Aon Risk Services, Inc. v. Liebenstein
| Decision Date | 28 December 2005 |
| Docket Number | No. 04AP2163.,No. 04AP2164.,04AP2163.,04AP2164. |
| Citation | 2006 WI App 4,710 N.W.2d 175 |
| Court | Wisconsin Court of Appeals |
| Parties | AON RISK SERVICES, INC., of Wisconsin, a Wisconsin Corporation, and Aon Risk Services, Inc., of Maryland, a Foreign Corporation, Plaintiffs-Appellants-Cross-Respondents, v. James A. LIEBENSTEIN and David Pautz, Defendants-Cross-Appellants, Palmer & Cay of Wisconsin, LLC, a Wisconsin Limited Liability Company, and Palmer & Cay Holdings, Inc., a Foreign Corporation, Defendants-Respondents-Cross-Appellants. Aon Risk Services, Inc., of Wisconsin, a Wisconsin Corporation, and Aon Risk Services, Inc., of Maryland, a Foreign Corporation, Plaintiffs-Appellants-Cross-Respondents, v. Palmer & Cay, Inc., a Foreign Corporation, Defendant-Respondent-Cross-Appellant. |
On behalf of the plaintiffs-appellants, the cause was submitted on the briefs of David M. Lucey of Foley & Lardner, LLP, of Milwaukee. Oral Argument by David M. Lucey.
On behalf of the defendants-cross-appellants', the cause was submitted on the briefs of Jane C. Schlicht of Cook & Franke, S.C., of Milwaukee.
On behalf of the defendants-respondents, the cause was submitted on the brief of Jane C. Schlicht of Cook & Franke, S.C., of Milwaukee. Oral argument by Jane C. Schlicht.
On behalf of the plaintiffs-appellants-cross respondents, the cause was submitted on the brief of David M. Lucey of Foley & Lardner, LLP. Of Milwaukee.
Before WEDEMEYER, P.J., FINE and CURLEY, JJ.
Aon Risk Services, Inc., of Wisconsin, and its parent, Aon Risk Services, Inc., of Maryland, in appeal number 2004AP2163 (Milwaukee County Circuit Court case number 2002-CV-932), appeal the trial court's grant of summary judgment dismissing their claims against Palmer & Cay of Wisconsin, LLC, and Palmer & Cay Holdings, Inc., and also appeal the trial court's denial of leave for the Aon companies to further amend their complaint.1 James A. Liebenstein, David Pautz, and Palmer & Cay cross-appeal, pursuant to our leave, the trial court's rulings in connection with the enforceability of non-compete agreements Liebenstein and Pautz signed with predecessors of Aon. We affirm and reverse, as summarized in Part I.C. of this opinion.
¶ 2 Aon also appeals, in appeal number 2004AP2164 (Milwaukee County Circuit Court case number 2003-CV-10621), the trial court's order granting summary judgment dismissing Aon's claims against Palmer & Cay, Inc. (the parent of Palmer & Cay of Wisconsin, LLC, and Palmer & Cay Holdings, Inc.) asserted in that action. Palmer & Cay, Inc., was not named as a party in appeal number -2163. Palmer & Cay, Inc., cross-appeals in appeal number -2164 from the trial court's order denying its request for frivolous-action costs and attorney fees under WIS. STAT. § 814.025 (2003-04). We affirm and reverse, as summarized in Part II.B. of this opinion.
¶ 3 These appeals were consolidated by our order.
¶ 4 Aon and Palmer & Cay sell and service commercial-property and casualty insurance for businesses. According to Aon's amended complaint, Palmer & Cay entered the Milwaukee market in November of 2001, and is Aon's "direct competitor." James A. Liebenstein worked for Aon as a senior vice president in Aon's Milwaukee office until he resigned in November of 2001 to, as phrased by Aon's amended complaint, "start a Milwaukee office for Palmer & Cay." David Pautz worked as an "account executive" in Aon's Milwaukee office until he, again according to the amended complaint, joined "Liebenstein in starting Palmer & Cay's new Milwaukee office."
¶ 5 Aon sued Liebenstein and Pautz, claiming that they each breached both their contractual and common-law duties of loyalty to Aon. Aon also sued Palmer & Cay for helping Liebenstein and Pautz breach those duties and also for tortuously interfering with Aon's relationships with Aon's customers. Aon's amended complaint in appeal number -2163 asserted the following claims:
Count One: An accounting from Palmer & Cay and Liebenstein and Pautz for their alleged misappropriation of Aon's "confidential information" and solicitation of Aon's customers, all of which was alleged to violate Liebenstein's and Pautz's employment agreements with Aon.
Count Two: An injunction against Liebenstein and Pautz enforcing their noncompete agreements with Aon, and preventing their use of Aon's "confidential business information."
Count Three: Against Liebenstein and Pautz for damages Aon asserted it sustained as a result of Liebenstein's and Pautz's alleged breach of their contracts with Aon.
Count Four: Against Palmer & Cay and Liebenstein and Pautz as employees of Palmer & Cay seeking Aon's damages arising from the defendants' alleged tortious interference with Aon's relationship with Aon's customers.
Count Five: Against Liebenstein and Pautz alleging that they breached their agency and loyalty duties to Aon.
Count Six: Against Palmer & Cay for helping Liebenstein and Pautz breach their "agency and other duties to Aon." Count Seven: Against all of the defendants, a claim for punitive damages.
As sources of Liebenstein's and Pautz's contractual duties of loyalty to Aon, Aon's amended complaint pointed to agreements executed by Liebenstein and Pautz when they were employees of an Aon predecessor, promising, in essence to: (1) not disclose to competitors confidential information; (2) not solicit their employer's customers for a competing business, either while they worked for Aon's predecessor or for two years thereafter; and (3) use their best efforts to advance the predecessor company's business while they worked for it. We address in turn each of Aon's claims against Palmer & Cay in light of the cross-appeal by Liebenstein, Pautz, and Palmer & Cay, which we discuss in its appropriate slot in Part I.B.1. below.
¶ 6 We review de novo a trial court's grant of summary judgment. Green Spring Farms v. Kersten, 136 Wis.2d 304, 315-317, 401 N.W.2d 816, 820-821 (1987). In assessing whether summary judgment is appropriate, we first determine whether the complaint states a claim, and, if so, whether there are any genuine issues of material fact for trial. Preloznik v. City of Madison, 113 Wis.2d 112, 116, 334 N.W.2d 580, 582-583 (Ct.App.1983). In evaluating the complaint, we determine whether, looking at the facts alleged in a light most favorable to the plaintiff, those facts state claims for relief. See Doe v. Archdiocese of Milwaukee, 2005 WI 123, ¶ 19, 284 Wis.2d 307, 320-21, 700 N.W.2d 180, 186-187. Although we accept "`the facts pled as true,'" a complaint's legal conclusions are analyzed de novo, both by the trial court initially, and by us on our de novo review. Ibid. (quoted source omitted). Stated another way, mere conclusory assertions that echo legal or statutory standards are insufficient; a complaint's assertions must "allege the ultimate facts" that support the plaintiff's claims. ECT Int'l, Inc. v. Zwerlein, 228 Wis.2d 343, 349, 597 N.W.2d 479, 482 (Ct.App.1999) .
¶ 7 In order to survive summary judgment, the party with the burden of proof on an element in the case must establish that there is at least a genuine issue of fact on that element by submitting evidentiary material "set[ting] forth specific facts," WIS. STAT. RULE 802.08(3), pertinent to that element, Transportation Ins. Co. v. Hunzinger Constr. Co., 179 Wis.2d 281, 290-292, 507 N.W.2d 136, 139-140 (Ct.App. 1993); Estate of Anderson, 147 Wis.2d 83, 88, 432 N.W.2d 923, 926 (Ct.App.1988) (); see also Schaffer ex rel. Schaffer v. Weast, ___ U.S. ___, ___, 126 S.Ct. 528, 534, 163 L.Ed.2d 387 (2005) () (quoted source omitted). As with the assessment of whether a complaint states a claim, mere conclusory assertions are not enough. Thus, summary judgment is not appropriate if both the complaint states a claim and there are genuine issues for trial. RULE 802.08(2). We analyze Aon's amended complaint and the parties' summary-judgment material against this background.
¶ 8 As we have seen, Count One asserts claims against Palmer & Cay based on two things Aon contends Liebenstein and Pautz did: (1) their alleged misappropriation of confidential Aon customer-list information, and (2) their alleged violation of their non-compete agreements. We look at each aspect of Count One in turn.
¶ 9 The ability in Wisconsin to assert a claim based on the alleged misappropriation of confidential information is circumscribed by WIS. STAT. § 134.90, Wisconsin's enactment of the Uniform Trade Secrets Act.2 First, the Act provides remedies for the misappropriation of "trade secrets," which, as material here, must be "information [that] derives [its] 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." Sec. 134.90(1)(c)1. This requires that the information for which trade-secret protection is sought be "available from only one source"—the party seeking trade-secret protection. ECT Int'l, 228 Wis.2d at 349, 597 N.W.2d at 482. Further, the party seeking trade-secret protection for information must specify how and why the information qualifies; that is, the party must show the unique characteristics of that information that make it worthy of protection. See id., 228 Wis.2d at 350-351, 597 N.W.2d at 482-483. Generally, customer lists...
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Published Writings
...evidence to prove the truth of the facts that they report because they are inadmissible hearsay. Aon Risk Services, Inc. v. Liebenstein , 710 N.W.2d 175, 2006 WI App. 4 (2006). Newspaper articles constitute inadmissible hearsay, even for purposes of summary judgment. Generally, they may not......
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Published writings
...evidence to prove the truth of the facts that they report because they are inadmissible hearsay. Aon Risk Services, Inc. v. Liebenstein , 710 N.W.2d 175, 2006 WI App. 4 (2006). Newspaper articles constitute inadmissible hearsay, even for purposes of summary judgment. Generally, they may not......
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Published Writings
...evidence to prove the truth of the facts that they report because they are inadmissible hearsay. Aon Risk Services, Inc. v. Liebenstein , 710 N.W.2d 175, 2006 WI App. 4 (2006). Newspaper articles constitute inadmissible hearsay, even for purposes of summary judgment. Generally, they may not......
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Published Writings
...evidence to prove the truth of the facts that they report because they are inadmissible hearsay. Aon Risk Services, Inc. v. Liebenstein , 710 N.W.2d 175, 2006 WI App. 4 (2006). Newspaper articles constitute inadmissible hearsay, even for purposes of summary judgment. Generally, they may not......