Court of Appeals of Ohio, Eighth District, Cuyahoga
TOMAYDO-TOMAHHDO L.L.C., ET AL. PLAINTIFFS-APPELLANTS
v.
GEORGE VOZARY, ET AL. DEFENDANTS-APPELLEES
Civil
Appeal from the Cuyahoga County Court of Common Pleas Case
No. CV-15-840927
ATTORNEYS FOR APPELLANTS Daniel F. Lindner Rick L. Ferrara
The Lindner Law Firm, L.L.C.
ATTORNEYS FOR APPELLEES Julie L. Juergens Melanie R. Irvin
Gallagher Sharp Bulkley Building.
BEFORE: Stewart, J., McCormack, P.J., and Boyle, J.
JOURNAL ENTRY AND OPINION
MELODY
J. STEWART, JUDGE.
{¶1}
Plaintiff-appellant Rosemarie Carroll and defendant-appellee
Larry Moore were partners in a restaurant venture called
Tomaydo-Tomahhdo. The partnership ended when the parties
signed a share purchase agreement in which Carroll bought out
Moore and Moore agreed not to compete against Carroll for one
year. When Moore's noncompetition agreement with Carroll
expired, he opened a catering business, Caterology, and
eventually entered into a partnership with defendant-appellee
George Vozary, a former Tomaydo-Tomahhdo employee. Carroll
brought this action in her own name and in the name of
Tomaydo-Tomahhdo and other businesses that she owned, against
Moore, Vozary, and their business, Clean Plate, Inc. d.b.a.
Caterology, alleging that Moore breached the share purchase
agreement by recruiting Vozary and that Moore and Vozary
stole trade secrets (recipes, menu builds, and a customer
list) and engaged in unfair competition. The court granted
summary judgment to all defendants, finding that most of the
claims against them were preempted by the Ohio Unfair Trade
Secrets Act and that there was no evidence that the items
allegedly misappropriated by Moore were trade secrets or used
without authorization. The sole assignment of error on appeal
contests various aspects of the summary judgment.
{¶2}
Carroll and Moore formed their partnership in 2000. They
began with a restaurant named Captain Tony's and expanded
their holdings to include the restaurants Tomaydo-Tomahhdo
and Tomaydo-Tomahhdo Express. They envisioned the
Tomaydo-Tomahhdo restaurant to be "kid friendly, "
"quick-service, " and inexpensive, yet
"upscale." In addition to dining, the restaurant
provided a food-catering service.
{¶3}
In 2004, Carroll and Moore hired Vozary. Vozary signed a
confidentiality agreement in which he acknowledged that he
would be exposed to "confidential information, including
recipes, food preparation methods, marketing strategies,
financial information and other trade secrets." Among
other things Vozary agreed "not to discuss or
disclose" were recipes, food preparation information,
design models and schematics, and databases or documents
containing customer information.
{¶4}
Carroll and Moore's partnership ended in February 2008
when Moore agreed to sell Carroll his entire interest in the
business entities by a share purchase agreement. In Section
6.1 of the agreement, Moore promised, among other things,
that he would not use, disclose, convey, or reproduce
"menu files and development ideas, recipes (current and
historical) and training tools (picture boards, build sheets,
prep lists, master order guide), materials that describe the
Tomaydo-Tomahhdo concept[.]" Moore also promised in
Section 6.2 of the agreement that "on or before January
2, 2010, " he would not "induce or attempt to
influence" any of Carroll's employees into entering
into an employment contract with any other person or entity
or "induce or attempt to influence" an individual
or entity from terminating a relationship or contract that
they, the individual or entity, had with Carroll. The parties
specifically contemplated that Moore would be opening a
restaurant in the 2008 fiscal year, so the agreement also
required Moore to provide Carroll with the location of the
restaurant he intended to open and that Moore not open a
restaurant in certain northeast Ohio communities before July
31, 2008.
{¶5}
Moore opened a restaurant called Go Bistro in December 2008,
but closed it in July 2010. Moore had several catering jobs
pending when he closed Go Bistro, so he started another
business, Caterology, that he operated from his house before
moving to the back of a pizza shop.
{¶6}
During the time Moore began operating Caterology, Vozary
began looking to branch out with his own restaurant through a
business called Clean Plate, Inc. Clean Plate did not open a
restaurant; however, Moore hired Vozary to work at Caterology
starting in April 2011. In June 2011, Moore and Vozary
combined Caterology and Clean Plate, Inc. in a handshake
agreement in which they became equal partners.
{¶7}
In February 2015, Carroll and her business entities including
Tomaydo-Tomahhdo, filed a complaint[1] in the common pleas court
alleging that Moore, Vozary, and Caterology misappropriated
Tomaydo-Tomahddo recipes and customer lists, engaged in
unfair competition, tortiously interfered with current and
prospective business relationships, and otherwise breached
contracts and fiduciary duties. Moore, Vozary, and Caterology
sought summary judgment on the grounds that the recipes were
not trade secrets; that the civil conspiracy, tortious
interference, unfair competition, and breach of fiduciary
duty claims were subsumed within the misappropriation of
trade secrets claim; and that they did not access the
Tomaydo-Tomahhdo customer list. The court granted summary
judgment, finding that most of the items included in the
trade secrets claim were not trade secrets; that Carroll and
Tomaydo-Tomahhdo failed to establish that Moore, Vozary, and
Caterology actually acquired and used customer lists; that
there was no proof that Moore and Carroll breached
non-competition agreements; and that the remaining claims
were preempted by trade secrets law.
{¶8}
Our review of a case decided on summary judgment is de novo,
conducting an independent review of the record and affording
no deference to the trial court. Summary judgment is
appropriate if the evidence properly before the court and
viewed in a light most favorable to the nonmoving party shows
that there are no genuine issues of material facts; the
moving party is entitled to judgment as a matter of law; and
reasonable minds can come to but one conclusion adverse to
the nonmoving party. Civ.R. 56(C).
I.
Misappropriation of Trade Secrets
{¶9}
In order to prevail on a misappropriation-of-trade-secret
claim, Carroll had to show by a preponderance of the
evidence: (1) the existence of a trade secret; (2) the
acquisition of a trade secret as a result of a confidential
relationship; and (3) the unauthorized use of a trade secret.
Heartland Home Fin., Inc. v. Allied Home Mtge. Capital
Corp., 258 Fed.Appx. 860, 861 (6th Cir.2008). Carroll
premised her misappropriation of trade secret claims on the
alleged theft of customer lists, picture builds (pictorial
representations of how to make a sandwich or salad), recipes,
food preparation and training techniques, and marketing
strategies and business models. The court found that, apart
from customer lists, the remaining items did not meet the
definition of a trade secret.
{¶10}
The Ohio Uniform Trade Secret Act, R.C. 1333.61(D), defines a
"trade secret" as:
[Information, including the whole or any portion or phase of
any scientific or technical information, design, process,
procedure, formula, pattern, compilation, program, device,
method, technique, or improvement, or any business
information or plans, financial information, or listing of
names, addresses, or telephone numbers, that satisfies both
of the following:
(1) It derives independent economic value, actual or
potential, from not being generally known to, and not being
readily ascertainable by proper means by, other persons who
can obtain economic value from its disclosure or use.
(2)It is the subject of efforts that are reasonable under the
circumstances to maintain its secrecy.
{¶11}
When analyzing a trade secret claim, the court must consider:
(1) The extent to which the information is known outside the
business; (2) the extent to which it is known to those inside
the business, i.e., by the employees; (3) the precautions
taken by the holder of the trade secret to guard the secrecy
of the information; (4) the savings effected and the value to
the holder in having the information as against competitors;
(5) the amount of effort or money expended in obtaining and
developing the information; and (6) the amount of time and
expense it would take for others to acquire and duplicate the
information. (Citation omitted.)
Salemi v. Cleveland Metroparks,
145 Ohio St.3d 408,
2016-Ohio-1192, 49 N.E.3d 1296, ...