Opinion
No. 28270-8-III.
January 6, 2011. UNPUBLISHED OPINION
Appeal from a judgment of the Superior Court for Whitman County, No. 08-2-00336-0, David Frazier, J., entered June 15, 2009.
Affirmed by unpublished opinion per Brown, J., concurred in by Kulik, C.J., and Sweeney, J.
BG Entertainment (BG) appeals the summary dismissal of its suit against Washington State University (WSU) alleging misappropriation of trade secrets, theft of trade secrets, and breach of contract. The suit arose after BG proposed a concert to WSU, but WSU declined and instead promoted another concert. After dismissing two similar suits and finding this suit frivolous and in bad faith, the trial court granted attorney fees. We conclude no material fact issues remain and find no abuse of discretion in the trial court's decision to grant terms. Accordingly, we affirm and award terms for this appeal.
FACTS
On August 20, 2007, BG asked WSU to fund the "Palouse Festival," a concert featuring urban hip-hop artist, Omarion. BG's proposal stated in relevant part:
BG Entertainment will advertise and promote the event by having flyers and posters distributed campus wide at Washington State University and University of Idaho. Newspaper ads will be ran (Spokane, Lewiston, Evergreen and Inlander) and in conjunction with that, airtime ads will be held on radio (ZFUN106.01, WIRED096.9). BG Entertainment will promote the event on the following websites Tickets West, Washington State University, Spokesman Review, Omarion, Wired 96.9, ZFUN106.1 and Beasley Coliseum. Parking will be available at various lots surrounding the Beasley Coliseum. There is a substantial educational component attached to the promoting and productions of this festival. . . . Kimbrough 101 has been selected as a viable location for the meet and greet with Bryant Hall and the Concert Hall being a contingency plan. Our consultant, Mr. Horace Alexander Young has done a previous meet and greet in Kimbrough 101 with Harry Connick Jr. when he visited Washington State University. BG Entertainment in conjunction with Mr. Horace Alexander Young, plan to utilize students majoring in music, business and marketing to setup various street teams for a hands on learning experience.
Clerk's Papers (CP) at 244. On August 28, WSU responded, "Our concert resources are going to be in use for the majority of this semester, and [we] will not be able to contribute anything to an event of this caliber." CP at 249.
On October 24, 2007, WSU presented a concert featuring urban hiphop artist, Common. WSU showed the research, planning and negotiations for that concert began in July 2007, before BG's August 20, 2007 proposal. WSU student representative Adam Fry-Pierce was responsible for planning concerts. In July 2007, he sent Common's agent a contract. Common signed the contract in "the last few days of August or the first day of September." CP at 209. Mr. Fry-Pierce alleges WSU did not consider BG's Palouse Festival idea because it "already had a plan in place." CP at 71. According to Mr. Fry-Pierce, nothing in BG's proposal could have enhanced WSU's knowledge of how to put together "urban shows," because "it's all public information." CP at 77.
BG filed two lawsuits against WSU that were dismissed. BG commenced this suit on December 15, 2008, alleging misappropriation of BG's trade secrets, theft of trade secrets and breach of contract.
On cross-motions for summary judgment, the trial court granted WSU's request, denied BG's request, and dismissed BG's complaint. The court awarded WSU its attorney fees under RCW 4.84.185 (frivolous lawsuit) and RCW 19.108.040 (bad faith). In its order, the court stated, "The court further finds that the plaintiff's claims are frivolous, advanced without reasonable cause, and are made in bad faith." CP at 108. In its oral ruling, the court stated:
And gentlemen, again, third time around, you've been warned and you've been warned, as to the standards that you have. Just filing a lawsuit, making allegations, not supporting those allegations with a legal or factual basis, is serious business. It costs people money. It wastes a lot of time.
. . . .
Gentlemen, it's frivolous. It is frivolous. And I'm going to grant the motion, here, third time around, that's
been made by [WSU], both under RCW 4.84.185, and under RCW 19.108.040, for an award of attorney's fees and costs. Because of having no legal or factual basis for this claim, not properly researching the issues involved here, not properly presenting evidence to support the allegations that were made here, you cost the other side a lot of money. From an objective standpoint, this was clearly a matter that's been brought in bad faith, and you're going to have to pay for it.
Report of Proceedings (RP) at 52-53. BG appealed.
ANALYSIS A. Summary Judgment
The issue is whether the trial court erred in granting WSU's request for summary judgment dismissal of BG's claims. BG appeals solely the dismissal of its trade secrets claims. BG argues the court wrongly made a credibility determination regarding whether WSU stole BG's trade secrets and incorrectly determined its proposal contained no trade secrets.
We review summary judgment dismissals de novo, performing the same inquiry as the trial court. Jones v. Allstate Ins. Co., 146 Wn.2d 291, 300, 45 P.3d 1068 (2002). We consider the facts and all reasonable inferences from them "in the light most favorable to the nonmoving party." Hertog v. The City of Seattle, 138 Wn.2d 265, 275, 979 P.2d 400 (1999).
Summary judgment is appropriate where "the pleadings, affidavits, and depositions establish that there is no genuine issue of material fact and that the moving party is entitled to judgment as a matter of law." Jones, 146 Wn.2d at 300-01; CR 56(c). "A material fact is one upon which the outcome of the litigation depends." Balise v. Underwood, 62 Wn.2d 195, 199, 381 P.2d 966 (1963). The moving party's burden is to show no remaining material fact issues. Id. "The nonmoving party must set forth specific facts showing a genuine issue [of material fact] and cannot rest on mere allegations." Baldwin v. Sisters of Providence in Wash., Inc., 112 Wn.2d 127, 132, 769 P.2d 298 (1989); CR 56(e).
BG asserts a trade secret. Under the Uniform Trade Secrets Act, chapter 19.108 RCW, a "Trade secret" is defined as information that, "(a) 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, and (b) Is the subject of efforts that are reasonable under the circumstances to maintain its secrecy." RCW 19.108.010(4)(a)(b). "A plaintiff seeking to establish a trade secrets claim under the uniform act has the burden of proving that legally protectable secrets exist." Boeing Co. v. Sierracin Corp., 108 Wn.2d 38, 49, 738 P.2d 665 (1987). While the existence of a trade secret is factual, "'summary judgment may be appropriate in cases where a party has failed to meet its burden of proof for the purposes of a summary judgment motion by generating through evidentiary submissions a genuine issue of material fact.'" MP Med., Inc. v. Wegman, 151 Wn. App. 409, 420, 213 P.3d 931 (2009) (quoting Scott v. Snelling Snelling, Inc., 732 F. Supp. 1034, 1043 (N.D. Cal. 1990)).
Here, BG proposed it would advertise using flyers and posters, on radio stations, in the local newspapers, and on various websites. No genuine material fact issue remains that this manner of concert advertising like other events is commonly known to or readily ascertainable by any member of the public. BG fails to cite any legal authority for the proposition that advertising is a trade secret. Advertising methods are not trade secrets. Van Products Co. v. Gen. Welding Fabricating Co., 213 A.2d 769, 776 (PA. 1965). Reasonable minds could not differ on this point; hence any remaining factual dispute can be determined as a matter of law. Hertog, 138 Wn.2d at 275. Accordingly, we hold BG's proposal did not contain trade secrets and the trial court did not err in dismissing BG's trade secret claims.
B. Sanction and Attorney Fees
The issue is whether the trial court erred in granted WSU's request for attorney fees based on bad faith and frivolous action. BG first contends the court erred in not entering written findings of fact to support its award.
RCW 4.84.185 states, "In any civil action, the court having jurisdiction may, upon written findings by the judge that the action . . . was frivolous and advanced without reasonable cause, require the nonprevailing party to pay the prevailing party the reasonable expenses, including fees of attorneys." Generally, when a statute requires a trial court to enter written findings in support of an attorney fee award, the court commits reversible error when it fails to enter findings. Mahler v. Szucs, 135 Wn.2d 398, 435, 957 P.2d 632 (1998). Unless, the court articulates its reasons supporting the award and makes "an adequate record so the appellate court can review [the] fee award." Just Dirt, Inc. v. Knight Excavating, Inc., 138 Wn. App. 409, 415, 157 P.3d 431 (2007) (citing Mahler, 135 Wn.2d at 435).
Here, the trial court stated in its written order, "The court further finds that the plaintiff's claims are frivolous, advanced without reasonable cause, and are made in bad faith." CP at 108. The court clarified in its oral ruling, "Just filing a lawsuit, making allegations, not supporting those allegations with a legal or factual basis, is serious business. It costs people money. It wastes a lot of time. . . . Gentlemen, it's frivolous . . . [and] been brought in bad faith." RP at 52, 53. Based on its written order, including a finding of frivolous action and bad faith; and its oral ruling, the trial court sufficiently articulated its reasons to support the award for this court's review.
BG next contends no basis exists for a finding of frivolous action or bad faith because the court erred in granting WSU's request for summary judgment. However, for the reasons discussed above the court did not err in granting WSU's request.
Moreover, when an award of attorney fees is authorized by statute, we leave to the trial court's discretion whether to award fees and that ruling will not be disturbed "'in the absence of a clear showing of abuse of discretion.'" Fluke Capital Mgmt. Servs. Co. v. Richmond, 106 Wn.2d 614, 625, 724 P.2d 356 (1986) (quoting Marketing Unlimited Inc. v. Jefferson Chem. Co., 90 Wn.2d 410, 412, 583 P.2d 630 (1978)). Discretion is abused if it is exercised without tenable grounds or reasons. State ex rel. Carroll v. Junker, 79 Wn.2d 12, 26, 482 P.2d 775 (1971).
A lawsuit is frivolous if, when considering the action in its entirety, it cannot be supported by any rational argument based in fact or law. Biggs v. Vail, 119 Wn.2d 129, 136, 830 P.2d 350 (1992). Under RCW 4.84.185, the court may impose attorney fees when an action is frivolous and advanced without reasonable cause.
An action is brought in bad faith if the defendant engages in, "'obstinate conduct that necessitates legal action' to enforce a clearly valid claim or right," "vexatious" conduct during the litigation, or the intentional bringing of a frivolous claim or defense with improper motive. Rogerson Hiller Corp. v. Port of Port Angeles, 96 Wn. App. 918, 927-28, 982 P.2d 131 (1999) (quoting Jane P. Mallor, Punitive Attorneys' Fees for Abuses of the Judicial System, 61 N.C. L. Rev. 613, 632, 634 (1983)). If a claim of misappropriation is advanced in bad faith, RCW 19.108.040 grants the trial court the authority to award reasonable attorney fees to the prevailing party. Additionally, a court's inherent equitable powers authorize an award of attorney fees in cases of bad faith conduct. In re the Recall of Pearsall-Stipek, 136 Wn.2d 255, 961 P.2d 343 (1998).
BG has brought prior unsuccessful claims based on WSU's rejection of BG's proposal. BG's primary contention is that WSU stole trade secrets. But, those alleged trade secrets (i.e. methods to promote a concert) are clearly public knowledge and not trade secrets as defined by RCW 19.108.010(4)(a)(b). Considering all, BG's suit cannot be supported by any rational argument based in fact or law. BG can be viewed as engaging in vexatious conduct due to WSU's decision to promote another performer. BG's complaint, therefore, is frivolous and advanced in bad faith. The trial court had tenable grounds to make a similar finding and did not abuse its discretion in awarding attorney fees below.
WSU requests attorney fees here based on frivolous action and bad faith. BG opposes this request. Because we affirm the trial court's attorney fee award and reject BG's similar arguments on appeal, we, like the trial court, grant WSU attorney fees for defending this appeal. See Standing Rock Homeowners Ass'n v. Misich, 106 Wn. App. 231, 247, 23 P.3d 520 (2001) (where a basis exists to award attorney fees to prevailing party at trial, the appellate court may make such an award on appeal).
Affirmed.
A majority of the panel has determined this opinion will not be printed in the Washington Appellate Reports, but it will be filed for public record pursuant to RCW 2.06.040.
KULIK, C.J. and SWEENEY, J., concur.