Western Blue Print Co. LLC v. Roberts

Decision Date29 April 2011
Docket NumberWD72025
PartiesWESTERN BLUE PRINT COMPANY, LLC, Respondent, v. MYRNA ROBERTS, MEL ROBERTS, DOCUCOPY, LLC, and GRAYSTONE PROPERTIES, LLC, Appellants.
CourtMissouri Court of Appeals

Appeal from the Circuit Court of Boone County, Missouri

The Honorable Gary M. Oxenhandler, Judge

Before Division II: Karen King Mitchell, Presiding Judge, and

Joseph M. Ellis and Victor C. Howard, Judges

This case involves the torts of breach of fiduciary duty and interference with business expectancy. It also involves a statute that prohibits computer tampering. The primary issues are (1) whether the branch manager of a limited liability company owes a fiduciary duty to the company; (2) whether the company's expectation of winning the bid to a contract was a valid business expectancy; and (3) whether the branch manager in this case copied and/or deleted the company's computer files without authorization. We hold that, in the context of this case, (1) thebranch manager owed the company a fiduciary duty; (2) the company's expectation of winning the contract bid was sufficiently definite to justify submission of the tortious interference claim; and (3) a reasonable juror could conclude that the branch manager copied and/or deleted company computer files without authorization. There are various other points relied upon by the appellants, but we reject them all. Accordingly, we affirm.

Facts and Procedural Background1

Respondent Western Blue Print Company, LLC ("Western Blue") is a company that specializes in document printing and document management services. Western Blue hired Appellant Myrna Roberts to set up and run a branch office in Columbia, Missouri. Western Blue gave Ms. Roberts the authority to run the Columbia office. That authority included the ability to hire, fire, and manage employees; oversee production; make sales; provide customer service; and develop customer relationships.

Eventually, Western Blue promoted Ms. Roberts from branch manager to division vice-president of Western Blue. As division vice-president, Ms. Roberts attended executive meetings where Western Blue devised its strategic business plans. Ms. Roberts was exposed to virtually every aspect of Western Blue's business, including financial, strategic, and competitive information that Western Blue considered its "secret recipe."

Ms. Roberts succeeded in procuring a contract with the University of Missouri ("University") for Western Blue. Essential to this contract ("the University contract") was Western Blue's employment of a subcontractor that was certified as either a "Minority Business Enterprise" or a "Women's Business Enterprise" ("MBE/WBE"). Ms. Roberts and her husband, Appellant Mel Roberts, decided to create such an entity themselves, but they did not informWestern Blue that they were doing so. This entity would eventually become known as DocuCopy, LLC ("DocuCopy"). Graystone Properties, LLC ("Graystone"), which was a real estate company owned by Mr. Roberts, would own 49% of DocuCopy, and a woman named Micki Marrero would own 51%. Ms. Roberts would provide DocuCopy with the expertise and knowledge of how to operate a document services company.

Initially, Mr. Roberts was "calling the shots" at DocuCopy. Later, Marrero also followed instructions from Ms. Roberts. Eventually, Mr. Roberts was not actively running DocuCopy at all; rather, he was simply relaying messages to Marrero from Ms. Roberts. Marrero communicated directly with Mr. Roberts as opposed to Ms. Roberts to avoid a conflict of interest with Western Blue. Mr. Roberts told Marrero that, if someone asked who owned DocuCopy and Graystone, she should feign ignorance.

DocuCopy began operating in the building next to Western Blue's office. Mr. Roberts also maintained offices for various other businesses, including Graystone, in the same location. Mr. Roberts met with Ms. Roberts on an almost daily basis to discuss the business of DocuCopy. Ms. Roberts also sent technicians from Western Blue to DocuCopy in order to provide DocuCopy with free services.

DocuCopy's MBE/WBE application was initially denied. Mr. Roberts asked Marrero to lie on the second application, but she refused. As a result, Mr. Roberts terminated Marrero. Mr. Roberts could not explain how it was possible that he "terminated" Marrero, who owned 51% of DocuCopy.

After Marrero's departure from DocuCopy, Mr. Roberts approached Cherri Rutter, who was his assistant at Graystone, and asked her to take over Marrero's "position." Rutter knew nothing about the printing business. When Rutter said she did not want the job, Mr. Roberts toldher he would fire her from Graystone if she did not accept it. Rutter reluctantly accepted. Rutter then acquired 51% of DocuCopy.

Mr. Roberts instructed Rutter to "run everything" through Ms. Roberts. It took several months for DocuCopy's application for MBE/WBE certification to be approved, but, soon after DocuCopy obtained the approval, Mr. Roberts "terminated" Rutter. Mr. Roberts told Rutter that she was not to tell anyone that she was no longer employed by DocuCopy and was to say that she worked for Mr. Roberts from home.

Prior to leaving DocuCopy, Rutter was told to file DocuCopy's tax returns for 2004 showing her as 100% owner because Mr. Roberts did not want Graystone to be reflected as an owner. DocuCopy's 2005 tax returns also falsely listed Rutter as the 100% owner of DocuCopy.

Western Blue's understanding was that DocuCopy was primarily a subcontractor with regard to the University contract. However, shortly after Vince Pingel became managing director of Western Blue, he began to question who owned and managed DocuCopy. When a Western Blue representative asked Ms. Roberts who owned DocuCopy and Graystone, Ms. Roberts failed to disclose her husband's interest—or her own role—in either company.

Pingel was also suspicious of the rate that Western Blue was paying DocuCopy for subcontractor services. In fact, Western Blue paid DocuCopy over 90% of all funds Western Blue received from clients for work subcontracted to DocuCopy, whereas a typical subcontractor would receive approximately 60% of such funds.

Pingel asked Ms. Roberts to meet with him to discuss DocuCopy, its relationship to her, and the work it was performing for Western Blue. Ms. Roberts agreed but asked if Mr. Roberts could also attend. At the meeting, Ms. Roberts assured Pingel that she had no interest inDocuCopy and that she received no financial benefit from DocuCopy. Mr. Roberts did not disclose his interest in DocuCopy either.

While still division vice-president for Western Blue, Ms. Roberts recruited the employees from Western Blue's Columbia office to begin working for DocuCopy. Ms. Roberts implied that they would need to leave without giving notice. Ms. Roberts gave the employees she recruited the impression that she was confident that DocuCopy would successfully bid on the University contract in 2006.

While still employed by Western Blue, Ms. Roberts spoke with a representative from the University regarding what the specifications would be for bidding on the University contract in 2006. The purpose of the conversations was to gain an advantage in the bidding process. After one such conversation, Ms. Roberts indicated that she had the University contract "locked up."

Around the same time, an employee of Western Blue encountered Ms. Roberts leaving Western Blue at night, after the closing hour, with numerous boxes, which were apparently full of files.

Later, after Ms. Roberts quit Western Blue, Pingel searched Western Blue's Columbia office and found no hard copies of essential sales documents. Pingel testified that the lack of such information essentially prevented Western Blue from serving its customers out of the Columbia office in the near-term.

In March of 2006, Western Blue was purchased by a third party for approximately $7,900,000. An expert testified that the Columbia branch of Western Blue was worth approximately $424,000, just over 5% of the total purchase price.

On March 31, 2006, Ms. Roberts called Pingel and informed him that she would refuse to sign a new employment agreement offered by Western Blue, which included a non-competeclause. She did not, however, resign. After his conversation with Ms. Roberts, Pingel drove to Columbia to assess the situation. When Pingel arrived, one of the employees handed him the keys to the Columbia office and told him that everyone was "gone."

Ms. Roberts purchased a 100% interest in DocuCopy from her husband for $100. Almost all of the other Western Blue employees in Columbia then joined DocuCopy. Bids for the University contract were due in June of 2006, two months after Ms. Roberts and the other employees left Western Blue.

Western Blue conducted an analysis of Ms. Roberts's company laptop. The analysis revealed that files had been deleted, including Western Blue's database of customer names, contacts, and sales history. Other files that had been deleted included Western Blue's business records containing financial information, strategic planning, profit analysis, and cost analyses. Pingel testified that the files included sensitive competitive information.

An expert testified that files had been deleted from Ms. Roberts's company laptop computer starting in January of 2006 and that the deletions continued until April 3, 2006. Western Blue was able to recover some of these files. Among the deleted and recovered documents was one entitled "Competitive Edge for MU Contract Renewal 2006," which included a strategic discussion of how to renew Western Blue's contract with the University. Other computer files that were deleted and subsequently recovered from Ms. Roberts's laptop included data files associated with Western Blue's provision of services to the University. These documents were not recovered in time to be used in the bid for the University contract. Pingel testified that the loss of these documents, combined with the loss of its key...

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