- The Washington Times - Thursday, March 28, 2002

BALTIMORE (AP) A businessman who said First Union Bank started a $2.4 billion business with his ideas was awarded $276 million by a Baltimore jury, one of the largest legal judgments in Maryland history.

First Union National Bank officials said they will appeal.

The six-member Circuit Court jury agreed with software company owner Scott Steele that First Union National Bank, owned by Wachovia Corp., not only broke its contract with Mr. Steele's company but also never intended to honor the pact.

The jury of five women and one man deliberated for 3½ days before awarding Mr. Steele $200 million in punitive damages and $76 million in compensation for lost business.

"I think it will say to corporate America, and to banks in particular, that you can't do this," said Evelyn McClain, the jury forewoman.

"You can't defraud people. That's the message," Ms. McClain said.

"And to First Union, it says that what you did was misconduct. It was wrong, and we feel that this is what you need to pay punitively," she said.

Wachovia, the nation's fourth-largest banking company, was shocked at the verdict.

"We were surprised and disappointed with the result of this case," said spokeswoman Christy Phillips.

"We strongly disagree with the jury's verdict and are confident that we have strong grounds on which to challenge it," Ms. Phillips said. "We will vigorously pursue all avenues to overturn this verdict, including the appeal process."

First Union's business took off after Mr. Steele's company, Steele Software Systems Corp., helped it build an online loan application system in 1997.

The bank nominated Mr. Steele, 44, for its Vendor of the Year award, which his attorneys said described him in glowing terms.

The bank broke the three-year contract more than a year early and started its GreenLink venture, using many of Mr. Steele's methods, his attorneys said.

"They made false and misleading statements to Steele that they were going to have a long-term relationship, that they were interested in buying his company, that 'As we grow, you'll grow,'" said William H. "Billy" Murphy Jr., one of Mr. Steele's attorneys.

First Union lawyers said the contract was for two years and GreenLink was started after the bank joined with Value America, which had more experience than Mr. Steele.

First Union attorney Stephen Marshall said all of the methods used for GreenLink came from the Value America, not from Mr. Steele.

Mr. Steele said he was pleased with the verdict and he did what he felt was right.


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