American Family Mut. Ins. v. Missouri Dept., WD 64460.
| Decision Date | 06 September 2005 |
| Docket Number | No. WD 64460.,WD 64460. |
| Citation | 169 S.W.3d 905 |
| Parties | AMERICAN FAMILY MUTUAL INSURANCE COMPANY, et al., Respondents, v. The MISSOURI DEPARTMENT OF INSURANCE, et al., Defendants, Legal Aid of Western Missouri, Appellant. |
| Court | Missouri Supreme Court |
Jeffrey L. Williams, Kansas City, MO, for appellant.
Gary L. Mayes, St. Louis, MO, for respondents.
Stephen R. Gleason, Jefferson City, MO, for defendants.
Before JOSEPH M. ELLIS, Presiding Judge, PAUL M. SPINDEN, Judge and VICTOR C. HOWARD, Judge.
Legal Aid of Western Missouri ("Legal Aid") appeals from a judgment entered in the Circuit Court of Cole County enjoining the Missouri Department of Insurance ("MDI") from releasing to Legal Aid certain statistical information that had been provided to MDI by various insurance companies doing business in the State, including Respondents Shelter Insurance Company, American Family Insurance Company, The Fire Insurance Exchange, and Mid Century Insurance Company. The trial court determined that the information sought by Legal Aid was protected from disclosure under the Sunshine Act by the Uniform Trade Secrets Act and by Article I §§ 10, 26, and 28 of the Missouri Constitution. For the following reasons, the judgment is affirmed.
Pursuant to § 374.405,1 which was originally enacted in 1978, insurers providing residential insurance in the State of Missouri, like Respondents, are required to report certain information to MDI on a yearly basis. Specifically, Section 374.405 states:
1. The director [of MDI] shall establish statistical bases for the reporting of premium and loss data under policies of homeowners' insurance, dwelling-owners' insurance, renters' or tenants' insurance, or residential fire insurance.
2. Each insurer shall annually report to the director all premium and loss data under policies of homeowners' insurance, dwelling-owners' insurance, renters' or tenants' insurance, or residential fire insurance as the director may require.
3. The director shall have the authority to review and verify the accuracy of the data reported.
In this vein, pursuant to 20 CSR 600-3.100, MDI has required insurers to provide it with written exposure (the number of policies issued), premium written (the amount of premium collected during the reporting year), loss paid counts (the number of claims made against the policies during the reporting year), and losses paid data (the total amount of losses paid on claims for the reporting year) for residential insurance policies. This information is to be broken down by the zip code in which the insureds reside. Over the years, the Director of MDI has issued bulletins assuring insurers that the information provided would be considered confidential and would not be distributed to anyone, except on an aggregate basis.
On March 17, 2003, Legal Aid submitted a request to MDI, pursuant to the Sunshine Law, § 610.010 et seq., and the Public Records Law, § 109.180, asking MDI to produce "statewide market share data and market share data in minority populated zip-codes in the Kansas City MSA" for residential insurance for the reporting year ending December 31, 2000. On April 4, 2003, MDI informed Respondents of Legal Aid's request and advised Respondents that it was considering releasing the zip code level data to Legal Aid and the public. Respondents subsequently informed MDI that they objected to such disclosure. On June 25, 2003, MDI notified Respondents that it intended to provide Legal Aid with the written exposure and written premium components of the zip code data on file for the year 2000 unless it was enjoined from doing so by a court of competent jurisdiction.
On July 16, 2003, Respondents filed a Petition for Declaratory and Injunctive Relief in the Circuit Court of Cole County asking the court to enjoin MDI from disclosing any of the zip code data on file with MDI. That same day, with the consent of the parties, the trial court entered a preliminary injunction enjoining MDI from disclosing the data.
On August 20, 2003, Legal Aid filed its answer to Respondents' petition. On December 15, 2003, MDI filed its answer to the petition.
The parties subsequently submitted the case to the trial court on written briefs, affidavits, exhibits, and discovery materials. On May 10, 2004, the trial court entered its judgment in favor of Respondents. The court found that the written premium component of the zip code data for the year 2000 was a trade secret and that "the Takings Clauses of the federal and state constitutions and the Missouri Uniform Trade Secrets Act prohibit MDI from disclosing the written premium component to Legal Aid." The trial court permanently enjoined MDI from disclosing any of Respondents' zip code data on file with MDI for the year 2000 to Legal Aid or any other member of the public. Legal Aid brings five points on appeal from that judgment.
With regard to this Court's standard of review on appeal, Legal Aid asserts that, in addressing its points, we should review the trial court's decision de novo because the trial court did not hear any testimony and the case was submitted to the court on the briefs, affidavits, exhibits and discovery materials. Legal Aid contends that, in reviewing the evidence, this court owes no deference to the factual findings made by the trial court and should determine the facts for itself.
Our review in a court-tried case is governed by Murphy v. Carron, 536 S.W.2d 30 (Mo. banc 1976). Business Men's Assurance Co. v. Graham, 984 S.W.2d 501, 505 (Mo. banc 1999). Accordingly, "[t]he decision of the trial court will be affirmed on appeal unless no substantial evidence supports it, it is against the weight of the evidence, it erroneously declares the law, or it erroneously applies the law." Brizendine v. Conrad, 71 S.W.3d 587, 590 (Mo. banc 2002).
Contrary to Legal Aid's assertions, "[t]his Court `defers to the trial court as the finder of fact in determinations as to whether there is substantial evidence to support the judgment and whether that judgment is against the weight of the evidence, even where those facts are derived from pleadings, stipulations, exhibits and depositions.'" Id. (quoting Graham, 984 S.W.2d at 506). Thus, "[i]n reviewing a contention that the evidence is insufficient, the evidence is viewed in the light most favorable to the verdict, and deference is accorded to the trial court's assessment of credibility." Id. Moreover, "[t]he appellate court is primarily concerned with the correctness of the trial court's result, not the route taken by the trial court to reach that result." Graham, 984 S.W.2d at 506 (internal quotations omitted). "Thus, the judgment will be affirmed if cognizable under any theory, regardless of whether the reasons advanced by the trial court are wrong or not sufficient." Id. With this standard of review in mind, we turn to Legal Aid's points on appeal.
In its first point, Legal Aid contends that the trial court erred in finding that the written premium data for 2000 was a trade secret under the Uniform Trade Secrets Act,2 thereby rendering the information exempt from disclosure under the Sunshine Act and the Public Records Law.3
A "trade secret" is defined as:
information, including but not limited to, technical or nontechnical data, a formula, pattern, compilation, program, device, method, technique, or process that:
(a) Derives independent economic value, actual or potential, from not being generally known to, and not being readily ascertainable by proper means by other persons who can obtain economic value from its disclosure or use; and
(b) Is the subject of efforts that are reasonable under the circumstances to maintain its secrecy.
Lyn-Flex West, Inc. v. Dieckhaus, 24 S.W.3d 693, 698 (Mo.App. E.D.1999) (quoting § 417.453(4)). In determining whether the information involved in a given case constitutes a trade secret under the Uniform Trade Secret Act, the following factors have been utilized by the courts to provide guidance:
(1) the extent to which the information is known outside of [the] business (2) the extent to which it is known by employees and others involved in [the] business;
(3) the extent of measures taken by [the business] to guard the secrecy of the information;
(4) the value of the information to [the business] and to [its] competitors;
(5) the amount of effort or money expended by [the business] in developing the information;
(6) the ease or difficulty with which the information could be properly acquired or duplicated by others.
Id. (quoting AEE-EMF, Inc. v. Passmore, 906 S.W.2d 714, 721-22 (Mo.App. W.D.1995)).4 "The existence of a trade secret is a conclusion of law based on the applicable facts." Id.
Legal Aid argues that the Respondents failed to prove that the written premium component derives independent value from not being generally known to or readily ascertainable by other persons who can obtain economic value from its disclosure because "prior release of such data has not afforded any competitive advantage to their competitors, the data is too limited in age and scope to afford such an advantage, and such deminimus [sic] value renders the information subject to disclosure when the interest of the public in disclosure is balanced against the need to protect property interests represented."
Legal Aid makes no assertions related to the first, second, third, fifth, and sixth factors set forth supra. Indeed, the record clearly supports a finding that the information sought by Legal Aid was not known outside of the various insurance companies and MDI; that the insurance companies only allowed a limited number of employees to have access to the information; that the insurance companies utilized extensive measures to guard the secrecy of the information; that the companies spent significant effort and money in developing the information at issue; and that it would be difficult for a...
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