Think Tank Software Dev. Corp. v. Chester, Inc.

30 N.E.3d 738

116 U.S.P.Q.2d 1769

THINK TANK SOFTWARE DEVELOPMENT CORPORATION, d/b/a Think Tank Networking Technologies Group and Think Tank Information Systems, Appellant–Plaintiff

v.CHESTER, INC., Mike Heinhold, John Mario, Joel Parker, Thomas Guelinas, Jon Meyer, Daniel Curry, Eric M. Wojciechoswki, Michael Gee, Philip Ryan Turner and Carl Zuhl, Appellees–Defendants.

No. 64A03–1404–PL–134.

Court of Appeals of Indiana.

April 14, 2015.

William C. Wagner, Geoffrey Slaughter, Taft Stettinius & Hollister LLP, Indianapolis, IN, Brian N. Custy, Merrillville, IN, Attorneys for Appellant.

F. Joseph Jaskowiak, Lauren K. Kroeger, Hoeppner Wagner & Evans LLP, Merrillville, IN, Attorneys for Appellee.

Opinion

BAKER, Judge.

[1] Think Tank Software Development Corporation d/b/a Think Tank Networking Technologies Group and Think Tank Information Systems (“Think Tank”) appeals the trial court's directed verdict in favor of Defendants–Appellees Chester, Inc. (Chester); Mike Heinhold (Heinhold); John M. Mario (Mario); Joel E. Parker (Parker); Thomas Guelinas (Guelinas); Jon Meyer (Meyer); Daniel B. Curry (Curry); Eric M. Wojciechowski (Wojciechowski); Michael Gee (Gee); Philip Ryan Turner (Turner); and Carl Zuhl (Zuhl) (collectively, the defendants) on Think Tank's claim for misappropriation of trade secrets. In addition, Think Tank appeals the trial court's determination that its non-solicitation claim was barred. Finding that the trial court did not err in granting a directed verdict and correctly determined that Think Tank's non-solicitation claim was barred, we affirm the judgment of the trial court.

Facts¹

[2] The relevant facts of this case have been relayed in prior decisions in this case as follows:

Think Tank is engaged in computer-related business activities, including systems and network engineering, problem solving, systems design, implementation, sales, client training, and computer maintenance. As of April 19, 2001, Think Tank employed defendants Mario, Parker, Guelinas, Meyer, Curry, Wojciechowski, Gee, Turner, and Zuhl (collectively, the former employees).

....

During a period ranging from April 20, 2001, to April 19, 2002, all of the former employees left Think Tank for various reasons, shrinking Think Tank's staff from sixteen to nine employees. With the exception of Parker, all of the former employees went directly from Think Tank to Chester. [Parker worked for another employer for five months before going to work for Chester.] Chester was informed of the covenant not to compete by Curry, Gee, Guelinas, Wojciechowski, and Zuhl. However, Mario, Parker, Meyer, and Turner did not believe they had signed the covenant when they were hired by Think Tank, and Think Tank could not produce the signed agreements. Think Tank's president asserts that each of these four signed the covenant in his presence.

On April 26, 2002, Think Tank filed its “Verified Complaint For Injunctive And Other Relief” against Chester; Chester's manager, Heinhold; and the former employees. Among other things, Think Tank alleged in its complaint that its former employees were violating the covenant not to compete by contacting Think Tank personnel and customers.² Think Tank further alleged that Chester, Heinhold, and the former employees were interfering with Think Tank's business by divulging confidential information and trade secrets. Three days later, after an ex parte emergency hearing, a Lake Superior Court granted a temporary restraining order finding that Think Tank had “a protectable interest in its goodwill (which includes all its customer information and relationships as well as its employees) and reputation....” The court further found that “the provisions of [the covenant] provide reasonable and appropriate restrictions on post-employment conduct of [Think Tank's] employees; and that all defendants in concert with one another have either breached the [covenant] or induced or aided the breach....”

On May 1, 2002, the defendants filed for a change of venue, and the Lake Superior Court transferred the case to the Porter Superior Court on May 6, 2002. After a hearing on the defendants' motion to dissolve the temporary restraining order, the trial court ruled on May 10, 2002, that the temporary restraining order was not properly issued because Think Tank failed to give proper notice pursuant to Indiana Rule of Trial Procedure 65(B)(2) and failed to post bond pursuant to Indiana Rule of Trial Procedure 65(C).

On June 7, 2002, Think Tank filed its “First Amended Verified Complaint For Injunctive And Other Relief.” In this amended complaint, Think Tank asserted breach of contract and tort claims against various defendants.

...

On December 31, 2009, the defendants filed a motion for summary judgment challenging Think Tank's claims. On March 9, 2010, after holding a hearing and reviewing the designated evidence of all parties, the trial court granted the motion for summary judgment for the defendants on all of the claims raised by Think Tank in its first amended complaint. In doing so, the trial court concluded that the covenant not to compete in the various employment agreements “is overbroad and is therefore unenforceable ... and cannot be reformed.” The court also concluded that “the information alleged to have been misappropriated by [the defendants] does not constitute a ‘trade secret’ under the Indiana Trade Secret Act and therefore [Think Tank's] claim for misappropriation fails as a matter of law.” The court further concluded as a matter of law that Think Tank's claims for interference with a business relationship, unfair competition, and unjust enrichment “do not apply to the fact situation of this case.”

Think Tank Software Dev. Corp. v. Chester, Inc. (Think Tank I ), No. 64A03–1003–PL–172 *1–3, 2011 WL 1362527 (Ind.Ct.App. Apr. 11, 2011).

[3] In Think Tank I, a panel of this Court concluded that the trial court erred in granting summary judgment with regard to Think Tank's claims for breach of the covenant not to compete and confidentiality agreement contained in the employee agreement, its claim for tortious interference with a contract, and its trade secrets claim. We held that the employee agreements the defendants signed—including the covenant not to compete and the confidentiality agreement—were valid. We found that the trial court correctly granted summary judgment on all remaining issues. Id. at *16. In addition, we limited the damages on Think Tank's claims to the profits lost in regard to four customers: Braun Corporation (Braun), Lowell Public Library (Lowell), Weil–McClain, and Methodist Hospital. Id. at *12.

[4] Regarding the confidentiality clause and the misappropriation of trade secrets issues, we noted “the misappropriation of trade secrets issue is subsumed by the confidentiality clause issue.” Id. at *7 n. 4. In determining that the grant of summary judgment was inappropriate on these issues, we stated:

Think Tank has designated evidence that shows there is a genuine issue of material fact that prevents the grant of summary judgment on this issue. The fact finder must determine whether the items contained in the confidentiality clause are trade secrets that may be protected. If they are not, then Think Tank has not asserted that the covenant not to compete asserts a legitimate interest that may be protected and/or that the former employees have gained a unique competitive advantage or ability to harm Think Tank.

Id. at *9. The case was remanded to the trial court for disposition of the remaining claims.

[5] On May 7, 2013, this Court handed down another opinion in this case following an interlocutory appeal. Think Tank Software Dev. Corp. v. Chester, Inc. (Think Tank II ), 988 N.E.2d 1169 (Ind.Ct.App.2013). Therein, Think Tank appealed the trial court's determination excluding expert evidence from Benjamin S. Wilner, Think Tank's economic expert, and requested that we clarify our decision regarding damages in Think Tank I.

[6] In Think Tank II, a panel of this Court found that the trial court had erred in ruling that Wilner's testimony regarding lost profits from Braun, Lowell, Weil–McClain, and Methodist Hospital was inadmissible. We also found that Wilner was qualified as an expert witness with respect to economics and business, but noted that,

To the extent that Wilner's profit erosion analysis is based solely on the departure from Think Tank of the defendant employees and their subsequent employment by Chester, the analysis may be inadmissible because the defendant employees were free to leave and become employees elsewhere. They committed no wrong, contractually or otherwise, against Think Tank merely by leaving.

Id. at 1180.

[7] We also clarified the issue of damages in Think Tank II:

Stated simply, four of Think Tank's claims survived summary judgment: breach of a covenant not to compete, breach of a covenant of confidentiality, misappropriation of trade secrets, and tortious interference with contract. In Think Tank I, we noted, “The proper measure of damages for breach of a covenant is the plaintiff's lost net profits.” No. 64A03–1003–PL–172, at *9. Next, we concluded that Think Tank had established a dispute of material fact as to lost profits arising from Chester's relationship with four specific customers. Consequently, we limited the damages for Think Tank's claim for breach of the covenant not to compete to lost profits in relation to those four customers. This holding also applies to Think Tank's claim for breach of a covenant of confidentiality. Similarly, with respect to Think Tank's claim for tortious interference with contract, we determined that the claim only survived summary judgment as to the same four customers. Id. at *14. It stands to reason that Think Tank's damages for misappropriation of trade secrets is also limited to those four customers. However, we said nothing about any measure of damages for tortious interference with contract or for misappropriation of trade secrets. Nothing in Think Tank I

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