Judgment ordered in trade secret suit

By CHRISTIE APPELHANZ

The Capital-Journal

Ajudge has ordered the owner of Capitol Card Co. to pay his former employer $750,000 after failing to defend a lawsuit that said the Topeka business profited from trade secrets owned by Lenexa Card Co.

Shawnee County District Judge Eric Rosen decided this month that Peter J. Ritchey and his attorney didn't comply with orders of the court, which included responding to written questions, paying attorney fee sanctions and obtaining co-counsel to appear in court. Ritchey was represented by Topeka attorney Mike Broemmel.

"It is unusual that a company doesn't defend a lawsuit that is this serious," said Bryan Smith, an attorney for Lenexa Card Co. "They failed to appear and defend this case at critical points."

Ritchey said he hired a new attorney, Frank Eschmann, because Broemmel has been hospitalized and is unable to continue. The clerk of the Kansas Supreme Court's office said Broemmel hasn't renewed his attorney registration for 1999 and an order for suspension will be issued.

Ritchey, who described the decision as a shock, said he expects the case to be reopened.

"If I had $750,000 I'd be in the mountains skiing," he said. "I have not taken their software, and they know it. My card members and my businesses support me and know what I'm doing is right."

At issue is whether Capitol Card Co. used confidential processes owned by Lenexa Card Co., a national marketing organization headquartered in Merriam. Both companies operate a program that gives shoppers cash back who use an electronic card at selected merchants.

Lenexa Card Co. maintains it developed the software and data processing systems to make such a program manageable. Smith said there is no software like it that can be purchased.

Ritchey was employed as a commissioned independent contractor by Lenexa Card Co. from 1995 through May 1998 to recruit merchants in the Topeka and Lawrence areas. He then launched Capitol Card Co. in Topeka in August 1998.

"We were shocked to find out that what he was doing was actually copying everything that we were doing," said Harry Weatherford, a consultant for Lenexa Card Co. "We really feel we've been vindicated by the judgment. I feel the Capitol Card Company will probably vanish as fast as it came on the scene."

But Ritchey said Capitol Card Co. will remain operational. The company, which has cash rebate programs in Topeka, Lawrence and Manhattan, recently expanded into the Kansas City market.

Weatherford said Lenexa Card Co. will pursue collection of the $750,000. He said ownership of the Capitol Card Co. could be transferred to the Lenexa Card Co. if Ritchey fails to pay.

Copyright 1999
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