Court Opinion

ID: 4158404
Source: CourtListenerOpinion
Date Created: 2017-04-06 07:09:35.817095+00
Date Added: 2024-06-11T14:22:27.848620
License: Public Domain

STATE OF MICHIGAN

                             COURT OF APPEALS

POLYTORX, LLC,                                                      UNPUBLISHED
                                                                    April 4, 2017
               Plaintiff-Appellant,

v                                                                   No. 330893
                                                                    Washtenaw Circuit Court
ANTOINE NAAMAN, SHERIF EL-TAWIL, and                                LC No. 13-000495-CZ
DONG JOO KIM,

               Defendants,
and

JU YOUNG KIM, JI YONG KIM, and SAMBO
CONSTRUCTION MACHINE COMPANY,
LTD,

               Defendants-Appellees.

Before: M. J. KELLY, P.J., and MURPHY and RONAYNE KRAUSE, JJ.

PER CURIAM.

        Plaintiff, Polytorx, LLC, appeals as of right the trial court’s order granting summary
disposition and dismissing the case with prejudice as against defendants-appellees, Ju Young
Kim, Ji Yong Kim, and Sambo Construction Machine Company, Ltd. We affirm.

         This appeal arises out of a dispute involving a design book and a machine used to mass
produce steel fibers for concrete reinforcement. The relevant underlying facts of this case are set
forth in a previous appeal. See Polytorx, LLC v Univ of Michigan Regents, unpublished opinion
per curiam of the Court of Appeals, issued May 7, 2015 (Docket Nos. 318151, 320989). Briefly,
plaintiff was formed by Luke Pinkerton, who, as a graduate student at the University of
Michigan (U of M), was involved, along with Professor Antoine Naaman, in a project to develop
steel fiber reinforcement technology for concrete. U of M obtained patents for the fibers, naming
Naaman as the inventor, but did not apply for a patent for machinery for manufacturing the
fibers. Plaintiff contends that it and U of M entered into an agreement under which the
production technology would remain a trade secret and be protected by non-disclosure
agreements (NDAs), and plaintiff received a license to produce and sell the fibers. Allegedly,
Naaman began working with Dong Joo Kim and Sambo Construction Machine Company, Ltd
(Sambo) and developed a competing steel fiber reinforcement product; in 2009, Sambo filed a

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patent application for a machine to manufacture those fibers. The patent was published on April
20, 2012, and Pinkerton claimed he discovered it in September of 2012. In March of 2013, he
discovered that the machine and design book he participated in creating were missing from U of
M, and he claimed that Sambo’s machine was directly copied therefrom.

        Plaintiff commenced two simultaneous lawsuits: one against U of M in the Court of
Claims, and the other against the named defendants and defendants-appellees in the instant
appeal. Prior to the prior appeal, the present defendants-appellees were named but did not
participate in this action, appearing only in a limited capacity to contest personal jurisdiction.
The previous panel of this Court determined (1) that there was “no genuine issue of material fact
that the license agreement did not require U of M to protect any trade secrets related to the
production technology” and (2) that Polytorx could not rely on any prior agreements or the
NDAs to establish a right to a trade secret in the production technology. Polytorx, LLC, unpub
op at 9-13. “Because no genuine issue of material fact exists regarding whether U of M was
obligated to protect any trade secrets in the production technology,” the previous panel held that
“any claim against defendants involving trade secrets required dismissal,” which included
Counts II (misappropriation), III (conversion), and IV (unjust enrichment) and portions of
Counts I (tortious interference) and V (civil conspiracy) to the extent they were based on trade
secrets. Id. at 13-14. This Court explicitly did not consider the personal jurisdiction issue, but
remanded for entry of summary disposition as to the then-participating named defendants.

        After the remand, Ju, Ji, and Sambo renewed their objection to personal jurisdiction and
sought to join the other defendants’ motion to dismiss. The trial court concluded that this
Court’s prior holding that the relevant statute of limitations barred plaintiff’s claims necessarily
applied to its claims against Ju, Ji, and Sambo. Consequently, the trial court granted summary
disposition in their favor. However, the trial court denied Ju, Ji, and Sambo’s request for fees
and costs.

       “Whether the law of the case doctrine applies is a question of law that [this Court]
review[s] de novo.” Duncan v Michigan, 300 Mich App 176, 188; 832 NW2d 761 (2013).

       As this Court explained, the law-case-of-the-case doctrine applies in the following
circumstances:

              Under the law of the case doctrine, if an appellate court resolves a legal
       issue and remands to the trial court for further proceedings, the legal question
       determined by the appellate court will not be decided differently in a subsequent
       appeal in the same case if the facts remain materially the same. Stated another
       way, the doctrine is applied when the prior appeal involves the same set of facts,
       the same parties, and the same question of law . . . [In re Wayne Co Treasurer,
       265 Mich App 285, 297; 698 NW2d 879 (2005) (quotation marks and citations
       omitted; alteration in original).]

A trial court’s grant of summary disposition is reviewed de novo. Innovation Ventures v Liquid
Mfg, 499 Mich 491, 506; 885 NW2d 861 (2016).

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        Although Ju, Ji, and Sambo were not parties to the previous appeal, they were named
parties in the lower court case (i.e., the instant case) that was previously appealed.

        To the extent that the counts involved trade secrets claims against Ju, Ji, and Sambo,
Polytorx relies on the same evidence to establish that it had trade secret rights (i.e., the license
agreement, prior agreements, and the NDAs1), so the same set of material facts and question of
law—whether summary disposition was proper based on these same material facts—were at
issue. See In re Wayne Co Treasurer, 265 Mich App at 297. See also Schumacher v Dep’t of
Natural Resources, 275 Mich App 121, 128; 737 NW2d 782 (2007). Accordingly, the law-of-
the-case doctrine applies to the claims to the extent that they involve trade secrets. Polytorx’s
complaint alleged that Ju, Ji, and Sambo collaborated with the other defendants in converting and
misappropriating trade secrets. Therefore, as the previous panel of this Court held on the same
material facts, dismissal of the counts involving trade secrets—which included Counts II
(misappropriation), III (conversion), and IV (unjust enrichment) and portions of Counts I
(tortious interference) and V (civil conspiracy) to the extent they were based on trade secrets—
was required.

        As noted by the previous panel of this Court and the trial court, there were portions of the
tortious interference and civil conspiracy counts that did not involve trade secrets (i.e., slandering
the product resulting in harm to its reputation). However, other than factual allegations
regarding trade secrets, there are no specific factual allegations that Ju, Ji, and Sambo interfered
with a business relationship, expectancy, or contract. The allegations against Ju, Ji, and Sambo
only involved trade secrets, and, as explained above, the counts involving trade secrets required
dismissal. The trial court correctly dismissed all counts. In light of this conclusion, we decline
to consider Polytorx’s argument that the trial court erred in concluding that the claims against Ju,

1
  After the previous appeal, Polytorx submitted various emails, which appear to reference the
NDAs that were alleged to be signed. However, these emails do not materially change the facts
as to the issue. As the previous panel of this Court explained,
       It is unclear from the complaint if Polytorx was claiming that these NDAs
       occurred before or after the license agreement was entered in June 2003. If they
       occurred before, they were not incorporated in the license agreement and could
       not be relied upon to establish a trade secret in the production technology. If they
       occurred after, the license agreement required any modifications to be in writing
       and involve both the parties. There is no allegation, and Polytorx offered no
       independent evidence, that any NDAs between U of M, Polytorx, and anyone
       working in the graduate studies program were entered to modify the license
       agreement. A mere possibility that the claim might be supported by evidence at
       trial is insufficient to survive summary disposition. Maiden v Rozwood, 461 Mich
       109, 121; 597 NW2d 817 (1999). Therefore, Polytorx could not rely on the
       NDAs to establish a trade secret in the production technology. [Polytorx, LLC,
       unpub op at 13.]

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Ji, and Sambo were time-barred. We also decline to consider Ju, Ji, and Sambo’s alternative
ground for affirmance regarding lack of personal jurisdiction.

        Finally, Ju, Ji, and Sambo argue for sanctions under MCR 7.216(C)(1) and fees under
Michigan’s Uniform Trade Secrets Act (UTSA). Their first request is not properly before this
Court because it was not made in a motion brought under MCR 7.211(C)(8) (“A party’s request
for damages or other disciplinary action under MCR 7.216(C) must be contained in a motion
filed under this rule. A request that is contained in any other pleading, including a brief filed
under MCR 7.212, will not constitute a motion under this rule.”). We deny the second request
because we are not persuaded that the trial court abused its discretion in finding that, while
unsuccessful, plaintiff did not pursue its claims in bad faith. Ju, Ji, and Sambo have not set forth
any facts suggesting otherwise. See Ronnisch Constr Group, Inc v Lofts on the Nine, LLC, 499
Mich 544, 551-552; 886 NW2d 113 (2016) (addressing fees and costs under the Construction
Lien Act).

       Affirmed.

                                                             /s/ Michael J. Kelly
                                                             /s/ William B. Murphy
                                                             /s/ Amy Ronayne Krause

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