ForScan Corp. v. Dresser Industries, Inc.

• Decision Date: 26 April 1990
• Docket Number: No. C14-88-00948-CV,C14-88-00948-CV
• Citation: 789 S.W.2d 389
• Parties: FORSCAN CORPORATION and Piero Wolk, Appellants, v. DRESSER INDUSTRIES, INC., Appellee. (14th Dist.)
• Court: Texas Court of Appeals

Page 389

789 S.W.2d 389

FORSCAN CORPORATION and Piero Wolk, Appellants, v. DRESSER INDUSTRIES, INC., Appellee.

No. C14-88-00948-CV.

Court of Appeals of Texas,

Houston (14th Dist.).

April 26, 1990.

Rehearing Denied May 24, 1990.

David L. Moseley and Arnold Anderson Vickery, Houston, for appellants.

Rodney K. Caldwell, Charles R. Dunn, Chris C. Pappas, Houston, and Michael A. Hatchell, Tyler, for appellee.

Before PAUL PRESSLER, CANNON and ELLIS, JJ.

OPINION

PAUL PRESSLER, Justice.

Appellants appeal the granting of a permanent injunction to appellee in a trade secrets case involving a type of well-logging tool called a compensated density tool. The parties have previously been before this court on an appeal of a temporary injunction, Dresser Industries, Inc. v. ForScan Corp., 641 S.W.2d 311 (Tex.App.--Houston [14th Dist.] 1982, no writ), and on a mandamus, ForScan Corp. v. Touchy, 743 S.W.2d 722 (Tex.App.--Houston [14th Dist.] 1987, no writ). We affirm.

Dresser employed Piero Wolk as an engineer from 1967 to 1975 and as a consultant until July 1976. During his employment, Wolk signed agreements pledging not to disclose or use confidential information. In 1979 Wolk incorporated ForScan Corporation for the purpose of designing, developing, manufacturing and marketing nuclear well logging tools. One such tool, developed with the aid of Heinz Lichtenberg, also a former Dresser employee and consultant, was a compensated density tool. Dresser had previously developed such a tool, and when it learned of Wolk's product, it was concerned that its trade secrets were involved. Following an inspection, Dresser concluded that the tool did indeed incorporate technical information belonging to Dresser. In 1981 Dresser sued to enjoin ForScan and Wolk from making and selling the logging tool. ForScan and Wolk counterclaimed, alleging unfair competition, malicious prosecution and abuse of process. When the case finally went to trial in 1988, the trial court dismissed the counterclaims and granted the following injunction:

ORDERED, ADJUDGED AND DECREED that Defendants Forscan Corporation and Piero Wolk, their officers, agents, and employees, and those persons in active concert or participation with any of them who receive actual notice of this Judgment are permanently enjoined and restrained from using any of the components or disclosing any of the trade secrets of the components or the configuration of the compensated density well logging tools manufactured by Plaintiff Dresser Industries, Inc., and from making, having made, selling, offering for sale, supplying, or otherwise disposing of any product incorporating any of said components or configurations comprising Dresser's trade secrets.

In their first three points of error, appellants argue that the trial judge erred in allowing certain witnesses to testify because their identities and the substance of their testimony were not disclosed during discovery. The testimony at issue is that of Howard Lui, James Bradshaw and Bernard Hubner, current or former Dresser employees.

In 1986 appellants served Dresser with interrogatories that included the following:

INTERROGATORY NO. 24

Identify all potential witnesses who have knowledge of the facts of this lawsuit that Plaintiff expects to call to testify at trial, and for each such witness, provide a written summary of the facts about which such witness is expected to testify at trial.

INTERROGATORY NO. 33

Does Plaintiff still contend that Forscan Corp. and/or Piero Wolk misappropriated any alleged trade secrets or confidential information of Plaintiff, and if the answer to this interrogatory is other than an unequivocal negative, identify each and every thing that Plaintiff contends is a trade secret or an item of confidential information of Plaintiff that Plaintiff alleges has been misappropriated by Defendants Forscan Corp. and Piero Wolk.

Dresser responded to No. 24 with this statement:

Plaintiff objects to this interrogatory on the grounds that it seeks to obtain the work product and thought processes of Plaintiff's attorneys. Plaintiff further objects to providing Defendants with any written summaries of any facts which any potential witnesses are expected to testify to at trial on the grounds that such request is further calling for the work product of Plaintiff's counsel where such summaries exist and where no summaries exist Defendants' request is burdensome and oppressive in that it attempts to have Plaintiff prepare summaries for the sole convenience of Defendants.

Dresser responded to No. 33 with a list of seventeen items which were claimed to be misappropriated trade secrets and confidential information. Neither party took further action on the interrogatories until trial when appellants objected to the admission of the testimony.

Appellants contend that Dresser had a duty to supplement its responses to Nos. 24 and 33. They concede that Interrogatory No. 24 was improperly phrased in that it should have requested the identity of persons with knowledge of relevant facts rather than a witness list. However, they argue that Dresser had a duty to object to the form of the question so that it could be reurged in proper form or to request a ruling on the matter.

The parties briefed this case while the supreme court was considering McKinney v. National Union Fire Ins. Co. of Pittsburgh, Pennsylvania, 772 S.W.2d 72 (Tex.1989). It held that the party requesting discovery has the responsibility of obtaining a hearing on discovery matters. Id. at 75. McKinney based its ruling on a modification of TEX.R.CIV.P. 166b(4), which was effective January 1, 1988. Because the McKinney case was tried before that date, the court applied the old rule, which placed the burden of requesting a hearing on the party seeking to exclude matters from discovery. Id. This case was tried in May 1988 and therefore comes under the McKinney rule, which places the burden on appellants, rather than Dresser, of requesting a hearing. This result is somewhat more equitable since the cut-off date for discovery was April 1, 1988. At that point, the McKinney rule had been applicable for several months, and Dresser's objection to No. 24 was still pending. Appellants had the duty to either rephrase the interrogatory or to request a ruling on its propriety.

The testimony at issue concerned drawings of Dresser which were allegedly stolen. Appellants claim that these drawings were not listed in response to No. 33 as a trade secret or item of confidential information misappropriated by appellants. The seventeen listed items focused on the similarities between the ForScan and Dresser tools and on the speed with which Wolk developed his tool.

Appellants do not include the failure to list Hubner in their complaint about Interrogatory No. 33 but contend only that he was not identified in response to No. 24. Appellants' objection to Lui's testimony was also based on the failure to respond to No. 24. Thus, only Bradshaw's testimony is open to attack. That testimony, however, was objected to on grounds of failure to supplement No. 33 only after Bradshaw was off the stand, Dresser had rested, and appellants had presented their first witness. This was on the following day. At that time appellants moved to strike portions of his testimony. In order to be considered on appeal, an objection to the admission of evidence must be made when the evidence is offered, not after it has been received. Montes v. Lazzara Shipyard, 657 S.W.2d 886, 889 (Tex.App.--Corpus Christi 1983, no writ); Wolfe v. East Texas Seed Co., 583 S.W.2d 481, 482 (Tex.Civ.App.--Houston [1st Dist.] 1979, writ dism'd). The trial court did not err in admitting the testimony of Lui, Bradshaw and Hubner. Points of error one through three are overruled.

In points of error four through six, appellants complain of the trial court's action in striking the case from the jury docket. On January 26, 1982, appellants' then counsel sent a letter to the District Clerk enclosing "our firm check in the amount of $10.00 which represents the jury fee for the above-referenced cause." Prior to trial, Dresser was successful in having the case removed from the jury docket because appellants had not made proper application for a jury trial.

Effective January 1, 1988, TEX.R.CIV.P. 216 requires that a party file a written request for a jury trial with the clerk of the court. At the time the jury fee was paid in 1982, the rule required that "[n]o jury trial shall be had in any civil suit, unless application be made therefor...." TEX.R.CIV.P. 216 (Vernon 1976). Appellants argue that their cover letter of January 26, 1982, is an application as it served the purpose of putting the case on the jury docket. Dresser argues, however, that a separate request, application or demand for a jury apart from payment of a jury fee has always been a requirement of Texas practice. The cover letter does not suffice because nowhere does it request, apply for or demand a jury.

In Sheth v. White, this court held that a trial certification request form constituted an application for jury trial within the meaning of Rule 216. 722 S.W.2d 805, 805 (Tex.App.--Houston [14th Dist.] 1987, no writ). The court in Walker v. Walker noted, however, that a demand must be made and the fee paid and ruled that the simple deposit of a jury fee with the district clerk did not constitute a demand for a jury. 619 S.W.2d 196, 198 (Tex.Civ.App.--Tyler 1981, writ ref'd n.r.e.). The court further stated that "[a] litigant must take affirmative action to avoid a waiver of his right to jury trial." Id. at 197; see also City of Houston v. Arney, 680 S.W.2d 867, 873 (Tex.App.--Houston [1st Dist.] 1984, no writ). On the basis of Walker and City of Houston, the cover letter did not serve as an application for a jury trial. The trial court therefore did not err in striking the case from the jury docket.

Appellants further argue that the trial court compounded its error...