and his Motion for Judgment as a Matter of Law [Doc. No 381] is DENIED in part and GRANTED in part.

I. Standard of Review

“A trial court evaluating a motion for judgment as a matter of law under Rule 50(b) must ‘view the evidence in the light most flattering to the verdict and must draw all reasonable inferences therefrom in favor of the verdict.'” Rodriguez-Valentin v. Doctors' Ctr. Hosp. (Manati), Inc., 27 F.4th 14, 20 (1st Cir. 2022) (internal quotation omitted). Similarly, “when an argument that the evidence was insufficient forms the basis of a motion for new trial,” the district court may “us[e] the same reasoning as in [addressing] a motion for judgment as a matter of law.” Lama v. Borras, 16 F.3d 473, 477 (1st Cir. 1994).

The court may also grant a motion for a new trial where “action is required to prevent injustice.” Rodriguez-Valentin, 27 F.4th at 20. Where, as here, a due process violation is claimed, the defendant must demonstrate that he was deprived of “constitutionally adequate process.” See Gonzalez-Droz v. Gonzalez-Colon, 660 F.3d 1, 13 (1st Cir. 2011).

II. Claimed Procedural Due Process Violation

Parzych argues that his due process rights were violated because one of his lawyers, Michelle Blair, was required to participate in the trial remotely after she contracted COVID-19 on Day 3 of the five-day trial.

The jury was empaneled on Monday, November 27, 2023, with both Attorney Blair and Attorney Robert Dionisi representing Defendant. Opening arguments for both sides and Plaintiffs' case in chief commenced the following day. Plaintiffs' counsel began direct examination of Parzych on Wednesday, November 29, 2023. On Thursday, November 30, 2023, Attorney Blair reported that she had tested positive for COVID-19 the prior evening. The court advised the parties of the need to follow CDC guidelines and required Attorney Blair to quarantine for five days. Tr. Day 4 at 5:7-9. Attorney Blair requested to participate remotely for her examination of Parzych. Tr. Day 4 at 5:10-12. The court explained the logistics involved in Attorney Blair's remote participation, offered “[t]he other option is we recess for five days, but I think we may lose our jury if we do,” and inquired as to whether Attorney Blair was well enough to proceed remotely. Tr. Day 4 at 7. Attorney Blair responded:

I believe I can proceed....[Plaintiff's expert] was the witness today, which Mr. Dionisi was going to examine. [Defendant's witness] tomorrow, Dionisi was going to examine. I'm examining just Mr. Parzych, and then was planning on doing the closing.

But, yes, I believe I can proceed, Your Honor.... ....

I don't want to risk losing - losing the jury. So I think I can proceed.

Tr. Day 4 at 7. After conferring further with counsel for both sides, the court determined that the remainder of trial could proceed with Attorney Blair participating via Zoom, and Attorney Dionisi continuing to participate in person. Tr. Day 4 at 20:10-13. The court also inquired as to whether there was any objection to having Plaintiffs' direct examination of Parzych continue while Attorney Blair was making arrangements for her Zoom participation, and Attorney Blair responded that “[a]s long as Attorney Dionisi is there for objections, I do not have a problem with that.” Tr. Day 4 at 9:24-10:2.

Following a break, Attorney Dionisi reported that Parzych was “very uncomfortable going forward without Attorney Blair in the courtroom.” Tr. Day 4 at 17. Attorney Dionisi suggested suspending the following day and returning to the courtroom on Monday, Tr. Day 4 at 18, which would not have satisfied the five-day quarantine requirement. When Attorney Dionisi expressed concern with proceeding before Attorney Blair was connected by Zoom, the court delayed Plaintiffs' examination of Parzych until later in the day. Neither Attorney Dionisi nor Attorney Blair formally objected to proceeding with Attorney Blair participating remotely.

Days 4 and 5 also proceeded without objection regarding Attorney Blair's remote participation. Trial included the reading of deposition testimony, Plaintiffs' counsel's conclusion of Parzych's direct examination, Attorney Dionisi's cross-examination of Plaintiffs' expert witness and direct examination of a Defense witness (as was previously scheduled), and Attorney Blair's examination (by Zoom) of Parzych. The court permitted Attorney Blair to raise objections to the evidence and repeatedly dismissed the jury so that she could do so freely despite not being in the courtroom. Tr. Day 4 at 96:22-108:25; 178:11-25; Tr. Day 5 at 122:16124:12. On Day 6, both sides presented closing argument, with Attorney Blair rejecting the court's offer that she conduct her closing statement in person with a mask and presenting her argument over Zoom. See Tr. Day 5 at 15:4-18.

The court finds that Parzych has waived his due process argument by failing to raise any formal objection to proceeding with trial at any time prior to this Motion. Attorney Blair herself consented on multiple occasions to the arrangement, as did Attorney Dionisi. “Counsel cannot play a waiting game and after an adverse verdict is rendered raise an objection . . . for the first time.” Wildman v. Lerner Stores Corp., 771 F.2d 605, 609 (1st Cir. 1985). But even without the waiver, allowing Attorney Blair to participate in trial remotely as requested did not deprive Parzych of due process where he was ably represented by counsel throughout the trial. Parzych's request for a new trial based on a procedural due process violation is denied.

III. Substantive Claims in Parzych's Motion for a New Trial Pursuant to Rule 59 and his Motion for Judgment as a Matter of Law

Because many of the remaining arguments in Parzych's motions overlap, the court addresses the motions together. Parzych argues that the verdict ran afoul of the corporate opportunity doctrine, the law of contract formation, and the law regarding the rights of at-will employees; and that the trade secret misappropriation and trademark infringement verdicts were against the great weight of the evidence.

A reasonable jury could find the following facts from the evidence at trial. While Parzych was the President of ZipBy USA, he was contacted by the managing director of Q-Free (the company that owned Parzych's former company, TCS International (“TCS”)) and asked if ZipBy would be interested in acquiring TCS. Parzych informed ZipBy's CEO, Anthony Karam, about the offer. Karam then asked Parzych about the advisability of ZipBy acquiring TCS. After initially expressing enthusiasm over the deal, Parzych advised Karam not to acquire TCS because, among other reasons, TCS's parent company was misrepresenting the financial information such that the deal appeared better than it was. After leading Karam to believe the deal was no good, and while still employed by ZipBy, Parzych attempted to acquire the company on his own, without discussing the purchase with Karam or ZipBy's board.

While he was President of ZipBy USA, Parzych also secretly purchased the office building where ZipBy USA was based and then renegotiated ZipBy USA's lease without disclosing to ZipBy that he was now ZipBy USA's landlord.

After being fired by ZipBy, Parzych reached out to others in the parking industry and indicated that TCS was offering parking technology solutions. These parking technology solutions were highly similar in description to projects in development at ZipBy to which Parzych had had access.^[1] Parzych also used ZipBy's logo on his personal webpage, MJP Global, and continued to do so after being fired.

A. Breach of Fiduciary Duty

Parzych argues in both motions that the court misrepresented the governing legal standard regarding the duties of an employee to his employer.

First Parzych argues that he was permitted to pursue the TCS opportunity under the corporate opportunity doctrine and that the jury was misled into believing that an employee may never pursue an opportunity even if his employer has rejected that opportunity. “[T]he corporate opportunity doctrine is best seen as a rule of disclosure obligating the fiduciary to disclose all material facts to the corporation so that the corporation can make an informed decision on the opportunity.” Report and Recommendation at 19 [Doc. No. 257] (citing In re Cumberland Farms, Inc., 284 F.3d 216, 228 (1st Cir. 2002)) (emphases added), adopted as to this issue by the court, see Clerk's Notes [Doc. No. 293]. The jury was presented with substantial evidence that Parzych presented intentionally misleading and incomplete information about TCS to Karam...