Quality Lighting, Inc. v. Benjamin

• Decision Date: 27 March 1992
• Docket Number: No. 1-91-1789,1-91-1789
• Citation: 227 Ill.App.3d 880,592 N.E.2d 377,169 Ill.Dec. 890
• Parties: , 169 Ill.Dec. 890 QUALITY LIGHTING, INC., Plaintiff-Appellant, v. Burton BENJAMIN, Lighting & Lowering Systems, Inc., Duray Fluorescent Manufacturing Co., Inc. and Esco International, Inc., Defendants-Appellees. First District, Fifth Division
• Court: United States Appellate Court of Illinois

Page 377

592 N.E.2d 377

227 Ill.App.3d 880, 169 Ill.Dec. 890

QUALITY LIGHTING, INC., Plaintiff-Appellant, v. Burton BENJAMIN, Lighting & Lowering Systems, Inc., Duray Fluorescent Manufacturing Co., Inc. and Esco International, Inc., Defendants-Appellees.

No. 1-91-1789.

Appellate Court of Illinois,

First District, Fifth Division.

March 27, 1992.

Jonathan E. Rothschild, Alan S. Madans, Rothschild, Barry & Myers, Chicago, Gregory B. Nokes, Chase T. Rogers, Cummings & Lockwood, Stamford, Conn., for plaintiff-appellant.

Vedder, Price, Kaufman & Kammholz, Chicago (Richard F. Zehnle, Diane M. Kehl, of counsel), for defendants-appellees.

Justice MURRAY delivered the opinion of the court:

Plaintiff, Quality Lighting, Inc., appeals a grant of summary judgment in favor of defendants in a case involving trade secrets. Defendants are Burton Benjamin, Lighting and Lowering Systems, Inc., Duray Fluorescent Manufacturing Co., Inc., and Esco International, Inc.

Plaintiff filed a three-count complaint to challenge the various defendants' use of technical, pricing and other information on the grounds that this information constitutes trade secrets and/or otherwise confidential information protectable under Illinois law. Plaintiff sought relief on the trade secrets issues in two separate counts, under the Illinois Trade Secrets Act (Ill.Rev.Stat.1987, ch. 140, par. 351 et seq.) and under Illinois common law, respectively. A third count sought relief for breach of fiduciary duty on the part of Burton Benjamin, a former employee of plaintiff.

Defendants filed a motion for summary judgment. On May 22, 1991, the trial court granted defendants' motion for summary judgment on counts I and II of plaintiff's amended complaint. Plaintiff then voluntarily dismissed count III without prejudice and filed this timely appeal. The facts are as follows.

Burton Benjamin (Benjamin) founded Quality Lighting, Inc., a Delaware corporation, in 1965. In 1987 the assets of Quality Lighting, Inc., were sold to L.P.I. Limited Partnership, an Illinois limited partnership (LPI), and the business became the Quality Lighting Products Division (QL Products Division) of LPI. Thereafter Benjamin was employed by LPI under the terms of a November 2, 1987, employment agreement. The employment agreement contained covenants restricting Benjamin's use of confidential information connected to the business and his ability to compete.

In 1989 LPI sold the assets of its QL Products Division to Jac Jacobsen Industries, Inc., a Connecticut corporation (JJI). The current Quality Lighting, Inc. (Quality) remains a wholly owned subsidiary of JJI. Quality designs, manufactures and assembles outdoor lighting products which it markets and sells nationwide for residential and commercial use.

After Benjamin sold the business to LPI in 1987, he became and remained an employee of LPI until LPI sold the business to plaintiff in 1989. Following that sale LPI remained in the lighting business, but in areas not competitive with plaintiff. Also following the 1989 sale Benjamin became an employee of plaintiff and remained an employee of plaintiff until his resignation in November of 1989. LPI informed Benjamin that as a condition of the purchase, JJI required that Benjamin become a consultant to JJI for a term of six months. Approximately April 3, 1989, JJI sent Benjamin an employment agreement which contained restrictive covenants regarding use of confidential information and post-employment competition. Benjamin refused to execute the employment agreement with JJI. In order to induce Benjamin to work for JJI, LPI entered into a Termination Agreement with Benjamin.

Benjamin also founded Lowering Systems, Inc., now known as Lighting and Lowering Systems (Lowering Systems) an Illinois corporation with its principal place of business at 2050 West Balmoral Drive in Chicago. Presently, Lowering Systems manufactures outdoor lighting fixtures and devices to raise and lower lighting fixtures. The other named defendants are Duray Florescent Manufacturing Co., Inc. (Duray), and Esco International, Inc. (Esco). Duray and Esco do business from the same address as Lowering Systems and are also engaged in the lighting business.

That the various defendants are using confidential information belonging to Quality appears to be undisputed. The various defendants claim a right to use the information based on a Termination Agreement between Benjamin and LPI and a failure of Quality to protect the information by measures required by Illinois case law construing the Illinois Trade Secrets Act.

Quality argues that the trial court erred in granting summary judgment because of the existence of numerous issues of material fact with respect to both the effect of the Termination Agreement and the reasonableness of the plaintiff's efforts to safeguard its confidential information.

For the following reasons we reverse and remand to the trial court for further proceedings.

A motion for summary judgment should be granted only when the pleadings, depositions, admissions, and affidavits establish there is no genuine issue as to any material fact and that the moving party is entitled to judgment as a matter of law. (Sons v. Taylor (1991), 219 Ill.App.3d 923, 925, 162 Ill.Dec. 467, 579 N.E.2d 1281; see also Breeze v. Payne (1989), 181 Ill.App.3d 720, 726-27, 130 Ill.Dec. 386, 391, 537 N.E.2d 453, 458; Cerniglia v. Farris (1987), 160 Ill.App.3d 568, 572, 113 Ill.Dec. 10, 12, 514 N.E.2d 792, 794.) The purpose of summary judgment is not to try an issue of fact, but rather to determine whether a triable issue of fact exists. Sloan v. Jasper County Community Unit School (1988), 167 Ill.App.3d 867, 870, 118 Ill.Dec. 879, 881, 522 N.E.2d 334, 336.

The use of summary judgment is encouraged under Illinois law as an aid to the expeditious disposition of a lawsuit. (Purtill v. Hess (1986), 111 Ill.2d 229, 240, 95 Ill.Dec. 305, 309, 489 N.E.2d 867, 871.) Yet, it is a drastic means of disposing of litigation and should be allowed only when the right of the moving party is clear and free from doubt. (Sons v. Taylor (1991), 219 Ill.App.3d 923, 925, 162 Ill.Dec. 467, 579 N.E.2d 1281.) If the facts of a case permit more than one conclusion or inference, including one unfavorable to the movant, the motion should be denied. (Cerniglia v. Farris (1987), 160 Ill.App.3d 568, 572, 113 Ill.Dec. 10, 12, 514 N.E.2d 792, 794.) Even if the facts of the case are undisputed, if reasonable persons could draw different inferences from the facts, a triable issue exists. It is only when undisputed facts admit a single inference does the issue become one of law. (In re Estate of Jessman (1990), 197 Ill.App.3d 414, 419, 143 Ill.Dec. 783, 785-86, 554 N.E.2d 718, 720-21; Practical Offset, Inc. v. Davis (1980), 83 Ill.App.3d 566, 570, 39 Ill.Dec. 132, 136, 404 N.E.2d 516, 520.) Finally, summary judgment is particularly inappropriate where the motive, intent or subjective feelings of the parties is at issue. In re Estate of Jessman (1990), 197 Ill.App.3d 414, 419, 143 Ill.Dec. 783, 785-86, 554 N.E.2d 718, 720-21.

An appellate court reviews summary judgment orders de novo. (Demos v. National Bank of Greece (1991), 209 Ill.App.3d 655, 659-60, 153 Ill.Dec. 856, 860-61, 567 N.E.2d 1083, 1086.) It is the duty of the court to construe the evidence strictly against the movant and liberally in favor of the opponent. (Stringer v. Zacheis (1982), 105 Ill.App.3d 521, 522, 61 Ill.Dec. 113, 115, 434 N.E.2d 50, 52.) A reviewing court will reverse the trial court's granting of summary judgment if it determines that a genuine issue of material fact does exist. Cerniglia v. Farris (1987), 160 Ill.App.3d 568, 572, 113 Ill.Dec. 10, 12, 514 N.E.2d 792, 794.

It is improper for the court to speculate in order to determine the parties' intent in granting a motion for summary judgment. (Farm Credit Bank v. Whitlock (1991), 144 Ill.2d 440, 448, 163 Ill.Dec. 510, 581 N.E.2d 664.) "Caution must be exercised in granting summary judgment so as not to preempt the right of a party to present the factual basis of his case to the fact finder." Farm Credit Bank v. Whitlock (1991), 144 Ill.2d 440, 448, 163 Ill.Dec. 510, 581 N.E.2d 664, citing Chaplin v. Geiser (1979), 79 Ill.App.3d 435, 34 Ill.Dec. 805, 398 N.E.2d 628.

In their motion for summary judgment, defendants claimed that as a matter of law, Quality could not prevail on the trade secret counts for two separate reasons. First, defendants relied upon an agreement between Benjamin and LPI which stated the terms under which Benjamin's employment agreement with LPI was to be terminated (Termination Agreement). The Termination Agreement, inter alia, released Benjamin from certain confidentiality and noncompete covenants with LPI. Plaintiff was not a party to the Termination Agreement.

Defendants' second contention was that plaintiff had failed to use reasonable efforts to protect the confidentiality of the information that it claims to constitute trade secrets.

The trial court entered summary judgment in favor of defendants based on the Termination Agreement. The trial court found the Termination Agreement clear and unambiguous. The trial court concluded that the Termination Agreement relieved Benjamin of the noncompetition clause in his original employment agreement and further that it relieved him of his obligations under the covenant regarding confidential information.

It is defendants' position that the Termination Agreement plainly and unambiguously permitted Benjamin to use the information Quality claims should be protected as a trade secret. Alternatively, Quality urges that the Termination Agreement is not clear and unambiguous and that numerous issues of material fact are present that precluded the granting of summary judgment thus requiring this court to reverse and remand to the trial court.

The Termination Agreement dated April 28, 1989, was solely between Benjamin and LPI. The agreement...