Electronic Data Systems Corp. v. Heinemann

459 S.E.2d 457, 217 Ga. App. 816, 95 Fulton County D. Rep. 2477, 1995 Ga. App. LEXIS 1145
CourtCourt of Appeals of Georgia
DecidedJuly 13, 1995
DocketA95A0256
StatusPublished
Cited by8 cases

This text of 459 S.E.2d 457 (Electronic Data Systems Corp. v. Heinemann) is published on Counsel Stack Legal Research, covering Court of Appeals of Georgia primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Electronic Data Systems Corp. v. Heinemann, 459 S.E.2d 457, 217 Ga. App. 816, 95 Fulton County D. Rep. 2477, 1995 Ga. App. LEXIS 1145 (Ga. Ct. App. 1995).

Opinions

Birdsong, Presiding Judge.

On June 16, 1994, appellant Electronic Data Systems Corporation (EDS) filed suit against its former employees and Mark E. Heinemann, Patricia G. Pelling and their company PowerPlan Consultants, Inc., for breach of employment contracts including solicitation of employees and customers, competition, and use of confidential and proprietary information; misappropriation of corporate opportunities; intentional interference with existing and prospective business relationships; unfair competition; and breach of fiduciary duty.

EDS contends appellees formed PowerPlan Consultants immediately upon their departure from EDS; that appellees admit they are soliciting EDS’s customers so as to sell EDS’s customers a computer software system which is intended to compete directly with the “capital asset tracking” software system which appellees were developing for EDS before they resigned from EDS; that, e.g., on the day after they resigned from EDS, appellees responded on behalf of their new company (PowerPlan) to a request for proposal sent to EDS by one of EDS’s customers which appellees had failed to answer on behalf of EDS before resigning from EDS; and that appellees admit they “target” customers who appellees knew had expressed an interest in EDS’s software system.

Appellees answered and asserted claims for declaratory judgment, injunctions, and other claims. Thirty-four days after the law[817]*817suit was filed, they filed a so-called “Motion for Interim Relief” containing Heinemann’s and Pelling’s affidavits and a “Statement of Material Facts Not in Dispute.” Appellees sought an “interim” declaration that they do not violate their EDS employment contracts and do not misuse trade secrets or violate a duty regarding corporate opportunities. They sought an injunction restraining EDS from invoking their contracts to prevent customers from considering appellees as vendors, contending that unless such relief were granted they would suffer immediate danger of irreparable harm. The legal grounds asserted for this “Motion for Interim Relief” were OCGA §§ 9-4-1 through 9-4-10 (the Declaratory Judgment Act) and OCGA § 9-11-56 of the Civil Practice Act (the summary judgment law).

The motion for interim relief, which appellant EDS calls a “procedural anomaly,” was heard August 18, 1994. On that day, appellees presented to the trial court an order on motion “for declaratory policy on partial summary judgment.” The order as presented states: “This court has considered defendants’ motion for interim relief, and briefs, depositions, affidavits and oral argument in support thereof and opposition thereto. Treating the motion as one for declaratory policy [emphasis supplied] on partial summary judgment, this court hereby ORDERS as follows . . . Covenants Not to Compete 2. The nonsolicitation covenants in Mr. Heinemann’s contract (Section 6) and the nonsolicitation covenants and covenant not to compete in Ms. Pelling’s contract (Section 6) do not include software that would be used for tracking capital assets. 3. Defendant Pelling’s covenant not to compete is void under Georgia law. Trade Secrets 4. There is no evidence that defendant’s capital asset tracking system contains any proprietary software that would constitute trade secrets of plaintiff EDS. 5. Defendants state their intention to continue to develop their capital asset tracking system without use of such trade secrets; if they do so, EDS has no claim against them for violation of EDS trade secrets. SO ORDERED, this 18th day of August, 1994.” From the bench, the trial court struck the word “policy” in the order’s preamble, wrote in the word “judgment,” and signed the order.

Enumerating ten errors, EDS contends the remedy of an “interim declaratory judgment” is alien to Georgia law and is unavailable under the Declaratory Judgment Act, and the procedure for summary judgment was not followed; and that the trial court’s rendition of judgment on this anomalous motion was error for it ignored non-discretionary procedural requirements, ignored the existence of hotly disputed facts, and rendered an advisory opinion. Appellees respond that appellant EDS is a large company headquartered in Texas, formerly headed by H. Ross Perot, and has revenues of $8 billion per year as opposed to appellees’ “fledgling” business. Appellees also allege “intimidation” by EDS in that at Pelling’s deposition, EDS’s [818]*818lawyer wore a tie figured with razor blades. Held:

1. Appellees contend EDS has the “view” that the trial court “was powerless to do anything on an expedited basis.” This is not true. EDS argued that the procedure invoked by appellees to get “interim declaratory judgment” is improper as it would not terminate the proceedings in final judgment as contemplated by OCGA § 9-4-8; that the preliminary injunction sought by appellees is not designed to preserve the status quo as in the usual procedure but asks the court to terminate the lawsuit; that appellees did not properly move for summary judgment under OCGA § 9-11-56 (c); that the suit had been filed less than two months prior to this motion and discovery, though intensive, was not complete, and the affidavits and evidence show issues of fact “literally abound”; and that the trial court should postpone any summary judgment until further discoyery.

Appellees also contend EDS claimed it could not arrange an examination of the product being developed. This is not true. Appellant’s president stated in affidavit that “due to the time constraints imposed by . . . this expedited hearing on defendants’ motion for interim relief . . . EDS has been unable to retain an expert to perform the necessary technical analysis on defendants’ PowerPlan product. Although [appellees say it] was developed ‘from scratch’ without use of any confidential, proprietary, or [trade secrets], EDS believes the circumstantial evidence suggests otherwise. [Affidavit cit.] . . . EDS requests sufficient time to develop direct evidence on these issues.”

It is also not true, as appellees assert, that in EDS’s view there was no procedural vehicle to bring the matter to a head before trial. EDS plainly acknowledged that summary judgment may be appropriate if proper procedure is followed.

2. Assuming, as has been held, that a trial court may sua sponte grant summary judgment even where no such motion is pending, it may do so only “ ‘provided the grant is proper in all other respects’ [cit.],” including procedural notice and opportunity to respond. Spivey v. Safeway Ins. Co., 210 Ga. App. 775 (1) (437 SE2d 641). What appellees asked for in their motion for “interim relief’ was not an injunction to maintain the status quo while the issues were discovered and tried, but a court order phrased by appellees as a “declaratory policy on partial summary judgment” (emphasis supplied), which would prevent EDS from pursuing its lawsuit altogether, without even giving EDS the rights and notices of a summary judgment proceeding.

3.

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Electronic Data Systems Corp. v. Heinemann
459 S.E.2d 457 (Court of Appeals of Georgia, 1995)

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Bluebook (online)
459 S.E.2d 457, 217 Ga. App. 816, 95 Fulton County D. Rep. 2477, 1995 Ga. App. LEXIS 1145, Counsel Stack Legal Research, https://law.counselstack.com/opinion/electronic-data-systems-corp-v-heinemann-gactapp-1995.