Advanced Magnification Instruments of Oneonta, N.Y., Ltd. v. Minuteman Optical Corp., 1

• Decision Date: 03 December 1987
• Docket Number: No. 1,No. 2,1,2
• Citation: 135 A.D.2d 889,522 N.Y.S.2d 287
• Parties: ADVANCED MAGNIFICATION INSTRUMENTS OF ONEONTA, N.Y., LTD., et al., Appellants, v. MINUTEMAN OPTICAL CORPORATION et al., Respondents. (Action) BRILLEN INTERNATIONAL OPTICAL, INC., Appellant, v. MINUTEMAN OPTICAL CORPORATION et al., Respondents. (Action)
• Court: New York Supreme Court — Appellate Division

Page 287

522 N.Y.S.2d 287

135 A.D.2d 889

ADVANCED MAGNIFICATION INSTRUMENTS OF ONEONTA, N.Y., LTD.,

et al., Appellants,

v.

MINUTEMAN OPTICAL CORPORATION et al., Respondents.

(Action No. 1.)

BRILLEN INTERNATIONAL OPTICAL, INC., Appellant, v. MINUTEMAN OPTICAL CORPORATION et al., Respondents.

(Action No. 2.)

Supreme Court, Appellate Division,

Third Department.

Dec. 3, 1987.

Keith Gorlay (Michael J. Hutter of Hesson, Ford & Whalen, Albany, of counsel), Oneonta, for appellants in both actions.

Edward P. Ryan, Albany, for respondents.

Before KANE, J.P., and MAIN, MIKOLL, YESAWICH and HARVEY, JJ.

YESAWICH, Justice.

Appeals from two judgments of the Supreme Court (Harlem, J.) in favor of defendants, entered June 19, 1986 in Otsego County, upon dismissals of the complaints at the close of evidence.

Brillen International Optical Corporation (hereinafter Brillen Corporation), which later changed its name to Advanced Magnification Instruments of Oneonta, N.Y., Ltd., plaintiff in action No. 1 herein, was engaged in the wholesale marketing of eyeglass frames via telephone. It employed defendant Francis Sullivan as sales manager from August 1974 to June 1976 and defendant James Rudloff as a salesman from July 1974 to August 1976. On leaving Brillen Corporation, Sullivan founded defendant Minuteman Optical Corporation (hereinafter Minuteman) and hired Rudloff to perform the same activity he had been involved in at Brillen Corporation. Shortly after Sullivan and Rudloff left, Brillen Corporation's sales, which had been growing dramatically since the business's inception in 1972, began to decline and by early 1977 the company was in financial distress. Brillen International Optical, Inc. (hereinafter Brillen, Inc.), a plaintiff in both actions Nos. 1 and 2 herein, was then formed to continue the business and it purchased the assets of the former company from an intermediate owner.

In the first of two actions, tried together, plaintiffs allege that between April 1976 and February 1977 Sullivan and Rudloff took confidential information from Brillen Corporation to use in the operation of Minuteman, thereby effecting a breach of fiduciary duty, unfair competition and fraud. The second action arises from the allegation by Brillen, Inc. that defendants induced one of its employees to obtain confidential information from the company for the benefit of defendants, also said to constitute a breach of fiduciary duty, unfair competition and fraud. At the close of the evidence, Supreme Court dismissed both actions. Plaintiffs appeal; we reverse.

With respect to Supreme Court's concern that plaintiffs in action No. 1 had not proven themselves to be the real parties in interest, we note that defendants did not interpose this defense either on motion or in their pleadings; hence, plaintiffs were not obligated to offer proof on this point (see, Massi v. Alben Bldrs., 270 App.Div. 482, 485, 60 N.Y.S.2d 494, affd. 296 N.Y. 767, 70 N.E.2d 746). This defense, not having been raised at trial, is waived (see, Fox v. McGrath, 152 F.2d 616, 618-619, (2nd Cir.), cert. denied 327 U.S. 806, 66 S.Ct. 966, 90 L.Ed. 1030; McLaughlin, Practice Commentaries, McKinney's Cons. Laws of N.Y., Book 7B, CPLR Prec. 1001, at 351).

Turning to the dismissal for failure to establish a prima facie case and viewing the evidence in the light most favorable to plaintiffs (see, Quinlan v. Cecchini, 41 N.Y.2d 686, 687, 394 N.Y.S.2d 872, 363 N.E.2d 578), we find actionable claims were made out for unfair competition. There is ample evidence in action No. 1 from which the jury could have concluded that Rudloff and Sullivan took a master list of customers, a list of accounts receivable and at least 150 customer information cards. Concededly, a customer list is not entitled to judicial protection if the information on it is readily ascertainable (see, American Print. Converters v. JES Label & Tape, 103 A.D.2d 787, 788, 477 N.Y.S.2d 660), but here there was testimony by persons engaged in the very same marketing endeavors as plaintiffs to the effect that the items when taken by Sullivan and Rudloff contained valuable confidential information. For instance, the master list, which embraced the entire United States, recited the extent of each customer's sales activity; the accounts receivable list furnished...