La Bella Vita, LLC v. Amanda Shuler & Eikova Salon & Spa, LLC
| Decision Date | 13 July 2015 |
| Docket Number | No. 42092.,42092. |
| Court | Idaho Supreme Court |
| Parties | LA BELLA VITA, LLC, an Idaho limited liability company, Plaintiff–Appellant, v. Amanda SHULER and Eikova Salon and Spa, LLC, an Idaho limited liability company, Defendant–Respondent, and Cassie Moser, Britney Harrington, Kortni Ellett, Jara Daley, and Emily Coffin, Defendants. |
Maguire Law, P.C., Pocatello, attorneys for appellant. David Maguire argued.
Racine, Olsen, Nye, Budge & Bailey, Chtd., Pocatello, attorneys for respondent. Lane V. Erickson argued.
This is a misappropriation of trade secrets case arising out of a dispute between two competing businesses providing spa and salon services in Pocatello, Idaho, La Bella Vita, LLC (La Bella Vita) and Eikova Salon and Spa, LLC (Eikova). In February 2011, a number of employees left their employment at La Bella Vita to open Eikova, a new salon nearby. La Bella Vita brought suit alleging that these employees took its confidential client information to create and promote Eikova. After conducting discovery, La Bella Vita voluntarily dismissed all of the defendants except Amanda Shuler and Eikova, as well as all of the claims except the violation of the Idaho Trade Secrets Act and breach of the confidentiality agreement. On motion by the remaining defendants, the district court granted summary judgment against La Bella Vita on these remaining issues. La Bella Vita appeals the district court's decision to strike a supplemental brief offered in opposition to summary judgment, and also argues that disputed issues of material fact should have precluded the entry of summary judgment.
Candy Barnard–Davidson (Davidson) is the owner and founder of La Bella Vita. Davidson started La Bella Vita in 1998 and has owned it to the present day. The individually named defendants in this action, Amanda Shuler (Shuler), Cassie Moser (Moser), Britney Harrington (Harrington), Kortni Ellett (Ellett), Jara Dalley (Dalley), and Emily Coffin (Coffin), are all former employees of La Bella Vita. While employed there, they held the following titles: Shuler was a Hair Stylist, Salon Manager, Co–Manager, and Trainer; Moser was a Hair Stylist; Harrington was a Hair Stylist; Ellett was a Front Desk Receptionist; Dalley was Front Desk Receptionist; and, Coffin was a Receptionist and Front Desk Manager. These individuals left their employment with La Bella Vita in mid-February 2011 to work for Eikova, a new spa and salon founded by Shuler. The circumstances of this collective departure give rise to this action.
Shuler and the other individually named defendants gave their notice of termination to Davidson in early February and left their employment with La Bella Vita on or about February 16, 2011. At the time of their joint departure, they constituted approximately half of La Bella Vita's employees. On February 22, 2011, Shuler opened Eikova for business at a location just around the corner from La Bella Vita. Eikova immediately began servicing clients, including some customers who were previously regular patrons of La Bella Vita.
On January 23, 2013, La Bella Vita filed suit in district court alleging that Shuler and the other defendants took protected or confidential information from La Bella Vita which they used to create and promote Shuler's new business, Eikova. In addition to the individual defendants, Eikova was named as a defendant in the action. Specifically, La Bella Vita alleged that these former employees wrongfully took and used its confidential client lists, calendars, scheduling lists, client contact information, and other information regarding products, services, and client preferences in the creation and promotion of Eikova. The defendants jointly answered the complaint on March 8, 2013, denying the allegations and raising affirmative defenses.
None of the defendants signed a non-compete agreement in favor of Davidson or La Bella Vita; however, all but one of the individually named defendants1 signed a "Confidentiality Agreement" whereby they promised to keep certain information confidential. Confidential information was defined in the agreement as including the following:
[La Bella Vita's] trade secrets and confidential or proprietary information, such as client lists, client prospect material, price lists, rate structures, client service records, salon appointment books, payroll information, sales and profit data, marketing strategies and information, chemical information and formulas and any other information of a technical, financial or business nature that is unique to [La Bella Vita] and/or provides [La Bella Vita] with a competitive advantage in the marketplace. Confidential information does not include any information or material that is generally known by the public.
On July 31, 2013, Shuler and the other defendants jointly moved for summary judgment on all claims alleged in the complaint.2
La Bella Vita timely opposed this motion, and oral argument was heard by the district court on October 7, 2013. At the outset of this hearing, however, La Bella Vita conceded that all of the defendants except Shuler and Eikova should be dismissed from the action. Given this oral representation, as well as La Bella Vita's written opposition to the summary judgment motion, the district court dismissed Moser, Harrington, Ellett, Dalley, and Coffin from the suit. In addition, La Bella Vita represented to the court at the hearing that only two issues remained in the action, an alleged violation of the Idaho Trade Secrets Act (ITSA) and an alleged breach of the confidentiality agreement signed by Shuler as a condition of her employment at La Bella Vita. As such, the court dismissed the remaining claims set forth in the complaint. For these reasons, the summary judgment hearing focused only on these two claims against the remaining defendants, Shuler and Eikova.
At the conclusion of the summary judgment hearing, La Bella Vita requested an opportunity to supplement the record with certain outstanding discovery items. Shuler and Eikova did not object to this request, so long as no additional briefing or argument would be submitted by La Bella Vita. La Bella Vita agreed to this condition and represented that no additional argument would be offered. On the issue of supplementation, the court ruled from the bench, permitting the submission of the outstanding discovery materials while cautioning the parties that additional argument would not be considered. The court explained that the motion would be taken under advisement as of the date the supplemental items were received.
On October 21, 2013, the district court received the additional information, which included Shuler's outstanding discovery responses, Eikova's business formation papers filed with the Secretary of State, as well as an affidavit from La Bella Vita's attorney. In addition, La Bella Vita filed a document entitled, "Supplemental Brief in Opposition to Motion for Summary Judgment." In response, Shuler and Eikova moved the court to strike the supplemental brief, arguing it violated both the rules governing summary judgment and also the court's ruling memorializing the agreement between the parties that no additional argument would be provided or considered. For the reasons outlined in greater detail below, the court struck the supplemental brief, as well as affidavits filed in response to the motion to strike.
Turning to the substance of the summary judgment motion, and after receiving and reviewing the outstanding discovery items, the district court addressed the two claims that remained in the operative complaint, an alleged breach of the confidentiality agreement and an alleged violation of the ITSA. La Bella Vita argued that Shuler and Eikova violated the ITSA and confidentiality agreement in two ways: one was the wrongful use of a "baby shower list," and the other was the improper accessing of La Bella Vita's official client list. The district court went through the affidavits offered in support of, and in opposition to, summary judgment and found that La Bella Vita failed to demonstrate the existence of a "trade secret" under the ITSA, and that even if some of the disputed information could conceivably qualify as confidential, there was no evidence to establish that Shuler actually took or used any of the allegedly confidential information in the creation of Eikova's client list.
In granting summary judgment, the district court rejected La Bella Vita's argument that the only way Eikova's client list could have been composed was through the misappropriation of La Bella Vita's confidential client list. Specifically, the court found that the affidavit testimony offered in support of the motion sufficiently described the alternative and independent methods and sources used to generate Eikova's client list, and that La Bella Vita provided only conjecture, assumptions, and beliefs, not evidence, in opposition to this affidavit testimony. The district court further declared that the finding of no trade secret dispensed of the second issue, breach of confidentiality agreement. Without a trade secret, the district court reasoned that there could be no breach of the confidentiality agreement. For these reasons, the court granted summary judgment on the two remaining claims in favor of Shuler and Eikova.
On November 27, 2013, La Bella Vita filed a motion entitled "Motion to Amend or Alter Decision on Summary Judgment."3 La Bella Vita brought its motion on four grounds, specifically Rules 11(a)(2)(B), 52(b), 60(b), and 61 of the Idaho Rules of Civil Procedure. Shuler and Eikova opposed this motion, oral argument was heard on January 13, 2014, and the district court took the matter under advisement at the conclusion of the hearing. The district court entered a memorandum decision and order on February 3, 2014, wherein it addressed each theory of relief and rejected all...
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