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Bernhard Mcc, LLC v. Zeringue

Court of Appeals of Louisiana, Fifth Circuit

May 30, 2018

BERNHARD MCC, LLC
v.
KURT M. ZERINGUE, ROBERT G. MAYFIELD, SR., ROBERT G. MAYFIELD, JR., CECIL PASSMAN, JAMES BRIAN CARLISLE & NICHOLAS ZAZULAK

          ON APPEAL FROM THE TWENTY-FOURTH JUDICIAL DISTRICT COURT PARISH OF JEFFERSON, STATE OF LOUISIANA NO. 774-865, DIVISION "G" HONORABLE E. ADRIAN ADAMS, JUDGE PRESIDING

          COUNSEL FOR PLAINTIFF/APPELLEE, BERNHARD MCC, LLC Mark R. Beebe Timothy M. Brinks William D. Shea Kellen J. Mathews

          COUNSEL FOR DEFENDANT/APPELLANT, KURT M. ZERINGUE, ROBERT G. MAYFIELD, SR, ROBERT G. MAYFIELD, JR., CECIL PASSMAN, JAMES BRIAN CARLISLE & NICHOLAS ZAZULAK Robert E. Couhig, Jr. Jason A. Cavignac Jack M. Capella

          Panel composed of Judges Jude G. Gravois, Marc E. Johnson, and Stephen J. Windhorst

          MARC E. JOHNSON JUDGE.

         This case involves claims of violations of the Louisiana Uniform Trade Secrets Act ("LUTSA") and the Louisiana Unfair Trade Practices Act ("LUTPA") brought by an employer against several of his former employees. In this appeal, Defendants, who are the former employees, appeal the trial court's granting of a preliminary and permanent injunction in favor of their former employer. For the reasons that follow, we vacate the judgment granting the injunction and remand the matter for further proceedings.

         FACTS & PROCEDURAL HISTORY

         On August 9, 2017, Bernhard MMC, LLC ("Bernhard") filed a petition for preliminary and permanent injunctions against six of its former employees: Kurt Zeringue, Robert Mayfield, Sr., Robert Mayfield Jr., Cecil Passman, James Carlisle, and Nicholas Zazulak (collectively "Defendants"). Bernhard alleged that Defendants were long-time employees of MMC entities of which Bernhard acquired membership interests in October 2015. Bernhard asserted that after the acquisition, Defendants became employees of Bernhard and continued in their same duties. Bernhard contended that as employees, each of the Defendants had access to confidential materials of the company, including employee wage rates, pricing structure information, bid information, estimates, proposals and other information pertaining to its business operations.[1]

         In May 2017, Defendants resigned their employment with Bernhard and began working with Regional Mechanical Services, LLC ("RMS"), a competitor of Bernhard. Bernhard alleged Defendants failed to return its confidential and proprietary information upon their termination and have used the misappropriated information to solicit and bid commercial construction projects on behalf of RMS in direct competition with Bernhard. It asserted Defendants' use of the confidential and proprietary information violates both the LUTPA, in that Defendants' use of the information is an unfair method of competition and constitutes unfair or deceptive acts, and the LUTSA, in that the information used by Defendants constitutes a trade secret.

         Bernhard alleged Defendants' use of the confidential and proprietary business information resulted in lost revenues, loss of customers, loss of business goodwill, loss of business opportunities, loss of skilled labor, and loss of market share. As such, Bernhard sought preliminary and permanent injunctions against Defendants to prohibit their continued use of its confidential business information.

         Defendants opposed the petition for injunctive relief, arguing the damages alleged by Bernhard were monetarily compensable and, thus, Bernhard would not suffer irreparable injury. A hearing on the preliminary injunction was held on August 23, 2017.[2] During the hearing, Bernhard presented the testimony of its president, Philip Catanzaro, and submitted various exhibits, including confidentiality agreements, the Bernhard Employee Handbook, and various emails. In their defense, Defendants presented the testimony of one defendant, Kurt Zeringue. The trial court took the matter under advisement and subsequently rendered judgment on August 31, 2017, granting Bernhard's petition for preliminary and permanent injunction. Defendants filed a motion for appeal from this judgment on September 14, 2017, within the 15-day time period to take an appeal from a preliminary injunction under La. C.C.P. art. 3612. The trial court granted the motion for appeal on the same day.

         Also on the same day, Bernhard filed a motion seeking to modify the August 31, 2017 judgment. In its motion, Bernhard noted that the judgment granted both a preliminary and a permanent injunction even though the only issue before the court was the preliminary injunction. As such, Bernhard sought a modification of the judgment to reflect only the granting of a preliminary injunction. Bernhard also requested the judgment be amended to specify the act or acts restrained by the judgment. Defendants objected to the motion to modify asserting that Bernhard was not entitled to a substantive modification of the judgment. On September 18, 2017, well after the order of appeal was signed, the trial court signed an amended judgment granting Bernhard's petition for preliminary injunction. This amended judgment was identical to the August 31, 2017 judgment except that it removed the word "permanent, " clarifying that only a preliminary injunction had been granted.

         One week later on September 25, 2017, Bernhard filed a second motion for modification of judgment again asking the trial court to modify its August 31, 2017 judgment. Like its first motion for modification, Bernhard again requested the trial court amend its judgment to describe the acts from which Defendants were enjoined. In its memorandum in support of its second motion for modification, Bernhard alternatively requested a partial new trial for the sole purpose of determining the specific conduct from which Defendants were enjoined. On September 27, 2017, without a hearing, the trial court signed a second amended judgment that granted Bernhard's petition for preliminary injunction, prohibited Defendants from certain acts, and ordered Defendants to return all of Bernhard's confidential and proprietary business information and any other material constituting a trade secret. Although maintaining that the two amended judgments were null and void, Defendants timely filed motions for appeal from both the amended judgment as a precaution.

         ISSUES

         Defendants first argue that the two amended judgments are null and void because they substantively alter the original judgment that had been appealed. Second, Defendants contend the original judgment granting injunctive relief failed to describe the prohibited acts and, thus, is fatally defective. Third, Defendants assert injunctive relief was not warranted ...


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