PUBLISHED OPINION
Case No.: 93-2838
Complete Title
of Case:THOMAS R. LESKE,
Plaintiff-Appellant,
v.
JOHN A. LESKE,
JEAN M. LESKE,
and
ARCTIC ICE CO.,
INC.,
Defendants-Respondents.
Submitted on Briefs: November 8, 1994
COURT COURT
OF APPEALS OF WISCONSIN
Opinion Released: September 28, 1995
Opinion Filed: September 28, 1995
Source of APPEAL Appeal from an order
Full Name JUDGE COURT: Circuit
Lower Court. COUNTY: Dane
(If "Special" JUDGE: Robert R. Pekowsky
so indicate)
JUDGES: Eich, C.J., Gartzke, P.J., and Dykman, J.
Concurred:
Dissented:
Appellant
ATTORNEYSFor the plaintiff-appellant the cause was submitted
on the brief of Joseph J. Beisenstein and Robert N. Duimstra of Menn,
Nelson, Sharratt, Teetaert & Beisenstein, Ltd. of Appleton.
Respondent
ATTORNEYSFor the defendants-respondents the cause was
submitted on the brief of Edwin J. Hughes of Stafford, Rosenbaum,
Rieser & Hansen of Madison.
|
COURT OF APPEALS DECISION DATED AND RELEASED September 28, 1995 |
NOTICE |
|
A party may file with the
Supreme Court a petition to review an adverse decision by the Court of
Appeals. See § 808.10 and
Rule 809.62, Stats. |
This opinion is subject to
further editing. If published, the
official version will appear in the bound volume of the Official Reports. |
No. 93-2838
STATE
OF WISCONSIN IN COURT OF
APPEALS
THOMAS R. LESKE,
Plaintiff-Appellant,
v.
JOHN A. LESKE,
JEAN M. LESKE, and
ARCTIC ICE CO., INC.,
Defendants-Respondents.
APPEAL from an order of
the circuit court for Dane County:
ROBERT R. PEKOWSKY, Judge. Affirmed
in part; reversed in part and cause remanded.
Before Eich, C.J.,
Gartzke, P.J., and Dykman, J.
GARTZKE, P.J. Thomas R. Leske appeals from an order
dismissing his complaint against John A. Leske, Jean M. Leske and Arctic Ice
Co., Inc. The issue is whether the
circuit court properly granted summary judgment on Thomas's claims of
misappropriation of trade secrets and conversion. We affirm in part, reverse in part, and remand for further
proceedings.
Summary judgment
methodology is well established in cases such as Grams v. Boss,
97 Wis.2d 332, 338-39, 294 N.W.2d 473, 476-77 (1980), and need not be
repeated. We apply the same methodology
de novo. In re Cherokee Park Plat,
113 Wis.2d 112, 115-16, 334 N.W.2d 580, 582 (Ct. App. 1983).
Thomas's first claim is
that defendants John and Jean, his parents, misappropriated his trade secrets
in violation of § 134.90, Stats. Thomas alleged that in early 1987 he
"compiled and formulated a program designed to establish a business to
manufacture, distribute, and sell ice for commercial use in Dane County and the
surrounding area." He attempted to
obtain financing for the business. At
the suggestion of a bank, he revealed "his basic concept" to the
defendants, who advised him that they were willing to help obtain
financing. During further negotiations
with the defendants and banks, Thomas disclosed and explained to the defendants
"the details of his formula, patterns, programs, devices, methods and
techniques in which to cause [sic] the proposed business to be highly
profitable."
The complaint alleged
that the defendants subsequently "manipulated the financing arrangements
through their superior economic status in such a manner that it would be the
defendants ..., and not the plaintiff who would be the substantial owners of
the proposed business." The
defendants persuaded the banks to make loans directly to them. They opened the business in February 1988,
and it is now incorporated as Arctic Ice Co., Inc. Thomas alleged that his "trade secrets ... were acquired
through deception in continually misleading the plaintiff into believing that
the defendants' only interest would be to facilitate him [sic] in obtaining
necessary financing." We conclude
this states a claim for violation of § 134.90, Stats. The answer
denies the claim. We turn to the affidavits
submitted in support of the defendants' motion for summary judgment.
The defendants argue
that it was not necessary for their summary judgment motion to specifically
negate the plaintiff's claims. In
essence, they argue that rather than considering the sufficiency of their
motion, we should immediately review the plaintiff's material to determine
whether he produced evidence in support of his claims.
The defendants
misinterpret Celotex Corp. v. Catrett, 477 U.S. 317, 322 (1986),
as we applied that decision in Transportation Ins. Co. v. Hunzinger
Constr. Co., 179 Wis.2d 281, 291-92, 507 N.W.2d 136, 140 (Ct. App.
1993).[1] Those decisions are not to the effect that a
defendant moving for summary judgment may simply move for that relief and
assert that the plaintiff lacks evidence to support its claim. Rather, as explained in Celotex
and the Wisconsin decisions, the party moving for summary judgment must
explain
the basis for its motion and identify those portions of "the pleadings,
depositions, answers to interrogatories, and admissions on file, together with
the affidavits, if any," that it believes demonstrate the absence of a
genuine issue of material fact; the moving party need not support its motion
with affidavits that specifically negate the opponent's claim.
Transportation
Ins. Co., 179 Wis.2d at 292, 507 N.W.2d at 140, citing Celotex,
477 U.S. at 323.
A statement that the
plaintiff lacks evidence is insufficient.
The burden is on the moving party to demonstrate a basis in the
record that this is so. In this
case, the defendants' motion did not demonstrate that the plaintiff lacked
evidence. Their motion is to be
contrasted with that of the defendants in Celotex, where the
motion included plaintiff's answers to interrogatories in which the plaintiff
was unable to identify any witness who could testify in her favor on a fact
crucial to her claim. Celotex,
477 U.S. at 320. Here, defendants
submitted no such material. Therefore
we next review the defendants' affidavits to see if they state a prima facie
defense. See Grams,
97 Wis.2d at 338, 294 N.W.2d at 476-77.
The defendants argue,
and the circuit court concluded, that there were no "trade secrets"
involved in this case. A trade secret
is information, including a compilation, program, method, technique or process
that (1) derives independent economic value, actual or potential, from not
being generally known to, and not being readily ascertainable by proper means
by, other persons who can obtain economic value from its disclosure or use, and
(2) is the subject of efforts to maintain its secrecy that are reasonable under
the circumstances. Section 134.90(1)(c),
Stats.
In support of their
motion for summary judgment, defendants submit a portion of Thomas's deposition
in which he did not identify any trade secrets at issue other than "the
information that's contained on Exhibits 1 and 4 and the information contained
in the disk that we've talked about."
The disk Thomas referred to was a computer disk.
The defendants must
demonstrate that the claimed trade secrets do not meet the definition of trade
secret. The defendants submitted copies
of Exhibits 2 and 4 from Thomas's deposition, but not Exhibit 1. They provided no further information about
the computer disk or its contents.[2] Because defendants failed to submit Exhibit
1 and the computer disk with the affidavits, they have not made a prima facie
showing that these items are not trade secrets. Summary judgment should not have been granted on this basis.
The defendants argue
that summary judgment could have been granted on the ground that Thomas did not
take reasonable steps to maintain the secrecy of what he alleges were trade
secrets. To prevail on this argument,
the defendants' affidavits would have to identify the measures Thomas took to
maintain secrecy. The defendants do not
cite to such material in their affidavits, and we have found none. The defendants mistakenly assert that it is
Thomas's burden to establish that he took reasonable precautions. While this would be true at trial, on
summary judgment the moving defendants must establish that Thomas did not
take reasonable steps.[3] Summary judgment should have been denied as
to Thomas's claim that the defendants violated § 134.90, Stats.
The circuit court also
dismissed Thomas's second claim, in which he realleged the facts relevant to
the first claim, and further alleged that "the business plan of the
plaintiff constituted personal property which was wrongfully taken from him and
converted by the defendants for their own use, profit, and benefit."
The parties agree that
the relevant elements for this claim are (1) time, labor and money expended in
the creation of the thing misappropriated; (2) competition; and (3) commercial
damage to the plaintiff. Gary Van
Zeeland Talent, Inc. v. Sandas, 84 Wis.2d 202, 220, 267 N.W.2d 242, 251
(1978). In that case, the plaintiff, a
booking agent, alleged that the defendant, a former employee, had
misappropriated a list of its customers.
The court concluded that the misappropriation doctrine was not
applicable in part because the list was
far
removed from the status of an end product.
In the instant case, the list of customers, ... constituted only a
feeble step in a competitive war against the original compiler of the list. Once the defendant Sandas secured the list,
he was still obliged to solicit the customers and to match their tastes with
the bands he could produce. He was
obliged to produce the talent which could be placed in the clubs at the
appropriate time.
Id. at
223, 267 N.W.2d at 252.
In the present case, the
circuit court dismissed this claim because "even if the defendants did
obtain information which the plaintiff had gathered, they still had to finance
and develop their ice business, purchase equipment and facilities, and find
customers. The information is far
removed from the actual operation of the ice business, the end product. The effect is indirect." We agree with the circuit court's
analysis. Thomas's complaint does not
state a claim for misappropriation because the defendants' alleged acts
"constituted only a feeble step in a competitive war."
We conclude that the
circuit court erroneously granted summary judgment as to Thomas's first claim,
but properly dismissed his second claim.
By the Court.—Order
affirmed in part; reversed in part and cause remanded for further proceedings.
[1] Transportation was also cited in Kenefick v. Hitchcock, 187 Wis.2d 218, 227-28, 522 N.W.2d 261, 264-65 (Ct. App. 1994), and Kaufman v. State Street Limited Partnership, 187 Wis.2d 54, 58-59, 522 N.W.2d 249, 251 (Ct. App. 1994).
[2] The disk was apparently the subject of a discovery dispute, but at the time they filed summary judgment affidavits, the defendants had not moved to compel production of the disk or its contents, although they had ample time to do so. At Thomas's deposition in December 1990, defense counsel requested a printout of the information on the disk. The defendants' summary judgment affidavits were filed in September and November 1991. The defendants moved to compel production of the disk printout in December 1991, after the conclusion of briefing on the summary judgment motion. The record does not show that the motion was ruled upon.