N. Highland Inc. v. Jefferson Mach. & Tool Inc.

• Decision Date: 28 April 2016
• Docket Number: No. 2015AP643.,2015AP643.
• Parties: NORTH HIGHLAND INC., Plaintiff–Appellant, v. JEFFERSON MACHINE & TOOL INC. and Steven M. Homann, Defendants, Frederick A. Wells, Defendant–Respondent.
• Court: Wisconsin Court of Appeals

369 Wis.2d 223

880 N.W.2d 182 (Table)

NORTH HIGHLAND INC., Plaintiff–Appellant,

v. JEFFERSON MACHINE & TOOL INC. and Steven M. Homann, Defendants,Frederick A. Wells, Defendant–Respondent.

No. 2015AP643.

Court of Appeals of Wisconsin.

April 28, 2016.

¶ 1 PER CURIAM.

North Highland, Inc., appeals summary judgment in favor of Frederick Wells. North Highland brought suit against Wells, alleging in part that Wells had conspired to breach a fiduciary duty owed to North Highland by a former employee of North Highland and that Wells has misappropriated a trade secret, in violation of Wis. Stat. § 134.90

(2013–14).¹ The circuit court granted summary judgment in favor of Wells on each of these claims. For the reasons discussed below, we affirm.

BACKGROUND

¶ 2 In 2012, North Highland brought suit against Wells and Dwain Trewyn. North Highland, a manufacturing company, alleged that in 2011, Tyson Foods, Inc., accepted confidential bids from manufacturing companies for a project related to its facility in Jefferson, Wisconsin. North Highland alleged that at the time, Trewyn was an employee of North Highland and that one of Trewyn's duties was to formulate North Highland's bid for the Tyson project. North Highland alleged that Trewyn and Wells formed Jefferson Machine & Tool, Inc., a competitor manufacturing company, and that while still employed by North Highland, Trewyn also formulated a bid for the Tyson project on behalf of Jefferson Machine, which was awarded the Tyson project.

¶ 3 North Highland asserted claims against Trewyn and Wells for trade secret misappropriation, alleging that its bid amount for the Tyson project constituted a trade secret, that Trewyn had disclosed North Highland's bid amount to Wells, and that Wells and Trewyn used that information in order for their company, Jefferson Machine, to present a more favorable bid to Tyson Foods. North Highland also asserted a claim against Trewyn for breach of fiduciary duty, and a claim against Wells for conspiracy to breach a fiduciary duty.²

¶ 4 The circuit court granted summary judgment in favor of Trewyn and Wells on North Highland's trade secret misappropriation claim, and the case proceeded on only North Highland's claims for breach of fiduciary duty against Trewyn and conspiracy to breach fiduciary duty against Wells.

¶ 5 Prior to trial on those claims, Trewyn declared Chapter 7 bankruptcy, which resulted in a stay in North Highland's action against Trewyn. North Highland filed an adversary action against Trewyn in the bankruptcy court, and North Highland and Trewyn reached a settlement agreement in which the parties agreed that Trewyn would pay an agreed upon sum to North Highland by a specified date, that the adversary proceeding filed by North Highland against Trewyn in bankruptcy court would be dismissed, that any debt above and beyond what Trewyn agreed to pay North Highland would be discharged, and that North Highland covenanted not to sue Trewyn. Pursuant to North Highland and Trewyn's stipulation, the bankruptcy court entered an order dismissing the adversary proceeding between North Highland and Trewyn.

¶ 6 Following the dismissal of the bankruptcy action between North Highland and Trewyn, North Highland and Trewyn stipulated in the present case that: North Highland had covenanted not to sue Trewyn but that it had reserved all rights to its claims against Wells; North Highland had received the settlement payment from Trewyn; and Trewyn could be dismissed as a party to this action. Following the stipulation, the circuit court entered an order dismissing Trewyn as a party in this case.

¶ 7 Following Trewyn's dismissal, Wells moved the circuit court for summary judgment on North Highland's conspiracy claim, arguing that as a result of the dismissal of North Highland's claim against Trewyn, North Highland's conspiracy claim against Wells was barred by claim preclusion. The circuit court granted Wells' motion. North Highland appeals the dismissal of both its trade secret misappropriation claim and its conspiracy claim.

DISCUSSION

¶ 8 North Highland contends that the circuit court erred in entering summary judgment in favor of Wells on North Highland's claims for conspiracy to breach fiduciary duty and trade secret misappropriation.

¶ 9 We review summary judgment de novo. Mach v. Allison, 2003 WI App 11, ¶ 14, 259 Wis.2d 686, 656 N.W.2d 766

. A party is entitled to summary judgment “if the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law.” Wis. Stat. § 802.08(2). Summary judgment materials are to be viewed in the light most favorable to the nonmoving party. Rainbow Country Rentals and Retail, Inc. v. Ameritech Publ'g, Inc., 2005 WI 153, ¶ 13, 286 Wis.2d 170, 706 N.W.2d 95.

A. Conspiracy to Breach Fiduciary Duty

¶ 10 Wells contends that the circuit court properly entered judgment in his favor on North Highland's conspiracy to breach fiduciary duty claim. Wells argues first that as a result of North Highland's settlement with Trewyn and the subsequent dismissal of North Highland's adversarial proceedings against Trewyn in the bankruptcy court and in the present case, claim preclusion operates to bar North Highland's conspiracy claim against Wells. Alternatively, Wells argues that if claim preclusion does not operate to bar North Highland's conspiracy claim against him, summary judgment is still appropriate because there is not sufficient evidence upon which a jury could find that Trewyn and Wells conspired for Trewyn to breach his fiduciary duty to North Highland.

¶ 11 For the reasons explained below, we agree with Wells that summary judgment is appropriate because North Highland has failed to establish that there is sufficient evidence to support the claim. Because our decision on this basis is dispositive, we do not address whether the claim is barred by claim preclusion. See Sweet v. Berge, 113 Wis.2d 61, 67, 334 N.W.2d 559 (Ct.App.1983)

(if a decision on one point disposes of the appeal, the court will not decide other issues raised).

¶ 12 “A civil conspiracy in Wisconsin is ‘a combination of two or more persons by some concerted action to accomplish some unlawful purpose or to accomplish by unlawful means some purpose not in itself unlawful.’ ” City of Milwaukee v. NL Indus., Inc., 2005 WI App 7, ¶ 25, 278 Wis.2d 313, 691 N.W.2d 888

(quoted source omitted). To prove a claim for civil conspiracy, a plaintiff must show: (1) the formation and operation of a conspiracy; (2) a wrongful act or acts done pursuant to the conspiracy; and (3) the damage resulting from the act or acts. See

Onderdonk v. Lamb, 79 Wis.2d 241, 247, 255 N.W.2d 507 (1977).

¶ 13 “A party against whom a motion for summary judgment has been brought ... must set forth specific evidentiary facts that are admissible in evidence showing that there is a genuine issue for trial.” Buckett v. Jante, 2009 WI App 55, ¶ 29, 316 Wis.2d 804, 767 N.W.2d 376

. In this case, the burden to do so lies with North Highland. We conclude, however, that North Highland has failed to set forth sufficient facts in evidence that show there is a genuine issue as to whether Wells and Trewyn conspired.

¶ 14 North Highland argues that evidence submitted to the circuit court on summary judgment is sufficient to “allow a reasonable inference” that Wells conspired with Trewyn. North Highland asserts that the summary judgment submissions establish that: (1) Trewyn worked on the Tyson project bid for North Highland; (2) while working on North Highland's bid, Trewyn and Wells formed Jefferson Machine & Tool, of which Wells owns seventy-five percent; (3) Trewyn prepared and submitted a bid for the Tyson project on behalf of Jefferson Machine & Tool; (4) Wells leased manufacturing space and bought equipment for Jefferson Machine; and (5) “Wells admitted to knowing about Trewyn's bidding work at North Highland and to being involved in [Jefferson Machine & Tool's] bidding on the [Tyson] [p]roject.”

¶ 15 Summary judgment must be based upon the pleadings, affidavits, and other records. Wis. Stat. § 802.08(2)

. The materials relied upon by North Highland in opposing summary judgment are nearly all portions of a brief submitted by it to the circuit court.³ While that brief may rely on evidence in the record, it is not evidence itself. See

Merco Distrib. Corp. v. O & R Engines, Inc., 71 Wis.2d 792, 795–96, 239 N.W.2d 97 (1976).

¶ 16 To the extent that North Highland intends to direct this court, through its circuit court brief, to actual evidentiary materials in the record that show there is a genuine issue of material fact, North Highland has failed to do so. The portions of North Highland's brief that appear to reference the facts identified in ¶ 14 either do not contain record citations or the citations that are provided are to record numbers that are not part of the record on appeal. Where we were able to locate the referenced document in the record, it was unclear to us where the particular fact or facts are located in the record, if it was there at all.⁴ Erroneous record references place an unwarranted burden on this court in deciding an appeal, and it is not the responsibility of this court to sift through the record to find the evidence on which North Highland relies. See Jensen v. McPherson, 2004 WI App 145, ¶ 6 n. 4, 275 Wis.2d 604, 685 N.W.2d 603

.

¶ 17 However, even if North Highland's assertions of fact had been supported with evidence that we were able to locate in the record and upon which summary judgment can be based, summary judgment in favor of Wells would still be appropriate because North Highland has failed to set forth any facts that establish that Wells conspired with Trewyn. All the spare undisputed facts show is that Wells knew that Trewyn was likely in a position to use North Highland's bid information to formulate Jefferson...