KAIB'S ROVING R.PH. AGENCY INC. v. SMITH

• Decision Date: 01 September 2010
• Docket Number: 07P1380,A138175.
• Citation: 237 Or.App. 96,239 P.3d 247
• Parties: KAIB'S ROVING R.PH. AGENCY, INC., Plaintiff-Appellant, v. Zane E. SMITH and RPH Relief, Inc., an Oregon corporation, Defendants-Respondents.
• Court: Oregon Court of Appeals

237 Or.App. 96
239 P.3d 247

KAIB'S ROVING R.PH. AGENCY, INC., Plaintiff-Appellant,
v.
Zane E. SMITH and RPH Relief, Inc., an Oregon corporation, Defendants-Respondents.

07P1380; A138175.

Court of Appeals of Oregon.

Argued and Submitted Jan. 8, 2010.
Decided Sept. 1, 2010.

239 P.3d 247

Paul R.J. Connolly, Salem, argued the cause for appellant. With him on the briefs were Kevin J. Jacoby and Tyler Malstrom, Certified Law Student.

Gregory Mark Abel, Medford, argued the cause for respondents. On the brief was Jamie L. Hazlett.

Before LANDAU, Presiding Judge, and SCHUMAN, Judge, and ORTEGA, Judge.

SCHUMAN, J.

237 Or.App. 98

Plaintiff appeals the trial court's judgment dismissing this action for misappropriation of trade secrets, ORS 646.461 to 646.475, breach of contract, breach of an implied covenant of good faith and fair dealing, and unfair competition. Focusing exclusively on the

239 P.3d 248

trade secrets claim, the trial court determined that the items of information that defendants allegedly misappropriated were not, in fact, trade secrets as that term is defined by law. On that basis alone, the court granted defendants' motion for summary judgment as to all of plaintiff's claims. On appeal, plaintiff challenges that ruling and also asserts that the court abused its discretion in ruling on the summary judgment motion without first permitting plaintiff to complete discovery. We conclude that, because there are disputed issues of material fact, summary judgment was inappropriate. Accordingly, we reverse and remand.

Summary judgment is appropriate if the moving party demonstrates that there is no genuine issue of material fact and that it is entitled to prevail as a matter of law. ORCP 47 C.

“No genuine issue as to a material fact exists if, based upon the record before the court viewed in a manner most favorable to the adverse party, no objectively reasonable juror could return a verdict for the adverse party on the matter that is the subject of the motion for summary judgment.”

Id. “On review, we view the evidence and all reasonable inferences that may be drawn from the evidence in the light most favorable to the nonmoving party.” Becker v. Pacific Forest Industries, Inc., 229 Or.App. 112, 114, 211 P.3d 284 (2009). From that perspective, the facts are as follows.

Plaintiff is a corporation located in Polk County that provides relief pharmacists for pharmacies in need of temporary assistance. Defendant Zane Smith (Smith) is a pharmacist; defendant RPH Relief, Inc., is a corporation located in southern Oregon that was formed by Smith in November 2006. Like plaintiff, RPH Relief provides pharmacies with relief pharmacists.

237 Or.App. 99

Smith contacted plaintiff in August 2006 and expressed interest in joining the company's roster of relief pharmacists. The company president spoke with him by telephone and told him about her business. Afterward, she sent him a packet of written materials that included a work agreement and information regarding the relief pharmacy business. She also added Smith to the company's referral list and began e-mailing him its “Current Work Available” information, which provides details regarding openings for relief pharmacists throughout the state. As part of the foregoing communications, plaintiff disclosed information to Smith that it contends is confidential and constitutes trade secrets. That information consists of the following:

“(1) How the pharmacists can maintain independent contractor status. This information was relayed to Smith on the phone, by the agreement, by statements about maintaining separateness, by discussions about the Oregon Employment Department policy towards [plaintiff] and the significant litigation and costs of litigation that [plaintiff] experienced in maintaining the pharmacists' independent contractor status.

“(2) The process by which customers refer openings to [plaintiff] and the process [plaintiff] uses to inform my relief pharmacists about available positions.

“(3) The process by which [the] pharmacists receive priority for positions.

“(4) The process by which [plaintiff] confirm[s] with customers that a particular relief pharmacist will be at their store at a date and time certain and the length of the shift.

“(5) The customs and practices of each store in a chain and of each independent pharmacy, including the manager's specific requirements.

“(6) Whether a store has technician assistance coverage or not.

“(7) Whether the store has employees with allergies.

“(8) The amount of internet prescriptions and the volume of walk-in business.

“(9) Whether lunch time is paid for or not.

237 Or.App. 100

“(10) The amount of narcotic paperwork, which is highly complex and difficult for some pharmacists to prepare.

“(11) The store policy for paying for lodging for the relief pharmacists.

“(12) Whether and how much drive time is paid for.

239 P.3d 249

“(13) The amount of customers' paperwork.

“(14) The billing rates paid by chains versus independent stores.

“(15) The store's billing cycles.

“(16) The profitability of the relief pharmacy business and prospects for the future.

“(17) The agreement between the pharmacy and [plaintiff].”

Eventually, in October 2006, Smith returned a signed work agreement to plaintiff. Among other things, the agreement contains the following provision: “I agree nor [ sic ] to disclose any confidential company information relating to [plaintiff's] method of doing business to any outside company or person.” Before returning the agreement, Smith had not taken any of the positions listed on the “work available” e-mail listing he received from plaintiff; after returning the agreement, he accepted one position and worked a day as a relief pharmacist. Plaintiff took Smith off its e-mail list at the beginning of November 2006. Later in the same month, Smith filed Articles of Incorporation to form RPH Relief.

Plaintiff brought this action against defendants, alleging that defendants had misappropriated trade secrets, breached a contract with plaintiff by disclosing confidential information, breached the implied duty of good faith and fair dealing, and engaged in unfair competition. Plaintiff sought damages and an order enjoining defendants from continuing to operate a pharmacist referral service.

Defendants filed a motion for summary judgment asserting, among other things, that the items of information at issue were not “confidential company information” and did not qualify as trade secrets under the statutory definition:

237 Or.App. 101

“ ‘Trade secret’ means information, including a drawing, cost data, customer list, formula, pattern, compilation, program, device, method, technique or process that:

“(a) Derives...