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Graphic Press to Pay Damages to ColorGraphics

Press release from the issuing company

July 30, 2003 -- (WhatTheyThink.com) -- Graphic Press, one of the largest minority-owned printing companies in the United States, defended itself in the trial of ColorGraphics v. Paul Good, Graphic Press and John Zamora. ColorGraphics asked to recover $6.8 million in damages from its competitor. Just last year, Graphic Press was awarded $2.84 million from Quebecor’s George Rice. Since Zamora launched his new company in June 2000, the Southern California printing industry has become one of the most competitive markets in the country. Zamora’s competitors have used the courts to resolve alleged unethical and illegal sales tactics by Graphic Press. John Zamora is a former employee of George Rice, which is now part of Quebecor. In 2000, he founded Graphic Press, Inc., a company that competes with George Rice, ColorGraphics and others in the high-end printing business. Prior to leaving George Rice in April, 2000, Zamora had been one of the most successful sales and marketing executives in the industry. After leaving George Rice, Zamora secured a 112,000-square-foot facility and $40 million worth of brand-new Heidelberg equipment financed by Heidelberg. The ColorGraphics Case: ColorGraphics sought to recover $6.8 million in compensatory and treble damages, as well as unspecified punitive damages, against Graphic Press and John Zamora for, among other things, misappropriation of trade secrets, receipt of stolen property and intentional and negligent interference with prospective economic advantage. For its part, Graphic Press brought claims against ColorGraphics and its President, Christopher Madison for, among other things, intentional interference with certain of Graphic Press’ customer relationships. After a 2 month trial, the jury awarded ColorGraphics damages of $76,500 each against Graphic Press and John Zamora based upon its claim for negligent interference with prospective economic advantage. No other monetary damages were awarded in this case at this time. (See below for phase two.) In a statement, John Zamora stated, "Evidently, the jury felt we could have done a better job of providing guidance to our new sales personnel when we first opened the company in June of 2000. And, while I disagree with their conclusion, I respect their verdict." Paul Good, a former ColorGraphics employee now working for Graphic Press, was found liable for breach of contract and other related claims. Good is weighing his legal options. Chris Madison, President of ColorGraphics stated, “This is already a clear victory and a complete validation as to why this legal action was started nearly three years ago. While this had been a time consuming effort for ColorGraphics, it was well worth it to ensure ethics and good business practices are upheld in the printing industry.” The next phase of the trial is expected mid-September with the Judge ruling on the remaining allegation by ColorGraphics of unfair competition by Graphic Press and John Zamora. Under California law, this matter must be decided by the Judge rather than the jury. Once this is decided, the Judge will then determine any punitive damages, assessment of court costs against the losing parties and ultimately the amount of damages awarded to ColorGraphics. Doug Stewart, Chief Administrative Officer of ColorGraphics expressed appreciation at the results so far and optimism that the next phase and associated rulings, including the Judgeís determination of monetary awards will continue to favor ColorGraphics. He also stated that while the results have been favorable so far, the company would review with its legal counsel the merits of even further legal action related to this trial once the final rulings are complete. Flashback: George Rice & Sons v. John Zamora and Graphic Press Last year, a jury ruled that George Rice & Sons and its parent company Quebecor World (USA), Inc. should pay John Zamora and Graphic Press $2.84 million for Intentional Interference with Contract, Breach of Contract and Slander. Included in the judgment was $1.8 million in punitive damages awarded the defendants because of slanderous comments made to Graphic Press suppliers and intentional acts taken by George Rice to interfere with one of Graphic Press’s major contracts. This litigation began when George Rice sued Zamora and Graphic Press, accusing them of violating the terms of an employment agreement by soliciting customers and employees of his former employer. Zamora and Graphic Press counter-sued George Rice and Quebecor, accusing them, among other things, of interfering with existing contracts with customers and slander.

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