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Court Orders George Rice/Quebecor to Pay Graphic Press $2.8 Million

Press release from the issuing company

LOS ANGELES, Calif. -- June 13, 2002 -- In a trial that pitted some of the biggest names in the Southern California printing business against each other, a jury last month found 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. 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 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 printing business in Southern California. The 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. The suit also named as defendants former George Rice and current Graphic Press employees Dennis Kiggins and David Kephart. Zamora and Graphic Press counter-sued George Rice and Quebecor, accusing them, among other things, of interfering with existing contracts with customers and slander. After a trial that lasted almost a month in the courtroom of Los Angeles County Superior Court Judge Richard L. Fruin, Jr., the jury found that Zamora and his fellow defendants had not committed the acts of which they were accused. The jury, however, found that George Rice/Quebecor: - Breached its contract with Zamora by filing suit against him in an effort to prevent his capitalizing on relationships with George Rice customers and employees - Intentionally interfered with Graphic Press’s contractual relations by sending an employee to meet with executives of the Cunard Cruise Lines in Miami to undermine Graphic Press’s relationship with the company. The jury assessed compensatory damages of $668,000 and added $550,000 in punitive damages for this interference. - Slandered Graphic Press by recklessly and without regard to the truth, making defamatory statements about Graphic Press’s financial condition to others in the industry. The jury found the slander had damaged Graphic Press by $370,000, and then it added $1.25 million in punitive damages. During the course of the trial, attorneys for Zamora, Paul George of the Portland, Oregon firm Foster, Pepper & Shefelman and Alan Kessel of the Irvine, California firm Buchalter, Nemer, Fields & Younger, presented evidence that Rice/Quebecor purposely attempted to keep Graphic Press from competing in the marketplace – even in violation of its own corporate policies. Attorney Paul George said the case should never have been filed by George Rice & Sons. "The fact that they came into court as plaintiffs and left with a sizable judgment against them tells you just what bad acts were committed and how lacking in merit their case was," George said. "The jury reminded them that good competition is the American way."