Firm Wins Judgment In Forged Non-Compete Case

On March 15, 2017, Gair Eberhard Nelson Dedinas Ltd. won an agreed judgment on consent in a case involving a forged non-competition agreement in the United States District Court for the Southern District of Indiana.

The firm’s client is an event promoter who had a long-term equipment lease with the defendant and his company.  After relations soured between the parties, they negotiated a rescission and mutual release agreement which called for a payment of $20,000 to the lessor.  The promoter emailed the lessor an executed settlement agreement, and the lessor agreed verbally and by email to the terms.  However, after delivering a $20,000 cashier’s check to the lessor and receiving what purported to be a fully-executed copy of the settlement agreement, the promoter learned that the lessor had created a different settlement agreement which included a five-year, worldwide non-competition agreement, secretly inserted it in the agreement, and copied and pasted the promoter’s signature from the true agreement.   That spurious agreement would have prevented the promoter from obtaining financing, contracts with venues, and advertising contracts and would have led to the imminent destruction of the business. 

The firm filed an action for fraud and declaratory judgment in federal court in Indianapolis along with a motion for a TRO and preliminary injunction.  Confronted with these filings and the proof of fraud, the lessor agreed to a consent judgment declaring that the initial agreement constituted the contract between the parties and that the non-competition agreement was not part of the agreement and was unenforceable.