The former CEO of a ferry services company has been ordered to compensate his onetime employer to the tune of more than $2.8 million in lost profit damages.

U.S. District Judge Kathleen Williams entered her order against Hernan Calvo, the former head of Balearia Caribbean, in Miami on March 5. Williams ruled the defendant had breached his fiduciary duty to the company by deliberately withholding a business opportunity from the company while he still worked for them.

Balearia Caribbean entered a federal lawsuit against Calvo in August 2016, nearly a year after he'd left his employer of almost a decade. According to the ferry company's attorney, Holland & Knight partner Brett Barfield, Calvo began serving as Balearia Caribbean's CEO after joining the company in 2007. Barfield said his client had made Calvo aware of their goal to conduct business with Malaysian holding entity Genting Group to provide a ferry service between Miami and Bimini.

“In 2015 [Calvo] began negotiations with Genting Group for a South Florida Bimini ferry line that was a very important business opportunity for Balearia,” Barfield said.

The company had run a ferry service between Miami and Bimini, but ceased when Genting opened its own resort, Resorts World Bimini, with its own accompanying ferry route and vessel. However, knowing that Genting's ship, the Superfast, was too large and wouldn't prove profitable, Balearia made it a priority to strike a deal with the company and provide its own services once more.

While serving as Balearia's CEO, Calvo was contacted by Genting in March 2015 about a possible collaboration between Balearia and Genting. However, he didn't tell any of his co-workers or superiors about the opportunity. Barfield characterized Calvo's behavior as effectively ”competing against Balearia.” He departed the company in October 2015 and brought his knowledge of Genting's search for a ferry service provider with him.

“There were two competitors [Calvo] took it to,” Barfield said. “The first competitor signed a contract in March 2016 and then backed out. Calvo then immediately brought it to a second competitor and they signed it in June 2016.”

German transportation company Forde Reederei Seetouristik, the second business Calvo offered his services to, brought him aboard as a consultant and subsequently secured a ferry deal with Genting. According to Williams' order, he used internal documents from his time with Balearia to help facilitate the business pact. It found the document contained revenue and cost projections based on multiple data points, including commission rates and average price per passenger.

“During the negotiations with FRS, Calvo used an Excel document template that had been created by Balearia,” the order reads.

Read Judge Williams' order: 

Balearia's lawsuit against Calvo accused him of breach of fiduciary duty, as well as misappropriating trade secrets in order to win business for an industry rival.

After hearing arguments from the parties in September 2018, Williams sided with the plaintiff regarding the breach of fiduciary duty charge. However, she rejected the claim that the spreadsheet used by Calvo constituted a trade secret.

“[Williams] found that without the confidentiality markings, Balearia had not taken sufficient measures to protect the trade secret,” plaintiff counsel Barfield said, noting it “didn't contain confidential or proprietary information.”

Calvo's counsel, Coral Gables-based litigator Robert Post, said the verdict might not signal the end of the case.

“Mr. Calvo's last day of employment with Balearia was on Oct. 30, 2015,” he said. “The contract between Genting and FRS was, however, not entered into until eight months later on June 15, 2016. In the interim there were five months of direct negotiations between Balearia and Genting. All the Genting witnesses, moreover, testified that Balearia was given a full and fair opportunity to bid on the contract, but Genting chose FRS for valid and legitimate business reasons. Therefore, we do not believe that Mr. Calvo's actions back in 2015 were the legal cause of Balearia losing out on this contract.”

Post said his client does not believe Williams used the proper legal standard in determining causation between Calvo's behavior and Balearia's failure to forge a partnership with Genting.

“Judge Williams evaluated causation using the 'substantial factor' standard, when we believe —because this was a case where Balearia was seeking lost future profits — that Balearia was required to prove causation using the 'reasonable certainty' standard,” he said. “We are, therefore, considering appealing.”

Although his side prevailed, Barfield described the litigation as “a hard-fought battle” and said “it was by no means a slam-dunk case.”

“Bob Post … did a very good job for his client,” he said. “Connecting the dots to convince the court that [Calvo's] conduct was a substantial cause of the loss, given the time lapse between when he left the company and when the competitor signed the contract, was a challenge.”

Case: Balearia Caribbean Limited Corp., also known as Balearia Caribbean Ltd. v. Hernan Calvo Case no.: 16-23300-civ-Williams Description: Breach of fiduciary duty, misappropriation of trade secrets Filing date: Aug. 2, 2016 Verdict date: March 6, 2019 Judge: Kathleen Williams Plaintiffs attorneys: Brett Barfield, Daniel Hanlon, George Mencio, Brian Briz, Ilene Pabian, and Benjamin Tyler; Holland & Knight; Miami Defense attorneys: Robert Post; Post and Romero; Miami Verdict amount: $2,843,870