Drouillard v. Keister Williams Newspaper Services, Inc.

Dec 1, 1992

9117SC1189

Versions:108 N.C. App. 169

423 S.E.2d 324

1992 N.C. App. LEXIS 877

1992 WL 360739

WELLS, Judge.

We first note that plaintiffs have not separated their assignments of error in their arguments as required by Rule 28 of the North Carolina Rules of Appellate Procedure. It appears, however, that although plaintiffs have set forth five assignments of error for our review, there are only four dispositive questions before us: (1) whether the trial court erred in finding a violation of the Trade Secrets Protection Act to be an unfair practice under N.C. Gen. Stat. § 75-1.1, (2) whether there was competent evidence to support the trial court’s finding that Lindsay Publishing maintained its customer list and pricing and bidding formulas as trade secrets, (3) whether the trial court erred in finding that Lindsay Publishing was “damaged” or “injured” by plaintiff’s unfair acts, and (4) whether the trial court erred in issuing injunctive relief. Plaintiffs’ other arguments are meritless and therefore we will not address them.

First, plaintiffs argue that violation of the Trade Secrets Protection Act (Article 24, Chapter 66) is not an unfair trade practice under N.C. Gen. Stat. § 75-1.1. Plaintiffs contend that because the Legislature did not specifically provide that any violation of Article 24, Chapter 66 would constitute unfair or deceptive acts or practices under N.C. Gen. Stat. § 75-1.1, such a result was not intended. We disagree.

N.C. Gen. Stat. § 75-1.1 should not be so narrowly construed. This section declares “[u]nfair methods of competition in or affecting commerce,” to be unlawful. The statute was created to provide an additional remedy apart from those less adequate remedies afforded under common law causes of action for fraud, breach of contract, or breach of warranty. The result was a broader cause of action with broader remedies. See Bernard v. Central Carolina Truck Sales, 68 N.C. App. 228, 314 S.E.2d 582, cert. denied, 311 N.C. 751, 321 S.E.2d 126 (1984). Given the expansive language of this section, all defendants need to show to maintain a cause of action under this section is (1) an unfair or deceptive act or practice, or an unfair method of competition, (2) in or affecting commerce, (3) proximately causing actual injury to defendant or defendant business. Spartan Leasing v. Pollard, 101 N.C. App. 450, 400 S.E.2d 476 (1991). If the violation of the Trade Secrets Protection Act satisfies this three prong test, it would be a violation of N.C. Gen. Stat. § 75-1.1.

Furthermore, the fact that the Trade Secrets Protection Act was not one of the regulatory statutes specifically listed in Chapter 66 as violative of N.C. Gen. Stat. § 75-1.1 is immaterial. This Court has repeatedly held that the violation of regulatory statutes which govern business activities may also be a violation of N.C. Gen. Stat. § 75-1.1 whether or not such activities are listed specifically in the regulatory act as a violation of N.C. Gen. Stat. § 75-1.1. See United Virginia Bank v. Air-Lift Associates, 79 N.C. App. 315, 339 S.E.2d 90 (1986) (finding N.C. Gen. Stat. § 75-1.1 applicable to commercial transactions also regulated by the Uniform Commercial Code); Eastern Roofing and Aluminum Co. v. Brock, 70 N.C. App. 431, 320 S.E.2d 22 (1984) (finding a violation of a Federal Trade Regulation (16 C.F.R. § 429.1(b) and (e)) to be a violation of N.C. Gen. Stat. § 75-1.1 as well); Ellis v. Smith-Broadhurst, Inc., 48 N.C. App. 180, 268 S.E.2d 271 (1980) (holding the Insurance Statutes (N.C. Gen. Stat. § 58-54 et seq.) did not provide exclusive regulation for that industry and that N.C. Gen. Stat. § 75-1.1 was applicable); Edmisten, Attorney General v. Chemical Co., 45 N.C. App. 604, 263 S.E.2d 849 (1980) (N.C. Gen. Stat. § 75-1.1 found applicable to labelling anti-freeze even though it was regulated by the Department of Agriculture). We, therefore, reject plaintiffs’ limited interpretation of N.C. Gen. Stat. § 75-1.1 and hold it to be applicable to violations of the Trade Secrets Protection Act.

Plaintiffs next contend that the evidence presented was insufficient to support the trial court’s finding that Lindsay Publishing maintained, as trade secrets, its customer lists and its pricing and bidding formulas. We note that plaintiff failed to provide this Court with a verbatim transcript of the proceedings pursuant to Rule 9(c) of the North Carolina Rules of Appellate Procedure.

Our review is limited to that which appears in the verbatim transcript or record on appeal. Where evidence is not presented in the record on appeal, we cannot speculate that there was prejudicial error but must assume that the findings of fact are conclusive and supported by competent evidence. Forrest v. Pitt County Bd. of Education, 100 N.C. App. 119, 394 S.E.2d 659, review denied, 327 N.C. 634, 399 S.E.2d 121 (1990), cert. denied, 328 N.C. 330, 400 S.E.2d 448, affirmed, 328 N.C. 327, 401 S.E.2d 366 (1991). For that reason, we are precluded from addressing questions of whether the evidence was sufficient to support the trial court’s findings of fact, and the only remaining issue is whether the facts found support the conclusions of law. Britt v. Britt, 49 N.C. App. 463, 271 S.E.2d 921 (1980). It is clear from the findings made that the trial court determined the defendant’s customer lists and pricing and bidding formulas to be trade secrets. This assignment is therefore overruled.

Plaintiffs also assign as error the trial court’s conclusion that defendant Lindsay Publishing suffered “damage” by reason of the purported misappropriation of trade secrets. Again, our review is limited to whether the findings of fact as set forth support the trial court’s conclusions of law. The record discloses that the trial court found Lindsay Publishing to have lost profits in the amount of $35,000.00 by reason of plaintiff’s successful transfer of the Byrd Food Stores printing account from his old employer to his new employer. The court also found that in obtaining the Byrd Food Stores business for Pilot Graphics, Inc., plaintiff used defendant’s customer lists and pricing and bidding formulas without defendant’s consent. Based on these findings of fact, the court concluded that defendant is entitled to recover damages from the plaintiff in the amount of $35,000.00 for the misappropriation of trade secrets in violation of the North Carolina Trade Secrets Protection Act. Assuming, as we must, that the court’s findings of fact are supported by the evidence and are therefore conclusive, we find that these facts are sufficient to support the trial court’s conclusion of law.

Finally, plaintiffs argue that the injunctive relief granted was improper because there was no violation of the Trade Secrets Protection Act. Having previously concluded that the customer lists and pricing and bidding formulas were trade secrets under Chapter 66, and in determining that misappropriation of such information violated the Trade Secrets Protection Act, we find injunctive relief was proper.

For the reasons stated, we affirm the trial court’s judgment.

Affirmed.

Judges ARNOLD and LEWIS concur.