B & G Crane Service, L.L.C. v. Duvic
| Citation | 935 So.2d 164 |
| Decision Date | 05 May 2006 |
| Docket Number | No. 2005 CA 1798.,2005 CA 1798. |
| Parties | B & G CRANE SERVICE, L.L.C. v. Shannon DUVIC, Bryan Vige, and Turner Bros. Crane & Rigging, Inc. |
| Court | Court of Appeal of Louisiana (US) |
Thomas P. Hubert, Joseph F. Lavigne, New Orleans, Ryan E. Johnson, Baton Rouge, for Plaintiff—Appellant B & G Crane Service, L.L.C.
Charles L. Patin, Jr., Todd A. Rossi, Baton Rouge, for Defendant—Appellee Turner Brothers Crane & Rigging, L.L.C.
MacAllynn J. Achee, Baton Rouge, for Defendant—Appellee Bryan Vige.
Richard M. Upton, Baton Rouge, for Defendant—Appellee Shannon Duvic.
Before: WHIPPLE, McCLENDON, and WELCH, JJ.
After a thorough review of the record and the applicable law, we find the trial court abused its discretion in denying the plaintiff's Motion for Preliminary Injunction. The trial court's conclusion that there was nothing to enjoin, since the evidence established that the Attorney General's office had seized the misappropriated computer disks and files is clearly unsupported by the record. Our review of the record and applicable law leads to the inescapable conclusion that the plaintiff, B & G Crane Service, Inc. (B & G), is entitled to a preliminary injunction pursuant to Louisiana's Unfair Trade Practices and Consumer Protection Law (LUTPL), La. R.S. 51:1401 et seq. and Louisiana's Unfair Trade Secrets Act, La. R.S. 51:1431 et seq., for the reasons detailed below.
B & G is in the business of providing crane rentals for construction jobs. Defendant, Turner Bros. Crane and Rigging, Inc. (Turner Bros.) also provides crane rentals for construction jobs and is a direct competitor of B & G. Defendant, Shannon Duvic, is a former employee of B & G. He began his employment with B & G in 1995 and terminated it on November 9, 2004, one day before starting employment with Turner Bros. While Duvic was employed with B & G, B & G paid for his education at LSU until he received an engineering degree. He continued his employment there as an engineer until he resigned in 2004. Duvic's responsibilities included placing bids to certain customers on behalf of B & G in order to secure crane rentals for construction jobs.1
On November 16, 2004, two former Turner Bros. employees, Jill and Rickie Gobert provided sworn affidavits detailing misconduct by Duvic in collusion with Turner Bros. and its general manager, Bryan Vige, whereby B & G's confidential bid/quote information, auto-cad drawings and other confidential files were misappropriated and used by Turner Bros. to competitively bid against B & G.
Based on those affidavits, the Louisiana State Attorney General was contacted and subsequently obtained and executed a search warrant for Turner Bros.' Prairieville office. Subject to the warrant, certain items, detailed later herein, were seized. After an investigation, the Attorney General concluded the items and information seized belonged to B & G and had been misappropriated by Duvic. According to the trial court's written reasons for judgment, a bill of information charging Duvic with theft of over $500 and one count of offenses against intellectual property was filed; apparently, that matter is still pending.
Two days after the execution of the search warrant by the Attorney General at Turner Bros.' office in Prairieville, B & G filed this suit seeking monetary damages, a temporary restraining order, a preliminary and permanent injunction and declaratory relief. The trial court issued a TRO, but later denied the plaintiff's Motion for a Preliminary Injunction, finding there was "nothing to enjoin" and dissolved the temporary restraining order. The trial court also granted the defendants' Motion to Strike Plaintiff's claim for treble damages. This appeal by B & G follows.2
Unfair methods of competition and unfair or deceptive acts in the conduct of any trade or commerce are unlawful in Louisiana. La. R.S. 51:1405. Injunctive relief is an available remedy for actual or threatened misappropriation of a trade secret. La. R.S. 51:1432.3 Trade secret is defined as "information . . . 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." La. R.S. 51:1431(4). Misappropriation is defined as the "acquisition of a trade secret of another by a person who knows or has reason to know that the trade secret was acquired by improper means" or the "disclosure or use of a trade secret of another without express or implied consent" by a person who uses improper means of acquiring the trade secret information. La. R.S. 51:1431(2). Finally, a breach of fiduciary duty claim based on the misappropriation of confidential information, although not technically a trade secret, is also recognized as grounds for injunctive relief under Louisiana's Unfair Trade Practices Act. La. R.S. 51:1405(A); Defcon, Inc. v. Webb, 28,898 (La.App. 2nd Cir.1/22/97), 687 So.2d 639, 643.
Therefore, the threshold inquiry is whether the information sought to be enjoined is indeed a legally protected trade secret; the second element is whether an express or implied contractual or confidential relationship existed between the parties which obligated the party receiving the secret information not to disclose it; and finally, whether the party receiving the secret information wrongfully disclosed the information to the injury of the plaintiff. Pontchartrain Medical Labs, Inc. v. Roche Biomedical Laboratories, Inc., 95-2260 (La.App. 1st Cir.6/28/96), 677 So.2d 1086, 1090. The elements of a breach of fiduciary duty claim premised on a breach of confidence are similar, except the information need not be a "trade secret." A plaintiff in that case must prove (1) possession by the plaintiff of knowledge or information which is not generally known, (2) communication of this knowledge or information by the plaintiff to the defendant under an express or implied agreement limiting its use or disclosure by the defendant, and (3) use or disclosure by the defendant of the information to the injury of the plaintiff. Engineered Mechanical Services, Inc. v. Langlois, 464 So.2d 329, 334 (La.App. 1st Cir.1984), writ denied, 467 So.2d 531 (La.1985).
The trial court made no express findings regarding whether the information was either trade secret information or information otherwise cloaked with the requisite confidentiality to prohibit its disclosure; the court simply found there was nothing to enjoin. We have reviewed the entire record and find that the evidence abundantly supports the conclusion that the information at issue in this case can be properly categorized as "trade secret" information. Additionally, the evidence established the information was also confidential by nature and content; efforts were made by the plaintiff to maintain and protect its confidentiality; the confidential nature of the information was expressly known to Duvic; and, Duvic had been expressly prohibited from disclosing the information to anyone, specifically the defendants for whom he was going to work.
As noted by the trial court in its written reasons for judgment, the information at issue "includes, but is not limited to, a computer disk, copies of hundreds of rolodex cards belonging to B & G, the memory chip out of the Nextel telephone which belongs to B & G and which Duvic used to download all of the phone numbers from the memory chip, B & G's auto-cad drawings, and confidential bidding and pricing information." The following evidence in the record supports a finding that the information at issue was confidential and subject to protection by law.
The affidavit of Xavier Grilletta, CEO of B & G, provides that the general practice in the construction industry is that contractor's bids are submitted under seal and not disclosed to other contractors bidding on the project, and are submitted with the expectation that they will remain private and closed. He also detailed the process of compiling information that is gathered and considered in submitting a bid and attested that it is generally known in the industry that a contractor's bid/quote information is very valuable, and if disclosed, would give a competitor a substantial advantage in the bidding process. He described this information as "akin to having a football team's entire playbook before a game begins, as opposed to knowing isolated plays that a team may run." Plaintiff corroborated this testimony with the affidavit of Rickie D. Gobert, an employee in the construction industry for over twenty years, who also stated that it is general knowledge in the industry that a company's pricing and cost structures in preparing bids is confidential and proprietary in nature and cannot be ascertained through public sources. He attested that he was employed for Turner Bros. and he regularly overheard Shannon Duvic discussing B & G's confidential bid information with Turner Bros.'s sales manager, Bryan Vige. He also stated that prior to being employed by Turner Bros., Duvic visited Turner's Prairieville office on a "regular basis." These attestations were uncontradicted.
Grilletta also attested to the precautions B & G took to limit access to the information even within B & G. A firewall was installed on the company's computer network server, which allowed access to the bidding information only to employees involved in the bidding process. Additionally, B & G sales people, including specifically Duvic, were personally advised that the information was confidential and should not be disclosed to anyone outside of the B & G bidding process. Again, these attestations were uncontradicted.
Grilletta also detailed the extensive auto-cad library maintained by B & G and the lengthy process through...
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