Opinion ID: 406060
Heading Depth: 2
Heading Rank: 2

Heading: Claims for Breach of Fiduciary Duty, Conversion and Unfair Competition

Text: 27 AIChE claims that the district court erred in granting summary judgment dismissing AIChE's claims for breach of fiduciary duty, conversion and unfair competition based on Reber-Friel's alleged failure to return all documents in its possession produced in its management of AIChE's shows and for its alleged use of those documents for its own benefit. At the very least, AIChE argues, it should be given the opportunity to explore thoroughly through discovery (1) exactly what exhibitor information Reber-Friel did produce as AIChE's agent and in what form, if any, Reber-Friel still retains that information; and (2) the extent to which Reber-Friel is and has been using such information in soliciting AIChE's exhibitors for the Chem Pro Show. (Brief for Appellant, p. 45). 28 At the hearing on the preliminary injunction plaintiff represented that as far as it knew defendant had at that point delivered to AIChE all information and documents accumulated in its management of AIChE's shows, with the exception of approximately 4,000 index cards each of which contained the names and addresses of potential exhibitors and the names and phone numbers of the individuals to contact at the exhibitors' offices. Upon the representation of Reber-Friel that it would immediately produce those cards, the court dismissed the claim for injunctive relief as moot. 29 AIChE did not offer any evidence to indicate that Reber-Friel was in possession of information that had not been provided to AIChE. A letter from plaintiff's to defendant's counsel dated September 3, 1981 submitted to suggest that Reber-Friel was withholding information, contains requests for information that already had been provided, was insignificant, or the whereabouts of which had been previously explained. And, in fact, with the exception of the index cards, further demand was not made for these items at the hearing held at the end of September. In addition, except for conclusory allegations of operating under impaired conditions AIChE did not make any showing of damages resulting from the delay in receiving material from Reber-Friel. Rather its allegations emphasized the superior position of Reber-Friel. Neither did the record support an inference that AIChE was damaged in any way. In the spring of 1981 Reber-Friel had delivered to AIChE computer printouts containing the names of exhibitors, addresses, and names of individuals to contact at the exhibitors' offices. Thus, except for the telephone numbers the information on the index cards was duplicative of that received months earlier. At the time of the hearing, AIChE executives testified, AIChE was still in the process of creating its own exhibitor list, using the list provided by Reber-Friel plus its own independent research. It had not yet procured phone numbers. In the spring of 1981, at the request of AIChE, Reber-Friel provided AIChE with its priority system for the assignment of exhibitor space plus an explanation of that system. Finally, in August 1981 Reber-Friel sent cartons of materials to AIChE, eleven of which contained exhibitor files in alphabetical order of correspondence and contracts with each exhibitor. In the absence of any specific allegation that AIChE has not received or does not have readily available to it relevant information or any specific allegation or evidence of damage, it was appropriate for the district court to dismiss the claim. 30 In support of its contention that Reber-Friel's alleged actual use of the documents containing information relating to AIChE's shows, even though not confidential, to solicit exhibitors for its own show amounted to breach of fiduciary duty and unfair competition AIChE cites the New York Court of Appeals in Leo Silfen, Inc. v. Cream, supra, 29 N.Y.2d at 391-92, 328 N.Y.S.2d at 426-27, 278 N.E.2d 636, 639. After holding that Cream could solicit former customers of Silfen because the names were not confidential the court stated: 31 Notably, plaintiffs did not attempt to sustain their allegation that Cream had made copies of plaintiff's secret and confidential files, or used the detail in those files with respect to each customer's 'profile'. The solicitation of plaintiffs' customers was at most the product of casual memory, or, as defendants would have the court believe, coincidence. If there had been a physical taking or studied copying, the court may in a proper case enjoin solicitation, not necessarily as a violation of a trade secret, but as an egregious breach of trust and confidence while in plaintiffs' service. (Emphasis added). 32 In the case cited by the court in support of its statement, Scott & Co. v. Scott, 186 App.Div. 518, 524-25, 174 N.Y.S. 583, 587 (1st Dep't. 1919), it was held that a salesman could solicit the trade of his employer's customers with whom he had done business even though the names of those customers were on a list given him by his employer, but could not copy a list of the employer's customers, with whom he had no personal dealings, and use the list in either his own or another business in competition with his former employer. In Silfen, the defendant did not have direct contact with the plaintiff's customers and, therefore, except for casual memory, the plaintiff's files would have been the primary source of his information. In addition, as the court noted, the files in Silfen contained confidential information in addition to customers' names. The case before us differs significantly. Here Reber-Friel has had access to this information for the past twenty (20) years and has used and gathered the information not only in its capacity as AIChE's agent but as general contractor for exhibitors. In addition, much of the relevant information has been made available to the public through brochures and promotional materials. Reber-Friel's reference to the materials in its possession does not support a claim for breach of trust or unfair competition. 10 33 The pleadings, affidavits and evidence adduced before the district court failed to present a genuine issue of material fact. Summary judgment was appropriate. S.E.C. v. Research Automation Corp., 585 F.2d 31 (2d Cir. 1978). The judgment is 34 Affirmed.