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Columbus Steel Castings Co. v. King Tool Co.

December 4, 2008

COLUMBUS STEEL CASTINGS COMPANY, PLAINTIFF-APPELLANT,
v.
KING TOOL COMPANY ET AL., DEFENDANTS-APPELLEES.



APPEAL from the Franklin County Court of Common Pleas. (C.P.C. No. 06CVH01-00249).

The opinion of the court was delivered by: Petree, J.

(REGULAR CALENDAR)

OPINION

{¶1} Plaintiff-appellant, Columbus Steel Castings, Inc., appeals from a judgment of the Franklin County Court of Common Pleas granting summary judgment in favor of defendant-appellee, Alliance Castings Company ("Alliance"). For the following reasons, we affirm in part, and reverse in part, the judgment of the trial court.

{¶2} Both appellant and Alliance produce bolsters for railroad cars. Bolsters are steel crossbeams that are positioned under railroad cars for support and stabilization. The production of these bolsters requires the use of a bolster milling machine. In 2003, management for appellant determined that the bolster milling machine in operation at its foundry was not adequate. As a result, appellant retained defendant-appellee, King Tool Company ("King Tool"), to build a replacement bolster milling machine for use at its foundry. The bolster milling machine was built and placed in operation. Subsequently, appellant learned that Alliance retained King Tool to build for it a bolster milling machine. In appellant's view, the machine built for Alliance by King Tool was essentially the same as the one produced for it and that this transaction was improper.

{¶3} Consequently, in January 2006, appellant initiated an action in the trial court against Alliance and King Tool. Appellant asserted the following seven causes of action:

(1) misappropriation of trade secrets as to King Tool; (2) common law conversion as to King Tool; (3) breach of contract as to King Tool; (4) breach of fiduciary duties as to King Tool; (5) unjust enrichment as to King Tool; (6) unjust enrichment as to Alliance; and (7) misappropriation of trade secrets as to Alliance. Appellant subsequently amended the complaint to allege a claim of breach of confidentiality as to King Tool. The basis of appellant's two claims against Alliance was Alliance's alleged misappropriation of trade secrets concerning the bolster milling machine designed and built for appellant's use.

{¶4} In January 2007, Alliance and King Tool filed motions for summary judgment. In April 2008, the trial court issued a decision concerning these motions. The trial court sustained in part and overruled in part King Tool's motion for summary judgment. The trial court found no genuine issue of material fact regarding appellant's breach of fiduciary duty claim against King Tool, but found that genuine issues of material fact exist regarding appellant's claims against King Tool for misappropriation, conversion, breach of contract, and unjust enrichment.

{¶5} In contrast, the trial court sustained Alliance's motion for summary judgment in its entirety. The trial court determined that there is a genuine issue of fact as to whether the information concerning the bolster milling machine developed for use by appellant qualifies as a trade secret under R.C. 1333.61(D). However, the trial court determined that appellant failed to produce evidence demonstrating that Alliance used improper means to acquire the information, or that Alliance knew or had reason to know the information was acquired improperly. The trial court resolved that Alliance is entitled to judgment as a matter of law as to appellant's claim for misappropriation. Regarding appellant's unjust-enrichment claim against Alliance, the trial court found that appellant failed to present any evidence demonstrating that appellant conferred a benefit upon Alliance. On the basis of this assessment, the trial court resolved that Alliance is entitled to judgment as a matter of law as to appellant's unjust-enrichment claim. On April 28, 2008, the trial court filed a judgment entry granting summary judgment in favor of Alliance. The entry expressly provides that there is no just reason for delay.

{¶6} Appellant appeals from the judgment of the trial court granting summary judgment in favor of Alliance and asserts the following single assignment of error for our review:

The lower court erred by sustaining Alliance's motion for summary judgment. Contrary to the lower court's holding, genuine issues of material fact do exist regarding Columbus Steel's misappropriation of trade secrets and unjust enrichment claims against Alliance. The lower court erred in finding that as a matter of law Alliance could not misappropriate Columbus Steels' trade secret because it received such information through an alleged independent contractor. The lower court also erred in finding that there was no material issue of fact as to whether Alliance knew or had reason to know that the trade secret information was acquired through improper means. Finally, the lower court erred in finding that no material issue of fact existed as to whether Alliance had been unjustly enriched by Columbus Steel's trade secret design.

{¶7} Appellant argues that the trial court erred in granting summary judgment in favor of Alliance. Appellate review of a trial court's granting of summary judgment is de novo. Mitnaul v. Fairmount Presbyterian Church, 149 Ohio App.3d 769, 2002-Ohio-5833, at ¶27. Thus, a reviewing court will not reverse an otherwise correct judgment merely because the lower court utilized different or erroneous reasons as the basis for its determination. Diamond Wine & Spirits, Inc. v. Dayton Heidelberg Distr. Co., 148 Ohio App.3d 596, 2002-Ohio-3932, at ¶25, citing State ex rel. Cassels v. Dayton City School Dist. Bd. of Edn., 69 Ohio St.3d 217, 222.

{¶8} Summary judgment is proper when a movant for summary judgment demonstrates that: (1) no genuine issue of material fact exists; (2) the movant is entitled to judgment as a matter of law; and (3) reasonable minds could come to but one conclusion, and that conclusion is adverse to the party against whom the motion for summary judgment is made, that party being entitled to have the evidence most strongly construed in its favor. Civ.R. 56; State ex rel. Grady v. State Emp. Relations Bd. (1997), 78 Ohio St.3d 181, 183. Summary judgment is a procedural device to terminate litigation, so it must be awarded cautiously with any doubts resolved in favor of the nonmoving party. Murphy v. Reynoldsburg (1992), 65 Ohio St.3d 356, 358-359.

{¶9} We first address the trial court's disposition of appellant's unjust-enrichment claim against Alliance. The trial court resolved that appellant failed to produce any evidence demonstrating that appellant conferred a benefit upon Alliance, which is one of the factors necessary to establish unjust enrichment. On the basis of this finding, the trial court concluded that Alliance is entitled to judgment as a matter of law as to appellant's unjust-enrichment claim. Appellant argues that the trial court erred in granting summary judgment in favor of Alliance as to appellant's claim of unjust enrichment. According to appellant, there is a genuine issue of material fact as to whether Alliance has been unjustly enriched. Appellant asserts that the three elements necessary to establish unjust enrichment have been demonstrated in the record. Conversely, Alliance contends that appellant failed to present evidence demonstrating these three elements, and, thus, the trial court properly granted summary judgment as to the unjust-enrichment claim.

{ΒΆ10} We resolve that the trial court properly ruled in favor of Alliance as to appellant's claim against Alliance for unjust enrichment. However, we reach this ...


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