Hot Spot Detector, Inc. v. Rolfes Electronics Corp.

• Decision Date: 05 April 1960
• Docket Number: No. 49952,49952
• Citation: 251 Iowa 647,102 N.W.2d 354
• Parties: HOT SPOT DETECTOR, INC., Appellant and Cross-Appellee, v. ROLFES ELECTRONICS CORPORATION and George A. Rolfes Co., Appellees and Cross-Appellants.
• Court: Iowa Supreme Court

Page 354

102 N.W.2d 354

251 Iowa 647

HOT SPOT DETECTOR, INC., Appellant and Cross-Appellee, v. ROLFES ELECTRONICS CORPORATION and George A. Rolfes Co., Appellees and Cross-Appellants.

No. 49952.

Supreme Court of Iowa.

April 5, 1960.

Gibson, Stewart & Garrett, Des Moines, for appellant and cross-appellee.

Brody, Parker, Miller, Roberts & Thoma, Des Moines, Mahoney & Mahoney, Boone, and Ooms, McDougall, Williams & Hersh, Chicago, Ill., for appellees and cross-appellants.

GARFIELD, Justice.

This is the first appeal submitted to us which involves solely questions arising under our discovery rules, 121 [251 Iowa 650] et seq., Rules of Civil Procedure, since they were changed in important respects in 1957. It concerns the propriety of certain written interrogatories filed by defendants under amended rule 121 to which plaintiff filed objections under rule 123.

Plaintiff's petition in equity seeks to enjoin defendants from utilizing its trade secrets and an accounting for profits and damages of $250,000 from the use thereof. Defendants counterclaimed for damages of $1,000,000 for plaintiff's alleged use of their trade secrets and violation of federal and state laws forbidding combinations in restraint of trade, monopolies and price fixing. Defendants also sought to enjoin plaintiff from disparaging their products or standing. Defendants then filed their interrogatories and plaintiff its objections thereto.

Plaintiff and defendants each make and sell thermostat controls and reporting systems for grain storage bins and buildings. The two defendants are affiliated companies which market their products under one trade name. The pleadings admit defendants employed ten of plaintiff's former employees. Plaintiff's petition alleges they possessed trade secrets used by it in the manufacture and sale of its products which defendants wrongfully acquired and used. Four trade secrets and five confidential papers and diagrams are referred to.

Defendants' answer denies any wrongful conduct on their part or that plaintiff's alleged trade secrets and items of confidential information are in fact such. It alleges plaintiff has not come into court with clean hands or proper motives, it has employed two of defendants' former employees, is engaging in the type of conduct of which it now complains, plaintiff and its parent corporation are engaging in unfair competition, price cutting and other monopolistic practices. Further reference to the counterclaim is unnecessary now.

Defendants' interrogatories are numbered one to 30. Plaintiff filed written objections to all and each of them. The trial court overruled the objections as to interrogatories 15, 24, 25, 26 and the first sentence of 23, and sustained the objections to the second sentence of 23 and all of the others. We granted each side an appeal, under rule 332, R.C.P., from this order. Plaintiff contends the overruled objections should have been sustained and defendants that those sustained should have been overruled.

Insofar as now pertinent, rule 121, as amended in 1957, states 'a party may * * * file in duplicate not over thirty numbered interrogatories to be answered by such adversary. Interrogatories may relate to any matters which can be inquired into under rule 143 * * *.'

Rule 122, which has been in effect since our rules were adopted in 1943 and is important upon this appeal, provides: 'Upon application to the court and showing good cause therefor the court may permit filing more than thirty interrogatories and may then specify the number which may be filed * * *.'

Since, according to rule 121, supra, interrogatories are keyed to rule 143 in the scope of material that may be inquired into, we set out the pertinent part of amended rule 143 relating to depositions:

'* * * the deponent may be examined regarding any matter, not privileged, which is relevant to the subject matter involved in the pending action, whether it relates to the claim or defense of the examining party or to the claim or defense of any other party, including the existence, description, nature, custody, condition and location of any books, documents or other tangible things and the identity and location of persons having knowledge of the relevant facts; provided that a party shall not be required to list the witnesses he expects to call at the trial. It is not ground for objection that the testimony will be inadmissible at the trial if the testimony sought appears reasonably calculated to lead to the discovery of admissible evidence.'

Wheatley v. Heideman, Iowa, 102 N.W.2d 343, considers one phase of our present discovery rules and holds they are to be interpreted broadly and liberally to effect their purpose, the trend being to broaden the scope of discovery so as to give litigants access to all material facts. Also that the test of relevancy under rule 143 is relevancy 'to the subject matter involved in the pending action' rather than in determining admissibility of evidence upon a trial or relevancy to the precise issues in the pleadings and that interrogatories should not be disallowed as irrelevant unless clearly outside the scope of the case. Of course we adhere to these views now.

Although defendants' interrogatories are, as above stated, numbered one to 30, each number, except perhaps two, is followed by more than one interrogatory--some by as many as five or six. It is fair to say the 30 numbered interrogatories are really more than three times that number. For example interrogatory 1 refers to plaintiff's ten former employees whom defendants employed and asks that as to each of them plaintiff set forth the alleged trade secrets possessed by each, the date of imparting knowledge thereof to each, by whom such knowledge was imparted to each and state each and every fact and identify each and every document of which plaintiff has knowledge supporing the allegation that each such person knew such information was secret. Incidentally plaintiff's petition contains no such allegation as that just referred to.

Interrogatory 30 asks, as to each of the four alleged trade secrets and five items of confidential information referred to in plaintiff's petition, that it state in detail what measures it has taken throughout the period since their acquisition to prevent them from becoming public knowledge, including but not limited to restrictions imposed on its employees' contacts with outsiders or on access to its plant by outsiders and undertakings by its employees to maintain secrecy with respect thereto. As to each such measure so described in detail, list, identify by date and brief description and state the present whereabouts of each and every document of which plaintiff has knowledge that relates to such measure.

Rule 121 fixes 30 as the maximum number of interrogatories that may be filed as of right. Our rules differ from the federal rules in that the latter prescribe no such limit. Rule 122 plainly contemplates that more than 30 interrogatories may be filed only after application to the trial court and showing good cause therefor. Upon such application and showing the court may permit more than 30 and may then specify the number which may be filed.

So far as the record shows defendants made no application to the court nor showing of good cause at any time for permission to file more than 30 interrogatories, nor was the court asked to specify the number which might be filed. Defendants' lack of compliance with rule 122 (in effect since 1943) must be deemed substantial, not merely technical. No adequate explanation therefor appears. Plaintiff duly objected to the filing of more than 30 interrogatories without a showing of good cause or permission of the court.

The order from which these appeals were taken refers to the multiple character of the interrogatories and that each incorporates many inquiries but states the court believes it proper to dispose of the interrogatories on their merits and therefore rules on the objections to each interrogatory. The court then sustained other objections to the interrogatories that were disallowed than the one based on defendants' lack of compliance with rule 122.

We are committed to the rule we must affirm the trial court if any sufficient basis appears in the record therefor even though the ruling was placed upon different grounds. The burden is upon an appellant to demonstrate error and this he has not done if the record shows proper support for the ruling complained of. The court could well have placed its ruling disallowing many of the interrogatories upon defendants' lack of compliance with rule 122 and we uphold it, insofar as it is unfavorable to defendants, upon that ground. We therefore think defendants are entitled to no relief upon their appeal. See in support of the views just stated Stover v. Central Broadcasting Co., 247 Iowa 1325, 1330-1331, 78 N.W.2d 1, 4, and citations; Stenberg v. Buckley, 245 Iowa 622, 633, 61 N.W.2d 452, 458. See also Bennett v. Powell, 284 Mass. 246, 187 N.E. 559, 560; 27 C.J.S. Discovery § 61a, page 184.

On plaintiff's appeal from the allowance of four of defendants' interrogatories and part of a fifth (No. 23), we think the fact more than 30 interrogatories were filed (to which only 30 numbers were assigned) does not entitle plaintiff to a reversal. Plaintiff seems to concede this in its brief by saying, 'It is of course true that plaintiff can, on appeal, avail itself of only those objections which apply to interrogatories 15, 23 (first sentence), 24, 25 and 26.' It then proceeds to argue that these four and one-half interrogatories which were allowed really consist of more than 30. But we cannot agree with this view. We think the interrogatories which were allowed contain not more than about 20 questions under any reasonable plan of numbering. We proceed then to consider, on plaintiff's appeal, whether its objections to interrogatories allowed were erroneously overruled.

Plaintiff's petition...