A unanimous Fort Bend County jury late Wednesday, February 22, 2023, found that prominent Odessa businessman Toby Eoff willfully and maliciously conspired with other former employees of DistributionNOW (DNOW) to steal the energy sector giant’s trade secrets.
The verdict included a finding that Mr. Eoff breached his fiduciary duty to Houston-based DNOW when he conspired with the others to cripple Odessa Pumps, a business his family had started 40 years ago and subsequently sold to DNOW, a leading global supplier of energy and industrial products.
Mr. Eoff, described in testimony as the ringleader of the conspiracy, sold his family business to DNOW for $170 million in 2015. He continued to run Odessa Pumps after the sale and was promoted within DNOW before retiring from the company.
According to the lawsuit, Mr. Eoff helped establish a competing company called Permian Pump & Valve after his retirement and conspired with other former DNOW employees to steal DNOW trade secrets and systematically poach employees to help Permian Pump & Valve. Jurors heard how Mr. Eoff hoped to cripple Odessa Pumps and sell his new company to DNOW or, alternatively, buy back the crippled Odessa Pumps for himself.
In testimony starting in November, jurors in 434th District Judge J. Christian Becerra’s court reviewed 32 boxes of evidence. The jury heard testimony describing how the former employee defendants emailed themselves DNOW documents, drawings and spreadsheets, and even discussed in writing what they wanted to steal and had stolen and how they planned to go after other employees.
Jurors deliberated two and a half days before returning the nearly $9 million verdict for DNOW, including punitive damages and attorneys’ fees, some of which will be awarded if the case is appealed.
The verdict included a finding that Mr. Eoff along with former DNOW employees Russell Dauphin, Jake Lewallen, Brian Madison, Michael Wheeler, Justin Coe, and Bo Young conspired to damage DNOW, and that the acts were of willful and malicious intent triggering punitive damages awards rendered against several of the defendants individually. The jury also found that Eoff, Dauphin, Madison, and Wheeler breached the fiduciary duty they owed to DNOW.
In closing arguments, John Zavitsanos, the lead lawyer in the case, told jurors they are the conscience of the community, and that the blatant, malicious thefts should not go unpunished. “These men were after DNOW. They were out to destroy Odessa Pumps. What we are doing here is trying to prevent other companies from thinking this is OK and trying to prevent these guys from doing it again,” he said.
After the sale of Odessa Pumps which they ran as co-owners, Toby and wife Sondra Eoff spearheaded the development of the Odessa Marriott and Odessa Convention Center bolstered by investments by the City of Odessa in excess of $50 million. Recently the Eoffs were listed as founding members and $10,000 donors to Odessans For Ethical Leadership, a group whose stated vision is to “ seek out and support leaders of the highest integrity.”