CMI International, Inc. v. Intermet Int'l Corp.

• Decision Date: 08 August 2002
• Docket Number: Docket No. 225585.
• Citation: 649 N.W.2d 808,251 Mich. App. 125
• Parties: CMI INTERNATIONAL, INC., Plaintiff-Appellant, v. INTERMET INTERNATIONAL CORPORATION, and Gary Ruff, Defendants-Appellees.
• Court: Court of Appeal of Michigan — District of US

649 N.W.2d 808

251 Mich. App. 125

CMI INTERNATIONAL, INC., Plaintiff-Appellant, v. INTERMET INTERNATIONAL CORPORATION, and Gary Ruff, Defendants-Appellees.

Docket No. 225585.

Court of Appeals of Michigan.

Submitted December 11, 2001, at Detroit.

Decided April 30, 2002, at 9:15 a.m.

Released for Publication August 8, 2002.

Barris, Sott, Denn & Driker, P.L.L.C. (by Stephen E. Glazek and Todd R. Mendel), Detroit, for the plaintiff.

Dickinson Wright PLLC (by Edward H. Pappas, Daniel D. Quick, and Charles G. Goedert), Bloomfield Hills, for the defendants.

Before: MURPHY, P.J., and NEFF and HOEKSTRA, JJ.

PER CURIAM.

Plaintiff, CMI International, Inc., appeals as of right from the trial court's order granting defendants Intermet International Corporation and Gary Ruff summary disposition on all of CMI's claims. Specifically, CMI challenges the trial court's grant of summary disposition on CMI's contract-related and misappropriated trade secrets claims with regard to Internet's hiring of Ruff, a former employee of CMI, and its denial of CMI's request for a preliminary injunction to prevent Ruff from working for Intermet. We affirm.

Both CMI and Intermet develop and manufacture casting and forged metal parts for the automobile industry. In 1998, CMI was in the market to be sold, acquired, or merged. Intermet expressed interest in a merger or acquisition of CMI and these parties commenced negotiations. During the discussions, CMI required Intermet to sign a confidentiality agreement, which the parties executed on March 31, 1998 (March agreement). The agreement prohibited Intermet during an eighteen-month period from hiring any CMI managerial, sales, or technical employee without CMI's consent.

In the summer of 1998, negotiations between CMI and Intermet failed, and CMI sought the assistance of an investment banker to auction the company. Any company participating in the auction process was required to sign a standard confidentiality agreement that prohibited soliciting CMI employees for one year without CMI's consent; however, the confidentiality agreement did not address the hiring of CMI employees. Intermet participated in the auction process and signed the agreement on July 23, 1998 (July agreement). Eventually, Hayes Lemmerz International, Inc. purchased CMI.

When Hayes acquired CMI, Ruff, who is a mechanical engineer with a master's degree in metallurgical engineering and a Ph.D. in metallurgy and materials science, was CMI's chief technical officer. Ruff had worked in the metal casting business for eighteen years before CMI hired him in 1987. Ruff clearly was a key employee of CMI at the time Hayes purchased CMI. At that time, Hayes offered him three options: accept a demotion; accept a business, rather than technical, position with Hayes; or accept a severance package from CMI, which would prohibit him from working for a competitor for eighteen months. Ruff accepted a nontechnical position as president of Hayes' North American Cast Wheels Business Unit. However, by April 1999, Ruff decided to look for another job and he contacted Intermet. In May 1999, Intermet hired Ruff to assume essentially the same duties as those that he performed for CMI and Ruff tendered his resignation to his current employer.

On June 24, 1999, CMI filed suit against defendants, seeking specific performance and alleging breach of contract, violation of the Uniform Trade Secrets Act (UTSA), M.C.L. § 445.1901 et seq., tortious interference with contractual relations, unjust enrichment and constructive trust, inevitable breach of trust and fiduciary duty, and conspiracy. The trial court denied CMI's request for a preliminary injunction, concluding that an injunction would be against public policy favoring the freedom to change jobs and would encroach on Ruff's rights. Further, the trial court found that CMI had failed to establish the existence of trade secrets. On November 5, 1999, this Court denied CMI's interlocutory application for leave to appeal.

Meanwhile, on November 2, 1999, defendants filed a motion for summary disposition and a motion for stay of discovery pending resolution of the summary disposition motion. In opposition to the latter motion, CMI argued that the trial court should not decide the summary disposition motion until after discovery because certain information was known only to defendants regarding Ruff's use or disclosure of confidential information. On November 18, 1999, the trial court denied defendants' motion to stay discovery. However, pursuant to its bench ruling on February 9, 2000, the trial court entered an order the next day granting the motion for summary disposition of all claims. The trial court concluded that it was against public policy to issue an injunction requiring Intermet to withdraw its employment offer. Further, it found that the July agreement superseded the March agreement. The trial court also concluded that CMI failed to present the court with "actual proof" of disclosure or inevitable disclosure of trade secrets in violation of the UTSA and that the statute displaced all other claims regarding misappropriation of trade secrets. This appeal ensued.

On appeal, CMI challenges the trial court's denial of a preliminary injunction and its decision to grant defendants summary disposition, essentially on the basis of two theories: breach of the March agreement with Intermet and trade secret misappropriation. We review for abuse of discretion a trial court's decision to deny a preliminary injunction. Michigan State AFL-CIO v. Secretary of State, 230 Mich.App. 1, 14, 583 N.W.2d 701 (1998). We review de novo a trial court's grant of summary disposition. Spiek v. Dep't of Transportation, 456 Mich. 331, 337, 572 N.W.2d 201 (1998).

Plaintiff argues that the trial court erred in denying its request for a preliminary injunction and in granting summary disposition in favor of defendants with respect to the March agreement because, plaintiff argues, that agreement was enforceable. We disagree. Rather, we agree with the trial court that the July agreement between Intermet and CMI superseded their March agreement and that CMI could not establish a breach of contract. The March agreement was a confidentiality agreement under which Intermet could learn certain information about CMI subject to restrictions. Included in that agreement was that Intermet would not directly or indirectly solicit to hire any officer, executive, employee, or agent of CMI, "or solicit for employment or employ any person who is now employed by [CMI] in a managerial, sales or technical position for a period of eighteen (18) months from the date of this agreement, except with prior written consent of [CMI]." The July agreement prohibited only soliciting to hire any CMI employee, or under certain circumstances a former employee, for a period of one year from the date of the agreement without written consent from CMI. CMI does not assert that Intermet solicited Ruff.

When two agreements cover the same subject matter and include inconsistent terms, the later agreement supersedes the earlier agreement. Omnicom of Michigan v. Giannetti Investment Co., 221 Mich.App. 341, 347, 561 N.W.2d 138 (1997). In the present case, both agreements addressed Internet's rights regarding CMI employees and included inconsistent limitations. A limit on solicitation in the July agreement would not have been necessary had the March limit on hiring still been in force. Because the agreements covered the same subject matter at issue and included inconsistent terms, the July agreement superseded the March agreement. Id. Thus, summary disposition of CMI's breach of contract claims based on the March agreement was appropriate, as was the denial of a preliminary injunction to enforce the March agreement.

CMI also argues that the trial court erred in dismissing its claim against Ruff for tortious interference with contractual relations with Intermet. To establish tortious interference, a plaintiff must show that the defendant unjustifiably instigated a breach of contract. Mahrle v. Danke, 216 Mich.App. 343, 350, 549 N.W.2d 56 (1996); Admiral Ins. Co. v. Columbia Casualty Ins. Co., 194 Mich.App. 300, 312, 486 N.W.2d 351 (1992). In Feldman v. Green, 138 Mich.App. 360, 378, 360 N.W.2d 881 (1984), this Court held:

[O]ne who alleges tortious interference with a contractual or business relationship must allege the intentional doing of a per se wrongful act or the doing of a lawful act with malice and unjustified in law for the purpose of invading the contractual rights or business relationship of another.

See also id. at 369, 360 N.W.2d 881; Prysak v. R L Polk Co., 193 Mich.App. 1, 12, 483 N.W.2d 629 (1992); Stanton v. Dachille, 186 Mich.App. 247, 255, 463 N.W.2d 479 (1990). If the defendant's conduct was not wrongful per se, the plaintiff must demonstrate specific, affirmative acts that corroborate the unlawful purpose of the interference. Feldman, supra at 369-370, 360 N.W.2d 881; see also SJI2d 125.04.

Here, plaintiff argues that it need not allege specific acts until trial. However,...