List Industries, Inc. v. Umina
| Decision Date | 12 July 2021 |
| Docket Number | 3:18-cv-199 |
| Parties | LIST INDUSTRIES, INC., Plaintiff, v. DEAN SCOTT UMINA, et al., Defendants. |
| Court | U.S. District Court — Southern District of Ohio |
ENTRY AND ORDER DENYING MOTION FOR SUMMARY JUDGMENT OF DEFENDANT DEAN SCOTT UMINA (DOC. NOS. 51 AND 52) AND DENYING MOTION FOR SUMMARY JUDGMENT OF DEFENDANT TOP TIER STORAGE PRODUCTS, LLC (DOC. NO. 53)
Plaintiff List Industries, Inc. (“List”) brings three claims in this diversity case: (1) violation of the Ohio Uniform Trade Secrets Act (“OUTSA”); (2) breach of contract; and (3) spoliation. (Doc. No. 35.) All three claims are brought against Defendant Dean Scott Umina (“Umina”), while only the first and third are brought against Defendant Top Tier Storage Products, LLC (“Top Tier”). Pending before the Court are two related motions for summary judgment, one filed by Umina (Doc. Nos. 51 and 52) and the other filed by Top Tier (Doc No. 53) (collectively, the “Motions”).[1] In the Motions, the Defendants move for an order granting summary judgment on all claims against them, pursuant to Federal Rule of Civil Procedure 65. In response, List argues that the Court must deny the Motions because there are disputed issues of material fact. As explained below, the Court finds that all of the claims survive, although certain documents cannot support the trade secret claim. The Court DENIES the Motions.
List was founded in approximately 1936 and, among other things, is involved in the business of manufacturing and distributing storage lockers and other storage products. (Doc. No. 49 at PageID 2184.) Similarly, the Midwest Entities[3] assembled and sold lockers and other industrial storage products. (Doc. No. 35 at PageID 409; Doc. No. 46 at PageID 630.) Umina was one of the owners of the Midwest Entities. (Doc. No. 46 at PageID 632.) Thom Champa, List's Senior Vice President of Sales and Marketing, saw value in List acquiring the Midwest Entities' customer base because the Midwest Entities “were long established” on the industrial side of the business in Indiana, Kentucky, Pennsylvania, and Illinois, and had “expanded their customer base coast to coast.” (Doc. No. 50 at PageID 2700, 2705-06.)
In 2010, List and the Midwest Entities executed a Purchase and Sale Agreement (the “PSA”). (Doc. No. 49-2.) The PSA became fully executed on August 13, 2010. (See Id. at PageID 2240, 2242-43.) Through the PSA, List (the Buyer) purchased the real property and substantially all of the assets of the Midwest Entities (the Sellers). (Id.) Among other provisions and exhibits, the PSA states the following:
(Id. at PageID 2225, 2226, 2228, 2236 (emphasis in original).) Exhibit C-1 to the PSA, under the heading “Assets, ” states, in part:
3. All equipment, orders not yet shipped, contracts, computer software, company names, tradenames, copyrights, marketing materials, patents, websites and other intellectual property of each Seller; a schedule thereof to be provided by Seller to Buyer 5 days from the Effective Date and upDated: Closing.
(Id. at PageID 2249.)
The Bill of Sale between List (as Assignee) and the Midwest Entities (as Assignor), which is referenced in Section 4.2.1 of the PSA, is dated October 11, 2010 and states, in part:
(Doc. No. 49-4 at PageID 2265, 2267.) Exhibit ‘C' of the Bill of Sale includes the Midwest Entities' servers, such as the POWEREDGE 600SC Server and the POWEREDGE Server SC420. (Id. at PageID 2276; Doc. No. 49 at PageID 2188.)
The day after executing the Bill of Sale, Umina and List entered into an employment agreement (the “Employment Agreement”). (Doc. No. 49-3; see also Doc. No. 35-1.) Through the Employment Agreement, Umina agreed to become List's employee, with a salary of $70, 000 over a six-month period, the potential for a bonus, and the possibility that List would renew the agreement after the initial six months at an increased annual salary. (Doc. No. 49-3 at PageID 2259.)
The Employment Agreement between List (as Company) and Umina (as Employee) is dated October 12, 2010 and states, in part, the following:
(Doc. No. 49-3 at PageID 2259, 2261.)
Umina's employment with List only lasted for the initial six-month period, ending in April of 2011. (Doc. No. 46 at PageID 649.) Umina admitted during his deposition that, at some point while he was employed by List, he downloaded files. (Id. at PageID 649-50.) He testified that those files were downloaded from the servers at the Midwest Factory Warehouse onto a Seagate hard drive (the “Seagate Hard Drive”). (Id.; see also Doc. No. 51 at PageID 3080 (Defendants acknowledging that, on March 24, 2011, Umina copied documents stored electronically and used by the Midwest Entities); Doc. No. 63 at PageID 3784 (“Umina acknowledges copying information to his Seagate hard-drive in March 2011 before his brief employment stint with List ended”).) Umina admitted that those servers “were part of the purchase” and “after the sale were owned by List.” (Doc. No. 46 at PageID 650.) Umina also admitted that he purchased the Seagate Hard Drive after November 23, 2010, which was after execution of the PSA and the Employment Agreement. (Doc. No. 62-1 at PageID 3749; Doc. No. 49-2 at PageID 2240, 2242-43; Doc. No. 49-3.)
The PSA had identified the Midwest Entities' accounts receivables that existed at the time of closing as the (only) “Excluded Assets” in the purchase by List. (Doc. No. 49-2 at PageID 2226, 2250; Doc. No. 49 at PageID 2186.) Umina explained: “I took documents that I felt that I needed to conclude [the remaining open business with the Midwest Factory Warehouse at the end of his employment with List] with our customers, accounts receivable, things of that nature.” (Doc. No. 46 at PageID 650.) In essence, he said that he took information “in order to wrap up or wind up” the four entities (i.e., the Midwest Entities) that had sold their assets to List. (Id.) However, Umina “didn't know what [he] would need, so [he] didn't pick the documents that [he] thought [he] might need, ” resulting in him “basically download[ing] a drive of files.” (Id. at PageID 650-51.) Umina could not remember whether he had asked anyone at List if it was okay for him to download that information from the servers and take it with him. (Id. at PageID 650.)
Umina testified that, in March of 2011 while his employment with List was ending, he did not think that he might start another materials handling equipment company in the future. (Doc. No 46 at PageID 651.) However, in late 2015, Todd Gillis, a former colleague of Umina, approached Umina about getting back into the storage locker business. (Id. at PageID 651.) Umina agreed, he helped to form Top Tier in February of 2016, and he became a Top Tier employee thereafter-running the company's day-to-day operations. (Id. at PageID 651, 653.) Among other things, Umina hired former Midwest Entities employee, Kevin Krumholtz (“Krumholtz”), for Top Tier. (Id. at PageID 653-54.) Umina...
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