Siemens Water Technologies Corp. v. Revo Water Systems, LLC

74 So. 3d 824, 11 La.App. 3 Cir. 248, 2011 La. App. LEXIS 1166, 2011 WL 4578601
Louisiana Court of Appeal·Decided October 5, 2011·No. 11-248·Published·Cited by 1 cases

Opinion

GREMILLION, Judge.

liThe defendants/appellants, Jacob J. David and Revo Water Systems, L.L.C. appeal a jury verdict in favor of Siemens Water Technologies Corp. (Siemens) awarding Siemens monetary damages and injunctive relief. For the reasons that follow, we affirm as amended.

FACTS

David was employed by Pure Water Solutions. In 2004, Pure Water Solutions was acquired by another business, Monosep Corporation. In 2004, David signed a confidentiality agreement with Monosep, which provided:

(b) The term “Confidential Information” shall mean all information (whether or not specifically labeled or identified as confidential), in any form or medium, that is disclosed to, or developed or learned by, Employee in the performance of duties for the Company and that related to the present or planned business, trade secrets, products, services, customers and customers list, employees, price and cost information, marketing information, financial plans, research, research programs, apparatus, processes, techniques, technologies or developments of the Company or its subsidiaries or affiliates, or of third parties (i) with whom the Company or its subsidiaries or affiliates does business, or is preparing to do business, or (ii) from whom the Company or its subsidiaries or affiliates receives or has received information.

David was Monosep’s representative for selling or leasing of portable reverse osmosis water desalination units (RO units) used on offshore facilities to produce potable water. In December 2005, Monosep was acquired by Siemens, then doing business as U.S. Filter Siemens.

The design of the RO unit was developed in the late 90s by Jason Badeaux, an employee of Pure Water Systems. In June 2006, David asked Badeaux if he could observe and assist in the construction of a unit. David’s stated reason for wanting to observe and help was that greater knowledge of the unit would make him a better salesman. David was allowed to assist in the fabrication of a unit 12being prepared for Shell Oil Company, one of David’s customers. David submitted his resignation to Siemens in September 2006. Revo Water Systems was formed in December 2006 and entered the RO unit market in March 2007.

In mid-2008, Michael Robicheaux, the former owner of Monosep and under contract to Siemens, noticed that the RO unit business was slowing. He requested a market analysis be performed, but left Siemens before the results were reported. In July 2008, Badeaux was contacted about a problem with a RO unit at a location he was certain no Siemens unit had been leased to. He dispatched a Siemens technician to the location. That technician verified that the unit was not built by Siemens, but by a company known as Revo Water Systems. Further investigation by *827 Badeaux convinced him that the Revo unit was a copy of the Siemens units.

Siemens instituted suit against Revo and David for breach of the confidentiality agreement, violation of the Uniform Trade Secrets Act (La.R.S. 51:1341, et seq), and “trade dress” infringement. The suit sought monetary damages and a permanent injunction. During the course of discovery, Siemens discovered that schematics of the electrical components of its unit were in David’s possession, and that in March 2006, David had forwarded these diagrams to Presley Turner, with whom he founded Revo. However, it appears from the evidence that Turner was unable to print the schematics. They were nonetheless printed at some point. According to several witnesses, the wiring of the Revo unit was copied from the Siemens unit.

The matter went to trial before a jury in June 2010. The jury returned a verdict in favor of Siemens and against Revo and David. The jury found that Siemens held trade secret information regarding the RO unit; that Revo and David improperly, willfully, and maliciously took those trade secrets; and that Revo and |sDavid engaged in unfair trade practices. Siemens was awarded $1,482,000 in damages. It is from this judgment that Revo and David appeal.

ASSIGNMENTS OF ERROR

Revo and David assign the following errors:

1. The jury’s findings that Plaintiff held trade secret information related to its reverse osmosis units and that Defendants willfully, maliciously, and improperly took such information were incorrect.
2. The jury erroneously found that Defendants engaged in unfair trade practices and unfair competition with respect to Siemens.
3. The jury’s damage award was incorrect because it was not supported by the facts or law.
4. The trial court erred in denying Defendants’ motion for directed verdict.
5. The trial court erred in denying Defendants’ motion for judgment notwithstanding the verdict and/or motion for new trial.
6. The trial court erred in granting Plaintiffs request for an injunction against Defendants.
7. The trial court erred in allowing royalties beyond the trial date to be awarded to Plaintiff.

At oral argument, the parties stipulated that the issues addressed by assignments of error six and seven have been resolved. Further, no judgment was ever signed by the trial court, although the trial court ruled on these issues. We deem assignments of error six and seven abandoned.

ANALYSIS

The first two assignments of error address findings of fact on the jury’s part. These are reviewed on appeal under the manifest error standard. In ascertaining whether the fact finder’s determinations are manifestly erroneous, the court of appeal will look at the record to determine whether a reasonable factual basis exists for the finding and then determine whether the record establishes that the finding is clearly wrong. Stobart v. State through Dept. of Transp. and Dev., 617 So.2d 880 (La.1993). The issue we must resolve, then, is not whether the jury was right or wrong, but whether is conclusions were reasonable. Id. Even if we feel that our evaluations and inferences are more reasonable than the jury’s, we must still uphold the verdict where there are conflicting accounts in the record. Id. A *828 reasonable basis for findings of fact in the record precludes us from reversing those findings. Id.

We find that a reasonable basis does exist in the record to support the jury’s findings. The timing of David’s departure from Siemens after e-mailing the wiring schematics to his future co-member of Revo, Turner, coupled with his expression of interest in learning how the units are constructed shortly before he departed Siemens, lends credence to the notion that in the months leading up to his departure, David was preparing to enter into direct competition with Siemens using Siemens’ own schematics and methods. The fact that David contacted an attorney to determine whether entering into competition with Siemens by copying Siemens’ units bolsters this notion. There certainly were explanations by David for his conduct and the actual innocence of his actions, but these were subject to the jury’s determinations of credibility. Apparently, the jury did not believe David’s explanations.

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Siemens Water Technologies Corp. v. Revo Water Systems, LLC, 74 So. 3d 824, 11 La.App. 3 Cir. 248, 2011 La. App. LEXIS 1166, 2011 WL 4578601 (La. Ct. App. 2011).

74 So. 3d 824 (Siemens Water Technologies Corp. v. Revo Water Systems, LLC) — published by Counsel Stack Legal Research, free access to 12M+ legal documents.

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