Trial involving financial adviser's valuable clientele postponed again

U.S. Bancorp Investments Inc. first filed the suit in U.S. District Court two days after investment guru Nadia Cavner joined The Signature Bank – now BancorpSouth – in September 2005. The suit alleges that Cavner violated her confidentiality and nonsolicitation agreements by “improperly attempting to lure away” her former U.S. Bancorp clients.

The case was scheduled to go to trial Aug. 20, but U.S. District Judge Richard Dorr recently issued an order rescheduling the jury trial for Dec. 3 to allow more time for a forensic computer investigation. A pretrial conference is scheduled Nov. 20.

In April, Dorr appointed technical adviser Mark Johnson to conduct the investigation in response to sanction motions filed by U.S. Bancorp’s attorneys. The motions allege that Cavner and her staff did not return all electronic files taken from U.S. Bancorp Investments.

Dorr has authorized Johnson to perform additional analyses of computer Internet history as it relates to the opening and accessing of files and to examine evidence that software was used to erase files, records show. Dorr also instructed other forensic examiners involved in the case to provide Johnson with their reports.

Jay Dade, a Springfield attorney representing U.S. Bancorp, said he’s pleased that Dorr has allowed his client’s sanction motions to proceed. Dade said he and other attorneys at Shughart Thomson & Kilroy PC were “vigorously preparing” for the Aug. 20 trial before it was postponed. He also noted that the judge partially granted a motion for summary judgment, ruling that two of Cavner’s employees – Devona Breeden and Britney Murray – are liable for breaching their fiduciary duties by photocopying confidential documents.

“We view (the postponed trial) as a positive thing because of why the judge ordered the trial reset,” Dade said. “We will try it when the court is ready to try it.”

Cavner also is eyeing the new court date.

“We’re looking forward to presenting our case to the jury in December,” she said.

Other motions recently filed in the case have focused on whether the defendants should be allowed to present evidence – namely signed affidavits – that Cavner’s clients would have followed her to The Signature Bank regardless of the alleged wrongdoing. A motion filed by U.S. Bancorp’s attorneys July 26 asked Dorr to exclude any affidavits from Cavner’s clients, suggesting the documents amount to hearsay that cannot be authenticated.

The defendants’ attorneys have argued that Cavner and her team should be allowed to present evidence of “their remorsefulness and regret for their actions” in response to U.S. Bancorp’s request for millions of dollars in punitive damages, records show.

“The mental stress, distress and strain that defendants experienced since they committed the wrongful acts at issue is directly relevant to whether further punishment is needed or warranted under Missouri law,” reads an Aug. 10 motion filed by Kansas City attorney David Marcus of Graves Bartle & Marcus LLC, who is representing Cavner.

Also in the mix is a motion asking the judge to admit evidence that an alleged “inappropriate relationship” between former U.S. Bancorp executives Melissa Gaustad and Steven Short contributed to a toxic work environment that prompted the defendants to resign and join The Signature Bank, which is listed as a co-defendant.

Another motion filed by the defendants argues that U.S. Bancorp in 2002 hired a former Salomon Smith Barney broker who copied customer lists for his new employer. When Smith Barney sued U.S. Bancorp, the bank claimed the new broker’s customers would have moved their accounts voluntarily.

Last October, a National Association of Securities Dealers arbitration panel ordered Cavner to pay $325,000 in compensatory damages to U.S. Bancorp Investments despite its attorneys’ request for $18 million in damages. The panel also ordered co-defendants Steven Clark and Becky Angus to pay $25,000 and $2,000, respectively.

In her 14 years with U.S. Bancorp, Cavner built a client portfolio valued between $363 million and $450 million, according to court records.