MARKETPLACE

Damages Are Awarded

A jury awarded two former employees of General Dynamics Corp. $107.5 million in damages after finding that the aerospace company failed to honor an agreement guaranteeing the two partial ownership of a business they helped develop.

A Superior Court jury in Norwalk, Calif., on Friday awarded William B. Forti and Dolores Blanton $7.5 million in compensatory damages and $100 million in punitive damages. The jury ruled that General Dynamics was liable for fraud and breach of oral contract.

According to the suit, the two former employees made an oral agreement with General Dynamics in 1990 to start a new company called E-Metrics. The new company was to develop an advanced computer called a neural network system that would emulate the way the brain processes information. General Dynamics was to contribute funding and technology, and Ms. Blanton and Mr. Forti, who worked at the company's missile plant in Pomona, Calif., were to receive an equity stake in E-Metrics, the suit claims.

When General Dynamics, based in Falls Church, Va., sold its air research defense systems unit to Hughes Aircraft in 1992, E-Metrics was included in the sale. The suit claims that the tow former employees weren't compensated for their E-Metrics stake in the sale. Ms. Blanton and mr. Forti subsequently were laid off following the Hughes acquisition.

Durint the trial, General Dynamics argued that it never agreed to grant the two employees an equity interest in E-Metrics. General Dynamics, which is expected to appeal the decision, couldn't be reached for comment.

"This is not a runaway result. This is an entirely just verdict," said Don Howarth, a lawyer representing the plaintiffs.

--Lisa Bannon
contributed to this article.

Disclaimer