Flooring company claims former employees started own company

By John Suayan, Galveston Bureau | Jan 26, 2011

GALVESTON - Custom Sports Surfacing Inc. alleges that two of its former employees engaged in actions that jeopardized the business.

In a lawsuit filed Jan. 18 in Galveston County District Court, the floor installation business accuses David R. Smith and Chad Burks of using corporate opportunities it afforded to them to form Rubber Flooring Systems, Inc.

"CSSI alleges that the defendants took CSSI's projects, worked on known CSSI projects to obtain the projects for themselves and obviously has caused considerable harm to CSSI," recent court documents say.

The plaintiff hired defendants Smith and Burks under non-compete agreements. Both men possessed vast knowledge of CSSI's operations, projects and proprietary information because of their positions, the suit says.

CSSI argues that Smith took advantage of then-owner Harry Forester's Feb. 7, 2010 death to enrich himself and start his rival company, which is also named a defendant in the case.

Smith cut drafts from the complainant's account to form a dividend account, invoiced his former employer to recoup personal expenses used for his residence and used CSSI labor, personnel and materials without authorization, according to the original petition.

It further explains that Smith and Burks formulated a fiduciary scheme which siphoned the plaintiff's projects, adding they were in the process of propping Rubber Flooring Systems while assuring CSSI's profitability and success.

Smith and Burks quit CSSI toward the end of 2010. The plaintiff asserts the defendants stole a lot of its property when they vacated.

"Interestingly, David Smith filed corporate papers for Rubber Flooring Systems, Inc. with the State of Texas the same day he quit CSSI,"

Consequently, CSSI seeks unspecified damages and a jury trial.

It is represented by attorney Nathan A. Hardee of League City.

The case has been assigned to Galveston County 405th District Court Judge Wayne Mallia.

Case No. 11-cv-0069

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