Loftness Specialized Farm Equipment, Inc. v. Twiestmeyer
2016 U.S. App. LEXIS 4760
8th Cir.2016Background
- Loftness, a farm-equipment manufacturer, agreed in May 2007 to evaluate and potentially develop grain-bagging equipment after receiving confidential design/market information from Twiestmeyer, Hood, and their rep firm TAI; the parties executed an NDA at that time.
- TAI/individuals provided market knowledge and suggested design improvements; Loftness reverse-engineered a prototype, developed and began selling equipment in 2008.
- In May 2008 the parties entered a separate two-year Override Agreement giving Twiestmeyer and Hood a 2% override on dealer net price for grain-bagging equipment; payments continued through 2010 but the Override Agreement expired at two years.
- In 2010 Loftness arranged for Brandt Industries to sell Loftness-manufactured grain-bagging equipment; TAI alleges Loftness’s Brandt relationship used and disclosed TAI’s confidential information in breach of the NDA.
- District court granted summary judgment to Loftness on NDA breach; this court previously vacated and remanded that ruling (Loftness I). On remand the district court again granted summary judgment to Loftness; the Eighth Circuit now vacates and remands for further proceedings.
Issues
| Issue | Plaintiff's Argument (TAI) | Defendant's Argument (Loftness) | Held |
|---|---|---|---|
| Whether NDA protects information based on TAI’s belief at time of disclosure or at time of alleged breach | NDA protects any information TAI considered confidential when disclosed (20-year protection regardless of later public availability) | NDA protects only information that remains confidential at time of alleged breach (protections end if info becomes public) | NDA is ambiguous on temporal scope; issue is one of fact for the jury unless extrinsic evidence is conclusive (vacated summary judgment) |
| Whether TAI’s theory that Loftness used confidential info for its own benefit was before the district court | Use-for-own-benefit theory was included in counterclaims and should be considered | District court treated that theory as not properly before it | Appellate court finds the theory was fairly encompassed by the counterclaims; district court erred to the extent it excluded it |
| Whether disclosure/use to Brandt violated NDA once Loftness’s product (and owner’s manual) made the information publicly available | Even if information became publicly available via product, NDA may still bar competitive/non-use for 20 years if protected at disclosure | Public sale and manual disclosure ended confidentiality; thus no NDA breach by disclosures to Brandt | Material dispute exists whether parties intended protections to survive public dissemination; summary judgment was improper |
| Whether summary judgment was appropriate given extrinsic evidence (course of performance, payments) | Continued override payments do not conclusively allow Loftness to use confidential info competitively; intent remains a fact question | Continued payments and lack of objection support Loftness’s interpretation that protections ceased upon successful project | Extrinsic evidence is not conclusive; fact question for jury — vacate and remand |
Key Cases Cited
- Motorsports Racing Plus, Inc. v. Arctic Cat Sales, Inc., 666 N.W.2d 320 (Minn. 2003) (primary goal of contract interpretation is to determine parties’ intent; unambiguous words get plain meaning)
- Martens v. Minnesota Min. & Mfg. Co., 616 N.W.2d 732 (Minn. 2000) (where terms are ambiguous, construction becomes question of fact unless extrinsic evidence is conclusive)
- Blackburn, Nickels & Smith, Inc. v. Erickson, 366 N.W.2d 640 (Minn. Ct. App. 1985) (whether contract terms are ambiguous is a question of law)
- Boe v. Christlieb, 399 N.W.2d 131 (Minn. Ct. App. 1987) (contracts construed as a whole; intent gathered from entire instrument)
- Fredrich v. Indep. Sch. Dist. No. 720, 465 N.W.2d 692 (Minn. Ct. App. 1991) (court may consider surrounding circumstances and subsequent conduct to determine parties’ intent)
- Oskey Gasoline & Oil Co., Inc. v. OKC Refining, Inc., 364 F. Supp. 1137 (D. Minn. 1973) (course of performance accepted without objection is relevant to contract meaning)