Summary
reversing district court's award of attorney's fees where, although party continued to assert claim after discovery produced no evidence to support it, there was no evidence the misappropriation claim was made in bad faith when it was filed and claimant survived summary judgment
Summary of this case from Johnson v. Simonton Building Products, Inc.Opinion
No. C0-01-2149
Filed June 18, 2002.
Appeal from the District Court, Hennepin County, File No. 0010728.
Galen E. Watje, Steven Moore, (for appellant)
Michael S. Kreidler, Louise A. Behrendt, (for respondents)
This opinion will be unpublished and may not be cited except as provided by Minn. Stat. § 480A.08, subd. 3 (2000).
UNPUBLISHED OPINION
Appellant challenges the district court's award of attorney fees to respondents, arguing that (1) the award is not supported by the findings and is contrary to law and (2) the amount of the award is excessive. Because we conclude that an award of attorney fees under the Uniform Trade Secrets Act or the Uniform Deceptive Trade Practices Act is not supported by the district court's findings, we reverse.
FACTS
In December 1999, appellant Wixon Jewelers, Inc., sued respondents Aurora Jewelry Designs, Robert Foote, Ronald Hansen, and Jenny Peterson for false statements in advertising, tortious interference with prospective business relations, unjust enrichment, unfair competition, and violations of the Uniform Trade Secrets Act and the Uniform Deceptive Trade Practices Act. See Minn. Stat. §§ 325C.01-.08 (providing that party may seek injunction or damages for misappropriation of trade secrets), 325D.43-.48 (2000) (providing that party may seek injunction for deceptive trade practices). Foote and Hansen, formerly employed by Wixon as goldsmiths and jewelry designers, founded Aurora in 1998. Peterson, also a former Wixon employee, worked for Aurora as a salesperson. Wixon alleged in part that respondents, in local advertisements, claimed Wixon jewelry designs as their own and falsely stated that Peterson was the top salesperson at Wixon.
Shortly before the close of discovery, respondents moved for summary judgment on all claims. Wixon dismissed its claim of false statements in advertising but otherwise opposed the motion. The district court granted respondents' motion as to all claims except the claims of misappropriation of trade secrets and deceptive trade practices.
A trial was held on the two remaining claims. After Wixon presented its case, respondents moved for a directed verdict. Before the district court ruled on the motion, Wixon dismissed Peterson as a defendant. The remainder of the case went to the jury, which found in favor of Aurora, Foote, and Hansen.
After trial, respondents moved for attorney fees under section 325C.04 of the Uniform Trade Secrets Act and section 325D.45, subdivision 2, of the Uniform Deceptive Trade Practices Act. See Minn. Stat. §§ 325C.04 (providing that attorney fees may be awarded against the complaining party when claim of misappropriation of trade secrets is made in bad faith), 325D.45, subd. 2 (providing that attorney fees may be awarded when party complaining of deceptive trade practice has brought an action knowing it to be groundless). The district court concluded that respondents were entitled to the portion of their attorney fees incurred in defending Peterson, finding:
[I]t is clear that [Wixon] did not have a cause of action against [Peterson] upon completion of discovery. Ms. Peterson was a salesperson at Wixon Jewelers and then subsequently at Aurora Jewelry Designs. She was not an owner of Aurora. Although there was some evidence presented to dispute that Ms. Peterson was not the "top salesperson" at Wixon's in support of [Wixon's] action against her for deceptive trade practices, there was no evidence presented that Ms. Peterson violated the Uniform Trade Secrets Act. [Wixon] admitted it had no evidence against Ms. Peterson when it withdrew its claim against Ms. Peterson upon [respondents'] motion for a directed verdict.
The district court awarded respondents one-third of their total attorney fees, entering a judgment of $14,765.76 in their favor. Wixon appeals.
DECISION I.
As a preliminary issue, respondents argue that this appeal should be dismissed on the ground that Wixon did not provide transcripts of the proceedings. An appellant has the burden to provide an adequate record on appeal. See Noltmier v. Noltmier, 280 Minn. 28, 29, 157 N.W.2d 530, 531 (1968). We have reviewed the record and conclude that it is adequate for a meaningful review of the issues presented here. We therefore decline to dismiss the appeal.
II.
An award of attorney fees will not be reversed on appeal absent an abuse of discretion. Becker v. Alloy Hardfacing Eng'g Co., 401 N.W.2d 655, 661 (Minn. 1987). When an appellant does not provide a transcript, this court's review is limited to whether the district court's conclusions of law are supported by the findings. See Duluth Herald News Tribune v. Plymouth Optical Co., 286 Minn. 495, 498, 176 N.W.2d 552, 555 (1970).
Wixon contends that the district court's findings do not support an award of attorney fees under the Uniform Trade Secrets Act. The district court found that Wixon did not have a cause of action against Peterson upon completion of discovery, presented no evidence at trial to support its claims that she misappropriated trade secrets, and admitted that it had no evidence against her when it withdrew its claim after respondents moved for a directed verdict. Wixon does not dispute these findings. Rather, Wixon notes that the district court did not expressly find bad faith and argues that the findings that were made are not the equivalent of a finding of bad faith.
We do not reach Wixon's argument because the district court's findings, even if they are the equivalent to a finding of bad faith, do not support an award of attorney fees under the Uniform Trade Secrets Act. Section 325C.04 provides that the district court may award attorney fees to the prevailing party only when "a claim of misappropriation is made in bad faith." We see no suggestion in the district court's findings that Wixon made its claim of misappropriation of trade secrets against Peterson in bad faith when the complaint was filed in December 1999. The district court's decision to award attorney fees to respondents was evidently based, then, on Wixon's conduct after the close of discovery, that is, that Wixon continued to assert the claim of misappropriation against Peterson after discovery produced no evidence to support the claim.
But even if, under section 325C.04, a claim "is made" continuously until it is dismissed, Wixon's claim against Peterson survived respondents' motion for summary judgment. The supreme court has held that a party who survives a motion for summary judgment "should not be subject to sanctions after trial predicated on [the] surviving claims." Uselman v. Uselman, 464 N.W.2d 130, 144 (Minn. 1990) (stating principle that sanctions after trial should not be predicated on claims that survive summary judgment, applying predecessor sanctions statute) (citation omitted). The supreme court noted that such a party "has no reason to believe that the court considers its claim * * * frivolous; indeed the opposite is the case." Id. at 144-45 (quotation omitted). Because the district court here denied respondents' motion for summary judgment on Wixon's claim of misappropriation of trade secrets, Wixon had no reason to believe that it would be subject to sanctions by continuing to assert its claim against Peterson. Moreover, respondents, in their motion for summary judgment, made no effort to separate Wixon's claim of misappropriation of trade secrets against Peterson from the claims against the other defendants and to address it specifically.
Wixon also argues that the district court's findings do not support an award of attorney fees under section 325D.45 of the Uniform Deceptive Trade Practices Act. Section 325D.45 provides that the district court may award attorney fees to the prevailing party when "the party complaining of a deceptive trade practice has brought an action knowing it to be groundless." Minn. Stat. § 325D.45, subd. 2 (2000). We see no suggestion in the district court's findings that Wixon brought its action against Peterson in December 1999 knowing it to be groundless. We conclude that respondents are not entitled to attorney fees under section 325D.45.
III.
Wixon argues that the district court awarded excessive attorney fees and improperly included $1,332.58 of costs in its award. Because we have concluded that respondents are not entitled to attorney fees under either the Uniform Trade Secrets Act or the Uniform Deceptive Trade Secrets Act, we need not address these issues.