Curl v. Greenlee Textron, Inc.

• Decision Date: 16 December 2005
• Docket Number: Case No. C2-03-919.
• Citation: 404 F.Supp.2d 1001
• Parties: Joseph CURL, Plaintiff, v. GREENLEE TEXTRON, INC., Defendant.
• Court: U.S. District Court — Southern District of Ohio

404 F.Supp.2d 1001

Joseph CURL, Plaintiff, v. GREENLEE TEXTRON, INC., Defendant.

Case No. C2-03-919.

United States District Court, S.D. Ohio, Eastern Division.

December 16, 2005.

Richard A. Frye, James D. Abrams, Gerhardt A. Gosnell, II, Chester Willcox & Saxbe, Columbus, OH, for Plaintiff.

Michael R. Gladman, Jones Day Reavis & Pogue — 2, Columbus, OH, for Defendant.

OPINION AND ORDER

MARBLEY, District Judge.

I. INTRODUCTION

This matter is before the Court on Defendant's Motion for Summary Judgment. Plaintiff Joseph Curl filed a breach of contract action against Defendant Greenlee Textron, Inc.

For the following reasons, the GRANTS Defendant's Motion for Summary Judgment.

II. FACTS

Plaintiff Joseph Curl ("Plaintiff") is a resident of Delaware County, Ohio. By virtue of an Assignment of Claims, Plaintiff is the successor to all of the rights of Ralph and Curl Engineers ("R & C"), an Ohio corporation, regarding its June 1989 confidentiality agreement with Defendant. Defendant Greenlee Textron, Inc. ("Greenlee"), a Delaware corporation with its principal place of business in Illinois, sells a wide variety of tools, primarily through its catalog business.

In 1988 and 1989, Greenlee negotiated with Plaintiff to purchase significant quantities of a "recessed light hole saw,"¹ one of R & C's products. Plaintiff created Beacon Industries ("Beacon"), a California corporation, to enter into a business arrangement with Greenlee under the terms of which R & C would design and develop saws which Beacon would manufacture in California. Both parties considered Plaintiff to be employee of R & C in connection with the work he performed in designing and developing the saws. No one ever sought or obtained a patent for the R & C design.

In 1989, through Plaintiff, Beacon and Greenlee negotiated to develop a product purchase and distributor agreement (the "Draft Agreement") contemplating that Beacon would provide recessed light hole saws bearing the "Greenlee" name at a set price. The Draft Agreement provided that Greenlee would have the right to inspect and test the recessed light hole saws it received from Beacon.

During the parties' negotiations, Beacon furnished Greenlee with product samples. In connection with those samples, Greenlee requested a drawing of the recessed light hole saw backplate, a "Can-Master Hub," for quality control purposes. Before sending Greenlee the drawing, Plaintiff mailed Greenlee a confidentiality agreement (the "Agreement") to ensure that Greenlee kept the drawing confidential. The Agreement stated:

[p]lease be advised that this drawing and any or all technology revealed therein is the sole property of Ralph and Curl, Engineers and is for your own use only.

This information is confidential and is not to be divulged without the express written consent of Ralph and Curl. Any and all drawings, data, specifications, technology or any other information pertinent to the enclosed drawing must be surrendered to Ralph and Curl upon demand, subject to the terms and conditions of the agreement.²

(emphasis added). On or around June 13, 1989, Tom Fewell, a Greenlee representative, signed the Agreement at his Illinois office, and returned it, by mail, to Plaintiff in Ohio. Shortly after Plaintiff had received the signed Agreement, R & C mailed Greenlee a copy of the confidential drawing. In August 1989, Beacon suffered financial difficulties and voluntarily ceased operations. As a result, Beacon and Greenlee ended their negotiations and did not finalize the distribution plan outlined in the Draft Agreement.

Greenlee, still inclined to distribute recessed light hole saws, began to design and produce its own saw product line in the fall of 1989. Greenlee's lead engineer, Tom Pearson ("Pearson"), obtained samples of recessed light hole saws from both Beacon and Lenox (a competitor) that were available on the open market. Greenlee's design, tooling, and production activities occurred from late 1989 through August 1991, when Greenlee unveiled its new recessed light hole saw for production. At that time, Greenlee circulated a flier announcing its new saw model and placed the product on the market. Plaintiff contends that Greenlee's new saw model is identical to that of R & C in all material aspects.

On October 10, 2003, Plaintiff sued Greenlee for breach of contract and misappropriation of the drawings and technology revealed in reliance upon the Agreement. This Court has diversity jurisdiction over the matter and venue is proper because a substantial part of the events giving rise to Plaintiff's claim occurred in this district.

Plaintiff claims that Greenlee illegally used the R & C drawing for purposes beyond quality control and failed to surrender the drawing back to R & C when negotiations between Beacon and Greenlee failed. Plaintiff seeks judgment against Greenlee for money damages, equitable relief in the form of a constructive trust, and reasonable royalties or other future damages to the extent Greenlee continues to "make, market, license, or otherwise generate revenue from any products derived from the [Agreement]."

Greenlee moved for Summary Judgment claiming that the Statute of limitations on Plaintiff's breach of contract claim had run and asserting an equitable defense of laches. Plaintiff replied, asserting that Ohio's statute of limitations, not Illinois', applied to the parties' dispute, and that, therefore, the statute of limitations on Plaintiff's breach of contract claim had yet to run. Further, Plaintiff argued that Greenlee failed to assert sufficient facts to support its laches defense. Greenlee filed its reply.

The Court must now consider whether to grant Greenlee's Motion for Summary Judgment.

III. STANDARD OF REVIEW

Summary judgment is appropriate "[i]f the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show there is no genuine issue as to any material fact and the moving party is entitled to judgment as a matter of law." FED. R.CIV.P. 56(c). The movant has the burden of establishing that there are no genuine issues of material fact, which may be accomplished by demonstrating that the non-moving party lacks evidence to support an essential element of its case. Celotex Corp. v. Catrett, 477 U.S. 317, 322-23, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986); Barnhart v. Pickrel, Schaeffer & Ebeling Co., 12 F.3d 1382, 1388-89 (6th Cir.1993). In response, the non-moving party must then present "significant probative evidence" to show that "there is [more than] some metaphysical doubt as to the material facts." Moore v. Philip Morris Cos., 8 F.3d 335, 339-40 (6th Cir.1993) (citations omitted).

In evaluating a motion for summary judgment, the evidence must be viewed in the light most favorable to the non-moving party. Adickes v. S.H. Kress & Co., 398 U.S. 144, 157, 90 S.Ct. 1598, 26 L.Ed.2d 142 (1970). The Court also must interpret all reasonable inferences in the non-movant's favor. United States v. Diebold, Inc., 369 U.S. 654, 655, 82 S.Ct. 993, 8 L.Ed.2d 176 (1962); see also Reeves v. Sanderson Plumbing Prods., Inc., 530 U.S. 133, 150, 120 S.Ct. 2097, 147 L.Ed.2d 105 (2000) (stating that the court must draw all reasonable inferences in favor of the non-moving party and must refrain from making credibility determinations or weighing the evidence). The existence of a mere scintilla of evidence in support of the non-moving party's position will not be sufficient; however, there must be evidence from which the jury reasonably could find for the non-moving party. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 251, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986); Copeland v. Machulis, 57 F.3d 476, 479 (6th Cir.1995); see also Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 587, 106 S.Ct. 1348, 89 L.Ed.2d 538 (1986) (finding summary judgment appropriate when "the record taken as a whole could not lead a rational trier of fact to find for the non-moving party").

IV. ANALYSIS

A. Introduction

As a threshold consideration, Plaintiff and Defendant disagree over which state's law governs this dispute. Though Plaintiff asserts that Ohio law is controlling, Defendant counters that because Illinois is more significantly related to the parties and the case, Illinois law applies.

This Court has diversity jurisdiction under 18 U.S.C. § 1332. A federal court sitting in diversity must apply the substantive law, including choice-of-law rules, of the state in which it sits. See Klaxon Co. v. Stentor Elec. Mfg., Co., 313 U.S. 487, 496, 61 S.Ct. 1020, 85 L.Ed. 1477 (1941); N. River Ins. Co. v. Employers Reins. Corp., 197 F.Supp.2d 972, 979 (S.D.Ohio 2002). Nevertheless, "[a]bsent an express statement that the parties intended another state's limitations statute to apply, the procedural law of the forum governs time restrictions on an action for breach [of contract] ..." Godwin v. Real Estate Inv. Mgmt., Inc., 2001 WL 1681122, at * 4 (S.D.Ohio Aug. 21, 2001). Before the 1980s, the "substance/procedure dichotomy" dominated Ohio conflicts of law jurisprudence. See Id. Ohio courts traditionally applied the substantive law of the place of the injury (the lex loci delicti doctrine) and the procedural law of the forum (lex fori). See Phelps, 30 F.3d at 661 (referencing Ellis v. Garwood, 168 Ohio St. 241, 152 N.E.2d 100 (1958); Howard v. Allen, 30 Ohio St.2d 130, 283 N.E.2d 167 (1972)). As such, because "[s]tatutes of limitations are ... characterized as procedural for purposes of choice-of-law analysis in Ohio and most other states," Ohio courts applied Ohio statutes of limitations to determine whether or not a claim was untimely. Phelps v. McClellan, 30 F.3d 658, 661 (6th Cir.1994) (emphasis added) (citing EUGENE F. SCOLES & PETER HAY, CONFLICT OF LAWS § 3.9 (1984)).

These formalistic rules, however, "have gradually fallen out of favor in Ohio and elsewhere," and the national trend in choice-of-law litigation has been to replace the...