Cal Francisco Inv. Corp. v. Vrionis

• Decision Date: 14 January 1971
• Citation: 92 Cal.Rptr. 201,14 Cal.App.3d 318
• Court: California Court of Appeals Court of Appeals
• Parties: CAL FRANCISCO INVESTMENT CORPORATION, doing business as West Coast Properties, Plaintiff and Appellant, v. Milton VRIONIS, Defendant and Respondent. Civ. 26757.

Page 201

92 Cal.Rptr. 201

14 Cal.App.3d 318

CAL FRANCISCO INVESTMENT CORPORATION, doing business as West Coast Properties, Plaintiff and Appellant, v. Milton VRIONIS, Defendant and Respondent.

Civ. 26757.

Court of Appeal, First District, Division 1, California.

Jan. 14, 1971.

Hearing Denied March 9, 1971.

Jay Jackson, San Francisco, for appellant.

Scampini, Mortara & Ertola by Haig A. Harris, Jr., San Francisco, for respondent.

ELKINGTON, Associate Justice.

This is an appeal from an order dismissing plaintiff's action following its election to stand on the first amended complaint without amendment.

Following the court's sustaining of a special demurrer to plaintiff's original complaint on the grounds of improper joinder of separate causes of action and uncertainty, plaintiff, Cal Francisco Investment Corporation, doing business as West Coast Properties, filed an amended complaint for damages against defendant, Milton Vrionis. This complaint, in substance, alleged the misappropriation by defendant of certain trade secrets of plaintiff.

In count I plaintiff, a licensed real estate broker, alleged that on or about August 31, 1961, it employed defendant as a real estate salesman which employment continued through January 29, 1968; that during his employment defendant in confidence was furnished information concerning certain trade secrets not known to plaintiff's competitors and which gave plaintiff an advantage over its competitors, specifically, that plaintiff had procured a listing for sale of a certain twenty-four-unit apartment building located in San Francisco and had procured a financing commitment from San Francisco Federal Savings & Loan Association and that Quentin Johnson was a prospective purchaser of such property; that following defendant's leaving plaintiff's employ, defendant using said information effected a sale of the apartment house to Johnson utilizing the financing commitment; and that plaintiff had been damaged as a result in an amount in excess of $25,000.

Count II alleged that pursuant to a written contract of employment entered into by plaintiff and defendant in which it was agreed that 'Salesman shall not after the termination of this contract use to his own advantage, or the advantage of any other person or corporation, any information gained for or from the files or business of Broker,' defendant was under a duty not to use plaintiff's trade secrets to his own advantage.

Count III, substantially the same as count I, alleged the misappropriation by defendant of another trade secret of plaintiff's, a listing of a certain eighteen-unit apartment building, the terms of the listing and the knowledge that Quentin Johnson was a prospective purchaser. The amended complaint alleged the sale by defendant of this property to Johnson following the termination of his employment with plaintiff. Count IV, as count II, alleged a contractual duty on the part of defendant not to disclose this trade secret.

Defendant's general demurrer to all four counts on the ground that none of the counts stated facts sufficient to constitute a cause of action against defendant was sustained with leave to amend the complaint 'to state a cause of action for a real estate commission under the written contract between plaintiff and defendant.' Plaintiff electing to stand on its amended complaint, the order dismissing the action was entered, and this appeal followed.

Since plaintiff was given leave to amend its first amended complaint and failed to do so, it must be assumed that it has stated its case as strongly as it was possible for it to do. (Sierra Investment Corp. v. County of Sacramento, 252 Cal.App.2d 339, 341, 60 Cal.Rptr. 519; Morris v. Toy Box, 204 Cal.App.2d 468, 474, 22 Cal.Rptr. 572.) Upon such a failure to amend, this court is only required to determine whether, as a matter of law, the unamended complaint states a cause of action. (Lowman v. Stafford, 226 Cal.App.2d 31, 35, 37 Cal.Rptr. 681.)

Appellant contends that its complaint sufficiently states a cause of action for damages for defendant's wrongful use of plaintiff's trade secrets, i.e., real estate listings, which defendant was under a duty not to use for his own benefit. No cause of action is set forth in the amended complaint on the theory that defendant breached his employment contract nor is that theory argued here on appeal.

'One who seeks protection against the use or disclosure of a trade secret must plead facts showing (1) the existence of subject matter which is capable of protection as a trade secret; (2) the secret was disclosed to the defendant, * * * under circumstances giving rise to a contractual or other legally imposed obligation on the part of the disclosure not to use or disclose the secret to the detriment of the discloser; and (3) if the defendant is an employee or former employee of the plaintiff * * * the facts alleged must also show that the public policy in favor of the protection of the complainant's interest in maintaining the secret outweighs the interest of the...