JEFFERSON CITY – A federal judge will have to decide if an insurance company has a duty to pay the legal defense costs for a host of defendants accused of stealing the design for a puncture-proof bag.
The May 24 complaint for declaratory judgment was filed on behalf of Selective Insurance Company of the Southeast in U.S. District Court for the Western District of Missouri.
The insurance company is asking the court to declare it has no duty to defend Morris Packaging LLC, Morris Converting LLC, Greg Below and Joseph Fiore against a lawsuit brought by Kansas City-based Gateway Packaging LLC. The case stems from a March 6 lawsuit filed against the defendants.
Gateway Packaging claims the defendants stole its designs for making dog food bags that won't rip when hit with shopping carts. The lawsuit alleges that Below, Gateway’s former business development manager of sales, and Joseph Fiore, its former vice president of sales and marketing, “signed a non-disclosure and confidentiality agreement preventing them from disseminating company trade secrets.” The lawsuit also alleges Schell & Kampeter Inc., also known as Diamond Pet Foods, manufactures Kirkland brand dog food for Costco Wholesale Corporation under Costco’s Kirkland brand.
Diamond reportedly “purchased substantially all of its flexible packaging materials from Morris Packaging” and became dissatisfied with Morris’ bags. According to court documents, Below contacted Andy Kampeter at Diamond in April of 2013 to express Gateway Packaging’s interest in developing a product for Diamond. The lawsuit alleges Below offered to send samples to Kampeter during a May 2013 phone call.
Kampeter allegedly executed a nondisclosure agreement in order for Below to send him samples. References to the agreement were reportedly deleted from Below’s emails. Below and Fiore met with Kampeter in June 2013, according to court documents. Kampeter reportedly asked Gateway Packaging to work with Diamond to provide a puncture-resistant bag for Diamond’s 40-pound bags of dog food.
The new bag was “successfully developed” and ready for Costco in November 2016, according to court documents. The lawsuit also alleges the owner of Morris Packaging approached Below and Fiore with a job offer that same year. Morris reportedly came out with a competing bag shortly after hiring Below and Fiore.
Gateway claims it spent more than $2 million developing the bag for Diamond.