Speece v. Speece

2017 Ohio 7950

• Court: Ohio Court of Appeals
• Decided: September 29, 2017
• Docket: 2016-G-0100
• Status: Published

Opinion

[Cite as Speece v. Speece, 2017-Ohio-7950.]

IN THE COURT OF APPEALS

ELEVENTH APPELLATE DISTRICT

GEAUGA COUNTY, OHIO

MARCIA SPEECE, : OPINION

Plaintiff-Appellee, : CASE NO. 2016-G-0100 - vs - :

BRYAN SPEECE, :

Defendant-Appellant. :

Civil Appeal from the Geauga County Court of Common Pleas. Case No. 2015 DC 00460.

Judgment: Affirmed.

Joseph G. Stafford, Stafford Law Co., L.P.A., 55 Erieview Plaza, 5th Floor, Cleveland, OH 44114 (For Plaintiff-Appellee).

John V. Heutsche, John V. Heutsche Co., L.P.A., Hoyt Block Building, 700 West St. Clair Avenue, Suite 220, Cleveland, OH 44113-1274; and Elaine Tassi, 34955 Chardon Road, Willoughby Hills, OH 44094 (For Defendant-Appellant).

TIMOTHY P. CANNON, J.

{¶1} Appellant, Bryan Speece, appeals from the October 25, 2016 judgment

entry of the Geauga County Court of Common Pleas, denying his motion for a

protective order, issued in the pending divorce proceedings between appellant and

appellee, Marcia Speece. For the following reasons, the trial court’s judgment is

affirmed. {¶2} During their marriage, the parties derived most of their income from

EnTech Ltd. Appellant is the sole owner of EnTech. On April 11, 2016, appellee filed a

motion to appoint an expert witness to conduct a business evaluation and forensic

accounting of EnTech. Appellee contended this information was necessary in order to

identify appellant’s income and to have an expert assign a value to the business. The

trial court granted the motion, ordering both parties to cooperate in the evaluation and

accounting. Appellee’s expert witness requested numerous documents from appellant

in order to perform the evaluation and accounting, including EnTech’s financial records,

client lists, and Non-Disclosure Agreements (“NDAs”). Appellant produced some of the

requested documents; he refused, however, to release certain documents until a

protective order was executed by the parties and counsel. Appellant argued those

documents were confidential and their release could expose EnTech to liability.

{¶3} On May 2, 2016, a magistrate’s order was issued, which ordered the

parties to execute an agreed protective order by May 9, 2016, with regard to information

related to EnTech. Within three days of filing the protective order, appellant was to

provide appellee with the requested documents. Appellant was also to provide appellee

with copies of NDAs within seven days of filing the protective order. Appellant was

permitted to redact anything necessary to remain in compliance with the NDAs. If no

agreed protective order was reached on or before May 9, 2016, the magistrate

instructed counsel for appellant to contact the court and request a telephone

conference. The magistrate also ordered appellee to respond to appellant’s request for

production of documents and that the parties be deposed on alternate days. There is

no indication in the record that an agreed protective order was reached by May 9, 2016.

2 {¶4} On August 15, 2016, the magistrate ordered that, on or before August 19,

2016, appellant was to produce the requested documents to appellee’s counsel. The

magistrate enumerated the items appellant was to produce and identified which items

were deemed confidential. The magistrate provided protection for the confidential items

by ordering that all documents deemed confidential and any reports generated from

those documents were prohibited from disclosure to individuals other than the parties,

counsel, expert witnesses identified in the matter, and the court. The magistrate further

provided that any additional documents appellant wished to have identified as

confidential would be considered confidential in the event the parties agreed in writing to

keep them confidential. The magistrate also determined there existed NDAs that

contained information appellant was obligated to keep confidential. The magistrate

ordered that, on or before August 25, 2016, appellant was to provide those NDAs, under

seal, to the magistrate, and that they were not to be filed with the clerk of courts. Upon

review of those documents, the trial court would determine whether any portion of the

documents should be redacted and how they could be used. The magistrate ordered

appellant to appear for deposition on September 17, 2016, and ordered appellee to

appear for deposition on September 25, 2016.

{¶5} On August 25, 2016, appellant filed a motion to set aside the magistrate’s

August 15, 2016 order. Appellant argued, in pertinent part, that the magistrate’s order

did not adequately protect confidential information and allowed exposure of confidential

information to appellee’s expert witness without any written agreement from the witness

to keep the information confidential.

3 {¶6} The trial court entered judgment on September 12, 2016, denying

appellant’s motion to set aside the August 15, 2016 magistrate’s order. The court

ordered appellant to produce the documents set forth in the magistrate’s order by

September 16, 2016. The court also ordered appellant to provide a copy of any

confidentiality agreements or NDAs he claimed were confidential for an in camera

review on or before September 16, 2016.

{¶7} The materials ordered in the September 12, 2016 judgment entry were

delivered to appellee’s counsel on September 16, 2016. Appellant maintains the NDAs

were delivered to the court.

{¶8} Appellant was deposed on September 17, 2016, but appellant’s counsel

terminated the deposition after appellee’s counsel sought to obtain confidential

information about EnTech.

{¶9} On September 21, 2016, appellant filed a “Motion to Limit Examination,

Motion for Protective Order enjoining the dissemination of Bryan Speece deposition

transcript, video and audio and requiring the same to be filed under seal.” Appellant

requested that the court enter a protective order, and also requested an order (1)

limiting the scope of examination of defendant during his deposition; (2) enjoining any

person from disseminating the September 17, 2016 deposition transcript; (3) requiring

the deposition transcript to be filed under seal and marked “confidential-to be opened

only by court order;” (4) prohibiting questions pertaining to certain subject areas; (5)

adhering to previous orders concerning the time allotted to depose each party; and (6)

stipulating that all depositions be conducted in a manner suitable to the legal profession.

Appellant maintained that a protective order sealing the deposition transcript was

4 necessary because during his deposition appellee’s counsel bullied and attempted to

humiliate him in order to extract confidential information about a pending federal lawsuit

between EnTech and appellee. Attached to the motion was an affidavit from appellant;

however, appellant did not provide the trial court with a copy of the September 17, 2016

deposition transcript or a statement showing the efforts made to resolve the dispute.

{¶10} Prior to the trial court’s ruling on his September 21, 2016 motion for a

protective order, appellant filed a second motion for a protective order on October 17,

2016, entitled, “Motion for Protective Order enjoining Plaintiff and her counsel from

inquiring of Bryan Speece any issue covered by his Non-disclosure agreements.” In the

October 17, 2016 motion, appellant stated, “[d]efendant renews the motion for a

protective order filed September 21, 2016.” However, this October motion appears to

be an entirely new request for a protective order, because appellant did not file a motion

to amend his September 21, 2016 motion. Appellant argued that the NDAs prevented

him from discussing certain confidential information, considered trade secrets.

Appellant maintained that discussion of the information could expose him to liability.

{¶11} On October 25, 2016, the trial court entered a decision, stating it denied

the motion “filed by defendant * * * on September 21, 2016.” The judgment entry states

the trial court denies “Mr. Speece’s ‘Motion to Limit Examination Motion for Protective

Order enjoining the dissemination of Bryan Speece deposition transcript, video and

audio and requiring the same to be filed under seal.’” The trial court’s decision and

judgment entry make no reference to appellant’s October 17, 2016 motion. That motion

is still pending in the trial court.

5 {¶12} On November 18, 2016, appellant filed a timely appeal from the trial

court’s October 25, 2016 decision.

{¶13} Appellant asserts two assignments of error on appeal:

[1.] The trial court committed error prejudicial to Appellant by failing to provide any protection from the disclosure of non-parties’ confidential information and trade secrets thereby exposing Appellant to liability.

[2.] The trial court committed error prejudicial to Appellant in denying Appellant’s motions for protective order dated September 21, 2016, and dated October 17, 2016.

{¶14} We review appellant’s assignments of error together. Because appellant’s

second motion for a protective order filed October 17, 2016, has not been ruled upon

and is still pending in the trial court, we will not consider appellant’s arguments as they

pertain to that motion. Our analysis is confined to the trial court’s denial of appellant’s

first motion for a protective order, filed September 21, 2016.

{¶15} Appellant argues the trial court erred in denying his motion for a protective

order because the deposition testimony he sought to protect included discussion of

trade secrets, which should have been protected pursuant to Civ.R. 26(C)(7). In

opposition, appellee argues that appellant has failed to provide evidence to support his

claim that the information constitutes trade secrets under R.C. 1333.61.

{¶16} Civ.R. 26(C) governs protective orders and provides, in pertinent part:

Upon motion by any party or by the person from whom discovery is sought, and for good cause shown, the court in which the action is pending may make any order that justice requires to protect a party or person from annoyance, embarrassment, oppression, or undue burden or expense, including one or more of the following: * * * (7) that a trade secret or other confidential research, development, or commercial information not be disclosed or be disclosed only in a designated way; (8) that the parties simultaneously file specified

6 documents or information enclosed in sealed envelopes to be opened as directed by the court.

***

Before any person moves for a protective order under this rule, that person shall make a reasonable effort to resolve the matter through discussion with the attorney or unrepresented party seeking discovery. A motion for a protective order shall be accompanied by a statement reciting the effort made to resolve the matter in accordance with this paragraph.

{¶17} The trial court has discretionary power in the regulation of discovery, and

its decisions will not be overturned absent an abuse of that discretion. Mauzy v. Kelly

Servs., Inc., 75 Ohio St.3d 578, 592 (1996) (citations omitted). “Such discretion,

however, is not without limits.” Id. “‘An appellate court will reverse the decision of a trial

court that extinguishes a party’s right to discovery if the trial court’s decision is

improvident and affects the discovering party’s substantial rights.’” Id., quoting

Rossman v. Rossman, 47 Ohio App.2d 103, 110 (8th Dist.1975).

{¶18} R.C. 1333.61(D) defines a trade secret, in relevant part, as:

[I]nformation, including * * * any business information or plans, financial information, or listing of names, addresses, or telephone numbers, that satisfies both of the following:

(1) It derives independent economic value, actual or potential, from not being generally known to, and not being readily ascertainable by proper means by, other persons who can obtain economic value from its disclosure or use.

(2) It is the subject of efforts that are reasonable under the circumstances to maintain its secrecy.

Pursuant to R.C. 1333.65, “a court shall preserve the secrecy of an alleged trade secret

by reasonable means that may include granting protective orders in connection with

discovery proceedings, holding in-camera hearings, sealing the records of the action,

7 and ordering any person involved in the litigation not to disclose an alleged trade secret

without prior court approval.”

{¶19} The Supreme Court of Ohio has established a six-factor test for

determining whether information constitutes a trade secret pursuant to R.C. 1333.61:

(1) The extent to which the information is known outside the business; (2) the extent to which it is known to those inside the business, i.e., by the employees; (3) the precautions taken by the holder of the trade secret to guard the secrecy of the information; (4) the savings effected and the value of the holder in having the information as against competitors; (5) the amount of effort or money expended in obtaining and developing the information; (6) the amount of time and expense it would take for others to acquire and duplicate the information.

State ex rel. The Plain Dealer v. Ohio Dept. of Ins., 80 Ohio St.3d 513, 524-525 (1997);

see also 84 Lumber Co., L.P. v. Houser, 188 Ohio App.3d 581, 2010-Ohio-3683, ¶63

(11th Dist.).

{¶20} “A possessor of a potential trade secret must take some active steps to

maintain its secrecy in order to enjoy presumptive trade secret status, and a claimant

asserting trade secret status has the burden to identify and demonstrate that the

material is included in categories of protected information under the statute.” Fred

Siegel Co., L.P.A. v. Arter & Hadden, 85 Ohio St.3d 171, 181 (1999), citing Plain

Dealer, supra, at 525; see also Ramun v. Ramun, 7th Dist. Mahoning No. 08 MA 185,

2009-Ohio-6405, ¶31 (citations omitted) (“The burden of showing that testimony or

documents are confidential or privileged rests with the party seeking to exclude it.”).

{¶21} Appellant’s September 21, 2016 motion for protective order requested that

the trial court file appellant’s September 17, 2016 deposition testimony under seal.

However, appellant did not provide the trial court with a copy of the deposition transcript

8 or any other evidence to support that the information sought to be protected constitutes

information that should be protected. Appellant provided the trial court with an affidavit,

but none of the sworn testimony supports appellant’s contention that the information he

seeks to protect constitutes information that should be protected. Appellant has failed,

both in the trial court and on appeal, to offer any evidence or argument in support of his

claim.

{¶22} Appellant maintains that filing the deposition transcript unsealed would

have amounted to dissemination and publication of the confidential information he was

seeking to protect. However, there is no indication in the record that appellant

requested an in camera review of the deposition transcript or provided any other

evidence in support of his claim. Without any evidence before it, the trial court was

unable to determine whether to grant the relief sought by appellant. Accordingly, the

trial court found that appellant “failed to provide a transcript or other evidence showing

the information sought was a trade secret and entitled to protection.” The trial court did

not abuse its discretion when it denied appellant’s September 21, 2016 motion for a

protective order.

{¶23} Moreover, pursuant to Civ.R. 26(C), appellant failed to provide “a

statement reciting the effort made to resolve the matter[.]” This failure alone was

sufficient reason for the trial court to deny appellant’s September 21, 2016 motion for a

protective order. See Dennis v. State Farm Ins. Co., 143 Ohio App.3d 196, 200 (7th

Dist.2001).

{¶24} While appellant may not have provided the trial court or this court with the

appropriate information essential to establish the need for a protective order, there are a

9 few principles to keep in mind when assessing the propriety of issuing a protective

order.

{¶25} First, “[d]iscovery has historically never been open to the public. Indeed,

noting that discovery proceedings were not open to the public at common law, the

United States Supreme Court has held that ‘pretrial depositions are not public

components of a civil trial.’” Adams v. Metallica, Inc., 143 Ohio App.3d 482, 487 (1st

Dist.2001), quoting Seattle Times Co. v. Rhinehart 467 U.S. 20, 33 (1984).

“‘Jurisdictions that require filing of discovery materials customarily provide that trial

courts may order materials not be filed or that they be filed under seal.’” Id., quoting

Seattle Times, supra, at 33, fn. 19.

{¶26} Second, the focus of attention in the trial court and the briefing in this case

has been on information that might constitute a trade secret. See Civ.R. 26(C)(7) (the

proponent’s obligation is to set forth a basis to establish that the information sought to

be protected is “a trade secret or other confidential research, development, or

commercial information”). However, Civ.R. 26(C) anticipates application of a protective

order to a broad range of information, not just to trade secrets.

{¶27} Third, while the burden is initially on the party proposing the need for the

order, the “trial court must balance the competing interests to be served by allowing

discovery to proceed against the harm which may result.” Arnold v. Am. Natl. Red

Cross, 93 Ohio App.3d 564, 576 (8th Dist.1994) (citation omitted). In this case, while

appellee and her expert may be entitled to the information from EnTech in order to

arrive at a value for the marital asset, appellee has not provided a reason that suggests

a need for her, her expert, or her attorney to view the information without restriction.

10 {¶28} The trial court ordered the parties to reach an agreement regarding the

protective order. While it is not clear from the record why the parties failed to reach an

agreement in this regard, that failure should not impede the court’s consideration.

Otherwise, an opposing party could always thwart the objective simply by refusing to

agree to otherwise reasonable terms. Here, while it appears the competing interests

would weigh heavily in favor of granting a protective order, as there does not appear to

be any harm that would be caused to appellee in doing so, the record does not contain

sufficient information for this court to determine appellant is entitled to the order he

seeks. Absent such information, we cannot say the trial court abused its discretion.

{¶29} Appellant’s assignments of error are without merit.

{¶30} For the foregoing reasons, the judgment of the Geauga County Court of

Common Pleas is affirmed.

CYNTHIA WESTCOTT RICE, P.J.,

THOMAS R. WRIGHT, J.,

concur.