Parking Co. v. Rhode Island Airport Corp., PB 2004-4189

• Decision Date: 18 February 2005
• Docket Number: PB 2004-4189
• Parties: THE PARKING COMPANY, L.P. Plaintiff v. RHODE ISLAND AIRPORT CORPORATION Defendant RHODE ISLAND AIRPORT CORPORATION Third Party Plaintiff v. NEW ENGLAND PARKING COMPANY, L. P. Third Party Defendant.
• Court: Rhode Island Superior Court

THE PARKING COMPANY, L.P. Plaintiff
v.
RHODE ISLAND AIRPORT CORPORATION Defendant

RHODE ISLAND AIRPORT CORPORATION Third Party Plaintiff
v.
NEW ENGLAND PARKING COMPANY, L. P. Third Party Defendant.

No. PB 2004-4189

Superior Court of Rhode Island

February 18, 2005

DECISION

RUBINE, J.

Before this court are three pretrial motions together with corresponding objections. The Parking Company, L.P. (hereinafter "Plaintiff" or "TPC") moves to dismiss the first three counts of the Defendant's Counterclaim. Additionally, New England Parking Company, L.P. (hereinafter "Third Party Defendant" or "NEP") moves to dismiss the Third Party Complaint in its entirety. Finally, Rhode Island Airport Corporation (hereinafter "Defendant" or "RIAC") moves for a judgment on the pleadings as to the first two counts of the Plaintiff's Amended Complaint. The motions are made in accordance with Super. R. Civ. P. 12 (b)(6) and 12(c).

FACTS AND TRAVEL

The claims, counterclaims and third party claims in this case arise from a contract dispute relative to the operation and control of the parking facilities at the Theodore Francis Green Airport (hereinafter the "airport"). Plaintiff attached to its Amended Complaint, and incorporated by reference therein, the agreements in question: the so-called Concession Lease Agreement (including five amendments thereto) and the Audit Agreement (referred to herein collectively as the "CLA").^[1] The pertinent facts gleaned from the parties' pleadings^[2] are set forth herein, and form the factual context for the determination of these motions.

Current parking amenities at the airport include three garages. Plaintiff, a limited partnership, is under contract to operate two of the garages, identified as Garages A and B. Pursuant to the Fourth Amendment to the CLA, TPC owned and operated Garage B as the "Express Valet Garage." Additionally, TPC manages and operates Garage A and other surface area parking lots. Defendant, a public corporation established in accordance with G.L. 1956 § 42-64-7.1, is a subsidiary of the Rhode Island Economic Development Corporation (hereinafter "EDC"). RIAC leases the land on which the airport is located and operates the airport. The Third Party Defendant, NEP, is a separate limited partnership entity that is closely affiliated with TPC.^[3] NEP owns and operates the garage identified as Garage C which is adjacent to the airport and accessible from airport property. On April 21, 1998, RIAC and NEP entered into an Easement Agreement, which is attached and incorporated by reference in the Third Party Complaint, whereby RIAC granted NEP an easement for Garage C to access the so-called "Airport Circulator" in exchange for a percentage of Garage C revenue. The CLA expires on or about December 17, 2007, at which time the agreements provide that Garage B, the property owned by TPC, "shall be conveyed to the State by good and sufficient bargain and sale deed, without any further consideration, free of liens and free of encumbrances." (CLA, Article II (C))

A dispute has arisen between the parties relative to revenue sharing, the calculation of fees and expenses, and the maximization of use of the parking facilities, which, prior to the commencement of this action, resulted in the condemnation of a temporary easement in Garage B on July 28, 2004.^[4] For purposes of this decision, other relevant facts, as alleged by the opposing party's pleading, are considered as each motion is addressed.

TPC's claims against RIAC are contained in four counts of the Amended Complaint. Count I is for termination due to Defendant's alleged material breach of the CLA. Count II is for damages allegedly caused by RIAC's breach of contract, including claims for breaches of the covenant of quiet enjoyment, the exclusive parking concession, operation of a new facility, the covenant on parking rates, and the agreement to use alternative dispute resolution. Count III is for breach of the implied covenant of good faith and fair dealing. Count IV seeks a declaratory judgment as to the interpretation of the parties' agreements relative to shuttle bus expenses, credit card expenses, and audit procedure.

RIAC answered, raised certain affirmative defenses, and filed both counterclaims and third party claims. In Count I of its Amended Counterclaim, RIAC seeks to enjoin TPC from sharing information about the parking revenues, alleging that the dissemination of that information results in a violation of the Rhode Island Trade Secrets Act. Count II alleges damages relating to the alleged violation of the Trade Secrets Act. In addition, the Amended Counterclaim contains counts seeking damages for breach of a related mediation agreement, and damages for breach of contract relating to certain alleged breaches of the CLA and its amendments. In its Third Party Complaint against NEP, RIAC alleges tortious interference with contract, violations of the Trade Secrets Act, and breach of the Easement Agreement.

TPC'S MOTION TO DISMISS

TPC moves to dismiss Counts I, II and III of RIAC s Counterclaim. Both Counts I and II of the Defendant's Counterclaim assert that the Plaintiff has violated the Rhode Island Trade Secrets Act by sharing certain defined "parking financial data" with the Third Party Defendant, NEP. Count III of the Counterclaim alleges that Plaintiff violated the parties' agreement not to disclose the fact that the parties had engaged in mediation, as contained in a separate mediation agreement executed in 2004.

Standard of Review.

In determining whether to grant a Rule 12(b)(6) motion to dismiss, this Court "assumes the allegations contained in the complaint to be true and views the facts in the light most favorable to the [non-moving party]." Giuliano v. Pastina, Jr., 793 A.2d 1035, 1036 (R.I. 2002) (quoting Martin v. Howard, 784 A.2d 291, 297-98 (R.I. 2001)). This Court should not grant the motion "unless it appears to a certainty that [the non-moving party] will not be entitled to relief under any set of facts which might be proved in support of [their] claim." Id. at 1037 (quoting Bragg v. Warwick Shoppers World, Inc., 102 R.I. 8, 12, 227 A.2d 582, 584 (1967)).

Counts I and II.

The main thrust of Plaintiff's argument is that the parking financial data is the Plaintiff's own property and, as such, cannot possibly be considered Defendant's "trade secret." Plaintiff cites to the language of the statute,^[5] which requires that the trade secret be "of another," and to the language of the Audit Agreement,^[6] which the Plaintiff believes defines that data as proprietary to the Plaintiff. The relevant confidentiality clause of the Audit Agreement provides, in pertinent part:

"The parties agree that the information provided by TPC as described in this Agreement is considered to be proprietary and confidential. RIAC agrees that the information provided by TPC under this Agreement shall be kept in strict confidence and shall not be distributed or disseminated in whole or in part to any third parties other than members of the RIAC Board and RIAC senior management related to audit and finance and its legal or audit or bond consultants and then only for the purpose of enabling RIAC to reasonably confirm that the gross revenues reported by TPC from the operation of the parking concession and the rent due RIAC under the terms of the Concession Agreement have been correctly calculated. In addition on a confidential basis, RIAC, may share information provided by TPC under this agreement with investment bankers and consultants retained by RIAC in connection with the issuance of revenue bonds to fund projects at T.F. Green Airport. RIAC shall require all persons receiving information under this Agreement to agree to abide by the confidentiality provisions of this Section 2."

Plaintiff insists that this clause unambiguously identifies the parking financial data as the exclusive property of TPC because it describes the data as "confidential and proprietary"; it forecloses free use of the data by the Defendant; and it places no prohibitions on the Plaintiff's use thereof. Therefore, Plaintiff maintains that" [w]ithout a proven trade secret there can be no action for misappropriation, even if defendant's actions were wrongful." Electro-Craft Corp. v. Controlled Motion, Inc., 332 N.W. 2d 890, 897 (Minn. 1983).

The Audit Agreement is limited in scope to data contained in ten specifically defined reports provided by TPC to RIAC. The Court, however, must look to the Counterclaim itself to understand the scope of the data alleged by RIAC to constitute RIAC's trade secret. The Counterclaim refers to the alleged trade secret as "parking financial data," and defines that term in paragraph 45 as "revenue control system data and cost data."

It appears that the data referred to in the Audit Agreement as "proprietary and confidential" may be a more limited subset of the data which the Counterclaim alleges is protected as a trade secret. At any rate, the Court cannot at this stage of the proceedings determine that all of the data alleged by RIAC to constitute its trade secret is coextensive with specific reports considered "proprietary and confidential" under the Audit Agreement. For that reason alone, the Court is unable to rely exclusively on the Audit Agreement for a determination relative to ownership of the data referred to in the Counterclaim.

In addition, alleged "ownership" of the financial data is not determinative of trade secret protection. The Act defines...