American Elec., a Div. of FL Industries v. Singarayar, M-2587
| Decision Date | 03 June 1988 |
| Docket Number | No. M-2587,M-2587 |
| Citation | 530 So.2d 1319 |
| Parties | AMERICAN ELECTRIC, A DIVISION OF FL INDUSTRIES v. Santiago SINGARAYAR, and Individual, and Evelyn Singarayar. |
| Court | Mississippi Supreme Court |
Paul R. Scott, Leigh A. Rutherford, Wilroy, Scott & Rutherford, W. Michael Richards, Jon P. McCalla, Heiskell, Donelson, Bearman, Adams, Williams & Kirsch, Memphis, Tenn., for appellant.
Susan M. Guerieri, E.F. Hale, III, Gilder Law Firm, Southaven, for appellee.
Before ROY NOBLE LEE, C.J., and ROBERTSON and ANDERSON, JJ.
I.
This matter is before the Court upon Petitioner's application for permission to appeal, interlocutorily, alleged inadequacies in a preliminary injunction entered in the trial court. Petitioner, a manufacturer of lighting fixtures, demands extraordinary relief to prevent Respondent, an electrical engineer and former employee, from disclosing Petitioner's trade secrets and other proprietary information to and for the benefit of his new employer. The trial court enjoined disclosure of the trade secrets but denied Petitioner's request that Respondent be enjoined from employment with his new employer, and then certified
that a substantial basis exists for a difference of opinion on a question of law as to which appellate resolution may protect the party from substantial and irreparable injury.
See Rule 5, Miss.Sup.Ct. Rules, eff. January 1, 1988.
We deny permission for Petitioner to present the interlocutory appeal.
II.
The Defendant, Santiago Singarayar was born in a town in southern India. He came to America in the mid-1970's, received his master's degree in engineering from the University of Mississippi in 1976, and is currently a permanent resident of the United States. His wife, Evelyn Pang Singarayar, is a Panamanian born Chinese who immigrated to the Mississippi Delta and was educated at the University of Mississippi.
Until early 1988 Singarayar was employed as a senior electrical engineer with the American Electric Division of FL Industries at its facility in Southaven, Mississippi. Singarayar began with American Electric on or about January 17, 1984. On that date he signed an "Agreement for Assignment of Inventions and Covenant Against Disclosure" (hereinafter "employment agreement"). The employment agreement contained no non-competition clause. Singarayar did, however, agree that he would not disclose "information identified as secret or confidential or which, from the circumstances, in good faith and good conscience ought to be treated as confidential." The covenant of nondisclosure did not apply to "information already in the public domain or information which has been dedicated to or released to the public by the Employer."
Beginning January 17, 1984, Singarayar became involved in American Electric's design, production and quality control of circuitry relating to the starting and control of lamps. This is a specialized aspect of the light fixture industry in which American Electric is a leader. Singarayar developed and learned extensive details of this area of production.
In mid-January, 1988, Singarayar gave American Electric notice of his intention to resign his employment. His last day of work was February 12, 1988. Singarayar immediately moved to North Carolina and began working for Regent Lighting Corporation, a company producing products in competition with American Electric.
On February 19, 1988, American Electric commenced this civil action when it filed its complaint in the Circuit Court of DeSoto County, Mississippi. The complaint alleged breach of contract, conversion and misappropriation, specific performance, appropriation of trade secrets, breach of fiduciary duties and sought a writ of replevin to recover personal property of American Electric alleged to be in Singarayar's possession. The complaint also sought damages, discovery and injunctive relief. 1
Various preliminary skirmishes resulted first in the Circuit Court's entry of a sweeping temporary restraining order, among other things, precluding Singarayar from working for Regent Lighting. See Rule 65(b), Miss.R.Civ.P. Incident to this T.R.O. American Electric posted a $200,000 bond and as well deposited $30,000 with the Court out of which Singarayar has been paid the salary he would otherwise have drawn from Regent Lighting. Thereafter, on March 25, 1988, the Circuit Court entered an order in essence restraining Singarayar, preliminary to disposition of the action on its merits, from disclosure or other use of American Electric's trade secrets and other proprietary information and ordering that Singarayar return to American Electric all property of American Electric of which he had custody.
The critical issue--then and now--was whether the temporary restraining order would be converted into a preliminary injunction insofar as Singarayar had been enjoined from employment with Regent. After an extensive hearing, the Circuit Court extended that T.R.O. for an additional ten days but refused to convert it into a preliminary injunction, in effect leaving Singarayar free thereafter to begin working with Regent. En route to this portion of its ruling, the Circuit Court stated
I want to make it absolutely clear at this point that unless there's a drastic change in circumstances between now and ten days from now, roughly March 26, that the Court will dissolve this TRO as to enjoining Singarayar from employment. In fact, according to Rule 65, the TRO would be dissolved according to its very terms. I am saying this so that the attorneys will know and the parties will know that they need to do whatever is necessary either here or in North Carolina 2 to resolve this issue to make sure that, certainly, American Electric is protected, but at the same time to make sure that Singarayar is not, likewise, irreparably damaged by not being able to work for Regent Lighting.
In its Order, however, the Circuit Court certified the case for interlocutory appeal as required by Rule 5(a), Miss.Sup.Ct. Rules. All proceedings below have been stayed pending our action.
Armed with its Rule 5(a) certificate, American Electric presents this petition for permission to appeal interlocutorily, arguing that the only way to prevent American Electric's protected information from being revealed to Regent and thereby causing harm to American Electric was to enjoin Singarayar preliminarily from employment with Regent. Accordingly, on the merits American Electric urges that the trial court erred in denying the preliminary injunction.
III.
We begin with our rule regarding interlocutory appeals. Rule 5(a), Miss.Sup.Ct. Rules, 3 provides that interlocutory appeals may be allowed when:
a substantial basis exists for a difference of opinion on a question of law as to which appellate resolution may:
(1) Materially advance the termination of the litigation and avoid exceptional expense to the parties; or
(2) Protect a party from substantial and irreparable injury; or
(3) Resolve an issue of general importance in the administration of justice.
Before reaching the merits, a point need be made clear. Nothing in our new Rules places in the hands of the trial court the keys to this Court's front door. That the court below has given the Rule 5(a) certificate in no way precludes our de novo review of whether the rule's criteria have been met and whether the application for interlocutory appeal should be granted. This Court retains absolute authority to decide whether an interlocutory appeal should be granted, notwithstanding the rule's provision that the lower courts may assist us in the exercise of that authority. This is not to denigrate the role of the trial court in the interlocutory appeals process. That Court's proximity and sensitivity will often provide invaluable insights whether we ought exercise our authority and grant an interlocutory appeal.
In the case at bar, we are concerned that in granting a certificate the Circuit Court may have misapprehended a threshold requirement of the rule, that is, that there be a substantial basis for a difference of opinion "on a question of law". Much metaphysical exposition may be found regarding the nature and definition of the phrase "a question of law". Practically speaking, the phrase's meaning may be shown by contrast, not definition. Some consider that the decisions of trial courts fall naturally into three broad categories: questions of law, questions of fact, and matters of discretion. Rosenberg, Appellate Review Of Trial Court Discretion, 79 F.R.D. 173 (1979). Indeed, the language of Rule 5(a) naturally suggests an opposition between a question of law and a question of fact or matter for the discretion of the trial court. Common sense suggests matters of the latter category--acts of discretion--least eligible for interlocutory review.
No doubt in reference to the rule, the Circuit Court's order identifies the question of law as "whether a preliminary injunction should have been issued pursuant to the temporary restraining order issued March 10, 1988," prohibiting Singarayar's employment with Regent. That, of course, is a question of law application, as distinguished from a pure question of law, see, e.g., Boardman v. United Services Automobile Association, 4 470 So.2d 1024, 1029-30 (Miss.1985), although this is not per se fatal to petitioner's application. The comment to Rule 5 considers that "question of law" within the rule "includes the application of law to fact." That we have before us a question of law application does, however, diminish the force of the appeal's claim for...
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