Ovation Plumbing, Inc. v. Furton, 00CA0101.

• Decision Date: 12 April 2001
• Docket Number: No. 00CA0101.,00CA0101.
• Citation: 33 P.3d 1221
• Parties: OVATION PLUMBING, INC., Plaintiff-Appellee and Cross-Appellant, v. Darrell D. FURTON, Defendant-Appellant and Cross-Appellee.
• Court: Colorado Court of Appeals

33 P.3d 1221

OVATION PLUMBING, INC., Plaintiff-Appellee and Cross-Appellant, v. Darrell D. FURTON, Defendant-Appellant and Cross-Appellee.

No. 00CA0101.

Colorado Court of Appeals, Div. III.

April 12, 2001.

As Modified on Denial of Rehearing September 6, 2001.

McKenna & Cuneo, L.L.P., Stephen B. Shapiro, Eloise Henderson Bouzari, Denver, CO, for Plaintiff-Appellee and Cross-Appellant.

Hall & Evans, L.L.C., Alan Epstein, Michael L. Luchetta, Denver, CO, for Defendant-Appellant and Cross-Appellee.

Opinion by Judge NIETO.

Defendant, Darrell D. Furton (Furton), appeals a judgment entered on jury verdicts against him and in favor of plaintiff, Ovation Plumbing, Inc. (Ovation), on Ovation's claims for misappropriation of trade secrets and unfair competition. Judgments on other claims were also entered in favor of Ovation, but those judgments are not at issue here. Ovation cross-appeals the trial court's order denying its motion for injunctive relief. We affirm the judgment, reverse the order, and remand with directions.

Ovation was a plumbing subcontractor for Jefferson Properties, Inc. (JPI), a multi-family home developer. Furton was an independent contractor who did plumbing work for Ovation pursuant to Ovation's contract with JPI. Ovation became dissatisfied with Furton's performance and terminated him. Furton subsequently submitted a bid for a plumbing contract on an unrelated, but similar multi-family home construction project known as Strawberry Fields, and his bid was accepted.

Ovation then filed this action against Furton. It asserted a claim for theft of a trade secret based upon Furton's use of Ovation's confidential contract pricing and bid information. Ovation claimed that Furton misappropriated and used to his advantage information from Ovation's bid on the plumbing contract with JPI. Ovation claimed that this information was a trade secret of great value and that the misappropriation caused it damage. Ovation also claimed unfair competition and misappropriation of business value based upon Furton's misrepresentations to the developers of the Strawberry Fields project concerning the scope of the work Furton had performed for Ovation, and Furton's misappropriation of Ovation's business reputation.

After judgments were entered against Furton, Ovation moved for an injunction to prevent Furton from further use of Ovation's trade secrets. The trial court denied the motion, finding that there was no showing of irreparable injury and that Ovation had an adequate remedy at law.

I.

Furton first contends that, for several reasons, Ovation was not entitled to judgment on its claim of theft of trade secrets. We are not persuaded.

A.

Furton first asserts that Ovation failed to present a prima facie case of misappropriation of trade secrets because, as a matter of law, the bid pricing information does not meet the definition of a trade secret under Colorado law. We disagree.

Colorado's Uniform Trade Secrets Act defines a trade secret as:

the whole or any portion or phase of any scientific or technical information, design, process, procedure, formula, improvement, confidential business or financial information,. . . or other information relating to any business or profession which is secret and of value. To be a "trade secret" the owner thereof must have taken measures to prevent the secret from becoming available to persons other than those selected by the owner to have access thereto for limited purposes.

Section 7-74-102(4), C.R.S.2000.

What constitutes a trade secret is a question of fact. Gold Messenger, Inc. v. McGuay, 937 P.2d 907 (Colo.App.1997). Novelty and invention are not required for a trade secret. "The protection is merely against breach of faith and reprehensible means of learning another[']s secret." Rivendell Forest Products, Ltd. v. Georgia-Pacific Corp., 28 F.3d 1042, 1044 (10th Cir. 1994) (quoting Restatement of Torts § 757 comment b at 6-7 (1939)).

Furton relies on Fortna v. Martin, 158 Cal.App.2d 634, 323 P.2d 146 (1958), and Whitmyer Bros., Inc. v. Doyle, 58 N.J. 25, 274 A.2d 577 (1971), for his assertion that bid pricing information cannot be a trade secret as a matter of law. Both of these cases are appeals from injunctions that were granted based on provisions in employment contracts restricting competition, and both holdings are distinguishable. In both Fortna and Whitmyer, the plaintiffs claimed their methods and procedures for developing bids were trade secrets. In each case the appellate court held that procedures for estimating prices and the constituent elements of bids were not trade secrets.

In contrast, here the trade secret claimed by Ovation is the bid itself, rather than the methods of calculating the bid or the constituent elements of the bid. The heart of Ovation's trade secrets claim is that Furton misappropriated the actual bid and used it to his advantage and to Ovation's disadvantage. Accordingly, we do not find these authorities persuasive.

We note that the definition of trade secret in § 7-74-102(4) includes "confidential business or financial information . . . or other information relating to any business or profession which is secret and of value." This definition, together with evidence of value and of measures to protect disclosure, is broad enough to include a bid on a contract. Accordingly, we decline to adopt a per se rule that a bid on a contract cannot be a trade secret as a matter of law.

B.

Furton also asserts that the bid cannot be a trade secret because it was not used continuously in the operation of Ovation's business. He argues that the bid is specific to a particular contract and therefore would not be useful in future bids on the other projects. We disagree.

Section 7-74-102(4) does not contain a continuous use requirement. Statutes must be construed according to their plain and obvious meaning, and they should not be given a strained or forced interpretation. People v. Browning, 809 P.2d 1086 (Colo. App.1990). We will not read a continuous use requirement into this statute when it does not contain such language nor any indication of legislative intent to include this concept.

Furton relies on Wisconsin Electric Power Co. v. Public Service Commission, 110 Wis.2d 530, 329 N.W.2d 178 (1983). However, that case is not persuasive because it concerns a Wisconsin statute defining trade secrets as including "business information used or for use in the conduct of a business," a term not found in our statute.

C.

Furton also contends there was a failure of proof on two elements of the trade secrets claim. He argues that Ovation's bid could not be a trade secret because the evidence did not establish that it had value to Ovation in the future or that it gave Furton any competitive advantage. Furton also argues that, even if the bid price was a trade secret, there was no evidence that Furton misappropriated the bid information. We are not persuaded.

A jury's verdict may be reversed on appeal if the record reveals a failure of proof. Radiology Professional Corp. v. Trinidad Area Health Ass'n, 39 Colo.App. 100, 565 P.2d 952 (1977),aff'd,195 Colo. 253, 577 P.2d 748 (1978). However, if there is evidence in the record, the weight of evidence, credibility of witnesses, and reasonable inferences to be drawn from the evidence are within the jury's exclusive province. City of Fountain v. Gast, 904 P.2d 478 (Colo.1995). Jurors may rely on circumstantial evidence in reaching their conclusion. White v. Muniz, 999 P.2d 814 (Colo.2000).

When reviewing a challenge based on the sufficiency of the evidence, an appellate court may not disturb the jury's verdict unless it is clearly erroneous. Ajay Sports, Inc. v. Casazza, 1 P.3d 267 (Colo.App.2000). An appellate court must evaluate the record in the light most favorable to the verdict, and every inference fairly deducible from the evidence should be drawn in favor of the verdict. Anderson v. Dunton Management Co., 865 P.2d 887 (Colo.App.1993). "[A] jury's verdict will not be disturbed if there is any support for it in the record." Murphy v. Glenn, 964 P.2d 581, 584 (Colo.App.1998) (emphasis in original).

The jury was instructed that the bid had to have value to be considered a trade secret. A review of the record reveals that both direct and circumstantial evidence was presented concerning the value of the bid to Ovation and the advantage that knowledge about the bid gave Furton.

JPI's regional vice president testified that Ovation's bidding information would be valuable to a plumbing contractor bidding on multi-family projects. Ovation's president testified that multi-family projects have similarities and therefore Ovation's bid would be valuable in formulating a bid on another multi-family project.

Ovation's president also testified that formulating a plumbing project bid was a detailed process requiring fifty to sixty pages of documentation. This is circumstantial evidence that having access to Ovation's bid information gave Furton a competitive advantage because he did not have to spend the time or money to generate or gather the documentation to develop his own bid on a similar project.

Furton also...