*1
Decision,
who issued the Memorandum
do not
Decision,
August
all dated
provisions
agency head. Neither the Memoran-
under the
not the
final orders
constitute
Transpor-
permits
nor the
contain the
Westway v. Idaho
of Decision
In
dum
IDAPA.
by
Id. Board reviewed either
Transportation
Therefore,
letter
neither
these letters.
the Memorandum of ConocoPhillips/Emmert faced with a would be permits until Apparently, the will lie dormant permits. issues as the state of Montana to make such time This creates an where would either have situation situation, interesting since proceed risky snow-covered decision to over provision permits for inclement make no expire upon permits roads or allow the state of Montana weather conditions. If why day unknown their issuance. It is fifth January permits approve for the loads on were to provision weather for inclement ITD made no automatically permits the Idaho would 1 of conditions. Thus, days. period five valid for a become
883 *4 Merrill, Pocatello, respon-
Merrill & argued, dent. Kent L. Hawkins OPINION. SUBSTITUTE THE COURT’S PREVIOUS OPINION FILED 2010 HEREBY JULY IS WITHDRAWN. BURDICK, Justice. purchase by out of the
This case arises Autobody Supply, Appellant Inc. (Wesco) body supply of three auto stores (P Equipment Supply, Paint Inc. & E) 2005. The stores were Falls, Pocatello, located in Idaho and Twin (Idaho Stores). Falls, Respondents *5 (Ernest) Holly Ernest and Tom Davis (Davis) were owners of Automotive Paint (APW), supplier Warehouse wholesale stores, Spray Supply, and Paint & the three (P S), corporation Inc. & an Idaho in supply owned stores the Boise area. Re- spondents Brady (Brady), Hugh Barkdull (Cook) (Hugh), and Mike Barkdull Cook in the Idaho Stores at the (Ernest, Davis, purchase. time of Wesco’s Brady, Hugh, collectively and Cook are re- August “Respondents”). ferred to as On majority of Wesco quit began working and for the Idaho Stores against P commenced this suit & S. Wesco Ernest, Davis, S, APW, depart- P and the & “Defendants”). (collectively ing employees ap- following issues on Wesco raises district court erred in peal: whether the granting summary judgment; whether holding in as a matter the district court erred Ernest, Davis, S, and of law that APW interference with are not liable for tortious employment and customer contracts Wesco’s advantage; prospective and narrowing in the district court erred whether Brady for the acts as a matter of law which liable; potentially whether is by finding as a matter of district court erred civil that Defendants are not liable for law cross-appeal, Respondents conspiracy. On of whether the district court raise the issue LLP, renewed failing grant Defendants’ Pursley, Boise and Davis erred Givens affirm, Tremaine, LLP, Seattle, summary judgment. appel- motion for We Wright proceedings. Middleton, Seattle, part, remand for further argued. lant. Alan Yeah, A. AND they I. PROCEDURAL had better handle of FACTUAL David’s &[P owner] E’s business. BACKGROUND They well, knew his real Washington corporation Wesco is they relationship had a better Washington, Oregon, and Ida- owns stores with them than David did and that— purchased August ho. On you know, mean, I if couldn’t P & E for Idaho Stores from million. $2.2 David, something they’d work out with $996,000 purchase price, Of was allocat- just go away take it from him. purchase goodwill ed to the of the associated Q. quote, just your Is that a Jeffrey with the Idaho Stores. Defendants today? recollection Peck, Johnston, Travis Joel Chantil A. That’s reco—it’s not an exact Cristobal, Dobbs, Nesmith, Ryan David Jo- quote, but pretty-pretty it’s a fair Reid, Stairs, Tiffany Thomsen, dee Curtis statement of Iwhat recall. Barkdull, Barkdull, Hugh Brady Michael Hancock, Shelby Thompson, Jenny E, purchase After the August of & on Kelly employed by McClure were all P & 9, 2005, Brady Seattle, traveled to Wash- E purchase. at the time of the ington for an meeting orientation with Wes- There, co. he learned that Wesco would no Stores, purchased When Wesco the Idaho longer purchase paint APW at the Idaho Brady regional manager was the sales Instead, Stores. supplying Wesco would be Stores; Hugh manager was the the Idaho Stores from Washington sales; manager outside was the Cook 10, 2005,1 warehouses. On or about store; manager Pocatello Hancock was the Brady met with Ernest and Davis. While store; Dayley the Idaho Falls was the man- Brady deposition stated at his that Ernest ager of Twin along Falls store with han- *6 Brady told he opening was in stores sales; dling some outside and Peck was the and asked if he would be in interested ac- manager of outside sales at the Twin Falls cepting position, a depo- Ernest stated his store. sition that Brady job he did not offer a until Ernest and Davis are the owners of APW August Brady 13 and that informed him at P purchased and & S. Wesco When the Ida- August meeting that going APW was E, ho Stores from P & APW was the whole- to lose its account Pwith & Davis E/Wesco. paint supplier sale P alleged to & E. Wesco they stated that he Brady believed did offer that, prior purchase E, to Wesco’s of P & joba at August meeting. It is not Howe, Ernest and Roger Davis informed disputed that Ernest and Davis at decided owner, they Wesco that knew P & E’s em- 19, 2005, prior August some time open well, ployees very had a relationship better compete stores that would with Wesco’s new- owner, with them than P & E’s and if P E& ly acquired Idaho Stores. them, something did not work they out with 13, 2005, August On Brady Er- met with would take the P business from & E’s owner. potential nest to look store sites in Poca- testimony Howe’s was as follows: tello. Ernest stated that Brady he took Q. And what was the that nature of con- along try Brady to convince to come work versation? Brady for P & S. told if Ernest were, essentially they A. Just you employees probably go went he would know, interested the three stores also, but Brady Ernest said did not offer to down if anything there and ever be- solicit employees. Brady of the did it, know, you they’d come of like to do make High Realty August calls to Desert on something with the stores down there 2005, 19, 17 and locating to assist P & S in thing. and that sort of Brady retail location. also admitted that he Q. you Anything 16, 2005, placed else recall about that August inquiring calls on today?
conversation obtaining about business licenses for P & S. Brady meeting stated that the date meeting “probably of the was Davis said the was closer to 11, August 2005. Ernest stated that the date of August. the 12th” of meeting August. was either the 9th or 10th of Office), phone that had customer lists been August August 10 and Between Excel, letters to custom- telephone in Microsoft exchanged 64 saved Brady Ernest Word, saved in Microsoft ers that had been calls. folder. hired Wes and his music 2005, 17, met with Cook Ernest August On Goodwin, company, a data services jobs working for them to offer and Hancock inappro- a hard drive for evidence of search meeting at the Brady present P & S. employees. usage the former priate date, Howe and the same Hancock. On with signifi- concluded that there was a Goodwin Mortensen, employee, met a Wesco Mark damaged of deleted and files cant indication Brady, Hugh, and Cook Pocatello with Wesco appeared to be associated leaving employees rumors discuss computer operating operations as well as the All three denied competitor. for a to work were not deleted system, and the files rumors, according to Howe. computer of the during the normal course Ernest day, August on The next operation. Cristobal, and Johnston to met with Brady jobs P stated that them at & S. offer point At some letters were sent to custom- with Peek and resignations he discussed ers from some of the former re- Thompson Dayley. spoke Hancock also garding P new and its loca- & S’s decisions to work McClure about their undated but stated tions. The letters were Brady told P & Hancock stated S. August ...” “[effective Friday they quitting all be her would employees had terminated afternoon. joining P P & E and would be & S as of August 19,2005, August submit- 2005. A letter dated August On resignations to Wesco at the end of was also sent to customers from & S ted their Brady “people.” contained day. resignation letters and included as one of its pre- language.2 Hancock nearly identical alleged that the contin- Idaho Falls office. pared the letter for the phones cell and cell ued to use their Wesco prepared the letter for the Pocatello Cook and, numbers as late as they use it if and told others could office gave employees’ phones still some Dayley pointed to a web- wanted to. Cook E introduction with the & name. Wesco resignation that he could use to draft site *7 alleged employees continued to also that the letter, Dayley by the other was asked Dayley P & E shirts at the new stores. wear draft letters for Twin Falls customers about the stated he told some well. them as Wesco, any lawsuit with but did make and Johnston left their When Cristobal outside of representations about Wesco Wesco, they took two inte- employment with 20, August also stated that on that. Peek (Cristobal books with them re- paint rior 2005, “Marky’s Auto- he contacted customer books). paint Johnston turned one of the working body” tell it he would be for & color in- that the “SEM book” has testified S. dyes matching up interior formation for Stairs, employees Curtis one he had re- Former Wesco the book he took was Cristobal, Thomsen, Tiffany David Chantil representative for quested from the SEM Peck, Dobbs, Dayley, Jeffrey Travis Joel also stated that he took himself. Johnston Johnston, McClure, Shelby Thompson, Kelly that customers and busi- the business cards Barkdull, Hancock, Hugh Bark- Jenny Brady years him his at P & given had over nesses dull, and Jodee Reid filed work Michael that he deleted his E. Cook admitted 2006, folder, in March that were substan- programs he had affidavits personal two (Adobe tially following: Shop similar to the brought in Photo and Microsoft opportunity given have been enhance Many I 2. of the letters stated: gain challenges my and ex- career and new Group: Dear Wesco periences. resignation, accept effec- this letter of Please my hope you I am confident in decision My to leave Wesco is in tive decision 8/19/05. negative experiences. can understand. way any related to no personal knowledge Dayley’s 1. That I have affidavit differed in that it added Ryan facts stated herein. declaration “[t]hat Nesmith terminated employment his prior August prior August 2. That 2005 I was an 19, 2005, does not and has never worked for employee Autobody Supply, of Wesco Spray Supply Paint and and had nothing to Inc., Equipment Supply dba Paint and any opening do with Spray of Paint & Supply Pocatello[, Falls, Falls], Twin stores.” McClure’s affidavit stated that I employee Idaho. had become an employment McClure terminated with Wesco Wesco when Paint and Equipment August on or about Thompson’s 2005. Supply, purchased by Inc. had been affidavit stated that she terminated her em- August Wesco on or about 2005. ployment with Wesco on or August about 3. That as an of Wesco I had 2005, and went to work for P & S on or about any employment not entered into con- August 2005. Cook’s affidavit also stated: tract which limited the time I was to I personal did delete a work folder and them, work for when or under what computer programs two my per- that were leave, circumstances I could Iwho (Microsoft programs sonal Office and for, go could to work or what informa- Adobe) and that I had loaded on one of the tion I could employ- share a new computers my to assist me with I specifically designated er. personal personal work and for matters. employee. Wesco as an “at will” This my included the deletion personal 4. That I terminated telephone customer All list. other custom- with Wesco on or August about er information computer, remained on the 2005 and went to work for Paint and location, including telephone number, sales Spray Supply, Inc. on or about information, etc.
22, 2005. The affidavit of Ernest read as follows: my employment 5. When I left I Wes- am one of the owners of Automotive co, I only my took with personal (APW), me Paint Warehouse a Utah cor- belongings. I specifically poration, did not take Spray also Paint and lists, any employee lists, (P Supply, S), customer cus- Inc. & sepa- which is a (such tomer information corporation custom rate from APW. Individu- formulas), paint any ally, other business and in capacities mentioned above, information or documents belonging to I personal knowledge of Wesco. I did not download or forward the facts stated herein. by computer any such information of P2. & S is an corporation that has any kind. I did not any remove com- good been in standing since about 1972
puter or corrupt any delete or comput- and has selling been paint automotive er files of kind. *8 supply products and in during Idaho that time. APW and P & S have an 6. going Since to work for Paint and agreement with BASF to sell BASF Spray Supply, Inc. I have not said products in charges Idaho and APW anything of a disparaging nature about price products S the same & for its any Wesco to former or current Wesco charged it prior Wesco and P E& customer, I any have not told former the time P opened & S its stores in or current Wesco customer that August 2005. APW is a in wholesaler did not comply any have to con- Idaho and compete does not with Wes- they may Wesco, tracts have with and co for retail business. I have not any interfered with relation- ship may may Wesco have or have telephone had I had , personal and contacts any current or former customer with some of the of Wesco other than compete for the business Autobody Supply, (Wesco), Inc. on or that customer have for 10, 2005, automobile August after purpose for the paint supplies and related offered attempting for of to hire some individuals by sale Paint Supply. and go to work in stores that being were (7) Aet; in Falls, computer fraud contravention Pocatello, and in Twin opened (8) 1030; misappropriation Any 18 U.S.C. Falls, by P & S. such Idaho in of the Idaho and in contravention on behalf of trade secrets made contacts were (9) Act; conspiracy. civil and and an owner of & S Trade Secrets capacity as Complaint,4 capacity personal in a In its First Amended not made against all De- of APW. a claim for conversion an owner added or as Decision Re: The district court’s fendants. 22, 2005, P & S after 4. On or Summary Judgment, September on entered supply paint and opened automotive 7, 2006, the claims raised Wesco decided Pocatello, Falls, and Twin in stores as follows: Falls, are Those stores Idaho. by P & operated S wholly owned (1) Prospec- Interference with Count One: APW, nothing to do with and have (All Advantage Defen- tive Economic customer of APW. than as a dants) I, personally or as an 5. At no time (a) except as to Dismissed S, P & had P & nor has S owner of Johnston, Cook, Brady, Dayley, out of desire to drive Wesco intent or Hancock business, has but the sole desire been (2) Two: Breach of Con- Count compete in the business legitimately (Employees) of Duties tract/Breach sup- paint and selling automotive (a) Faith and Fair Covenant Good in the mar- plies potential customers Dealing as to all —Dismissed in by the P & stores S kets served (b) Idaho, prior Fiduciary Duty except case to Wesco’s as was the —Dismissed Johnston, Brady, P & E. purchase of as to and Hancock against action its for- brought this (3) Three: Interference with Con- Count Ernest, Davis, S, P & employees and mer (Ernest, Davis, P & S and Auto- tract5 liability APW, asserting nine theories of motive) restraining order:3 temporary seeking (1)interference prospective economic (a) Dismissed as to all (2) advantage; breach contract/breach (4) with Con- Count Four: Interference (3) duties; with contract as to interference Defendants) (All tract S, APW; Ernest, Davis, interfer- P (a) to all Dismissed as Defendants; as to all ence with contract (All Competition Five: Unfair of commerce Count competition; restraint unfair Defendants) Competition of the Idaho in contravention preliminary injunction, had granted, which restraining order and temporary order was 3. The previously granted part September not an district part, and is been on complaint appeal. added the amended also issue on this court. The However, the defendants did conversion claim. complaint was to amend the 4. Wesco’s motion summary judgment the conver- not move during July seemingly granted claim, timing filing due to the sion summary judgment, hearing on the motion complaint. ad- That issue will be amended com- court used the amended and the district claim of the conversion dressed in the context Summary Judgment. plaint its Decision Re: stated that below. Because Defendants 10, 2006, hearing July on the motion for At the complaint did not affect the motion for amended summary judgment, for Defendants stat- counsel *9 substantially summary judgment is the complaint: “I’ve regard ed in to the amended original complaint, we will use as the same my gone through and discussed it with Complaint Court’s discus- in this First Amended agree, part, are the most those I for clients. sion as well. My af- housekeeping review of it didn't issues. summary judgment, motion for fect Davis, S, Ernest, alleged P & 5. Count Three thing had a chance I haven’t than the conversion intentionally interfered with Automotive to, making respond far as a motion as contracts. summary judgement However, on the conversion.” [sic] complaint until Feb- was not filed interfer- on Defendants’ 2, 6. Count Four focused complaint not ruary did 2007. The amended with customer contracts. temporary ence restrain- Wesco’s claim for contain 890
(a)
APW,
II.
Dismissed as
Ernest &
but
ANALYSIS
not to all
and P & S
grant-
A. The district court did
err in
not
(6)
(All
Competition
Act
Count Six:
ing partial summary judgment.
Defendants)
1. Standard of review
(a)
to all
Dismissed as
reviewing ruling
When
on a sum
(Em-
Count Seven: 18 U.S.C.
motion,
mary judgment
applies
this Court
ployees)
the same standard used
the district court.
Ctr.,
552,
Van v.
Med.
147 Idaho
Portneuf
(a)
to all
Dismissed as
Defendants ex-
556,
982,
Summary
P.3d
cept Cook
judgment
appropriate
pleadings,
is
“if the
Eight:
Count
Idaho Trade Secrets Act
file,
depositions,
together
and admissions on
(All Defendants)
affidavits,
any,
with the
if
show that there is
genuine
no
issue as to
material fact and
(a)
except
Dismissed as to all
Cook
moving party
that the
judg
is entitled to a
(All
Conspiracy
Count Nine: Civil
De-
56(e).
ment as a matter of law.” I.R.C.P.
fendants)
establishing
The burden of
the absence of a
genuine issue of material fact is on the mov
(a) Dismissed as to all
Van,
ing party.
556,
147 Idaho at
(All
Count Ten: Conversion
Defen-
at 986.
dants)
This Court will construe the record
(a) Defendants did not move for sum-
light
party
most
op
favorable to the
mary judgment as to this cause of posing
summary judgment,
the motion for
action, but the court found there could drawing all
par
reasonable inferences in that
genuine
be a
issue of fact as to
ty’s
Summary judgment
favor.
Id.
is im
Cook, Johnston, and Cristobal
proper “if
persons
reasonable
could reach
differing conclusions or
conflicting
draw
in
The district court denied Wesco’s motion
ferences
presented.”
the evidence
11,
for reconsideration on November
Maile,
391, 394,
McPheters v.
Judge
Harding
Don
was substituted for
However,
a “mere
Judge Randy
April
Smith on
2007. On
scintilla of
only slight
evidence or
doubt as to
11, 2008,
January
parties stipulated
the facts
sufficient to create a
the dismissal from
prejudice
the action with
issue of material fact
purposes
for the
Peck,
Jeffrey
Travis
Joel John-
Van,
summary judgment.”
147 Idaho at
ston,
Dobbs,
Cristobal,
Chantil
Ryan
David
«91
directly appealed
laws
of Idaho.
nor
the
of the State
final order that can be
employ-
the doctrine of
recognizes
an
State
an
that can be reviewed on
is it
order
party
ment-at-will
means that either
which
judgment
final
action.”
appeal from a
the
Tires,
821, 823,
relationship
to the
can terminate the em-
Courtney
139 Idaho
Big
v.
O
(2003).
ployment
or without notice and
930,
Consequently,
we
P.3d
932
87
by
party.
or without cause
either
I fur-
Respondents’
the denial of
will not review
my employment
acknowledge
ther
summary judgment.
request
full
Inc.,
Autobody
will
Supply,
remain
employment-at-will notwithstanding any
of Contract
Breach
by
oral
other
or written statement made
Complaint, Wesco
In its First Amended
to,
company
at or
prior
following
the
employees
employ-
had an
asserts:
the
of employment.
date
Wesco;
implied
ment contract with
acknowledgment
Included with
form
every
duty
good
to act in
contract
is
defining “Employment-
a document further
faith;
employees
duty
owed a
Ah-Will,”
“[ejmployees may
which stated
Wesco;
loyalty
fidelity, confidentiality, and
resign
company
proper
after
notice
(4) by taking
infor-
and
confidential customer
by
company
be
at
terminated
mation, soliciting customers for their new
time,
reason,
any
any
with or without
Wesco,
by
employed
business while still
notice.”
employees to work for
recruiting their fellow
APW,
materially
employees
Here,
S
that,
& and
court found
district
because
their duties to Wesco.
at-will, they
breached
employees
could
were
termi-
any
employment
nate their
at
time and for
in Idaho that em
It is settled law
any
breaching
employ-
reason without
their
employee
unless an
is
ployment is at will
agree
ment contracts. We
and find that the
pursuant
specifies
contract
hired
to a
district court did not err in its determination
employment or
the duration of
limits
that the
did not breach their em-
employee may
an
be dis
reasons for which
by terminating
ployment contracts
their em-
charged.
Corp.,
Boise
Jenkins v.
Cascade
ployment with Wesco.
we still
P.3d
141 Idaho
387
must
consider whether
Thus,
agreement
of an
limit
the absence
good
breached the
faith
fair
covenant
right
employ
terminate
party’s
fiduciary
dealing or
duties toward
Wes-
they may
relationship,
ment
terminate it at
co.
any
any
time
reason.
v.
or for
Mitchell
Inc.,
Zilog,
125 Idaho
good
a. Breach of covenant of
faith
judiciary’s
“This rule reflects the
dealing
and fair
employers and employees
reluctance to bind
recognizes
“Idaho law
a cause of
unsatisfactory
potentially costly
to an
implied
action for
of an
covenant of
breach
situation,
recognize
although we
that either
good
dealing.
faith
and fair
Such covenant
party
likely
damaged
is
to be
an unfore
employment agreements,
is found in
in
all
employment
warned
rela
termination
cluding employment
relationships.”
at-will
tionship.” Id.
Boise,
City
Cantwell
dispute that
employ
There is no
(internal
citation
Howe,
employees.
ees here
at-will
omitted).
The determination whether the
Wesco,
deposition
stated in his
owner
objective
covenant has
is an
been breached
employment
could leave the
parties
determination
whether the
competitor
go
work for a
the next
good
enforcing
acted in
faith in terms of
day
upon
employee agreements
based
Jenkins,
provisions.
contractual
they signed
with Wesco. The
“An
Cantwell,
135-36,
private
P.3d at
interest
disregard
191
to
that of his
146
principal....”
213-14.
the “covenant
arises
by
agreed to
the
in
the terms
connection with
348,
(1922).
1003,
36 Idaho
210 P.
not create
parties, and
new duties
does
(Third)
§
Agency
8.048
The Restatement
of
agree-
in
employment
are not inherent
that:
states
Ctr., 147
Med.
Ida-
ment.” Van v. Portneuf
Throughout
agency
an
duration of
rela-
ho
tionship,
agent
duty
an
has a
to refrain
competing
principal
from
with the
court here found
a
The district
taking action
of
on behalf
or other-
dealing
faith
good
covenant of
and fair
arises
assisting
principal’s competitors.
wise
par
only regarding
agreed
by
terms
to
time,
During
may
agent
an
take ac-
ties,
was no
in the record
and there
evidence
tion,
wrongful,
to prepare
otherwise
employment agreements
between
competition
termination
following
of
regarding
parties
included
terms
agency relationship.
information, soliciting
confidential customer
Herr,
Corp.
Wesco’s customers for other entities after
In R Homes
v.
the Idaho
employment,
Appeals
leaving
recruiting
of
Court
addressed
issue of fidu
and/or
duty
talking
employees
chang
ciary
fellow
in the
about
context of the solicitation of
(Ct.
court,
employment.
The district
customers.
893
Prospective
not
3.
Interference with
the district court did
err
Eco-
We find that
Advantage9
genuine
that a
issue of
nomic
in its determination
Dayley,
to
fact
as
whether
material
exists
In
Complaint,
First Amended
its
Wesco
Cook,
Johnston, Brady,
and Hancock breach-
argues
that Wesco had
valid economic ex-
fiduciary
to
The dis-
their
duties Wesco.
ed
relationship
pectancy
employ-
in its
with its
finding
depo-
the
correct in
trict court is
Stores,
in the
ees and customers
Idaho
De-
Johnston, Brady,
testimony Dayley,
sition
knowledge
expectancy,
fendants had
of that
Cook,
that, by
Hancock indicates
draft-
and
yet
intentionally
and
Defendants
interfered
resignation
ing
for other
letters of
with both Wesco’s customer and
quit-
speaking to
about
and
Furthermore,
relationships.
argued
Wesco
ting,
employees may
put
have
those five
purpose
that Defendants interfered for the
their
position
themselves in such a
inter-
stealing
putting
Wesco’s customers and
the
antagonistic
those of their
ests became
business,
out
coercing
Idaho Stores
and
they may
been assist-
principal or
have
employees to leave
employ
Wesco’s
Wesco’s
addition,
competitors.
In
principal’s
the
P
and
for
appeal,
work
& S. On
Homes,
unlike in R
the letters written to
Ernest, Davis,
argues that
and P & S em-
provide
here
the
customers
evidence
wrongful
ployed
aiding
means in
and abet-
may
sought
defendants
have
out customers
ting Brady’s
loyalty
duty
breach of his
and
or
customers before the termination
solicited
tortiously
therefore
interfered with Wesco’s
employment with
The let-
of their
Wesco.
expectancy in
continuing employment
the
Peck, Day-
ters have contact information
loyalty
of its workforce.
Johnston, Cristobal, Hancock,
ley, Brady,
McClure, and
and are not dated.
To establish a claim for intention
However, they
the employees
state that
have
prospective
al interference with a
economic
with P & E
terminated
advantage, Wesco
show:
must
19, 2005, and
beginning Au-
effective
2005,
22,
joined
It
gust
P &
(1)
have
S.
of a
the existence
valid economic ex-
may
the
(2)
difficult to tell when
letters
pectancy,
knowledge of
expectancy
tenuous,
sent,
the evidence is
but the
been
so
interferer,
part
on
intentional
Therefore,
district court should consider it.
inducing
interference
termination
Peck,
Johnston, Hancock,
as
Cristo-
expectancy,
interference was
bal, and McClure were dismissed from the
wrongful by
beyond
measure
some
fact
by stipulation,
hold
action
we
itself,
resulting
of the interference
issue of material fact exists as to whether
damage
plaintiff
expectancy
whose
Brady
fiduciary
and Cook breached their
disrupted.
has been
duties to Wesco.
Cantwell,
Wesco also Ernest establish actually participated resulting injury wrongful, in the and & S em- “(1) fiduciary proof duties offer that either: ployees’ breach of their defendant aiding employees. improper objective purpose had abetting Howev- or er, plaintiff; harm claim for breach of contract and defendant used duty wrongful injury on of Ernest and & means cause breach of behalf S relationship.” argued prospective the district court. Idaho was not before Foods, Inc., Thus, Valley Bank need address claim First Nat’l v. Bliss we not (1991). however, P.2d 121 824 861 appeal aiding abetting; as to need an enforceable contract the claim will be addressed the context of exist, just a economic of tortious interference with con- be shown valid claim Ventures, expectancy. Inc. v. tract. Commercial commentary addressing apply previously the two torts often 9. “This Court has noted that torts interchangeably proving prospective the common ele- of intentional interference with eco- Boise, City advantage and intentional interference ments.” Cantwell nomic similar, n. 5 cases n. 216 with contract are and that Trust, Lynn Family through possible M. & Lea Rex resignation, demonstrating en masse improper purpose had an Wes- to harm Enters., Barker, In Inc. v. Highland *13 argument, support co. To relies Wesco proper stated that the standard this Court deposition testimony on Howe’s Ernest “knowledge expectancy” of the ele for the they and informed knew P Davis Howe that of necessary to make a claim intention ment well, very & E’s had a better advantage al interference with economic is owner, relationship with them than P & E’s knowledge. not actual 133 E something and if P & did not work out Instead, 986 P.2d 1004 “ them, they with would take the business from knowledge may by ‘satisfied element be testimony P & E’s owner. Howe’s was as knowledge prospective actual [econom follows: advantage] by knowledge ic which facts “of person lead a would reasonable believe Q. And what was the nature of that con- 338-39, at interest exists.”’” Id. that such versation? (alteration emphasis at 1004-05 986 P.2d and were, essentially you A. they Just original) (quoting v. Zimmer Kutcher know, interested the three stores man, 87 Hawaii 1088 n. down there and if ever anything be- (Haw.Ct.App.1998)). it, know, you they’d come like to do something with the stores down there may Intent be if it demonstrated thing. and that sort of bring that the shown actor desires to about interference, or “knows that interfer Q. Anything you else recall about substantially ence is certain or certain to today? conversation a occur as result of his Id. at action.” Yeah, they A. had a handle of better (Sec (quoting Restatement [P David’s & E’s owner] business. ond) (1977)). § of Torts 766 cmt. d “Intent well, They knew his real can be shown even if the interference is they relationship and had a better purpose incidental the actor’s intended with them than David did and that— ‘but and desire known to him to be a neces know, mean, you I if couldn’t ” sary consequence (quoting of his action.’ Id. David, something they’d work out with (Second) j. Restatement of Torts cmt. just go away take it from him. (1977)). Q. quote, a just your Is that or is that that, The district court here found today? recollection given that it had found that some A. That’s reeo—it’s not an exact (Dayley, Johnston, Brady, defendants quote, but pretty pretty it’s a fan- — Hancock) may and violated fidu statement of what I recall. ciary duty Wesco, such a violation wrongful also by be conduct some measure taking further Wesco contends that as support above interference itself so as many employees of possible, Wesco’s as claim prospec Wesco’s for interference with leaving without managers or trained advantage. tive economic We affirm the dis Stores, sales staff the Idaho when Wesco trict court in its finding genuine that a market, issue was new to the Eastern Idaho Er- exists to whether nest, Davis, APW, the violation of the and & S demonstrated employees’ fiduciary duty may support also an intent to cause harm to Wesco’s economic claim prospec Weseo’s for interference with interests. advantage.
tive economic put evidence Wesco forth, We also affirm employ- the district court in besides actual fact that the finding its genuine masse, a resigned issue material en ees was the statement Ernest, fact does not exist with regard “pretty was a Howe that fair statement” Davis, S, P & and APW. Wesco seeks to what Howe recalled of the conversation. Ernest, APW, Davis,
demonstrate
and P
This
did not
issue of
evidence
raise
plan
many
Davis,
& had formulated a
Ernest,
APW,
S
to take as
regarding
material fact
Employee
a.
Interference with
Con-
P &
intentional
interference
S’s
tracts
advantage.
prospective economic
alleged in
First
its
Amended
Ernest, Davis,
S,
Interference with Contracts
Complaint
P &
knowledge of
APW had
Wesco’s contract
intentionally
improp
who
“One
they intentionally
employees,
performance
erly interferes
contracts,
interfered with the
marry) be
(except a contract
contract
which caused a breach
the contract and
person by
induc
and third
tween another
injury
court
to Wesco.
district
found
*14
person
third
not
causing
otherwise
in the
there is no evidence
record to
contract,
subject
is
to liabili
perform
to
employees
suggest
that Wesco
breached
(Second)
§
766
ty____” Restatement
Torts
and,
employment
with
their
contract
Wesco
(1979).
may
inter
Liability
arise for tortious
therefore,
cannot
this
Wesco
maintain
action
con
a contract even where the
ference with
agree
upon
We
based
against Defendants.
because,
at
until it
will
tract
terminable
genuine
that a
our determination
issue of
party, the con
by one
has been terminated
regarding
fact
not exist
material
did
whether
subsisting and a defendant
is valid and
tract
their
breached
Re
may
interfere with it.
improperly
not
with
contracts
Wesco.
(Second)
g.
of Torts
766 cmt.
statement
(1979).
with contract
interference
Tortious
with
b.
Interference
Customer Con-
“(1)
aof
four
the existence
has
elements:
tracts
contract;
the contract on
knowledge of
that all
Wesco next contends
Defen
defendant;
intentional
part
knowledge
had
contracts
dants
contract;
causing a
breach
interference
its customers and Defendants intention
plaintiff resulting
from
injury
to
contracts, resulting
ally interfered with those
251,
Isaac, 145
Bybee v.
the breach.”
relationships
injury
in a breach of the
to
plaintiff
178
624
P.3d
In
Complaint,
its First Amended
Wesco.
these
must establish
elements before
it
three contracts
claimed
Wesco identified
explain
switches
the defendant to
burden
appeal,
with. On
Wesco fo
were interfered
Nw.
with the contracts.
the interference
contracts,
argues
cuses on one of the
Serv.,
Bec-Corp
Living
v. Home
136
using
still
that because the customer is
purchasing paint
equipment
not
but
Wesco, evidence of interference has been
inter
“The ‘intent’ of the ‘intentional
argued
Defendants
below that
provided.
by the
requirement can be inferred
ference’
injury
of an
because
there
no evidence
substantially
jury from evidence of ‘conduct
merely re
”
the contracts identified Wesco
By
[contract].’
certain to interfere with the
any equipment provided
to the
quire
Isaac,
P.3d
v.
145 Idaho
bee
along
any
un
customers be returned
Enters.,
(quoting Highland
product,
Wesco
used
and therefore
could
Barker,
Inc.
pick
and bill the
simply
up
equipment
its
(1999)).
996, 1006
In
found
Bybee,
Court
any
paint.
unused
customers
jury
which the
that there was evidence from
engaged
Air
inferred Farm
Here,
could have
that a “con-
district court found
substantially
certain
interfere
conduct
use contract” was the
contract
ditional
non-compete
agreement
because
Wesco and customers
between
Air
not
of Farm
knew of
covenant
owner
the customers. The court
been breached
directly
she
compete, hired Isaac
after
no
evidence that
“There is
stated:
Air,
Bybee
duty
quit working for
testified
customers owed contractual
purchase goods
Isaac
refrain from contact
to continue to
he did not ask
and/or
is no other evi-
Bybee
Air before or after
from them. There
with customers
services
her,
then
put any
on her
such Wesco customers
hired
nor
limitations
dence
he
duty as
a contractual
a result
ability
Id.
breached such
to contact customers.
the contractual
That
interference
rela-
continued to
& E
wear
tionship by any of the Defendants.”
clothing and use P & E cell numbers did
genuine
create a
issue material fact as to
pro-
The three contracts Wesco identified
making repre-
whether the
were
supply equipment
that P
vided
& E would
at
likely
sentations
to deceive or mislead cus-
charge
exchange
pur-
no
for the customer
pointed
tomers. As Wesco
out in its memo-
chasing products
from & E. As Defendants
opposition
randum in
summary judgment,
argued,
simply pick up
Wesco could
its
calling
“customers
former
Wesco Paint &
if
equipment
longer
the customers
no
Equipment employees
Equip-
heard Paint &
purchasing
specified products
from Wes-
recordings,
Equipment
ment
saw Paint &
Therefore,
affirm
co.
we
the district court
uniforms, called
phone
the same cell
num-
and find that
Defendants did
interfere
bers,
dealt
people they
with the same
with Wesco’s customer contracts.
dealing
years
had been
with for
Paint
Equipment.” Thus, the district court was
Competition
5. Unfair
finding
correct in
there
was a
Wesco asserts in its First Amended Com-
issue material
fact as to
whether
for-
Defendants,
plaint
joint
*15
through
employees
mer
engaged
and & S
in unfair
efforts,
engaged
and several
in
purposefully
competition. The district court was also cor-
competition specifically designed
unfair
to re-
finding
rect in
that P & S did not use its
ability
against
to compete
duce Wesco’s
De-
E,
name to confuse
of P
customers
& be-
in
paint supply
fendants
the automotive
in-
cause the record indicated that
name
the
had
dustry and to drive Wesco out of business.
been in use since 1972.
(Third)
The Restatement
Competi-
Unfair
provides
§
tion 4
subject
that one is
to liabili-
Competition
6.
Idaho
Act
ty if:
marketing
[I]n connection
the
contends
Ernest and
services,
goods or
repre-
the actor makes a
conspired
APW
or combined with the em
likely
pro-
sentation
to deceive or mislead
ployees
unreasonably
restrain
com
Idaho
spective purchasers by causing the mistak-
by attempting
merce
to steal Wesco’s cus
en belief that the actor’s business is the
put
tomers and
and to
the Idaho
other,
or that the actor is
§
Stores out
business.
Idaho Code
48-
affiliate,
agent,
or associate of the oth-
102(2)
purpose
outlines the
of the Idaho
er,
goods
or
or services that the Competition Act:
produced,
actor markets
sponsored,
are
or
purpose
chapter
The
of this
is to maintain
approved by the other.
promote
competition
economic
Ida-
The district court
found
here
commerce,
ho
provide
the benefits of
genuine
a
there was
issue of material fact as
competition
to consumers and busi-
whether former
engaged
were
state,
in the
nesses
and to
effi-
establish
(1)
competition by
wearing
unfair
P & E
procedures
cient and economical
to accom-
clothing
working
while
for & S and
plish
purposes
policies.
these
maintaining
using
the P
E& cell num
§
provides:
Idaho Code 48-104
“A
then
con-
(with
telephone
bers
same recorded
mes
tract, combination,
conspiracy
or
between
sages) for
telephones
cell
while
two
persons
or more
in unreasonable
for P &
worked
S. The court thus refused to
restraint of Idaho commerce is unlawful.” In
dismiss
former employees
or P &
Furniture,
Larsen,
Woodland
LLC v.
count,
allegations
S from the
in this
but did
Court stated:
APW,
dismiss Ernest and
as there was no
evidence that an
§
action could
requires
[Idaho
be maintained
a claim-
48-104]
Code
against them.
purpose
the court found no
ant to
a
show'
drive another out
organizers
business,
evidence that the
of P & S used
reflecting the notion that un-
E,
the name to
of P
confuse
customers
fair competition
pro-
laws were
enacted
record
competition,
indicated that
P &
competitors.
S name
tect
not
Idaho
company
was
§
used
since 1972.
Code 48-104
strikes
balance between
computer.
from the Wesco
The court
competition
fair
mation
competition and
free
except
company can
only
a
all Defendants
find-
offering relief
where
dismissed
to drive the
a
competitor’s
intent
issue of materi-
there
show
business, rather than sim-
out
violated 18
company
al fact that Cook’s conduct
compete.
1030(a)(5)(A),
ply
impaired
intent to
U.S.C.A.
integrity
availability
pro-
of data or a
1016, 1022
142 Idaho
gram causing loss.
omitted).
(2005) (internal
Court
citation
The
that, although the defendant’s
then found
summary judgment
denying
An order
there was
“not commendable”
actions were
Tires,
Courtney
Big
O
not reviewable.
support
the claim
no evidence
plaintiff
to drive the
had an intent
defendant
Therefore,
this Court will not review the
147,
maintained
48-801(5)
§
a
Idaho Code
defines
“trade
employees
tial
and the
customer information
secret”
follows:
intentionally
computers
the
accessed
without
[I]nformation,
formula,
including
pattern,
a
purposes
Wesco for the
authorization from
computer
compilation, program,
program,
transmitting,
utilizing the
obtaining,
of
device, method,
or
technique,
process, that:
their
customer information for
confidential
(a)
value,
independent economic
Derives
Computer
A
gain.
own
violation of
being general-
or
not
potential,
actual
from
one:
Fraud Abuse Act occurs when
to,
being readily
known
ly
ascer-
(A)
a
knowingly
transmission of
causes the
per-
by proper
by, other
tainable
means
information, code,
command,
program,
or
obtain economic value
sons who can
conduct, intention-
and as a result of such
use;
or
its disclosure
authorization,
ally
damage without
causes
(b)
subject
efforts that are
Is the
of
rea-
(B) intentionally
computer;
protected
a
to main-
sonable under
circumstances
protected computer
a
au-
accesses
without
secrecy----
its
tain
conduct,
thorization, and as a result of such
(C)
or
inten-
recklessly
damage;
causes
prevail
misappropri
in a
In
order
protected computer
a
tionally accesses
action under the Idaho Trade Secrets
ation
authorization,
a
of
and as
result
without
(ITSA),
plaintiff
must
a
Act
show
conduct,
damage and
such
causes
loss.
Am.,
actually
secret
existed. Basic
trade
1030(a)(5).
§
18 U.S.C.A.
Shatila,
Inc. v.
American,
In Basic
was
found
there
The district court
six
to the Restatement for
fac-
infor- Court looked
undisputed
that Cook deleted
evidence
given
genuine
can be
to show that
tors that
used
of
fact
issue material
as to
is a trade
information
secret:
whether Cook’s actions with Weseo
com-
(1)
puter
lists,
violated
because
ITSA
customer
the extent to which the information is
business; (2)
showing
plaintiffs]
buying preferences,
lists
customer
[the
known outside
history
by employ-
purchases,
to which it is known
the extent
customer
and cus-
business;
paint
ees and others involved
tom
are
formulas
trade secrets. The
by
extent
him
of measures taken
court further
found
there was no evi-
information;
guard
secrecy
of the
dence
Weseo’s former
used
the value of the information to him and his
trade
secrets
cause the customers
competitors;
the amount of
or
buy
effort
products
from P & S.
money expended by him in developing the
affirm
We
the district court on this issue.
information;
difficulty
the ease or
Weseo did not
raise
issue of mate-
prop-
with which the information could be
fact
rial
other than
erly acquired
duplicated
others.
lists,
Cook took
showing
customer
lists
cus-
(quoting
§
Id.
Restatement
Torts
757 cmt.
buying preferences,
history
tomer
of cus-
(1939)) (alteration
original).
b
All of these
purchases,
paint
tomer
and custom
formulas
factors address the issue whether the in-
through
presented.
it
evidence
To the
question
generally
formation
known or
extent that
left
began
customers Weseo and
readily ascertainable.
Id.
S,
using
depositions
employ-
Bec-Corp
In Northwest
v. Home
ees indicate that this was due to the relation-
Service, Inc.,
Living
the issue was whether
ships
developed
had
with the
misappropriation,
actual
as defined
I.C.
customers and not trade secrets taken from
48-801(2),
occurred. 136 Idaho
Weseo.
agreed
The Court
with the district court’s finding that “the
Conspiracy
9. Civil
legislature did not intend the
statute
be
contends that Defendants as
Weseo
broadly
preclude
hiring
read so
as to
together
sociated
objective
for the unlawful
competitor;
from a
legisla
putting
business,
Idaho Stores out
ture also did not
that merely hiring
intend
*17
stealing
customers,
unlawfully
Wesco’s
competitor’s employee
acquiring
constitutes
a
restricting
competition
Wesco’s
lawful
trade secret.” Id. at
Here, based on the in evidence the conspiracy, conspiracy tive the not the record, Furthermore, the district court found that there Id. spe- itself.” there must be conversion, except the plan agreement issues as to claim as a or tifie evidence of properly conspiracy we hold that the issue was not the existence demonstrate objective court. The unlawful before the district case re- allegedly at the time the Moss, proceedings 143 manded for further consistent accomplished. Mannos opinion. with this Mannos, argued plaintiff In engaged EISMANN, acts that the defendants
fraudulent Chief Justice and Justices W. company in him to invest a in to induce concur. JONES HORTON wrong. underlying civil Id. constituted JONES, dissenting part. Justice J. However, plaintiff found that the Court offer, Although I part to con- concur for the most and the records failed failed to tain, opinion, agree I am regarding an al- Court’s unable to any specific evidence (the Ernest, P P plan among the defen- Davis and & S & S defen- leged agreement or dants) jury have answer should not on him. Id. dants to defraud in Parts II.B.3 and claims addressed 4.a court here stated: “While district opinion. present This does case genuine fact con- found issues of Court has employee, acting each situation where his allegedly cerning those who committed interest, or her own decided to terminate complaint, Court wrongs alleged in the pursue employ- Wesco to agreement of an between finds no evidence A ment with & S. number accomplish these civil two more to or encourage- who to P & had switched S wrongs.” the district court on We affirm managerial employees, ment of act- Wesco’s issue, specific as record is devoid of inside, certainly appears what plan agreement to commit evidence of from the P be assistance the outside wrongful any two acts between defendants. I S defendants. believe the inferences to be evidence, when viewed drawn most 10. Conversion Wesco, favorably support would the vaca- alleged in its First Amended summary judgment tion of the for the & S Complaint wrongfully took that Defendants defendants, it leaving jury to a to decide belonging property to Wesco. converted whether committed actionable conduct. did not add the conversion II.B.3, regard agree With to Part I complaint, claim its amended and there until conclusion that issue of Court’s summary not move for fore Defendants did fact material exists to whether claimed (Counsel Defen judgment on the issue. employees’ fiduciary duty violation of the com “My amended [the dants: review claim for support also interfer- summary plaint] didn’t affect motion *18 prospective advantage. ence with economic thing judgment, other than the conversion I However, I disagree with the Court’s conclu- to, to far respond had a chance as as haven’t sion that there is no of issue of summary judgement a for making motion regard fact this claim with to the material on conversion.”). However, the dis on the [sic] P & S defendants. court, recognizing that trict while Defendants summary as judgment had moved for to not affirming In the of Wesco’s dismissal action, could this cause of found there defendants, P against claims the & S as only genuine issue of material fact to be a “only *19 August Ernest and on II.B.4.a, Davis 10. Between regard With to Part I would va- 19, Brady that time and August Ernest summary judgment cate the in favor of the P exchanged at phone least cell my estimation, calls. Dur- In S defendants. there is time, Brady evidence, this met with Ernest indicating to scout sufficient that these de- store sites for P & S. He potential out placed fendants interfered with the contractual rela- sites, tionship number of calls locate store and he between Wesco and some of its em- governmental contacted agencies ployees, about summary judgment. busi- to survive employee may ness licenses for P & An agree S. IWhile would there is no real certainly arrangements per- make so as to evidence that P directly the & S defendants sonally compete against or her present his interfered with the relationships, contractual not, employer, may but breaching without his there sufficient evidence to draw the infer- so- managerial who enee that the quit employees to other
licited acting the P
join & at behest of P S were certainly evidence There is
& S defendants. the P & S support an inference Brady agent, regarded as their
defendants indicated a letter dated P & S
because Brady employee was prior days This three to the
of P & S. resignation his from his
effective date of An at
employment Wesco. employment own at
will terminate his time, liability. an em- without employees to
ployee may not solicit other for the benefit
terminate violating the employer without
of another Co., Supply
duty
loyalty.
D & B
managerial
If the
employees, em-
soliciting employees to switch their urging of the & S defen-
ployment at the
dants, drawn a reasonable inference be record, judgment summary
from the and the issue be claim should be vacated jury to the for determination.
submitted
Thus, summary judg- I would vacate the against favor
ment
S defendants on claims addressed 4.a.
Parts II.B.3 and Plaintiff-Respondent, Idaho,
STATE REED, Conan Defendant-
Samuel
Appellant.
No. 37192. Appeals of Idaho.
Court 27, 2010.
Oct. notes evidence” Wesco Court Cook, Johnston, of and Cristobal the actions resignation put the en masse of forth was find that the court on count. We district this testimony by employees, and Howe issue, addressing as it had not erred in him that Ernest Davis informed by in Defendants their Motion been raised they attempt to take Wesco’s business. would Summary Judgment. in must be considered context. This evidence Davis and The record also establishes that III. CONCLUSION many as attempted to Ernest obtain employees Specifically, Davis possible. as affirms the district court’s This Coui’t summary judgment on all was asked: grant partial of idea, Q. up duty loyalty, Who came with this let’s see of do so for the of benefit a many employees party we competing against [Wesco’s] how third who will be his Brady’s can present employer. plan take from Wesco? here was competitive to up not set his own myself. Holley Ernest A. It would be but, rather, third-party competi to assist a you Q. right. [up] All When did come Taking arrange acquisi tor. to action for the with this idea? potential tion store sites that the third probably It would have been A. after party compete against present can to use 12th, shortly 12th or before the some- employer certainly antagonistic would be to time in that area. present employer’s interests, just like mind, In is this evidence sufficient to trying surreptitiously acquire employ to genuine issue raise a of material fact premises on er’s leasehold to be used for in engaged whether the P & S defendants competing against employer, which we prospective eco- tort interference a duty loyalty held be violation of the advantage. light nomic Viewed in the most Distrib., City Twin Falls Farm & v. D Inc. Wesco, favorable to evidence that a substan- Co., Supply & B workforce, majority including tial of Wesco’s 1286, 1290(1974). nearly top managerial employ- all of Wesco’s Furthermore, Brady P claimed & ees, resigned August began be days prior 5 to its three to his working P for & S raises Meanwhile, resignation from Wesco. Bra- at least colorable inference that dy’s Cook, employee, fellow Wesco was en- Johnston, Brady, and Hancock all vio- gaged copying deleting from his respective duty loyalty lated to Wes- computer variety including of documents co at the behest of the P & It S defendants. lists, showing customer buy- lists customer is clear from the record that these preferences, history of customer acting go were with the intent out purchases, paint and custom formulas. personally Rather, compete against Wesco. allegedly disloyal employees Were these they obviously acting, were while acting strictly benefit, trying their own Wesco, to advance the interests of its curry employer, favor with new or were P & ItS. competitor, certainly intended they acting employ- at the of that behest new reasonable to infer from the evidence smoke, er? Where there is defendants, & there well least, the P S be fire. and, When inferences from the rec- applauding disloyal these acts at the most, Wesco, are ord drawn favor of requesting they there is be done. Absent adequate premise interest of the & defendants, support evidence to S the P & S individual would not defendants were the insti- have had the impetus Wesco, gators wrongful employer, they treat their new conduct and that disloyal in a should be jury fashion. held answer to a as to whether committed the tort of interfer- And, these are not the acts acts of ence with prospective advantage. economic I apparent disloyalty might have been summary judgment would vacate the in favor beneficial to S defendants. The of the P & S defendants on this claim. Brady record discloses that first met with