2004 Ohio 1190 | Ohio Ct. App. | 2004
{¶ 2} Becker is engaged in the business of distributing metering pumps, parts, and accessories. From 1979 to June 2001, Becker was the "Master Distributor" for Liquid Metronics, Inc. ("LMI"), a metering pump manufacturer. Pursuant to its "Master Distribution Agreement" with LMI, Becker had the exclusive right to purchase, promote, and resell LMI products in designated parts of Ohio, Indiana, Kentucky, West Virginia and Pennsylvania. In 1987, Becker hired Flynn, who eventually became the company's general manager. Flynn became LMI's primary "contact person" at Becker, establishing relationships with that company's personnel.
{¶ 3} On November 29, 2000, Becker discharged Flynn for sexual harassment. On December 12, 2000, Flynn, who never signed a non-competition or confidentiality agreement with Becker, met with one of LMI's managers to discuss the prospect of Flynn's replacing Becker as LMI's Master Distributor in Becker's five-state sales region. Flynn subsequently established his own company — Flynn Metering Systems ("FMS") — to distribute metering pumps. On March 12, 2001, LMI provided Becker with 90-days written notice that it was terminating their Master Distribution Agreement, effective June 10, 2001. Also on March 12, 2001, Flynn sent a letter to approximately 150 of Becker's customers, which stated, "Flynn Metering Systems, operated by Mr. Marvin Flynn, is now your LMI Master Distributor. Becker Equipment, Inc. was the former LMI Master Distributor in this five-state region." (Emphasis sic.) From March 12, 2001 to June 10, 2001 — a period in which Becker was still, contractually, LMI's exclusive distributor — Flynn, acting through FMS, sold more than $290,000 worth of LMI product.
{¶ 4} On March 23, 2001, Becker filed a complaint against Flynn and FMS (hereinafter, "appellees"), raising claims for (1) business defamation, arising from Flynn's March 12, 2001 letter to some of Becker's customers; (2) misappropriation of trade secrets, arising from allegations that Flynn improperly used Becker's customer information, including a copy of its customer list; and (3) tortious interference with a contractual or business relationship, namely, the Master Distribution Agreement between LMI and Becker and Becker's relationship with its established customers. Becker sought an award of compensatory and punitive damages and attorney fees against appellees.1 Appellees answered Becker's complaint and filed counterclaims for (1) business defamation, arising from Becker's calling Flynn a "sexual harasser"; and (2) tortious interference with a contract, namely, appellees' contract with LMI.
{¶ 5} A seven-day trial was held on the parties' claims and counterclaims. At the close of Becker's case, appellees requested and received a directed verdict in their favor on the issue of punitive damages. The trial court subsequently directed a verdict against appellees on their counterclaims against Becker. Becker's remaining claims were submitted to the jury.
{¶ 6} The jury returned a verdict in favor of Becker on all three of its remaining claims, awarding it $196,500 for business defamation, $82,795 for tortious interference, and one dollar for misappropriation of trade secrets, for a total judgment of $279,296. On March 1, 2002, the trial court issued a final appealable order and judgment entry consistent with the jury's findings, which incorporated its prior decisions directing verdicts in appellees' favor on the issue of punitive damages and in Becker's favor on appellees' counterclaims. Becker never filed an appeal from the March 1, 2002 judgment entry.
{¶ 7} On March 29, 2002, Becker filed a motion requesting an award of punitive damages and attorney fees pursuant to R.C.
{¶ 8} Becker appeals from the trial court's denial of his motion for punitive damages and attorney fees, raising the following assignment of error:
{¶ 9} "The Trial Court erred in denying plaintiff's motion for punitive damages and attorney fees."
{¶ 10} Becker argues that the trial court erred in denying its motion for an award of punitive damages and attorney fees pursuant to R.C.
{¶ 11} R.C.
{¶ 12} In this case, the trial court's decision to deny Becker's motion for punitive damages and attorney fees under R.C.
{¶ 13} Becker suggests that appellees saved time by misappropriating its customer lists and discount schedules. However, the evidence demonstrated that Flynn worked for Becker for almost 13 years, and, therefore, was already familiar with the customer information he was alleged to have misappropriated.
{¶ 14} Becker also argues that the jury's decision to award it only one dollar on its misappropriation claim stemmed from the fact that it had already awarded Becker all of its lost profits pursuant to its finding for it on its business defamation and tortious interference claims. However, this assertion is mere speculation. The best explanation for the jury's decision to award Becker only nominal damages on its misappropriation of trade secrets claim remains that the jury concluded that Becker had sustained little or no damage as a result of appellees' alleged acts of misappropriation.
{¶ 15} Becker further argues that its "tortious interference claim relied on the use of misappropriated trade secrets as evidence of improper interference with [its] customer relations, and thus the misappropriation of trade secrets was a necessary component of the tortious interference claim." However, this assertion is inaccurate and misleading. The torts of interference with business relationships and contract rights generally occur when a person, without a privilege to do so, induces or otherwise purposely causes a third person not to enter into or continue a business relation with another, or not to perform a contract with another." A B-Abell Elevator Co. v. Columbus/Cent. Ohio Bldg. Constr. Trades Council,
{¶ 16} There was also sufficient evidence to support the trial court's determination that Becker failed to provide sufficient proof that "willful and malicious appropriation" existed in this case. Although R.C.
{¶ 17} Becker asserts that the evidence established that Flynn acted with hatred, ill will or a spirit of revenge towards it because he wanted revenge for Becker having discharged him for sexual harassment. However, Flynn testified at trial that he accepted responsibility for the incident, and apologized to Becker's female employees for his actions. Obviously, the trial court was in the best position to determine his sincerity on this issue. There was also evidence presented that Flynn did not act with a conscious disregard for Becker's rights, since the evidence showed that Flynn never signed a confidentiality or noncompete agreement with Becker and that Flynn sent out the March 12, 2001 letter only after being advised to do so by LMI's personnel.
{¶ 18} Furthermore, R.C.
{¶ 19} In light of all the evidence and circumstances present, we conclude that the trial court had a reasonable basis for its decision to overrule Becker's motion for punitive damages and attorney fees for misappropriation of trade secrets.
{¶ 20} Becker's sole assignment of error is overruled.
{¶ 21} The trial court's judgment is affirmed.
Valen, P.J., and Powell, J., concur.