The issue here presented is whether the appellees, Rudolph R. Redmont and Circle Redmont Corporation, deprived the appellant, Abbott Redmont Thinlite Corporation, of a business opportunity in which it had a “tangible expectancy,” and thereby violated Redmont’s obligations as a former officer-employee of appellant. Burg v. Horn,
Appellee Redmont, who had previously worked in the glass block business, joined appellant Abbott in 1960 as president of Abbott Redmont Thinlite Corpo *87 ration. Abbott Redmont’s business consisted of furnishing and installing glass block skylights, including toplights (glass blocks set in aluminum grids, generally used in schools) and rooflights (glass blocks set in anti-corrosive concrete grids, generally used in sewage plants). The method used to sell these lights was to discover through trade journals and other sources what construction рrojects were in the course of design. Once aware of this, Abbott would contact the architect who was in the process of working up the designs for those projects, and attempt to convince him to write into the design the use оf skylights and other specifications which Abbott’s products line would fulfill. Part of appellee Redmont’s job was to contact such architects and to convince them of the advisability of employing Abbott’s products in their final design. As of the time in quеstion, up to and including the date when Redmont quit his employ with Abbott and began his own company, Circle Redmont Corporation (Circle), Abbott was the sole distributor in the metropolitan New York area for the particular products with which this action is concerned. Therefore, once the proper requirements were, or named product was, written into the architect’s specifications, to all intents and purposes Abbott was assured of the required subcontract. Oncе Abbott’s products had been incorporated into the plans and specifications by the architect, the projects were then in the regular course put out for bid to general contractors. When the general contractor was chosen Abbott would enter into a formal subcontract with the general contractor to furnish and install the Abbott product.
There are five projects here involved. 1 Appellee Redmont, while in the employ of Abbott, had proceeded to contact the architects for each of these five projects and to write Abbott product specifications into each of the projects. In each case Redmont had also prepared a bid for submission to the general contractor who had been successful in obtaining the general construction contract (or the owner himself if the owner chose to build without a general contractor). Redmont concededly retained knowledge of the amounts of the bids which he had prepared while in Abbott’s employ after his employment ceased.
In early 1966 Owens-Illinois, the producer of the glass block used in all of Abbott’s products, announced that it was discontinuing the production of glass block. Soon aftеrward, in February, 1966, Products Research Corporation (PRC), which made the aluminum grids for the toplights and inserted the Owens-Illinois glass block in the grids and from which Abbott purchased the complete toplight sections, 2 informed Abbott that as a result of Owens-Illinois’ action, it was leaving the glass block business.
In March, 1966, George Abrams, executive vice president of Abbott, told Redmont that if he wanted to stay with Abbott he would have to take a cut in salary. As an alternative Abrams offered Redmont the opportunity оf buying Abbott’s rooflight inventory at cost and going into business for himself. Redmont and Abrams entered into a series of negotiations concerning (1) the possibility of an agreement whereby Redmont would purchase appellant’s roof-light inventory; and (2) the рossibility that Redmont would assume all of appellant’s outstanding skylight contracts and share the profits. None of Abbott’s proposals were acceptable to Redmont and he left Abbott'on April 1, 1966.
Meanwhile Abbott had put in protective orders with PRC for the four top- *88 light jobs as to which it now seeks an accounting. On May 18, 1966, however, PRC sent a letter to Abbott referring to these and other orders from Abbott “which we have not entered because we have received no shop drаwings,” and advising Abbott that a failure to receive shop drawings by June 6, 1966, would result in a cancellation of the orders. There is no evidence that Abbott ever found another supplier of either roof-lights or toplights after June 7, 1966, or that it furnished shop drаwings to PRC by the deadline date of June 6, 1966.
Redmont, meanwhile, had established his own company, Circle, and had found another source of supply for rooflights and toplights. On the dates given below, Redmont, acting by and for Circle, entered into contrаcts for toplight and rooflight work on projects for which he had persuaded the architects to write in Abbott product specifications while working for Abbott:
As stated, the central questions for determination here are whether Abbott Redmоnt Thinlite Corporation had a “tangible expectancy,” Burg v. Horn, supra,
The degree of likelihood of realization from the opportunity is, however, the key to whether an expеctancy is tangible. A Massachusetts opinion with which we agree, and believe New York courts would agree if presented with the issue, American Window Cleaning Co. v. Cohen,
The high degrеe of likelihood that, but for Redmont’s competition, Abbott would have been awarded these contracts is combined here with the fact that Redmont benefited by information as a result of his employment at Abbott —knowledge of the details оf the specifications, knowledge of the contractor’s requirements, knowledge of Abbott’s probable costs — which made Abbott peculiarly vulnerable to his competition on the specific deals here in question. While this is not the kind оf information that, like customers’ lists, is “confidential” in the sense of the term that might in and of itself create liability on use, Restatement, Agency (Second) § 396(b) and Comment (1958), it was information obtained in the course of his employment. A former employee may, of course, go into competition with his ex-employer and can use general information concerning the method of business and names of customers of his ex-employer in his new venture. Id. But he cannot, as here, utilize specific information he obtained during his employment to deprive his ex-employer of customers with whom he knows a deal is in the process of completion. 4 The use of specific information on deals in progress obtained while in Abbott’s employ, and the degree of likelihood that but for Redmont’s competition Abbott would have been awarded the contract, dictate our holding that Redmont violated his fiduciary obligations to Abbott by submitting competing bids.
But Abbott had a “tangible expectancy” in the four toplight contracts only until June 7, 1966, when PRC can-celled Abbott’s toplight orders, leaving Abbott without a source of supply. Abbott had ample warning from PRC that these orders would be cancelled if Abbott did not submit shop drawings to PRC by June 6, 1966. Abbott’s failure to submit the requested drawings cоnstitutes intentional abandonment, cf. International News Service v. Associated Press,
We reverse as to the Plainfield Public Library and Oakland High School proj *90 ects, affirm as to the Junior High School 144 and Riverdale Girls School projects, and remand for further findings in respect to the Manhattan Pumping Station project and for the award of damages in accordance with this opinion.
Notes
. Job Type
Plainfield Library ......... Toplight
Oakland High School...... Toplight
Junior High School 144 .... Toplight
Riverdale Girls School...... Toplight
Manhattan Pumping Station Rooflight
. For “roоflight” jobs, Abbott bought its own glass block directly from Owens-Illinois.
. Corporate officers and directors are not permitted to use their position of trust and confidence to further their private interests. While technically not trustees, they stand in a fiduciаry relation to the corporation and its stockholders.....The rule that requires an undivided and unselfish loyalty to the corporation demands that there shall be no conflict between duty and self-interest. The occasions for the determination of honesty, good faith and loyal conduct are many and varied, and no hard and fast rule can be formulated ....
If an officer or director of a corporation, in violation of his duty as such, acquires gain or advantage for himsеlf, the law charges the interest so acquired with a trust for the benefit of the corporation, at its election, while it denies to the betrayer all benefit and profit ....
The rule, referred to briefly as the rule of corporate opportunity, is merely one of the manifestations of the general rule that demands of an officer or director the utmost good faith in his relation to the corporation which he represents.
Guth v. Loft, Inc.,
. The dictum in Duane Jones Co. v. Burke,