226 So. 3d 466
La. Ct. App.2017Background
- Deca Systems, Inc. (owned by Gerald Callaway) developed customized Access databases and calibration software used to manage customer histories, pricing, procedures, and scheduling; Timmy Bihm worked for Deca ~1990–2010 and received 36 gifted shares; Shelly Bihm was Deca bookkeeper until July 2010.
- After Termination (Nov. 2010) the Bihms formed Bihm Calibration Services (BCS); evidence (video, forensic analysis) showed off-hours copying of Deca files, failure to produce USBs/laptop, and use of CCleaner to wipe drives after a preservation letter.
- Deca and Callaway sued on reconventional demand for conversion (misappropriation) of funds, misappropriation of trade secrets (LUTSA), unfair competition (LUTPA), tortious interference, and sought rescission of stock donations for ingratitude.
- Trial court found for Deca/Callaway on all claims: conversion award $83,041.16; base LUTPA/LUTSA/interference damages $739,319.00; trebling under La. R.S. 51:1409(A) to $2,217,957.00; total judgment $2,300,998.16; ordered return of donated stock and dividends; attorney fees reserved.
- On appeal the court affirmed liability findings, applied contra non valentem to conversion/prescription issues, vacated a portion of the damages award (reducing base damages to $352,598.00), and affirmed trebling of the reduced base (total treble award $1,057,794.00); judgment otherwise affirmed.
Issues
| Issue | Plaintiff's Argument (Deca/Callaway) | Defendant's Argument (Bihms) | Held |
|---|---|---|---|
| Whether Deca’s Access database/customer list/software are trade secrets under LUTSA/LUTPA | Database and customized files compiled by Deca were confidential, gave economic value, and Bihms secreted and copied them for competitive use | Deca failed to take reasonable security measures, no nondisclosure agreements, no passwords; information not proprietary | Court held data/software were trade secrets; secrecy measures and Bihms’ conduct showed knowledge and wrongful misappropriation — liability affirmed |
| Whether Bihms converted/misappropriated Deca funds and whether claim prescribed | Deca showed unauthorized personal charges on company cards, checks to cash, falsified bookkeeping; discovery of theft occurred Aug 2010; claim timely filed May 2011 | Bihms claimed company culture allowed personal use and asserted one‑year prescription | Court found conversion proven, Bihms concealed theft (contra non valentem applies), claim timely; conversion award affirmed |
| Whether LUTPA/LUTSA and intentional interference damages ($739,319) and trebling were proper; prescription/peremption and causation | Deca sought lost profits from diverted customers, treble damages under LUTPA because violations continued and were knowing after AG notice | Bihms argued LUTPA claims were perempted, failed to prove elements/causation, and damages overstated | Court held LUTSA/LUTPA violations proven; continuing violations prevented peremption from running; causation proven but trial overincluded certain customers — base award reduced to $352,598 then trebled to $1,057,794 |
| Whether donations of 36 Deca shares to T. Bihm should be rescinded for ingratitude | Callaway argued Bihm publicly accused him, sued for dissolution, demanded $750,000, misappropriated funds and trade secrets — grounds for revocation under La. C.C. art. 1557(2) | Bihm argued acts were defensive, in desperation, not ingratitude | Court found depth of ingratitude and pernicious conduct supported revocation and return of stock/dividends; rescission affirmed |
Key Cases Cited
- Mart v. Hill, 505 So.2d 1120 (La. 1987) (two-part test for appellate review of factual findings)
- Rosell v. ESCO, 549 So.2d 840 (La. 1989) (appellate review: court will not reverse reasonable factual findings)
- Stobart v. State, Through Dep't of Transp. & Dev., 617 So.2d 880 (La. 1993) (when two permissible views exist, factfinder's choice is not manifestly erroneous)
- Sistler v. Liberty Mut. Ins. Co., 558 So.2d 1106 (La. 1990) (standard for weighing conflicting evidence on appeal)
- Dual Drilling Co. v. Mills Equip. Investments, Inc., 721 So.2d 853 (La. 1998) (enumeration of acts that constitute conversion)
- Cheramie Servs., Inc. v. Shell Deepwater Production, Inc., 35 So.3d 1053 (La. 2010) (LUTPA requires showing unfair methods that offend public policy)
- Hogg v. Chevron USA, Inc., 45 So.3d 991 (La. 2010) (prescription begins when notice would excite attention and call for inquiry)
- Crump v. Sabine River Auth., 737 So.2d 720 (La. 1999) (continuing tort theory can delay accrual of prescriptive period)
- Boncosky Servs., Inc. v. Lampo, 751 So.2d 278 (La. App. 1 Cir. 1999) (employer protection for specially developed customer lists)
- Zeigler v. Hous. Auth. of New Orleans, 118 So.3d 442 (La. App. 4 Cir. 2013) (LUTPA one-year period treated as peremptive)