N. Highland Inc. v. Jefferson Mach. & Tool Inc.
| Decision Date | 06 July 2017 |
| Docket Number | No. 2015AP643,2015AP643 |
| Citation | 898 N.W.2d 741,377 Wis.2d 496,2017 WI 75 |
| Parties | NORTH HIGHLAND INC., Plaintiff-Appellant-Petitioner, v. JEFFERSON MACHINE & TOOL INC. and Steven M. Homann, Defendants, Frederick A. Wells, Defendant-Respondent. |
| Court | Wisconsin Supreme Court |
For the plaintiff-appellant-petitioner, there was a brief by Kyle B. Hanson and Hanson Law Group, LLP, Barrington, and oral argument by Kyle B. Hanson.
For the defendant-respondent, there was a brief by Bruce A. Schultz, Vincent J. Scipior, and Coyne, Schultz, Becker & Bauer, S.C., Madison, and oral argument by Bruce A. Schultz.
¶1 Petitioner, North Highland, Inc., seeks review of an unpublished per curiam opinion of the court of appeals affirming a circuit court grant of summary judgment in favor of Frederick A. Wells ("Wells").1
The court of appeals determined that the circuit court properly entered summary judgment in favor of Wells. It concluded that North Highland failed to present evidence sufficient to support either its claim of conspiracy to breach a fiduciary duty or its claim of misappropriation of a trade secret. N. Highland Inc. v. Jefferson Mach. & Tool Inc. , No. 2015AP643, unpublished slip op., ¶¶ 11, 26, 369 Wis.2d 223, 2016 WL 1689972 (Wis. Ct. App. Apr. 28, 2016).
¶2 North Highland contends that the court of appeals erred and that it is entitled to summary judgment in its favor. It alleges that Wells conspired to breach a fiduciary duty that Dwain Trewyn ("Trewyn"), a former North Highland employee, owed to the company. North Highland further contends that Wells misappropriated a trade secret in violation of Wis. Stat. § 134.90 (2013-14) (Uniform trade secrets act).2
¶3 In this review of a grant of summary judgment, we examine the conspiracy and misappropriation claims through the lens of sufficiency of evidence. We determine that North Highland has not met its burden to show that there exists a genuine issue of material fact as to either claim. Consequently, due to insufficiency of evidence, both of North Highland's claims fail to survive Well's summary judgment motion.3
¶4 Accordingly, we affirm the decision of the court of appeals affirming the circuit court's grant of summary judgment in favor of Frederick Wells.4
¶5 This review originates from a lawsuit North Highland brought against Frederick Wells, Dwain Trewyn, Bay Plastics, Inc., and Jefferson Machine & Tool Inc. ("Jefferson Machine").
¶6 Wells is the owner of Bay Plastics, a distributer of customized plastic parts that it purchased from vendors. One of its vendors was North Highland, a small manufacturing company. Trewyn was an employee of North Highland with job duties that included submitting quotes and obtaining business for the company.5
¶7 When Wells decided that he wanted to form a company to manufacture the parts Bay Plastics sold, he asked Trewyn to be his partner in the new business. While Trewyn was still employed at North Highland, he and Wells formed their new manufacturing company, Jefferson Machine.6 Wells owned 75 percent of Jefferson Machine and Trewyn owned 25 percent.
¶8 The underlying dispute arose when both North Highland and Jefferson Machine submitted confidential bids on a manufacturing project for Tyson Foods Inc. ("Tyson").7 North Highland alleges that while Trewyn was still its employee, he formulated confidential bids for both North Highland and Jefferson Machine, the company he co-owned with Wells.
¶9 Jefferson Machine was awarded the Tyson project, but its contract was cancelled after North Highland threatened to seek an injunction, blocking the performance of the contract. Ultimately, neither Jefferson Machine nor North Highland was awarded the Tyson contract.
¶10 North Highland subsequently filed a lawsuit against Trewyn, Jefferson Machine, Wells, and Bay Plastics. In its amended complaint, North Highland alleged that: (1) the defendants misappropriated trade secrets; (2) Trewyn breached his fiduciary duties to North Highland and that the other defendants conspired with Trewyn in the breach of those duties; (3) Trewyn breached his contract with North Highland; and (4) the defendants interfered with Trewyn's contract with North Highland.
¶11 The affidavits on file demonstrate that during litigation, both Wells and Trewyn repeatedly testified at their depositions that Wells had no knowledge that Trewyn was bidding on behalf of North Highland. For example, Wells testified:
¶12 Wells also repeatedly testified that he had no knowledge that Trewyn was bidding specifically on the Tyson project for North Highland. For example, he testified:
¶13 Trewyn similarly testified that Wells had no knowledge Trewyn was bidding on the Tyson project for North Highland:
¶14 In addition, Wells repeatedly denied that he formed Jefferson Machine to compete against North Highland:
¶15 Wells further testified that he left the bidding at Jefferson Machine up to Trewyn:
¶16 The circuit court granted in part and denied in part the defendants' motion for summary judgment. Pursuant to the circuit court order, Bay Plastics was dismissed as a party from the lawsuit and the trade secret and contract claims were dismissed with prejudice. The breach of fiduciary duty and conspiracy to breach a fiduciary duty claims remained.
¶17 Two days before trial on the fiduciary duty claims, Trewyn filed a Chapter 7 bankruptcy petition. In response, North Highland filed an adversary claim against Trewyn arguing that its state law claims were non-dischargeable in bankruptcy. Ultimately, North Highland and Trewyn entered into a settlement agreement that dismissed North Highland's claims against Trewyn with prejudice. The settlement allowed North Highland to maintain its state law claims against Wells and Jefferson Machine.
¶18 Wells moved to dismiss the remaining claims against both him and Jefferson Machine, arguing that a litigant may not maintain a derivative conspiracy claim when it has settled and dismissed all claims against the actual tortfeasor. The circuit court granted Wells' motion to dismiss. North Highland appealed the circuit court's decision, naming Wells as the only respondent.9
¶19 The court of appeals issued a per curium opinion affirming the circuit court order. It determined that the circuit court properly entered summary judgment in favor of Wells because North Highland failed to set forth any facts establishing there was a conspiracy. N. Highland , No. 2015AP643, unpublished slip op., ¶¶ 16-17. Likewise, it determined that North Highland did not meet its burden of establishing that the amount of its bid for the Tyson project constituted a trade secret. Id. , ¶ 26.
¶20 In this case we are asked to review the court of appeals' decision affirming the circuit court's grant of summary judgment in favor of Wells. We review a decision granting summary judgment independently of the determinations rendered by the circuit court and the court of appeals. Lambrecht v. Estate of Kaczmarczyk , 2001 WI 25, ¶ 21, 241 Wis.2d 804, 623 N.W.2d 751.
¶21 On review, we apply the same two-step analysis the circuit court applies pursuant to Wis. Stat. § 802.08(2). It provides that the "judgment sought shall be rendered 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). We examine the record in the light most favorable to the non-moving party. Lambrecht , 241 Wis.2d 804, ¶ 3, 623 N.W.2d 751 (citation omitted).
¶22 "The mere allegation of a factual dispute will not defeat an otherwise properly supported motion for summary judgment." Helland v. Kurtis A. Froedtert Mem'l Lutheran Hosp. , 229 Wis.2d 751, 756, 601 N.W.2d 318 (Ct. App. 1999). A party opposing a motion for summary judgment must demonstrate that there exists a genuine issue of material fact. Id. "It is not enough to rely upon unsubstantiated conclusory remarks, speculation, or testimony that is not based upon personal knowledge." Id. (citation omitted).10
¶23 Finally, a claim for conspiracy to breach a fiduciary duty requires a more stringent test than whether a reasonable inference may be drawn from the facts. Maleki v. Fine-Lando Clinic Chartered, S.C. , 162 Wis.2d 73, 84, 469 N.W.2d 629 (1991). To prove a conspiracy, a plaintiff "must show more than a mere suspicion or conjecture that there was a conspiracy or that there was evidence of the elements of a conspiracy." Id. In...
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