MT Business Technologies, Inc. v. Greene , 2019 Ohio 4847 ( 2019 )

[Cite as MT Business Technologies, Inc. v. Greene, 2019-Ohio-4847.]
COURT OF APPEALS
LICKING COUNTY, OHIO
FIFTH APPELLATE DISTRICT
MT BUSINESS TECHNOLOGIES, INC. : JUDGES:
: Hon. William B. Hoffman, P.J.
Plaintiff-Appellee/Cross-Appellant : Hon. Patricia A. Delaney, J.
: Hon. Earle E. Wise, Jr., J.
-vs- :
:
MICHAEL GREENE, ET AL. : Case No. 18-CA-61
:
Defendants-Appellants/Cross- :
Appellees : OPINION
CHARACTER OF PROCEEDING: Appeal from the Court of Common
Pleas, Case No. 17-CV-00978
JUDGMENT: Affirmed/Reversed in Part and
Remanded
DATE OF JUDGMENT: November 25, 2019
APPEARANCES:
For Plaintiff-Appellee/ For Defendants-Appellants/
Cross-Appellant Cross-Appellees
THOMAS P. DILLON DAVID K. MONTGOMERY
NICHOLAS T. STACK KAREN DUNLEVEY
North Courthouse Square PNC Center, 26th Floor
1000 Jackson Street 201 East Fifth Street
Toledo, OH 43604-5573 Cincinnati, OH 45202
Licking County, Case No. 18-CA-61 2
Wise, Earle, J.
{¶ 1} Defendants-Appellants, Michael Greene and Modern Office Methods, Inc.
(hereinafter "MOM"), appeal numerous judgment entries of the Court of Common Pleas
of Licking County, Ohio. Plaintiff-Appellee, MT Business Technologies, Inc., cross-
appeals the trial court's July 5, 2018 judgment entry on post-trial motions.
FACTS AND PROCEDURAL HISTORY
{¶ 2} In July 2003, appellant Greene began working for appellee MT selling and
leasing Ricoh copiers and equipment. He signed an employment agreement that
contained a non-disclosure agreement, but did not contain restrictive covenants, non-
competition, or non-solicitation provisions. Prior to working for MT, Greene owned his
own business selling and leasing Xerox equipment.
{¶ 3} In May 2017, MT was acquired by Xerox and was no longer an authorized
Ricoh dealer. In July 2017, Greene submitted a notice of retirement to MT and began
employment with MOM who sold and leased Ricoh equipment and was an authorized
Ricoh dealer.
{¶ 4} On October 23, 2017, MT filed an amended complaint against Greene,
claiming breach of employment agreement, breach of duty, trade secret misappropriation,
unfair competition, and conversion. On January 5, 2018, MT filed a second amended
complaint to add claims against MOM for trade secret misappropriation, unfair
competition, and tortious interference with contract. MT sought injunctive relief and
damages.
{¶ 5} On February 15, 2018, appellants filed a motion for summary judgment
seeking dismissal of all of MT's claims because MT could not establish the requisite
Licking County, Case No. 18-CA-61 3
elements of each claim. By judgment entry filed March 20, 2018, the trial court agreed
Greene never consented to the restrictive covenants and therefore held that MT could not
pursue its breach of contract claim relating to those provisions. The trial court denied the
motion as to the remaining claims.
{¶ 6} A jury trial commenced on April 4, 2018. The jury found in favor of MT on
its breach of employment agreement and trade secret misappropriation claims against
Greene, tortious interference with contract claim against MOM, and unfair competition
claims against each appellant. The jury also found each appellant acted with malice
and/or fraud. The jury awarded MT $665,000 in damages: $375,000 for compensatory
damages and $40,000 for punitive damages against Greene, and $225,000 for
compensatory damages and $25,000 for punitive damages against MOM. Pursuant to
interrogatories, the $375,000 compensatory award against Greene consisted of: $25,000
for the breach, $150,000 for trade secret misappropriation, and $200,000 for unfair
competition. The $225,000 compensatory award against MOM consisted of: $25,000 for
tortious interference and $200,000 for unfair competition. A final judgment entry on the
verdicts was filed on April 10, 2018.
{¶ 7} On April 24, 2018, MT filed a motion for prejudgment interest.
{¶ 8} On May 4, 2018, appellants filed a motion for judgment notwithstanding the
verdict (hereinafter "JNOV"), or in the alternative for a new trial.
{¶ 9} On May 15, 2018, MT filed a motion for exemplary damages against Greene
for his willful and malicious misappropriation, a motion to tax costs, and a motion for
attorney fees.
Licking County, Case No. 18-CA-61 4
{¶ 10} By judgment entry filed July 5, 2018, the trial court denied appellants' motion
for JNOV or in the alternative for a new trial, denied MT's motions for prejudgment interest
and exemplary damages, granted MT's request for injunctive relief for a period of five
years, partially granted MT's motion for costs, and partially granted MT's motion for
attorney fees. By judgment entry filed July 27, 2018, the trial court entered its order on
injunctive relief.
{¶ 11} On August 6, 2018, appellants filed an appeal and assigned the following
errors:
I
{¶ 12} "THE TRIAL COURT ERRED IN DENYING APPELLANTS' MOTION FOR
JUDGMENT NOTWITHSTANDING THE VERDICT."
II
{¶ 13} "THE TRIAL COURT ABUSED ITS DISCRETION IN DENYING
APPELLANTS' MOTION FOR A NEW TRIAL."
III
{¶ 14} "THE TRIAL COURT ERRED IN DENYING APPELLANTS' MOTION FOR
SUMMARY JUDGMENT."
IV
{¶ 15} "THE TRIAL COURT ABUSED ITS DISCRETION IN OVERRULING
APPELLANTS' OBJECTIONS TO THE ADMISSION OF EVIDENCE RELATING TO
APPELLANT GREENE'S PREVIOUS LAWSUIT."
Licking County, Case No. 18-CA-61 5
V
{¶ 16} "THE TRIAL COURT ABUSED ITS DISCRETION IN GRANTING
APPELLEE'S MOTION FOR ATTORNEYS' FEES."
VI
{¶ 17} "THE TRIAL COURT ABUSED ITS DISCRETION IN GRANTING
APPELLEE'S MOTION FOR INJUNCTIVE RELIEF."
{¶ 18} On August 16, 2018, MT filed a cross-appeal and assigned the following
errors:
CROSS-ASSIGNMENT OF ERROR I
{¶ 19} "THE TRIAL COURT ABUSED ITS DISCRETION IN DENYING CROSS-
APPELLANT'S MOTION FOR EXEMPLARY DAMAGES PURSUANT TO R.C. §
1333.63(B)."
CROSS-ASSIGNMENT OF ERROR II
{¶ 20} "THE TRIAL COURT ABUSED ITS DISCRETION IN DENYING CROSS-
APPELLANT'S MOTION FOR PRE-JUDGMENT INTEREST PURSUANT TO R.C. §
1343.03(C)."
CROSS-ASSIGNMENT OF ERROR III
{¶ 21} "THE TRIAL COURT ABUSED ITS DISCRETION IN DENYING, IN PART,
CROSS-APPELLANT'S MOTION FOR ATTORNEYS' FEES PURSUANT TO THE
JURY'S PUNITIVE DAMAGE AWARD AND R.C. § 1333.64(C)."
Licking County, Case No. 18-CA-61 6
CROSS-ASSIGNMENT OF ERROR IV
{¶ 22} "THE TRIAL COURT ABUSED ITS DISCRETION IN DENYING, IN PART,
CROSS-APPELLANT'S MOTION FOR COSTS PURSUANT TO CIVIL RULE 54(D), R.C.
§ 2303.21, AND THE JURY'S PUNITIVE DAMAGE AWARD."
{¶ 23} This matter is now before this court for consideration.
I
{¶ 24} In their first assignment of error, appellants claim the trial court erred in
denying their motion for JNOV. We agree in part.
{¶ 25} Civ.R. 50(B) governs motions for JNOV and states the following in part:
"Whether or not a motion to direct a verdict has been made or overruled, a party may
serve a motion to have the verdict and any judgment entered thereon set aside and to
have judgment entered in accordance with the party's motion."
{¶ 26} In Pariseau v. Wedge Products, Inc., 36 Ohio St. 3d 124, 127, 522 N.E.2d
511 (1988), the Supreme Court of Ohio discussed the standard of review on a motion for
JNOV as follows:
While we are aware that the grounds for granting a judgment n.o.v.
are not easily met, a motion for such a judgment must be sustained when
circumstances so require.
"The test to be applied by a trial court in ruling on a motion for
judgment notwithstanding the verdict is the same test to be applied on a
motion for a directed verdict. The evidence adduced at trial and the facts
established by admissions in the pleadings and in the record must be
Licking County, Case No. 18-CA-61 7
construed most strongly in favor of the party against whom the motion is
made, and, where there is substantial evidence to support his side of the
case, upon which reasonable minds may reach different conclusions, the
motion must be denied. Neither the weight of the evidence nor the
credibility of the witnesses is for the court's determination in ruling upon
either of the above motions." Posin v. A.B.C. Motor Court Hotel (1976), 46
Ohio St. 2d 271, 275, 74 O.O.2d 427, 430, 344 N.E.2d 334, 338. (Additional
citations omitted.)
{¶ 27} Appellate review of a ruling on a motion for JNOV is de novo. Midwest
Energy Consultants, L.L.C. v. Utility Pipeline, Ltd., 5th Dist. Stark No. 2006CA00048,
2006-Ohio-6232.
UNFAIR COMPETITION CLAIM
{¶ 28} In their motion for JNOV, appellants challenged the jury's verdict on MT's
unfair competition claim. The jury found appellants "by false representations engaged in
unfair competition against Plaintiff" and awarded MT $200,000 as against Greene and
$200,000 as against MOM for lost profits. Interrogatory Nos. 5 and 8. Appellants argued
MT based its unfair competition claim solely on one email sent by Greene to one of its
customers, and no proof was presented that this customer was misled by the email or
that MT lost any business because of Greene's statements.
{¶ 29} On cross-examination, Greene admitted to sending out the following email
dated September 21, 2017, to one of MT's customers, Scott & Nolder Co., LPA: "This is
Mike Greene, your Ricoh copy machine rep. I have made the transition to the Authorized
Licking County, Case No. 18-CA-61 8
Ricoh dealer…Modern Office Methods. Ricoh has several promotions available for
current customers. Can I make an appointment to discuss them with you and Attorney
Scott?" T. at 324; Plaintiff's Exhibit 30. On direct examination, Greene acknowledged
that he informed MT's customers that he was now with the authorized Ricoh dealer and
MT was no longer the authorized dealer. T. at 640.
{¶ 30} Charles Rounds, MT's president, explained because MT was purchased by
Xerox, it was no longer a Ricoh authorized service provider for marketing purposes, but
they continued to sell new and used Ricoh equipment and provide service and supplies.
T. at 426-427.
{¶ 31} The trial court instructed the jury on unfair competition as follows (T. at 807-
808):
Unfair competition ordinarily consists of representations by one
person for the purpose of deceiving the public that his goods or services are
those of another. The concept of unfair competition extends [to] unfair
commercial practices such as malicious litigation, circulation of false
rumors, or publication of statements designed to harm the business of
another.
MT claims that Greene, while acting as MOM's agent, falsely
represented himself to MT customers as the current product representative
for those customers. MT claims the statement was false[ly] made to the MT
customers to cause confusion and cause MT damages.
Licking County, Case No. 18-CA-61 9
If you find by the greater weight of the evidence that MT proved its
unfair competition claim, you must further decide whether Greene and/or
MOM's unfair competition caused MT to suffer any damages and, if so, in
what amount.
If you find from the greater weight of the evidence that MT failed to
prove any part of its unfair competition claim, you will then find for Greene
and/or MOM.
{¶ 32} Appellants did not object to this instruction.
{¶ 33} Greene sent out an email informing Scott & Nolder, an MT customer, that
he was their "Ricoh copy machine rep," presumably because he transitioned to MOM, the
authorized Ricoh dealer. In truth, their current Ricoh copy machine rep was whomever
replaced Greene at MT. Greene further informed Scott & Nolder that Ricoh has several
promotions available for current customers; however, Scott & Nolder was a current
customer of MT. In construing the evidence presented most strongly in favor of the non-
moving party, we find reasonable minds could have reached different conclusions as to
whether Greene falsely represented himself to MT customers as the current product
representative for those customers in order to cause confusion and cause MT damages.
{¶ 34} Appellants further argue there was no evidence that MT suffered damages
related to Greene's statements. The trial court instructed the jury on unfair competition -
damages as follows (T. at 809; Jury Instructions filed April 9, 2018):
Licking County, Case No. 18-CA-61 10
GENERAL. If you find by the greater weight of the evidence that
Greene and/or MOM engaged in unfair competition, MT is entitled to
recover damages.
DAMAGES – LOST PROFITS. Actual loss may include lost profits.
Lost profits are calculated by deciding what MT would have received had
Greene and/or MOM refrained from unfairly competing with MT. You may
only award damages the existence and amount of which are reasonably
certain and have been proved to you by the greater weight of the evidence.
You may not award damages that are remote or speculative.
{¶ 35} The jury awarded MT $375,000 for compensatory damages against Greene
and $225,000 for compensatory damages against MOM. Out of those amounts, a total
of $400,000 was attributable to the unfair competition claim ($200,000 each).
Interrogatory Nos. 5 and 8.
{¶ 36} Appellants argue evidence was not presented that Scott & Nolder moved
its business to MOM or that Green's statements caused any other customers to move to
MOM, and there was no evidence that the amount of damages was reasonably certain.
{¶ 37} "[I]n order for a plaintiff to recover lost profits, 'the amount of the lost profits,
as well as their existence, must be demonstrated with reasonable certainty.' " Ask
Chemicals, Inc. v. Computer Packages, Inc., 593 Fed.Appx. 506, 511 (6th Cir.2014),
quoting City of Gahanna v. Eastgate Properties, Inc., 36 Ohio St. 3d 65, 68, 521 N.E.2d
814 (1988). "A plaintiff may not merely assert that it would have made a particular amount
of profits, but must prove lost profits with calculations based on facts." UZ Engineered
Licking County, Case No. 18-CA-61 11
Products Co. v. Midwest Motor Supply Co., Inc., 147 Ohio App. 3d 382, 2001-Ohio-8779,
¶55, 770 N.E.2d 1068 (10th Dist.). " 'Unless the figure is supported by calculations based
on facts available or in evidence, the courts will properly reject it as speculative or
uncertain.' " Ask at 511, quoting Endersby v. Schneppe, 73 Ohio App. 3d 212, 596 N.E.2d
1081, 1084 (1991). "The law in this state requires that evidence of lost profits be based
upon an analysis of lost 'net' profit after the deduction of all expenses impacting on the
profitability of the business in question." Digital & Analog Design Corp. v. North Supply
Co., 44 Ohio St. 3d 36, 48, 540 N.E.2d 1358 (1989) (Wright, J., concurring in part and
dissenting in part).
{¶ 38} This court reiterates that in reviewing a decision on JNOV, we must
determine whether there is " 'sufficient material evidence presented at trial on this issue
to create a factual question for the jury.' " Torres v. Concrete Designs, Inc., 8th Dist.
Cuyahoga Nos. 105833 and 106493, 2019-Ohio-1342, ¶ 78, quoting Malone v. Courtyard
by Marriott Ltd. Partnership, 74 Ohio St. 3d 440, 445, 659 N.E.2d 1242 (1996).
{¶ 39} Mr. Rounds testified to lost revenue of over two million dollars. T. at 452,
455, 511. He explained whenever MT received a cancellation request, he and an
employee reviewed the individual contracts for average selling price, the actual hardware
purchased, and the term of the service agreement, and calculated the lost revenue from
each lost customer. T. at 457-458. Mr. Rounds then testified to lost profits of $940,000.
T. at 458, 482, 511. He calculated the lost profits amount on the same records used in
determining the lost revenue amount. T. at 458, 482. Mr. Rounds stated it was "not exact
science. We just had - - go one contract by another, went through every one and came
to a conclusion that this would be the amount of the gross profit or profit of the deal." T.
Licking County, Case No. 18-CA-61 12
at 458. He did not deduct overhead expenses because each contract contained a markup
to cover overhead costs. T. at 488. There was no explanation as to what the "markup"
entailed. Mr. Rounds was the person responsible at MT to "maintain revenue and
profitability numbers." T. at 481. He determined the $940,000 lost profits amount "using
the same type of methodology and regular analysis" that he used to review the profitability
of MT's business and other contracts. T. at 482. In support, MT presented Plaintiff's
Exhibit 37. Said exhibit is a list of MT's lost customers that apparently included amounts
for lost revenue, not lost profits, however, the trial court admitted the exhibit after redacting
any listed amounts, finding the two million dollar number included in the exhibit to be
prejudicial. T. at 461-463, 533. The exhibit as redacted is merely a list of customer names
that switched from MT to MOM.
{¶ 40} MT also presented Plaintiff's Exhibits 18 (larger print) and 19 (smaller print),
a spreadsheet containing "data regarding your [Greene's] historical sales" for the time
period that Greene was employed with MT. T. at 277. The exhibit, prepared by MT on
July 3, 2017, contained detailed information on Greene's customer accounts, including
gross profits made from each customer. T. at 278-281, 299-300. On cross-examination,
Mr. Rounds was asked if the gross profit number minus the sales commission figure
equaled MT's net profit. T. at 488-491. Mr. Rounds explained the resulting number would
not reflect the actual profit because "I also just told you there's a markup. These are the
sales rep transfers." T. at 490. The markup numbers are not included in the exhibit. Id.
On redirect, he reiterated, "those numbers off the spreadsheet are based off of sales rep
costs. There is a markup from true cost to cover the expenses of the company, and so
that obviously the company is profitable." T. at 509. MT did not present any exhibits
Licking County, Case No. 18-CA-61 13
containing numbers related to lost profits, nor did the employee that helped "crunch the
numbers" testify.
{¶ 41} During closing argument, MT's counsel discussed damages as follows:
"And we heard from Chuck Rounds. Yeah, there was $2 million plus of revenue and he
said that equated to $940,000 in lost profits. To be made whole MT needs $940,000 to
make up that difference in the business that Mike Greene diverted." T. at 755. On
rebuttal, MT's counsel argued that Mr. Rounds explained one could not figure out lost
profits from Plaintiffs Exhibits 18 and 19 "[s]o, I don't think you should try and do that
because it's incorrect, it's misleading, and Mr. Rounds explained to you why." T. at 780.
{¶ 42} In its appellate brief at 8, MT argues it claimed lost profits on canceled
customer contracts, and those contracts and related invoices were admitted into
evidence. Those contracts and invoices were introduced by Greene as Defendant's
Exhibit C. Greene explained the contracts and invoices therein were freely given to him
by MT customers. T. at 649-650. From these documents, he formulated his proposals
on behalf of MOM. T. at 650. The exhibit contained a couple more than half of the
contracts/leases of the lost customers listed in Plaintiff's Exhibit 37. Mr. Rounds was not
asked about Defendant's Exhibit C, and did not testify on the amounts listed therein. At
no time did Mr. Rounds review a contract or lease or invoice and explain what number(s)
he used in his calculations to determine lost profits. There was no testimony as to whether
the contracts/leases and invoices were current and if the contracts/leases were at the
beginning or end of their terms.
{¶ 43} The only evidence in the record regarding lost profits is the testimony of Mr.
Rounds. This testimony is not supported by other facts or documents in the record. Mr.
Licking County, Case No. 18-CA-61 14
Rounds admitted calculating the gross lost profits amount was not an exact science. Even
assuming the credibility of Mr. Rounds's testimony, there is insufficient proof of lost profits.
His testimony fails to set forth how he arrived at the final amount of $940,000. Without
more in the record, any award for lost profits is speculative and uncertain.
ALL OTHER CLAIMS
{¶ 44} Also in their motion for JNOV, appellants challenged the jury's verdict on all
of appellee's claims because appellee's evidence of lost profits was insufficient.
Appellants argued appellee failed to establish lost profit damages with reasonable
certainty as the only evidence presented was from the company president, Charles
Rounds.
{¶ 45} As discussed above, we agree the evidence was insufficient to prove lost
profits. All of the claims, including the claim for unfair competition, sought damages based
on lost profits except for one, trade secret misappropriation. Said claim sought damages
based on lost profits and unjust enrichment. The trial court instructed the jury on unjust
enrichment as follows: " 'Unjust enrichment' means the value to Greene and/or MOM of
the trade secret resulting from the misappropriation. In determining this value, you may
consider the value of customer relationships or contracts realized by Greene and/or MOM
as a result of any misappropriation."
{¶ 46} Appellants did not object to this charge, did not raise the issue in their
motion for JNOV, and did not claim any error on appeal. Appellants did not specifically
challenge the trade secret misappropriation claim and the resulting damages award. The
jury could have awarded damages on said claim under the theory of unjust enrichment.
Licking County, Case No. 18-CA-61 15
{¶ 47} Appellants further argue because appellee did not sufficiently establish
compensatory damages, the trial court erred in not granting the motion for JNOV on the
issue of punitive damages. As compensatory damages were awarded on the trade secret
misappropriation claim in the amount of $150,000 against Greene and the jury found the
misappropriation was willful and malicious (Interrogatory No. 3), we find punitive damages
could be awarded (R.C. 2315.21). Appellants did not challenge the punitive damages
award in any other fashion.
{¶ 48} Upon review, we find the trial court erred in not granting the motion for JNOV
on the damages awarded against Greene for breach of contract ($25,000) and unfair
competition ($200,000), and against MOM for tortious interference ($25,000) and unfair
competition ($200,000). In light of the fact that the JNOV motion should have been
granted on the total amount of compensatory damages assessed against MOM, the
motion should have also been granted on the punitive damages award ($25,000) against
MOM.
{¶ 49} Assignment of Error I is granted in part and denied in part.
II
{¶ 50} In their second assignment of error, appellants claim the trial court erred in
denying their motion for new trial. Given our decision in Assignment of Error I, we find
this assignment to be moot save for the claim of trade secret misappropriation.
{¶ 51} Civ.R. 59 governs motions for new trial and states the following in part as
argued by appellants:
Licking County, Case No. 18-CA-61 16
(A) Grounds for New Trial. A new trial may be granted to all or any
of the parties and on all or part of the issues upon any of the following
grounds:
(4) Excessive or inadequate damages, appearing to have been given
under the influence of passion or prejudice;
(6) The judgment is not sustained by the weight of the evidence;
however, only one new trial may be granted on the weight of the evidence
in the same case;
(7) The judgment is contrary to law;
In addition to the above grounds, a new trial may also be granted in
the sound discretion of the court for good cause shown.
{¶ 52} As explained by this court in McFarland v. Gillespie, 5th Dist. Fairfield No.
18-CA-17, 2019-Ohio-1050, ¶ 60:
When considering a motion for a new trial pursuant to Civil Rule
59(A)(6), a court must weigh the evidence and pass on the credibility of the
witnesses. A new trial will not be granted where the verdict is supported by
competent, substantial, and apparently credible evidence. Harris v. Mt.
Sinai Med. Ctr., 116 Ohio St. 3d 139, 2007-Ohio-5587, 876 N.E.2d 1201.
Because a trial court is in the best position to decide issues of fact, it is
vested with broad discretion in ruling upon motions for new trial based upon
Civil Rule 59(A)(6). Id. Our standard of review on a motion for new trial is
Licking County, Case No. 18-CA-61 17
abuse of discretion. Civil Rule 59. In order to find an abuse of discretion,
we must determine the trial court's decision was unreasonable, arbitrary, or
unconscionable and not merely an error of law or judgment. Blakemore v.
Blakemore, 5 Ohio St. 3d 217, 450 N.E.2d 1140 (1983).
{¶ 53} In his May 4, 2018 motion arguing for a new trial on the trade secret
misappropriation claim, Greene argued the jury's verdict was "against the manifest weight
of the evidence and contrary to law because MT did not present any evidence to
sufficiently establish its damages relating to such claims to a reasonable certainty."
Because we have determined insufficient evidence as to lost profits, we will review this
argument in relation to unjust enrichment.
{¶ 54} The Ohio Uniform Trade Secret Act, R.C. 1333.61(D), defines a "trade
secret" as follows:
"Trade secret" means 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.
Licking County, Case No. 18-CA-61 18
(2) It is the subject of efforts that are reasonable under the
circumstances to maintain its secrecy.
{¶ 55} R.C. 1333.61(B) defines "misappropriation" as any of the following:
(1) Acquisition of a trade secret of another by a person who knows
or has reason to know that the trade secret was acquired by improper
means;
(2) Disclosure or use of a trade secret of another without the express
or implied consent of the other person by a person who did any of the
following:
(a) Used improper means to acquire knowledge of the trade secret;
(b) At the time of disclosure or use, knew or had reason to know that
the knowledge of the trade secret that the person acquired was derived from
or through a person who had utilized improper means to acquire it, was
acquired under circumstances giving rise to a duty to maintain its secrecy
or limit its use, or was derived from or through a person who owed a duty to
the person seeking relief to maintain its secrecy or limit its use;
(c) Before a material change of their position, knew or had reason to
know that it was a trade secret and that knowledge of it had been acquired
by accident or mistake.
Licking County, Case No. 18-CA-61 19
{¶ 56} In State ex rel. Plain Dealer v. Ohio Department of Insurance, 80 Ohio St. 3d
513, 524-525, 687 N.E.2d 661 (1997), citing Pyromatics, Inc. v. Petruziello, 7 Ohio App. 3d
131, 134-135, 454 N.E.2d 588, 592 (8th Dist.1983), the Supreme Court of Ohio set forth
what a trial court must consider when analyzing a trade secret claim:
(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.
{¶ 57} Greene admitted he was aware that "customer lists, telemarketing
information, pricing, contact expiration, information, et cetera" was considered by MT to
be trade secrets, confidential, and was to be protected at all times. T. at 229-230. Greene
agreed MT owned the information regarding the sales he had made. T. at 245. He agreed
he shared comparative pricing information, service rates, and color base pricing with
MOM. T. at 252-255. He also shared three customer names outside of Licking County
with MOM and discussed trying to convert them from MT to MOM. T. at 255-256. Prior
to leaving MT, Greene backed-up all of his contacts on his phone in anticipation of leaving
MT. T. at 268-269. His contacts included MT's customer names and phone numbers. T.
Licking County, Case No. 18-CA-61 20
at 270-271. He then emailed the list from his work email address to his personal email
address. T. at 270-272; Plaintiff's Exhibits 12-15. He was aware that once he left MT's
employ, MT would have remotely wiped his contact list from his phone. T. at 269. He did
not have permission from MT to back-up the contact information. T. at 269. He also
emailed to his personal email address an analysis prepared by MT of his historical sales
figures. T. at 277; Plaintiff's Exhibit 18. The historical sales figures contained detailed
information on Greene's customer accounts. T. at 280-281. Greene agreed the exhibit
contained confidential information, and he did not ask for permission to send the
information to his personal email address. T. at 282. He did not have any reason to
believe that MOM had any of the information contained in the exhibit at the time that he
left MT's employ. T. at 283. Greene admitted that he emailed himself the information to
provide proof of his sales to MOM. T. at 286. Prior to leaving MT, Greene emailed to his
personal email address three proposals he had prepared on behalf of MT for customers
that he contacted after he moved to MOM. T. at 304-314; Plaintiff's Exhibits 21, 22, 23,
24, 25. Greene admitted that he retained confidential information from MT despite
representing in his employment agreement with MOM that he had not. T. at 319. He
acknowledged that he wanted to maximize the number of customers that he could move
from MT to MOM. T. at 320. He admitted he was working on those efforts to move
customers before he was an official employee of MOM. T. at 320-321. Mr. Rounds
testified MT's employment agreements and employee handbook expressly discussed the
handling of confidential information. T. at 435-440; Plaintiff's Exhibits 1, 2, 29. MT
specifically trained its employees that company information was confidential and was not
to end up in "anyone's hands outside the company." T. at 436. MT went to great lengths
Licking County, Case No. 18-CA-61 21
to make sure everything was secure and the computers had sign-in IDs. Id. He stated
the information contained in Plaintiff's Exhibit 18 contained confidential information that
would absolutely give a competitor an advantage in the marketplace. T. at 433-435.
{¶ 58} We find the record contains sufficient evidence, if believed by the jury, to
support a finding of trade secret misappropriation and that the misappropriation was willful
and malicious. Interrogatory No. 3.
{¶ 59} As instructed by the trial court, cited above in ¶ 45, unjust enrichment is the
value to Greene of the trade secret resulting from the misappropriation. The jury could
consider the value of customer relationships or contracts realized by Greene as a result
of the misappropriation. The jury had before it Defendant's Exhibit C which contained
various contracts and invoices of Greene's customers while he was employed with MT,
Plaintiff's Exhibit 37 which was the list of customers that moved from MT to MOM, and
Plaintiff's Exhibits 18 which was the spreadsheet containing data regarding Greene's
historical sales during his employ with MT. We find the record contains sufficient evidence
to support the jury's determination on the value to Greene of the trade secrets he
misappropriated. There was ample evidence to support an award under the theory of
unjust enrichment.
{¶ 60} Upon review, we find the trial court did not abuse its discretion in denying
the motion for new trial on the trade secret misappropriation claim. The compensatory
damages awarded against Greene for said claim ($150,000) and the punitive damages
award ($40,000) stand.
{¶ 61} Assignment of Error II is denied.
Licking County, Case No. 18-CA-61 22
III
{¶ 62} In their third assignment of error, appellants claim the trial court erred in
denying their motion for summary judgment on appellee's claims for breach of contract,
unfair competition, and tortious interference with a contract. Based upon our decision in
Assignment of Error I, we find this assignment to be moot.
IV
{¶ 63} In their fourth assignment of error, appellants claim the trial court abused its
discretion in permitting evidence of a prior lawsuit filed against Greene by Xerox
Corporation after he stopped working as an independent agent for Xerox. We disagree.
{¶ 64} The admission or exclusion of relevant evidence lies in a trial court's sound
discretion. State v. Morris, 132 Ohio St. 3d 337, 2012-Ohio-2407, 972 N.E.2d 528; State
v. Sage, 31 Ohio St. 3d 173, 510 N.E.2d 343 (1987). As previously stated, in order to find
an abuse of that discretion, we must determine the trial court's decision was
unreasonable, arbitrary or unconscionable and not merely an error of law or judgment.
Blakemore v. Blakemore, 5 Ohio St. 3d 217, 450 N.E.2d 1140 (1983).
{¶ 65} Prior to working for MT, Greene was an independent agent selling copiers
made by Xerox. After Greene terminated that business relationship and started working
for MT, Xerox filed a lawsuit against Greene and MT, alleging various claims including
breach of contract, misappropriation of trade secrets, and taking "tally sheets" which is
the list of sales made by Greene. T. at 334, 337. In the case sub judice, MT was permitted
to cross-exam Greene, over objection, about this prior lawsuit, and admit into evidence
Plaintiff's Exhibit 36, a "Final Judgment of Permanent Injunction and Other Relief" entered
in the Xerox case as part of the parties' settlement agreement. In the settlement
Licking County, Case No. 18-CA-61 23
agreement, Greene was "enjoined from competing for new business for any person,
business or entity that currently has one or more items of Xerox brand equipment located
in Licking County, Ohio for a period of one year." T. at 338. Greene agreed he was so
enjoined. T. at 339. Said exhibit indicated that Greene and MT were "jointly and severally
liable to Xerox for $150,000." T. at 339. The trial court cautioned the jury on the
significance of a settlement agreement, both before and after the evidence was
presented. T. at 329-330, 339-340.
{¶ 66} Appellants argue the evidence was inadmissible under Evid.R. 403 and
404. Evid.R. 403(A) states relevant "evidence is not admissible if its probative value is
substantially outweighed by the danger of unfair prejudice, of confusion of the issues, or
of misleading the jury." Evid.R. 404(A) states, "[e]vidence of a person's character or a
trait of character is not admissible for the purpose of proving action in conformity therewith
on a particular occasion," and Evid.R. 404(B) states, "[e]vidence of other crimes, wrongs,
or acts is not admissible to prove the character of a person in order to show action in
conformity therewith." Evid.R. 404(B) goes on to state: "It may, however, be admissible
for other purposes, such as proof of motive, opportunity, intent, preparation, plan,
knowledge, identity, or absence of mistake or accident." Appellants argue the evidence
was highly prejudicial, and was offered to show action in conformity therewith i.e., "pattern
and practice."
{¶ 67} In permitting the complained of evidence, the trial court ruled as follows (T.
at 287 and 289-290, respectively):
Licking County, Case No. 18-CA-61 24
I would note that based on some of the testimony of Defendant
Greene with regards to whether or not something is confidential information
or whether he believed paragraph two, addendum three was applicable, I'm
going to find there's a stronger nexus with absence of mistake and
knowledge. So, if you move to admit it, the odds are that's what I'm doing.
***
When Mr. Greene was indicating certain things about confidential
information saying I didn't believe that was confidential, I didn't believe, I
think there's reference in the judgment entry about confidential information
and there's enough there that I find that the nexus that the Plaintiff was
arguing about is less tenuous, and my concerns about any prejudice
overweighing the probative value is not outweighed by the prejudice. Okay.
And I will give that curative instruction.
{¶ 68} We concur with the trial court's reasoning. Greene was cross-examined as
to the confidential nature of certain company documents, to which Greene testified he did
not believe the documents to be confidential. T. at 242-245, 252-255, 269, 279-283, 285-
286. In wanting to present the evidence of the prior Xerox lawsuit, MT did more than
argue "pattern and practice" as argued by appellants in their appellate brief at 25. MT
also argued motive, intent, preparation, absence of mistake or accident, and knowledge.
T. at 23-24. MT wanted to challenge Greene's reasons for emailing himself certain
company information by arguing his actions were planned, were not a mistake, and he
knew what he was doing. In addition, the trial court twice issued a limiting instruction on
the jury's use of the evidence.
Licking County, Case No. 18-CA-61 25
{¶ 69} Upon review, we find the trial court did not abuse its discretion in permitting
evidence of the prior lawsuit.
{¶ 70} Assignment of Error IV is denied.
V
{¶ 71} In their fifth assignment of error, appellants claim the trial court abused its
discretion in granting appellee attorney fees. Given our decision in Assignment of Error
I, we agree in part.
{¶ 72} We review a trial court's decision regarding an award of attorney fees for
abuse of discretion. Bittner v. Tri-County Toyota, Inc., 58 Ohio St. 3d 143, 569 N.E.2d
464 (1991); Blakemore, supra.
{¶ 73} In its July 5, 2018 judgment entry, the trial court assessed attorney fees
against both Greene and MOM, mitigating the award "by the degree of success, or lack
therefore, of the Plaintiff on his claims." The trial court found appellee was responsible
for 42% of the attorney fees found to be reasonable in the case and appellants were
responsible for the remaining 58%.
{¶ 74} Appellants first argue the trial court abused its discretion in awarding
attorney fees under R.C. 1333.64(C) because MT was not entitled to punitive damages.
We disagree as we have found punitive damages against Greene to be appropriate.
{¶ 75} Appellants next argue the trial court abused its discretion in awarding
attorney fees with respect to MOM under R.C. 1333.64(C) because the jury found MOM
did not misappropriate trade secrets. A review of the trial court's decision indicates the
trial court awarded attorney fees against MOM based on the jury's finding that MOM
"acted with malice; acted with aggravated or egregious fraud; or knowingly authorized,
Licking County, Case No. 18-CA-61 26
participated in, or ratified as principal or master, the actions or omissions of an agent or
servant that demonstrates malice." Interrogatory No. 11. This finding referenced the
jury's findings that MOM tortiously interfered with the contract and engaged in unfair
competition. Interrogatory Nos. 8 and 9. Given our decision in reversing the
compensatory damages award against MOM on these two claims and the attendant
punitive damages award, we find any attorney fees awarded against MOM are no longer
warranted.
{¶ 76} Appellants lastly argue the trial court abused its discretion in awarding
attorney fees without limiting the fees to the misappropriation claim against Greene.
Given that the judgment on the misappropriation claim is the only one remaining, along
with the attendant punitive damages award, we find the attorney fee award should be
recalculated to reflect this court's decision.
{¶ 77} Attorney fees assessed against MOM are stricken. The attorney fees
awarded against Greene are reversed and the matter is remanded to the trial court for
recalculation consistent with this opinion.
{¶ 78} Assignment of Error V is granted in part and denied in part.
VI
{¶ 79} In their sixth assignment of error, appellants claim the trial court abused its
discretion in granting MT injunctive relief. We disagree.
{¶ 80} At the outset, we note the trial court granted MT a limited injunction of five
years, not a permanent injunction as argued by appellants. Whether to grant an injunction
rests in the trial court's sound discretion. Perkins v. Quaker City, 165 Ohio St. 120, 133
N.E.2d 595 (1956); Blakemore, supra.
Licking County, Case No. 18-CA-61 27
{¶ 81} R.C. 1333.62 governs injunctions under the Uniform Trade Secrets Act and
states the following:
(A) Actual or threatened misappropriation may be enjoined. Upon
application to the court, an injunction shall be terminated when the trade
secret has ceased to exist, unless the court finds that termination of the
injunction is likely to provide a person who committed an actual or
threatened misappropriation with a resulting commercial advantage, in
which case the injunction shall be continued for an additional reasonable
time in order to eliminate commercial advantage that otherwise would be
derived from the misappropriation.
{¶ 82} In its July 5, 2018 judgment entry granting MT a limited injunction, the trial
court found the following:
In the instant matter, we are dealing with a former employee
(Greene) with comprehensive knowledge of an employer's trade secrets
and confidential information that has not only begun employment with a
competitor, but has also been found by a jury to have used those trade
secrets and confidential information in an improper fashion. Further, there
was evidence that the new employer (Modern Office Methods, Inc.)
benefited from the conduct of their new employee (Greene) in using such
Licking County, Case No. 18-CA-61 28
information and was either aware of such conduct or was intentionally
ignorant of the same.
{¶ 83} The trial court noted that although MOM was found not to have
misappropriated trade secrets, actual or threatened misappropriation may be enjoined.
The trial court determined given the actions of appellants and the nature of their
relationship, MT's concern that MOM will engage in misappropriation of trade secrets is
justified. The trial court found "[m]uch of the confidential information sought to be
protected may at some point become legitimately public information" and therefore a
permanent injunction "would be both excessively broad and unnecessary."
{¶ 84} We concur with the trial court's decision. The jury found Greene
misappropriated trade secrets. He had in his possession confidential information
regarding MT's customers and their respective sales contracts and leases and service
agreements. Greene's position with MOM was in direct competition with MT. Under these
circumstances, Greene's use of MT's information and trade secrets was a very real threat.
{¶ 85} Appellants argue the information sought to be protected no longer
constituted trade secrets because MT publicly filed the information with the trial court.
The trial court addressed this issue, noting it had previously issued a stipulated protective
order on November 20, 2017, and an order and entry on January 29, 2018. The
information sought to be protected was marked "CONFIDENTIAL – SUBJECT TO
PROTECTIVE ORDER" consistent with the instructions contained in the protective order.
Further, in its July 5, 2018 judgment entry, the trial court ordered the sealing of the
information sought to be protected.
Licking County, Case No. 18-CA-61 29
{¶ 86} Upon review, we find the trial court did not abuse its discretion in granting
MT a limited injunction.
{¶ 87} Assignment of Error VI is denied.
CROSS-ASSIGNMENT OF ERROR I
{¶ 88} In its first cross-assignment of error, MT claims the trial court abused its
discretion in denying its request for exemplary damages. We disagree.
{¶ 89} Pursuant to R.C. 1333.63(B), if willful and malicious misappropriation exists,
a trial court "may award punitive or exemplary damages in an amount not exceeding three
times any award made" for actual damages and unjust enrichment.
{¶ 90} Whether to award exemplary damages rests in the trial court's sound
discretion. Baker Equipment, Inc. v. Flynn, 12th Dist. Butler No. CA2002-12-313, 2004-
Ohio-1190; Blakemore, supra.
{¶ 91} As discussed above, the jury found willful and malicious misappropriation
by Greene, and awarded MT $150,000 in compensatory damages. Interrogatory No. 3.
In a separate punitive damages verdict form, the jury awarded MT $40,000 as against
Greene. The record does not contain an interrogatory as to which specific claim(s) the
punitive damages award attaches to.
{¶ 92} In its July 5, 2018 judgment entry denying the request for exemplary
damages, the trial court stated the following:
While the Court found that limited attorney fees were appropriate
based on the willful and malicious misappropriation of trade secrets
pursuant to R.C. 1333.64(C), and further finds that the misappropriation was
Licking County, Case No. 18-CA-61 30
willful and malicious for purposes of considering exemplary damages
pursuant to R.C. 1333.63(B), it does not believe an award is appropriate in
this case.
The Jury has already awarded punitive damages to the Plaintiff
based in part on the conduct of the Defendant in the willful and malicious
misappropriation of trade secrets. * * * To permit a second award of punitive
or exemplary damages would have the effect of punishing the Defendant
twice for the same conduct. While the Court does not state that a trier of
fact is prohibited from awarding exemplary damages when punitive
damages have been awarded by a jury for similar conduct, it does believe
that an award of punitive damages for same or similar conduct can be
considered when determining whether such an award is appropriate under
the statute.
{¶ 93} In considering the reprehensibility of Greene's conduct "with regards to the
appropriateness of punitive damages" and considering the evidence presented at trial
and the jury's imposition of punitive damages, the trial court found an additional award of
exemplary damages would be inappropriate.
{¶ 94} MT argues the punitive damages award relates only to the jury finding of
unfair competition (Interrogatory No. 10), and the trade secret misappropriation claim was
separate and distinct from the punitive damages award. We disagree. A review of the
jury instructions indicates the trial court instructed the jury on punitive damages as follows
in relevant part (T. at 813):
Licking County, Case No. 18-CA-61 31
1. GENERAL. If you find that MT is entitled to compensatory
damages against Greene and/or MOM on MT's claim(s) for (Breach of Duty
of Good Faith and Loyalty (against Greene) / Trade Secret Misappropriation
(against Greene and MOM) / Conversion (against Greene and MOM) /
Unfair Competition (against Greene and MOM) / Tortious Interference with
Contract (against MOM), you may now consider whether you will separately
award punitive damages related to (those / that) (claims / claim).
{¶ 95} The punitive damages instruction included the misappropriation claim. This
instruction was identical to the instruction MT requested in its proposed jury instructions
filed March 29, 2018.
{¶ 96} The trial court went on to instruct the jury members if they were to find that
Greene or MOM acted with fraud or malice, they could then award punitive damages to
punish the offending party and to make the offending party examples to discourage others
from similar conduct. T. at 813-815. The trial court instructed the jury members on the
elements to consider in their determination on punitive damages. Id.
{¶ 97} The jury found against Greene on MT's claims for unfair competition and
trade secret misappropriation. Interrogatory Nos. 3 and 5. The jury found Greene acted
with malice or fraud under the unfair competition claim and acted willfully and maliciously
under the misappropriation claim. Interrogatory Nos. 3 and 10. Without a specific
interrogatory relating to the punitive damages award, it is impossible to determine the
jury's intention regarding the award: did it attach to the unfair competition claim, the
Licking County, Case No. 18-CA-61 32
misappropriation claim, or split between both? Regardless, the parties agreed to have
the jury determine a punitive damages award, and the jury did so. The jury considered
Greene's conduct and the damages sustained by MT, and awarded MT punitive damages
of a little over ten percent ($40,000) of the total compensatory award against Greene
($375,000). The trial court considered the jury's decision, Greene's conduct, and the
evidence presented, and declined to award anything additional.
{¶ 98} Upon review, we find the trial court did not abuse its discretion in denying
MT's request for exemplary damages.
{¶ 99} Cross-Assignment of Error I is denied.
CROSS-ASSIGNMENT OF ERROR II
{¶ 100} In its second cross-assignment of error, MT claims the trial court abused
its discretion in denying its request for prejudgment interest. We disagree.
{¶ 101} Whether to award prejudgment interest rests in the trial court's sound
discretion. Kalain v. Smith, 25 Ohio St. 3d 157, 495 N.E.2d 572 (1986); Blakemore, supra.
{¶ 102} R.C. 1343.03 governs rate of interest on judgments. Subsection (C)
provides for the payment of interest on a judgment if:
upon motion of any party to a civil action that is based on tortious
conduct, that has not been settled by agreement of the parties, and in which
the court has rendered a judgment, decree, or order for the payment of
money, the court determines at a hearing held subsequent to the verdict or
decision in the action that the party required to pay the money failed to make
Licking County, Case No. 18-CA-61 33
a good faith effort to settle the case and that the party to whom the money
is to be paid did not fail to make a good faith effort to settle the case.
{¶ 103} The party requesting the prejudgment interest bears the burden of
demonstrating that the other party failed to make a good faith effort to settle the case.
Broadstone v. Quillen, 162 Ohio App. 3d 632, 2005-Ohio-4278, 834 N.E.2d 424, ¶ 27 (10th
Dist.), citing Loder v. Burger, 113 Ohio App. 3d 669, 674, 681 N.E.2d 1357 (11th
Dist.1996).
{¶ 104} In Kalain, supra, at syllabus, the Supreme Court of Ohio explained the
following:
A party has not "failed to make a good faith effort to settle" under
R.C. 1343.03(C) if he has (1) fully cooperated in discovery proceedings, (2)
rationally evaluated his risks and potential liability, (3) not attempted to
unnecessarily delay any of the proceedings, and (4) made a good faith
monetary settlement offer or responded in good faith to an offer from the
other party. If a party has a good faith, objectively reasonable belief that he
has no liability, he need not make a monetary settlement offer.
{¶ 105} In its July 5, 2018 judgment entry denying the request for prejudgment
interest, the trial court found appellants failed to fully cooperate with discovery, all parties
failed to evaluate the risks and potential liabilities of their respective case, none of the
parties attempted to delay the proceedings, and none of the parties made a good faith
Licking County, Case No. 18-CA-61 34
reasonable settlement offer. Based upon the filings in the record pertaining to settlement
negotiations, we concur with the trial court's analysis under each category.
{¶ 106} Upon review, we find the trial court did not abuse its discretion in denying
MT's request for prejudgment interest.
{¶ 107} Cross-Assignment of Error II is denied.
CROSS-ASSIGNMENT OF ERROR III
{¶ 108} In its third cross-assignment of error, MT claims the trial court abused its
discretion in denying in part its request for attorney fees.
{¶ 109} Given our decision in Assignment of Error V to strike the attorney fees
assessed against MOM, we will review this cross-assignment as it pertains to Greene
only.
{¶ 110} As stated in Assignment of Error V, we review a trial court's decision
regarding an award of attorney fees for abuse of discretion. Bittner v. Tri-County Toyota,
Inc., 58 Ohio St. 3d 143, 569 N.E.2d 464 (1991); Blakemore, supra.
{¶ 111} In determining the amount of reasonable attorney fees, a trial court should
first calculate the "lodestar" amount by multiplying the number of hours reasonably
expended by a reasonable hourly rate. Bittner, supra. After arriving at the lodestar figure,
a trial court may modify the amount based on the factors listed in Prof.Cond.R. 1.5 which
governs fees and expenses. Subsection (a) lists the following factors to be considered in
determining the reasonableness of a fee:
Licking County, Case No. 18-CA-61 35
(1) the time and labor required, the novelty and difficulty of the
questions involved, and the skill requisite to perform the legal service
properly;
(2) the likelihood, if apparent to the client, that the acceptance of the
particular employment will preclude other employment by the lawyer;
(3) the fee customarily charged in the locality for similar legal
services;
(4) the amount involved and results obtained;
(5) the time limitations imposed by the client or by the circumstances;
(6) the nature and length of the professional relationship with the
client;
(7) the experience, reputation, and ability of the lawyer performing
the services;
(8) whether the fee is fixed or contingent.
{¶ 112} In its May 15, 2018 motion for attorney fees, MT requested $226,228 for
attorney fees. MT presented the affidavits of trial counsel as well as detailed time entries
billed and expert opinion that the number of hours expended and the rates charged were
reasonable (Jackson Affidavit). In response, appellants argued any attorney fees award
should be limited to fees incurred with respect to the misappropriation claim. Appellants
did not contest the hourly rates.
{¶ 113} In its July 5, 2018 judgment entry, the trial court granted attorney fees to
MT, but lowered the amount to $155,945, finding the following:
Licking County, Case No. 18-CA-61 36
The hourly rates for some of the legal services incurred by the
Plaintiff are far in excess of those customarily charged in this county for
similar legal services relative to both the hourly rate of the individual
attorneys involved and the number of hours spent on the matter. And while
Ohio law allows that when a firm involved has a statewide practice, its rates
may be based upon its statewide rates, the Court is not required to award
fees that are far in excess of the customary rate for similar work.
For the most part, based on the facts of this case and the complex
protracted and contentious litigation involved, and considering the factors
listed in Rule 1.5 of the Ohio Rules of Professional Conduct, the Court finds
the request for the attorney fees sought by the Plaintiff to be appropriate.
However, not in the amount requested. In the Court's view, the hourly rate
at which the Plaintiff's attorneys billed for their time was excessive
compared to the fees customarily charged locally. Further, while this was
not a simple case it was also not so complicated or technically difficult as to
justify the rates suggested by the Plaintiff.
{¶ 114} MT first argues the trial court abused its discretion in reducing each of its
attorney's hourly rates.
{¶ 115} Pursuant to Prof.Cond.R. 1.5(a)(3), the trial court was permitted to
consider "the fee customarily charged in the locality for similar legal services" and as
stated above, the trial court's determination is reviewed under an abuse of discretion
Licking County, Case No. 18-CA-61 37
standard. "The trial judge which participated not only in the trial but also in many of the
preliminary proceedings leading up to trial has an infinitely better opportunity to determine
the value of services rendered by lawyers who have tried a case before him than does an
appellate court." Brooks v. Hurst Buick-Pontiac-Olds-GMC, Inc., 23 Ohio App. 3d 85, 91,
491 N.E.2d 345 (12th Dist.1985).
{¶ 116} Upon review, we cannot say the trial court abused its discretion in lowering
the hourly rates.
{¶ 117} MT also argues the trial court abused its discretion in proportionately
awarding attorney fees to the number of successful claims.
{¶ 118} Although the trial court recognized that "a court should not reduce attorney
fees based on a simple ratio of successful claims raised," the trial court stated it carefully
considered the matter and found such a division to be appropriate. The trial court
considered determining the amount of fees associated with the individual claims proven
by appellants, but found it "proved to be administratively impractical such that the Court
finds the proportional division is appropriate." July 5, 2018 Judgment Entry at fn. 11. In
determining this issue, the trial court incorporated by reference the following factors it
considered in determining costs:
Dividing the costs as noted above might appear to be nothing more
than a formulaic division based on the interrogatories. However, the Court
has carefully reviewed the facts of this case, the interrogatories from the
jury and all of the evidence presented during the trial and finds that this
percentage of division is appropriate. The Court acknowledges that some
Licking County, Case No. 18-CA-61 38
of the claims brought arguably involved core facts or were based on similar
legal theories and considered this fact when reaching the above division.
Further, the Court considered the motions filed in this case, the handling of
discovery, the claims brought by the Plaintiff and the manner in which this
case was prosecuted.
{¶ 119} Upon review, we cannot say the trial court abused its discretion in
proportionately awarding attorney fees.
{¶ 120} Upon review, we find the trial court did not abuse its discretion in denying
in part MT's request for attorney fees, subject to this court's directive in Assignment of
Error V.
{¶ 121} Cross-Assignment of Error III is denied.
CROSS-ASSIGNMENT OF ERROR IV
{¶ 122} In its fourth cross-assignment of error, MT claims the trial court abused its
discretion in denying in part its request for costs. We disagree.
{¶ 123} We review a trial court's decision regarding the assessment of costs for
abuse of discretion. Taylor v. McCullough Hyde Memorial Hospital, 116 Ohio App. 3d
595, 688 N.E.2d 1078 (12th Dist.1996); Blakemore, supra.
{¶ 124} Civ.R. 54(D) governs "costs" and states: "Except when express provision
therefor is made either in a statute or in these rules, costs shall be allowed to the
prevailing party unless the court otherwise directs." "Denying costs to both parties can
be appropriate when neither party entirely prevails." State ex rel. Reyna v. Natalucci-
Persichetti, 83 Ohio St. 3d 194, 198, 699 N.E.2d 76 (1998).
Licking County, Case No. 18-CA-61 39
{¶ 125} In assessing court costs, the trial court used the same proportionality
approach as in determining attorney fees, considering the factors cited in Cross-
Assignment of Error III. As in that assignment of error, we do not find the trial court
abused its discretion in utilizing such an approach. However, as we found in Assignment
of Error V, given that the judgment on the misappropriation claim is the only one
remaining, along with the attendant punitive damages award, we find the assessment of
costs should be recalculated to reflect this court's decision.
{¶ 126} Cross-Assignment of Error IV is granted in part and denied in part.
{¶ 127} The judgment of the Court of Common Pleas of Licking County, Ohio is
hereby affirmed in part and reversed in part. The matter is remanded to said court in light
of this court's opinion to recalculate the attorney fee award and costs and to enter final
judgment accordingly.
By Wise, Earle, J.
Hoffman, P.J. and
Delaney, J. concur.
EEW/db