Court Opinion

ID: 161698
Source: CourtListenerOpinion
Date Created: 2010-08-14 07:15:30+00
Date Added: 2024-06-11T12:36:05.217555
License: Public Domain

F I L E D
                                                                   United States Court of Appeals
                                                                           Tenth Circuit
                     UNITED STATES COURT OF APPEALS
                                                                          OCT 31 2001
                            FOR THE TENTH CIRCUIT
                                                                      PATRICK FISHER
                                                                               Clerk

    CRAIG NEON, INC., an Oklahoma
    Corporation,

                Plaintiff-Appellant,
                                                   Nos. 00-5069 & 00-5087
    v.                                             (D.C. No. 99-CV-63-B)
                                                        (N.D. Okla.)
    TRENT MCKENZIE, NEW RAPID
    OF KANSAS, LLC, a Kansas LLC;
    NEW RAPID OF OKLAHOMA, LLC,
    a Kansas LLC,

                Defendants-Appellees.

                            ORDER AND JUDGMENT            *

Before HENRY , PORFILIO , and MURPHY , Circuit Judges.

         After examining the briefs and appellate record, this panel has determined

unanimously to grant the parties’ request for a decision on the briefs without oral

*
      This order and judgment is not binding precedent, except under the
doctrines of law of the case, res judicata, and collateral estoppel. The court
generally disfavors the citation of orders and judgments; nevertheless, an order
and judgment may be cited under the terms and conditions of 10th Cir. R. 36.3.
argument. See Fed. R. App. P. 34(f); 10th Cir. R. 34.1(G). The cases are

therefore ordered submitted without oral argument.

      The parties to this case each appeal rulings of the district court entered

during the course of a jury trial. Plaintiff challenges the district court’s decision

not to instruct the jury that it could award damages for unjust enrichment. For

their cross appeal, defendants claim that plaintiff’s fraud-and-deceit claim was

preempted by the Oklahoma Uniform Trade Secrets Act (UTSA) and that fraud

was not proved by the appropriate legal standard. We exercise jurisdiction under

28 U.S.C. § 1291 and affirm.

      At defendants’ request, plaintiff prepared sketches and a model for new

signs for defendants’ automobile repair business locations as part of an offer to

replace all the signs at the businesses. The plans were presented at a meeting

between the parties. Although the testimony was conflicting, according to

plaintiff’s president, he insisted that the plans remain confidential, and

defendants’ representatives agreed to keep them confidential. Thereafter,

defendants used plaintiff’s plans to hire another company to construct new signs

for its business outlets. Plaintiff sued, claiming defendants had violated the

UTSA and had committed fraud and deceit when they failed to keep its plans

confidential. Following a trial, a jury returned a verdict in favor of plaintiff on

only its fraud-and-deceit claim, and awarded damages of $75,000. The district

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court refused to give plaintiff’s proffered instruction on unjust enrichment. The

jury made specific findings against plaintiff on its UTSA claim and its request for

punitive damages. The district court entered judgment on the jury’s verdict and

denied defendants’ motion for judgment as a matter of law on their argument that

the UTSA preempted plaintiff’s fraud-and-deceit claim. This appeal and cross

appeal followed.

       The district court’s decision whether to give a particular jury instruction is

reviewed for abuse of discretion.     Doering ex rel. Barrett v. Copper Mountain,

Inc. , 259 F.3d 1202, 1212 (10th Cir. 2001). “We review     de novo the instructions

in their entirety, however, to determine whether the jury was misled. Reversal is

appropriate only if there was prejudicial error.”   Id. (citation omitted). We review

de novo an order denying a party’s request for a judgment as a matter of law, and

will “upset the jury’s conclusion only if the evidence points but one way and is

susceptible to no reasonable inferences supporting the nonmoving party.”      Webb

v. ABF Freight Sys., Inc. , 155 F.3d 1230, 1238 (10th Cir. 1998) (quotation

omitted). There is no dispute that Oklahoma substantive law controls. In this

case based on diversity, we must reach the same conclusion the State’s highest

court would reach. See Blanke v. Alexander, 152 F.3d 1224, 1228 (10th Cir.

1998). In applying Oklahoma law, we afford no deference to the district court’s

legal rulings. See Salve Regina Coll. v. Russell, 499 U.S. 225, 238-40 (1991).

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       We first address plaintiff’s claim that the district court erred in refusing to

instruct the jury that it could award damages for unjust enrichment. Okla. Stat.

tit. 76, § 2 provides damages for deceit as follows: “One who willfully deceives

another, with intent to induce him to alter his position to his injury or risk, is

liable for any damage which he thereby suffers.”        See also Cooper v.

Parker-Hughey , 894 P. 2d 1096, 1100 (Okla. 1995) (“The tort of fraud or deceit

provides a remedy to a person who suffers damages due to his reliance upon

another’s willful misstatement of fact.”). Under Oklahoma law, if a statute’s

language “is clear and unambiguous, the plain meaning of the statute reflects the

legislative intent and no further construction is required or permitted.”    Sullins v.

Am. Med. Response of Okla., Inc.     , 23 P.3d 259, 263 (Okla. 2001).

       The evidence showed that plaintiff created the new sign designs in

anticipation of being hired to replace the signs at defendants’ business outlets. A

favorable outcome of negotiations with defendants would have been a profit for

replacing the signs. Under the circumstances, plaintiff was entitled to

compensatory damages only, as provided by Okla. Stat. tit. 76, § 2. Accordingly,

the district court did not abuse its discretion in refusing to instruct on unjust

enrichment and the jury instructions as a whole did not mislead the jury. We need

not address plaintiff’s argument on the issues appropriate for a remand because

we determine a remand is not warranted.

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       For their cross appeal, defendants first argue that the UTSA preempts

plaintiff’s claim for fraud and deceit. The UTSA “displaces conflicting tort,

restitutionary, and other law of this state providing civil remedies for

misappropriation of a trade secret, [but] does not affect . . . other civil remedies

that are not based upon misappropriation of a trade secret.” Okla. Stat. tit. 78,

§ 92(A) & (B)(2). The Oklahoma courts have not announced a case involving

preemption of a claim of fraud and deceit by the UTSA. Other jurisdictions have

addressed similar questions based on the same statutory language, but the

holdings are not uniform.      Cf. On-Line Techs. v. Perkin Elmer Corp.       , 141 F.

Supp. 2d 246, 258-60 (D. Conn. 2001) (holding unjust enrichment claim

preempted by state uniform trade secrets act, but not addressing whether fraud

claim also preempted; fraud allegations sufficient to withstand dismissal);         Leggett

& Platt, Inc. v. Hickory Springs Mfg. Co.     , 132 F. Supp. 2d 643, 648-49 (N.D. Ill.

2001) (holding claim for tortious interference with contract, based “squarely on a

misappropriation of trade secrets,” preempted by state uniform trade secrets act);

Powell Prods., Inc. v. Marks    , 948 F. Supp. 1469, 1474-75 (D. Colo. 1996)

(declining to apply blanket preemption to all claims arising from circumstances

involving information plaintiff claims is trade secret; holding conversion claim

partly preempted).

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        As the district court noted, and the parties do not dispute, the elements for a

UTSA claim differ from those for a claim of fraud and deceit. There is also no

real dispute that plaintiff’s fraud-and-deceit claim could stand alone even without

proving that the sign plans were a trade secret.   Cf. Powell Prods., Inc. , 948 F.

Supp. at 1474 (“Often, a plaintiff will be able to state claims that do not depend

upon the information in question qualifying as trade secrets.”). Plaintiff’s fraud

claim alleged that defendants used its plans after promising not to do so and,

further, that plaintiff’s president would not have left the sketches and model with

defendants unless they promised not to reveal them to anyone else. Plaintiff

further alleged that at the time defendants kept the sketches and model, they

intended to show them to others to solicit bids for making signs based on

plaintiff’s plans. Plaintiff’s fraud-and-deceit claim does not depend on a finding

that the sign plans were a trade secret. The Oklahoma UTSA does not apply to

“civil remedies that are not based upon misappropriation of a trade secret.” Okla.

Stat. tit. 78, § 92.   Consequently, we conclude that the fraud-and-deceit claim is

not preempted by the UTSA.

        Defendants also claim that the evidence of fraud and deceit was not clear

and convincing, as required by Oklahoma law. Defendants do not allege that the

jury instructions failed properly to instruct the jury on this point. Rather, they ask

this court to reevaluate the witnesses’ testimony. “The jury . . . has the exclusive

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function of appraising credibility, determining the weight to be given to the

testimony, drawing inferences from the facts established, resolving conflicts in

the evidence, and reaching ultimate conclusions of fact.” Okla. Federated Gold

& Numismatics, Inc. v. Blodgett, 24 F.3d 136, 141 (10th Cir. 1994) (quotation

omitted). Upon consideration of the evidence and the inferences to be drawn

from it, we determine that substantial evidence supports the jury’s verdict on the

fraud-and-deceit claim. See id.

      The judgment of the United States District Court for the Northern District

of Oklahoma is AFFIRMED.

                                                    Entered for the Court

                                                    Michael R. Murphy
                                                    Circuit Judge

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