Retirement Corp. of Am. v. Henning , 2019 Ohio 4589 ( 2019 )

[Cite as Retirement Corp. of Am. v. Henning, 2019-Ohio-4589.]
IN THE COURT OF APPEALS
FIRST APPELLATE DISTRICT OF OHIO
HAMILTON COUNTY, OHIO
THE RETIREMENT CORPORATION : APPEAL NO. C-180643
OF AMERICA, TRIAL NO. A-1702512
:
and
: O P I N I O N.
FIFTH THIRD BANK,
:
Plaintiffs-Appellants,
:
vs.
:
DAVID B. HENNING,
:
and
:
FORMIDABLE ASSET
MANAGEMENT, :
Defendants-Appellees. :
Civil Appeal From: Hamilton County Court of Common Pleas
Judgment Appealed From Is: Affirmed in Part, Reversed in Part, and Cause
Remanded
Date of Judgment Entry on Appeal: November 8, 2019
Zieger, Tigges & Little LLP, Marion H. Little, Jr., and Christopher J. Hogan, for
Plaintiffs-Appellants,
Freking Myers & Ruel, LLC, Kelly Mulloy Myers and Brian P. Gillan, for Defendant-
Appellee David B. Henning,
Stagnaro, Saba & Patterson Co., L.P.A., Peter A. Saba and Jeffrey M. Nye, for
Defendant-Appellee Formidable Asset Management.
OHIO FIRST DISTRICT COURT OF APPEALS
MYERS, Judge.
{¶1} The Retirement Corporation of America (“RCA”) and Fifth Third Bank
appeal the judgment of the Hamilton County Court of Common Pleas dismissing
their action for breach of contract, breach of fiduciary duty, misappropriation of
trade secrets, tortious interference with prospective business relationships, and
spoliation of evidence against RCA’s former employee, David B. Henning, and
Henning’s new employer, Formidable Asset Management (“Formidable”). For the
reasons that follow, we affirm the trial court’s judgment dismissing the breach-of-
contract claim and reverse its judgment dismissing the remaining claims.
I. Background Facts and Procedure
{¶2} Henning was employed by RCA, a registered investment advisor, from
March 2010 to April 2017. In his capacity as a relationship manager, Henning
provided investment-related advisory and wealth-planning services to RCA
customers. Henning’s employment agreement with RCA restricted him from
disclosing or using RCA’s confidential information at any time after the termination
of his employment and from soliciting RCA customers for a period of 18 months
following the termination of his employment.
{¶3} The employment agreement contained the following provisions:
[5(a)] Employee agrees that during the term of Employee’s
employment with Employer and for the periods of time set forth in
subsections 5(a)(i) through 5(a)(iii) respectively after the termination
of Employee’s employment with Employer for any reason, whether
voluntary or involuntary, Employee will not, directly or indirectly, do
or suffer any of the following:
(i) For eighteen (18) months after the termination of Employee’s
employment with Employer for any reason, whether voluntary
or involuntary, solicit any person who is an employee, officer,
agent, customer or supplier of the Employer or any of
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OHIO FIRST DISTRICT COURT OF APPEALS
Employer’s affiliates or subsidiaries to terminate said
relationship.
(ii) For eighteen (18) months after the termination of Employee’s
employment with Employer for any reason, whether voluntary
or involuntary, solicit, attempt to solicit, accept, attempt to
accept, direct or attempt to direct, divert or attempt to divert,
take away or attempt to take away business of or from any
customers of the Employer or any of Employer’s affiliates or
subsidiaries, either for himself or for any other corporation,
limited liability company, partnership, proprietorship, firm,
association or other business entity in competition with the
Employer or any of its affiliates or subsidiaries or advise or
assist any person or entity with respect thereto. As used in this
Agreement the term “customer” means any customer, whether
actual or potential, of Employer or any of Employer’s affiliates
and subsidiaries with whom Employee had business contact, or
whose identity Employee learned through employment with
Employer or Employer’s affiliates or subsidiaries, during the
twelve (12) months immediately before Employee’s
employment with Employer ended.
(iii) At any time after the termination of Employee’s employment
with Employer for any reason, whether voluntary of [sic]
involuntary, disclose, divulge, discuss, copy, reproduce,
publish, reveal, show, use or otherwise communicate in any
manner any Confidential Information. Employee acknowledges
and agrees that all Confidential Information is, and shall
remain, the property of Employer. Upon termination of
Employee’s employment with Employer, Employee agrees not
to remove such Confidential Information, copy it, or commit it
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to memory to use outside of Employer. Employee shall
promptly return to Employer all copies and originals of all
documents and other materials containing or referring to
Confidential Information and any other materials that belong
to Employer or its affiliates or subsidiaries. The covenant in
this subsection 5(a)(iii) has no temporal, geographical or
territorial limitation and is not limited by the time periods set
forth in the preceding subsections.
{¶4} “Confidential Information” was defined in the employment agreement
to include the following:
[C]onfidential information and trade secrets, which include customer
lists, identities of customer contact persons, lists of prospective
customers, accounting and tax projections, compilations of
information, records, and specifications, marketing programs and
materials, employee training programs, client service and retention
strategies, methods of operating, intellectual property, information
regarding customers and employees of Employer, and information
about the Employer that is not known to the public and gives
Employer an opportunity to obtain an advantage over competitors who
do not know such information[.]
{¶5} In early 2017, RCA was acquired by, and ultimately became a
subsidiary of, Fifth Third Bank. On April 3, 2017, Henning and RCA entered into an
agreement to terminate Henning’s employment agreement with RCA (the
“termination agreement”), which contained a provision expressing that “[e]mployee
desires to continue his * * * employment with RCA following the termination of the
[e]mployment [a]greement.” In addition, the termination agreement provided:
1. Effective upon the Closing (as defined in the Purchase Agreement),
the Employment Agreement is hereby terminated, and all rights
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OHIO FIRST DISTRICT COURT OF APPEALS
and obligations under the Employment Agreement are canceled
and void.
***
2. Effective upon the Closing, to the extent permitted under
applicable law, each of Employee and RCA releases and forever
discharges the other from any and all obligations under the
Employment Agreement.
{¶6} Fifth Third acquired RCA as planned and the closing took place on
April 7, 2017. Henning resigned from RCA on April 21, 2017, and immediately began
working for Formidable and soliciting RCA customers.
{¶7} According to the amended complaint, in the weeks prior to his
resignation, Henning accessed RCA’s password-protected computer system and
emailed from and to his personal email account detailed spreadsheets containing
contact and account information for RCA customers. He provided these customer-
related documents in electronic format to Formidable and prepared a separate
document that contained the information. After saving the electronic documents
that he removed, Henning deleted the emails by which he had sent and received the
documentation.
{¶8} After his resignation, Henning allegedly used the RCA customer
information to begin soliciting RCA customers. He also allegedly logged into RCA’s
computer system and either accessed or tried to access RCA’s confidential customer
information.
{¶9} After being advised that RCA and Fifth Third Bank had raised concern
about Henning’s removal of customer information, Formidable took the electronic
customer contact and account information that Henning had removed from RCA,
which was contained on two external drives, and physically burned it.
{¶10} On May 5, 2017, RCA and Fifth Third Bank filed their action for breach
of contract, breach of fiduciary duty, and misappropriation of trade secrets against
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OHIO FIRST DISTRICT COURT OF APPEALS
Henning. And they later amended their complaint to include Formidable and to add
claims for tortious interference and spoliation.
{¶11} Henning filed an answer, counterclaims, and a third-party complaint
against Daniel C. Kiley, a Fifth Third Bank employee who was the former chief
executive officer of RCA. Formidable filed an answer. Thereafter, both Henning and
Formidable moved for judgment on the pleadings pursuant to Civ.R. 12(C).
{¶12} On June 1, 2018, the trial court granted the motion and dismissed all
claims against Formidable except for the spoliation claim.1 On September 26, 2018,
Henning voluntarily dismissed his counterclaims against RCA and Fifth Third.
Then, on October 24, 2018, the trial court dismissed all claims against Henning and
the remaining spoliation claim against Formidable and certified the judgment for
immediate appeal under Civ.R. 54(B). This appeal followed.
{¶13} Even though our record demonstrates that Henning’s third-party
claim against Kiley has not been resolved, the trial court’s Civ.R. 54(B) determination
that there is no just reason for delay has not been challenged on appeal, and we agree
that the order is a final order. Therefore, we will address the merits of the appeal.
II. Judgment on the Pleadings
{¶14} In ruling on the Civ.R. 12(C) motions, the trial court determined that
the breach-of-contract claim by RCA and Fifth Third could not stand because the
termination agreement constituted a complete release by RCA of Henning’s
obligations under the employment agreement. In addition, the court ruled that
because the termination agreement released Henning from his obligations with
respect to the use of confidential information and his nonsolicitation obligations
thereunder, the claims by RCA and Fifth Third for misappropriation of trade secrets,
tortious interference, and breach of fiduciary duty could not survive. The court
dismissed the spoliation claim because RCA and Fifth Third Bank could not show
1 RCA and Fifth Third Bank appealed the trial court’s June 1, 2018 decision in the case numbered
C-180368. We dismissed that appeal for lack of a final, appealable order.
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OHIO FIRST DISTRICT COURT OF APPEALS
that the destruction of the external drives caused disruption to their case because the
court had deemed their claims to be nonviable.
{¶15} In a single assignment of error, RCA and Fifth Third argue that the
trial court erred by dismissing their action against Henning and Formidable
pursuant to Civ.R. 12(C). Dismissal on a Civ.R. 12(C) motion for judgment on the
pleadings is proper when a court construes as true the material allegations in the
complaint, along with all reasonable inferences to be drawn therefrom, and finds,
beyond doubt, that the plaintiff can prove no set of facts that would entitle the
plaintiff to relief. New Riegel Local School Dist. Bd. of Edn. v. Buehrer Group
Architecture & Eng., Inc., __ Ohio St.3d ___, 2019-Ohio-2851, ___ N.E.3d ___, ¶
8. We review a trial court’s ruling on a Civ.R. 12(C) motion for judgment on the
pleadings de novo. Id.; Chase Home Fin., LLC v. Literski, 1st Dist. Hamilton Nos. C-
130404 and C-130433, 2014-Ohio-615, ¶ 10.
A. Breach of Contract
{¶16} RCA and Fifth Third Bank argue that the trial court erred by
dismissing their breach-of-contract claim upon its determination that the
termination agreement released Henning from his obligations under the
employment agreement. They assert that the termination agreement was ineffective
and that Henning remained subject to the obligations in his employment agreement
with RCA. We disagree.
{¶17} According to RCA and Fifth Third Bank, the termination agreement
was unenforceable due to Henning’s failure to fulfill his larger promise to continue
employment with them and to execute a new agreement containing restrictive
covenants with Fifth Third Bank. They argue that executing a new agreement was a
condition precedent to termination of the prior agreement.
{¶18} Contracts that are clear and unambiguous will be enforced according
to their terms. Swaters v. Lawson, 1st Dist. Hamilton Nos. C-130604 and C-130627,
2014-Ohio-2252, ¶ 11. “[A]bsent fraud, mistake or other invalidating cause, the
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OHIO FIRST DISTRICT COURT OF APPEALS
parties’ final written integration of their agreement may not be varied, contradicted
or supplemented by evidence of prior or contemporaneous oral agreements, or prior
written agreements.” Chase Home Fin., 1st Dist. Hamilton Nos. C-130404 and C-
130433, 2014-Ohio-615, at ¶ 15, quoting Galmish v. Cicchini, 90 Ohio St. 3d 22, 27,
734 N.E.2d 782 (2000).
{¶19} Here, the termination agreement is clear and unambiguous. It
provided that RCA “releases and forever discharges [Henning] from any and all
obligations” under the prior employment agreement. This included soliciting RCA
customers or disclosing or using any confidential information. Because the
termination agreement is clear and unambiguous, it will be enforced according to its
terms unless RCA and Fifth Third Bank have a legal defense.
{¶20} RCA and Fifth Third Bank argue that they have alleged a condition
precedent which would nullify the termination agreement. They argue that an oral
agreement existed requiring Henning to execute a new employment agreement
before the termination agreement would become effective. There is no such
condition in the written contract. RCA and Fifth Third Bank rather rely on a
purported oral agreement. Taking the allegations as true in this regard, RCA and
Fifth Third Bank have not stated a claim.
{¶21} An oral agreement may, in certain limited situations, establish a
condition precedent to the existence of a written contract. Beatley v. Knisley, 183
Ohio App. 3d 356, 2009-Ohio-2229, 917 N.E.2d 280, ¶ 15 (10th Dist.). However,
such an oral agreement may not modify the terms of the written contract. Id. at ¶ 16.
Nor may the claimed condition precedent be inconsistent with the express terms of
the writing. Campbell v. George J. Igel & Co., Inc., 2013-Ohio-3584, 3 N.E.3d 219, ¶
24 (4th Dist.). When the subject matter of a condition precedent is covered by the
written contract, “the condition may not be shown by parol evidence to be different
from the manner in which it is expressed in the writing.” Id., quoting Hiatt v. Giles,
2d Dist. Darke No. 1662, 2005-Ohio-6536, ¶ 32.
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OHIO FIRST DISTRICT COURT OF APPEALS
{¶22} Here, the alleged condition precedent to the effectiveness of the
termination agreement was a promise by Henning to “continue employment with
RCA/Fifth Third, and execute new agreement(s), containing restrictive covenants,
with Fifth Third.” The subject matter of that condition, however, was covered by the
express terms of the termination agreement, which stated that Henning would
“continue his * * * employment with RCA following the termination of the
Employment Agreement.” Thus, the termination agreement specifically
contemplated that Henning would continue to work for RCA without any
employment agreement, not that he would execute a new employment agreement.
Because the subject matter of the alleged condition precedent directly contradicted
the express terms of the termination agreement, there can be no oral condition
precedent. Therefore, the trial court properly determined as a matter of law that
execution of a new employment agreement was not a condition precedent to the
effectiveness of the termination agreement. Consequently, the termination
agreement released Henning from his contractual obligations under the employment
agreement, and the trial court did not err by dismissing the breach-of-contract claim
against Henning.
B. Ohio Uniform Trade Secrets Act
{¶23} Upon its determination that Henning was no longer subject to the
contractual restrictions under the employment agreement, the trial court concluded
that Henning was released from his obligations with respect to confidentiality and
nonsolicitation, and that, therefore, the claim against Henning for misappropriation
of trade secrets under the Ohio Uniform Trade Secrets Act (“OUTSA”), R.C. 1333.61
through 1333.69, could not survive.
1. Trade Secret
{¶24} The first issue we address is whether RCA and Fifth Third Bank have
alleged that customer lists and related information were trade secrets. We first note
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OHIO FIRST DISTRICT COURT OF APPEALS
that the parties, by their prior agreement, recognized that customer lists and related
customer information were confidential and trade secrets. While not determinative
of the issue, we consider this as part of the pleadings in determining whether RCA
and Fifth Third Bank have stated a claim.
{¶25} In the proceedings below, the trial court determined that, because all
contractual obligations of nondisclosure were released by the termination
agreement, RCA and Fifth Third Bank failed to properly allege that RCA’s customer
information continued to be a trade secret under Ohio law.
{¶26} Under R.C. 1333.61(D), a “trade secret” is defined as:
[I]nformation, 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.
{¶27} A customer list can constitute a trade secret under R.C. 1333.61(D). Al
Minor & Assoc., Inc., v. Martin, 117 Ohio St. 3d 58, 2008-Ohio-292, 881 N.E.2d 850,
¶ 27. Therefore, we turn to the “economic value” and “reasonable efforts”
components of R.C. 1333.61(D)(1) and (2) to determine whether RCA and Fifth Third
Bank have stated a claim.
{¶28} The trial court made no determination as to whether RCA had alleged
sufficient facts to support the “economic value” element of a trade secret under R.C.
1333.61(D)(1). Instead, the court assumed that this element was satisfied and
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OHIO FIRST DISTRICT COURT OF APPEALS
proceeded to find that RCA and Fifth Third Bank had not alleged sufficient facts to
support the “reasonable efforts” element of a trade secret under R.C. 1333.61(D)(2),
following termination of the original employment agreement.
a. Reasonable Efforts
{¶29} The trial court determined that RCA and Fifth Third Bank could not
establish that its customer information was the subject of reasonable efforts to
maintain its secrecy because RCA continued to employ Henning after releasing him
from the confidentiality obligations under the employment agreement. However, the
presence of an existing confidentiality agreement is not required to find that a trade
secret exists. See Vanguard Transp. Sys., Inc. v. Edwards Transfer & Storage Co.,
109 Ohio App. 3d 786, 791, 673 N.E.2d 182 (10th Dist.1996); MNM & MAK Ents.,
LLC v. HIIT FIT Club, LLC, 10th Dist. Franklin No. 18AP-980, 2019-Ohio-4017, ¶
30; Al Minor & Assoc., 117 Ohio St. 3d 58, 2008-Ohio-292, 881 N.E.2d 850
(employee liable for misappropriation, despite the lack of an employment agreement,
where he had memorized customer lists). “[T]he obligations imposed by law to
maintain the confidentiality of trade secrets exist regardless of whether there is any
written agreement.” 84 Lumber Co., L.P., v. Houser, 188 Ohio App. 3d 581, 2010-
Ohio-3683, 936 N.E.2d 131, ¶ 69 (11th Dist.); see Gerling & Assoc., Inc. v. Odulair,
LLC, S.D.Ohio No. 2:16-cv-1000, 2017 WL 2790669 (June 28, 2017). The absence of
a formal, written confidentiality agreement is not determinative of whether a party
has taken reasonable efforts to maintain secrecy. Hoffman-LaRoche, Inc. v. Yoder,
950 F. Supp. 1348, 1361 (S.D.Ohio 1997).
{¶30} Here, RCA and Fifth Third Bank alleged that RCA maintained
“extensive password-protected and otherwise secure access to computer-based
customer information, implementing security measures to protect office space where
customer information is maintained[.]” In addition, they alleged that RCA required
“all employees, including Henning, to acknowledge their agreement to comply with a
detailed compliance manual. Such manual sets forth, among other things,
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OHIO FIRST DISTRICT COURT OF APPEALS
obligations applicable to Henning that further reflect and protect the confidentiality
of RCA’s customer information.” These allegations sufficiently set forth the
“reasonable efforts” element of a trade secret under R.C. 1333.61(D)(2).
b. Economic Value
{¶31} Because we review a Civ.R. 12(C) motion de novo, we must also
consider whether RCA and Fifth Third Bank sufficiently alleged the “economic value”
element of a trade secret under OUTSA. The amended complaint alleged that RCA
maintained “substantial confidential, financial, account, and contact information for
RCA customers,” which included “customer records, lists of customers, and other
customer-related information, including account numbers,” and that the information
derived independent economic value from not being generally known to the public or
competitors. This is sufficient. We find that RCA and Fifth Third sufficiently alleged
the “economic value” element of a trade secret under R.C. 1333.61(D)(1).
2. Misappropriation
{¶32} The second issue we must examine is whether RCA and Fifth Third
sufficiently alleged the misappropriation element of an OUTSA claim. Under R.C.
1333.61(B), “misappropriation” means 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
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OHIO FIRST DISTRICT COURT OF APPEALS
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.
{¶33} In the amended complaint, RCA and Fifth Third Bank alleged that
Henning took customer information without authorization and provided the
information to Formidable; that both of them used the information to solicit RCA
customers; and that Formidable received and used the customer information without
authorization and with reason to know it had been acquired improperly. Thus, RCA
and Fifth Third Bank sufficiently alleged the misappropriation element of an OUTSA
claim.
{¶34} Construing the allegations in the amended complaint as true and
construing all reasonable inferences in favor of RCA and Fifth Third, we hold that
they may be able to prove facts in support of their OUTSA claim that would entitle
them to relief. Therefore, the trial court erred by dismissing the OUTSA claim.
C. Breach of Fiduciary Duty2
{¶35} Next, RCA and Fifth Third Bank argue that the trial court erred by
ruling that an employee owes no duty of loyalty or good faith to the employer absent
a written agreement codifying such duties. The trial court determined that the
2Although RCA and Fifth Third Bank label the claim a “breach of fiduciary duty,” they allege that
Henning breached his duty of loyalty and good faith to his employer. In some instances, an
employee can be a fiduciary of an employer, however, employees typically owe nothing more than
a duty of good faith and loyalty to their current employer. See Lombardo v. Mahoney, 8th Dist.
Cuyahoga No. 92608, 2009-Ohio-5826, ¶ 19, citing Connelly v. Balkwill, 160 Ohio St. 430, 440,
116 N.E.2d 701 (1954).
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OHIO FIRST DISTRICT COURT OF APPEALS
termination agreement released Henning from his obligations of confidentiality and
nonsolicitation, including his duty of loyalty to RCA.
{¶36} An employee’s duty of good faith and loyalty exists regardless of
whether an employment agreement exists. See MNM & MAK Ents., LLC, 10th Dist.
Franklin No. 18AP-980, 2019-Ohio-4017, at ¶ 30. This common-law duty is
breached when an employee engages in competition with the employee’s present
employer while still employed. Veterinary Dermatology, Inc. v. Bruner, 1st Dist.
Hamilton No. C-040648, 2005-Ohio-5552, ¶ 16. In the absence of a contract not to
compete, an employee is free to compete with a former employer upon termination
of employment. Dill-Elam, Inc. v. Smallwood Bros. Transp. Serv., 12th Dist.
Clermont No. CA2005-01-001, 2005-Ohio-6554, ¶ 8, citing Curry v. Marquart, 133
Ohio St. 77, 111 N.E.2d 868 (1937), paragraph one of the syllabus. The employee may
solicit the former employer’s customers, so long as there is no disclosure or use of
trade secrets belonging to the former employer for the benefit of the new employer in
a competing business. Id.
{¶37} The trial court erred by holding that Henning, while still employed by
RCA, owed no duty of loyalty to RCA in the absence of an employment agreement.
Even though the termination agreement released Henning from his contractual
duties, it did not release him from his common-law duty of good faith and loyalty
that continued through his employment. In their amended complaint, RCA and Fifth
Third Bank alleged that Henning violated this duty by removing RCA’s confidential
customer information without authorization and for an unauthorized purpose, while
still employed by RCA. These allegations sufficiently stated a claim for breach of an
employee’s duty of good faith and loyalty, and the trial court erred by dismissing the
claim.
D. Tortious Interference
{¶38} The torts of interference with a business relationship and interference
with contract generally occur when a person, without privilege to do so, induces or
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OHIO FIRST DISTRICT COURT OF APPEALS
otherwise purposely causes a third person not to enter into or continue a business
relation with another. A & B-Abell Elevator Co. v. Columbus/Cent. Ohio Bldg. &
Constr. Trades Council, 73 Ohio St. 3d 1, 14, 651 N.E.2d 1283 (1995); Inwood Village,
Ltd., v. Christ Hosp., 1st Dist. Hamilton No. C-110730, 2012-Ohio-3434, ¶ 17. A
crucial element of the tort is that the alleged interference was not justified or
privileged. Inwood at ¶ 18.
{¶39} The trial court found that the amended complaint did not sufficiently
allege a lack of justification because the termination agreement “released Henning
from his obligations with respect to confidentiality, nonsolicitation and
noncompetition.” However, as we have stated, the termination agreement did not
eliminate Henning’s common-law or statutory duties. In other words, the
termination agreement released Henning from his contractual duty not to solicit
RCA customers or disclose confidential information, but it did not release him from
his duties under OUTSA.
{¶40} In the amended complaint, RCA and Fifth Third Bank alleged that they
have valid contracts and business relationships with customers, that Henning and
Formidable knew about, and that Henning and Formidable intentionally interfered
with their current and prospective contracts and relationships by soliciting those
customers using wrongful means, including via violation of OUTSA, without
justification. These allegations sufficiently stated a claim for tortious interference,
and the trial court erred by dismissing the claim.
E. Spoliation
{¶41} The tort of intentional spoliation of evidence has five elements: “(1)
pending or probable litigation involving the plaintiff, (2) knowledge on the part of
defendant that litigation exists or is probable, (3) willful destruction of evidence by
defendant designed to disrupt the plaintiff’s case, (4) disruption of the plaintiff’s
case, and (5) damages proximately caused by the defendant’s acts.” Elliott-Thomas
v. Smith, 154 Ohio St. 3d 11, 2018-Ohio-1783, 110 N.E.2d 1231, ¶ 10, quoting Smith v.
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Howard Johnson Co., Inc., 67 Ohio St. 3d 28, 29, 615 N.E.2d 1037 (1993). The trial
court concluded that RCA and Fifth Third Bank could not meet the disruption
element of their spoliation claim because the destruction of the external drives
containing customer information would have no impact on their case where no viable
claims remained.
{¶42} The amended complaint alleged that RCA and Fifth Third Bank’s
concerns about Henning’s unlawful removal of protected customer information in
violation of OUTSA were relayed to Henning and Formidable, thereby putting them
on notice of probable litigation, and that Henning and Formidable willfully destroyed
the customer information, which constituted key evidence in their case, thereby
causing RCA and Fifth Third Bank to suffer damages. These allegations were
sufficient to allege spoliation, and the trial court erred by dismissing the claim.
III. Conclusion
{¶43} Consequently, we sustain the sole assignment of error in part and
overrule it in part. We affirm the trial court’s judgment dismissing the breach-of-
contract claim and reverse its judgment dismissing the remaining claims. We
remand this cause to the trial court for further proceedings.
Judgment accordingly.
ZAYAS, P.J., and CROUSE, J., concur.
Please note:
The court has recorded its own entry on the date of the release of this opinion.
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