Richdale Development Co. v. McNeil Co.

508 N.W.2d 853, 244 Neb. 694, 1993 Neb. LEXIS 278
CourtNebraska Supreme Court
DecidedDecember 10, 1993
DocketS-91-814
StatusPublished
Cited by25 cases

This text of 508 N.W.2d 853 (Richdale Development Co. v. McNeil Co.) is published on Counsel Stack Legal Research, covering Nebraska Supreme Court primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Richdale Development Co. v. McNeil Co., 508 N.W.2d 853, 244 Neb. 694, 1993 Neb. LEXIS 278 (Neb. 1993).

Opinion

Hastings, C.J.

Richdale Development Company brought this action against McNeil Company, Inc., seeking injunctive relief and monetary damages based on deceptive trade practices, misappropriation of trade secrets, unjust enrichment, and conversion. Richdale appeals the order of the district court in which the court granted injunctive relief but dismissed Richdale’s claims for damages.

An injunction is a remedy available through an equity action. In an appeal of an equity action, an appellate court tries factual questions de novo on the record and reaches a conclusion independent of the findings of the trial court; provided, where credible evidence is in conflict on a material issue of fact, an appellate court considers and may give weight to the fact that the trial judge heard and observed the witnesses and accepted one version of the facts rather than another. K N Energy, Inc. v. Cities of Broken Bow et al., ante p. 113, 505 N.W.2d 102 (1993); Chambers-Dobson, Inc. v. Squier, 238 Neb. 748, 472 N.W.2d 391 (1991).

McNeil is a Nebraska corporation engaged in the construction of residential and commercial projects in Omaha. Patrick McNeil testified that he was the owner of McNeil and that in 1989 he was approached about the possibility of building an apartment complex at 144th and F Streets. McNeil had not previously constructed an apartment complex, and Patrick McNeil felt it necessary to gather information about the costs involved in this type of project. In late September 1989, he went to the Vanderbilt apartment complex, which was under *696 construction, in order to do research on construction costs of multifamily units. Patrick McNeil stated that when he went into the Vanderbilt complex, he looked around and saw a set of plans in one of the units. He picked the plans up and took them back to his office. At the time, he did not know who was building the complex and did not ask permission of anyone to take the plans. Patrick McNeil testified: “I shouldn’t have taken the plans. It was an error in judgment. I was walking through. There was a plan sitting there; probably shouldn’t have been there and I probably shouldn’t have taken it.”

Patrick McNeil subsequently removed the names of the architects from the Vanderbilt plan, made changes to the window design, and had 20 photocopies made of 9 pages of the plan. He then sent those copies out to subcontractors for preliminary numbers, indicating to them that the project was to be built on Fort Street. Patrick McNeil testified that he never arrived at any conclusion about what it would cost to construct an apartment complex similar to the Vanderbilt. When he heard that he was being sued, he gathered up all the plans and destroyed whatever he had. He tried to contact David Slosburg, a partner in Richdale, the builder of the Vanderbilt complex. Patrick McNeil stated that he believed that Slosburg thought McNeil was going to build from the Vanderbilt plan and that he wanted to tell Slosburg that he was not using the plan in that manner.

Slosburg testified that in 1985, he contacted architect Terry Molik for the purpose of developing plans for an apartment complex in Omaha. Molik designed the plans for Richdale’s Lion’s Head complex and was paid approximately $37,000 for his services. Based on marketing exposure and feedback from tenants, Richdale revised those plans for the construction of its Vanderbilt complex. Molik was paid an additional $37,000 for his architectural services with respect to the Vanderbilt complex. Slosburg testified that in his opinion, the total cost for the Vanderbilt plans would be $250,000, based on “the input that went into it, the time that went into it, and the competitive advantage as far as — not only has that community been a success but the predecessor design was a success.” Slosburg also stated that he would not sell the plans to someone who intended *697 to use them in the same marketplace as Richdale, but if he sold, them to someone in a different marketplace, it would be at a cost of $125,000. He stated that Richdale had taken steps to protect the integrity of its plans, including numbering each set and requiring deposits and the return of the plans from subcontractors. Although the city of Omaha required a set of plans to be filed in order to issue construction permits, Slosburg stated that he did not intend to place his plans and specifications into the public domain by complying with the city ordinance. Richdale did not attempt to copyright the plans.

The district court found that McNeil’s misappropriation of the plans constituted a deceptive trade practice entitling Richdale to injunctive relief, but that Richdale’s claims for misappropriation of trade secrets, unjust enrichment, and conversion were preempted by the federal Copyright Act of 1976, 17 U.S.C. § 101 et seq. (1988). Richdale appeals, asserting that the court erred in (1) finding that McNeil’s misappropriation of Richdale’s plans was preempted by the federal Copyright Act of 1976 and (2) finding that Richdale had not sustained any damages by way of misappropriation, unfair competition, conversion, or unjust enrichment.

Richdale alleges in its amended petition filed January 9, 1990, generally that it is engaged in the design and construction of residential properties in the Omaha area and, to accomplish that end, had retained an architectural firm to prepare blueprints, plans, and specifications for a particular type of apartment building, which items it refers to generally as its “plans.” It is further alleged that Richdale took steps to keep the plans in the strictest of confidence and that the plans are valuable trade secrets. Richdale goes on to assert that McNeil, without authority, came into possession of a copy of the plans, erased certain identifying characteristics, and misappropriated the plans with the intent to use them for its own benefit or that of a third party.

The amended petition goes on to state that as a result of the facts alleged, it requests the issuance of an injunction and prays for damages for misappropriation of trade secrets, unjust enrichment as a result of the violation of Richdale’s proprietary rights, and conversion.

*698 Neb. Rev. Stat. § 87-302 (Cum. Supp. 1992) of Nebraska’s Uniform Deceptive Trade Practices Act provides in pertinent part:

(a) A person engages in a deceptive trade practice when, in the course of his or her business, vocation, or occupation, he or she:
(1) Passes off goods or services as those of another;
(2) Causes likelihood of confusion or of misunderstanding as to the source, sponsorship, approval, or certification of goods or services.

Under the provisions of Nebraska’s Ttade Secrets Act, Neb. Rev. Stat. § 87-501 et seq. (Cum. Supp. 1992), a trade secret is defined as follows:

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Bluebook (online)
508 N.W.2d 853, 244 Neb. 694, 1993 Neb. LEXIS 278, Counsel Stack Legal Research, https://law.counselstack.com/opinion/richdale-development-co-v-mcneil-co-neb-1993.