Opinion ID: 2117528
Heading Depth: 1
Heading Rank: 1

Heading: Fluidizer's Counterclaim and Cross-Complaint

Text: Fluidizer has presented several theories for its cause of action against ISI, Dynamic Air, and Schlee. In its counterclaim and its amended third-party complaint, Fluidizer alleged that ISI was guilty of transferring confidential business information; that Dynamic Air and Schlee were guilty of conversion and of unfair competition by misuse of trade secrets; and that ISI, Dynamic Air, and Schlee were guilty of interference with a customer relationship. The trial court properly held against Fluidizer on all of the theories. Findings of fact, made by the trial court and supported by the record, demonstrated that the information Schlee allegedly used in developing the Dynamic Air proposal was general information and did not constitute use of trade secrets; that Fluidizer failed to prove Schlee or Dynamic Air had material assistance other than their own training, skill, knowledge, and experience in developing the Dynamic Air proposal or that ISI had transferred confidential Fluidizer business information to Dynamic Air; and that Fluidizer's loss of the contract for the Standard conveyor system resulted from unilateral repudiation of its original commitment. Fluidizer does not on this appeal contest the trial court's rejection of these theories. However, in post-trial memoranda, Fluidizer presented still another theory: conspiracy in unfair competition among Schlee, Dynamic Air, Stearns, and presumably ISI. In effect, Fluidizer argued that Schlee, Dynamic Air, and ISI engaged in a conspiracy with Stearns to commit acts of unfair competition which resulted in Fluidizer's loss and Dynamic Air's gain of the Standard contract and that these acts constituted a breach by Stearns of contractual and fiduciary duties owed to Fluidizer. [4] Fluidizer sought leave to amend its original third-party complaint to conform to the evidence, arguing that Stearns' breach of fiduciary and contractual duties became apparent only during the trial and, further, that the issue had been tried with consent. Based upon its review of the case law and Rule 15.02, Rules of Civil Procedure, the trial court held that it was not proper for Fluidizer to amend its third-party complaint. It further held that Fluidizer had not established a right to recover from any of the third-party defendants under the conspiracy theory. The validity of the theory of conspiracy in unfair competition is the basis of Fluidizer's appeal with respect to its crossclaim and amended third-party complaint. The crux of the various theories asserted by Fluidizer is that Fluidizer lost the contract for the Standard conveyor system because of illegal acts by ISI, Dynamic Air, Schlee, and others. Only a shade of difference, at best, separates these theories and, therefore, the trial court's findings of fact pertaining to the theories expressly pleaded by Fluidizer are important in analyzing Fluidizer's present theory of conspiracy in unlawful competition. Based upon relevant findings of fact by the trial court and upon our own independent review of documentary sources, the evidence conclusively demonstrates that Fluidizer did not present sufficient facts to establish its cause of action. [5] Fluidizer did not sufficiently establish that the alleged conspirators met upon a plan or purpose of action to deprive Fluidizer of the Standard contract. Contrary to Fluidizer's claims, the trial court found, with ample support in the evidence, that no drawings, sketches, catalogs, documents, pricing policies, [6] or information of any kind belonging to Fluidizer was used by Dynamic Air to prepare its proposal; that no confidential Fluidizer business information or trade secrets were transferred or converted by Schlee, Dynamic Air, or ISI; and that Fluidizer's loss of the Standard contract was due to its refusal to perform the original contract and its submission of a second proposal at a greatly increased price. Implicit in these findings was the finding that Schlee, Dynamic Air, and ISI were not engaged in a conspiracy, either among themselves or with others, to deprive Fluidizer of the Standard contract. Furthermore, our examination of the record indicates that the evidence does not compel a finding of any such conspiracy. Additionally, if Fluidizer had been able to establish that Dynamic Air, Schlee, and ISI had conspired with Stearns and aided him in breaching his contractual and fiduciary duties to Fluidizer, it nonetheless did not sufficiently demonstrate that it was damaged by such acts. Fluidizer was not deprived of an existing contract with Standard. The trial court's findings of fact properly established that the contractual relationship between Fluidizer and Standard was terminated by Fluidizer's unilateral withdrawal of its original proposal and its subsequent submission of a second proposal at a highly inflated price. Dynamic Air's bid became important only after the December 17, 1973, meeting at which Fluidizer submitted its inflated second proposal. Thereafter, Standard began seeking additional bids, and Dynamic Air presented its bid to Standard only after it was asked to do so by Standard. For Fluidizer to contend that it would have regained the contract in the future is speculative and without sufficient foundation in the record. In sum, Fluidizer suffered no damages, because it abandoned any expectation of retaining the contract when it repudiated the original proposal and presented a second proposal. See, Abbott Redmont Thinlite Corp. v. Redmont, 475 F.2d 85 (2 Cir. 1973). [7]