         [Cite as Boehm v. Black Diamond Casino Events, LLC, 2018-Ohio-2379.]
                 IN THE COURT OF APPEALS
             FIRST APPELLATE DISTRICT OF OHIO
                  HAMILTON COUNTY, OHIO



ROGER BOEHM, JR.,                               :          APPEAL NO. C-170339
                                                           TRIAL NO. A-1406309
        Plaintiff/Third-Party                   :
        Defendant-Appellee,                                          O P I N I O N.
                                                :
  vs.
                             :
BLACK DIAMOND CASINO EVENTS,
LLC,                         :

        Intervenor/Third-Party
        Plaintiff-Appellant.                    :




Civil Appeal From: Hamilton County Court of Common Pleas

Judgment Appealed From Is: Affirmed

Date of Judgment Entry on Appeal: June 20, 2018


Eugene R. Butler, for Plaintiff/Third-Party Defendant-Appellee,

Edward J. Collins and Zachary D. Bahorik, for Intervenor/Third-Party Plaintiff-
Appellant.
                     OHIO FIRST DISTRICT COURT OF APPEALS


M ILLER , Judge.

       {¶1}    Intervenor/third-party plaintiff-appellant Black Diamond Casino Events,

LLC (“Black Diamond”) appeals the decision of the trial court to grant plaintiff/third-

party defendant-appellee Roger Boehm, Jr.’s (“Boehm”) motion for involuntary

dismissal under Civ.R. 41(B)(2). For the following reasons, we affirm.

                         Facts and Procedural History

       {¶2}    Black Diamond operates a casino-games-themed events business for

corporate and private parties. Roger Boehm, Jr., a former employee of Black Diamond,

approached the owners about buying two of the four members’ interests in Black

Diamond.      In connection with his due diligence, Boehm signed a nondisclosure

agreement to review Black Diamond’s business records.          Boehm obtained Black

Diamond customer information, tax returns, financial statements, and vendor

information. Boehm elected to move forward on the purchase of the two members’

interests, but the members refused to sell. Boehm commenced this action, alleging that

the members breached an oral agreement to sell him their membership interests. Black

Diamond intervened, asserting counterclaims for breach of contract and violations of

the Ohio Uniform Trade Secrets Act. Boehm ultimately dismissed his complaint. Black

Diamond moved for partial summary judgment on its breach-of-contract claim, which

was granted. The trial court held a bench trial on the trade-secrets claim and rendered

an oral judgment of dismissal under Civ.R. 41(B)(2) finding in favor of Boehm at the

conclusion of Black Diamond’s case.

                                      Analysis

       {¶3}    The dismissal of a plaintiff’s case under Civ.R. 41(B)(2) during a bench

trial allows the trial court to weigh the evidence, resolve any conflicts therein, and

render judgment for the defendant at the close of the plaintiff’s case if the plaintiff


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has shown no right to relief. Bank One, Dayton, N.A. v. Doughman, 59 Ohio App.3d

60, 63, 571 N.E.2d 442 (1st Dist.1988). On appeal, the dismissal will be set aside

only if erroneous as a matter of law or against the manifest weight of the evidence.

Id.

      Black Diamond’s Client List and Financial Data are Trade Secrets

         {¶4}    Black Diamond presents three assignments of error for review. In its

first assignment of error, Black Diamond contends that the trial court erred as a

matter of law in finding that no trade secrets existed. A trade secret is defined as

         information, including the whole or any portion or phase of any scientific

         or technical information, design, process, procedure, formula, pattern,

         compilation, program, device, method, technique, or improvement, or

         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.

R.C. 1333.61(D). The following factors should be considered when analyzing a trade-

secrets claim:

         (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



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       to guard the secrecy of the information; (4) the savings effected and the

       value to the holder in having the information as against competitors; (5)

       the amount of effort or money expended in obtaining and developing the

       information; and (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, 687 N.E.2d 661

(1997), citing Pyromatics, Inc. v. Petruziello, 7 Ohio App.3d 131, 134-135, 454 N.E.2d

588 (8th Dist.1983).

       {¶5}   Here, Black Diamond claims that its client list, tax returns, and quarterly

profit and loss statements are trade secrets under the Ohio Revised Code. “An entity

claiming trade secret status bears the burden to identify and demonstrate that the

material is included in categories of protected information under the statute and

additionally must take some active steps to maintain its secrecy.” State ex rel. Besser v.

Ohio State Univ., 89 Ohio St.3d 396, 732 N.E.2d 373 (2000).

       {¶6}   Testimony established that Black Diamond’s client list, which the parties

also referred to as an event bid calendar, was not known to the public or those outside

of the business. “A customer list is an intangible asset that is presumptively a trade

secret when the owner of the list takes measures to prevent its disclosure in the

ordinary course of business to persons other than those selected by the owner.” State

ex rel. Lucas Cty. Bd. of Commrs. v. Ohio Environmental Protection Agency, 88 Ohio

St.3d 166, 724 N.E.2d 411 (2000).       The client list was primarily on a password-

protected computer, though some information pertaining to clients was occasionally

posted on clipboards inside the business’s warehouse that employees could see in order

to prepare for that client’s event. Evidence established that the complete client list was

not accessible to nonemployees unless a nondisclosure agreement was signed. Repeat




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clients made up approximately 25 to 30 percent of Black Diamond’s clientele.

Testimony established that at one time a former member of Black Diamond opened up

a competing business and Black Diamond lost approximately 25 to 30 percent of its

business revenue, in part, through the loss of clients. Black Diamond obtained a

judgment against the former member for a misappropriation of trade secrets, including

the client list.

        {¶7}       With respect to the tax returns and quarterly profit-and-loss statements,

evidence established that this financial information was not known to the public or

those outside the business. The financial information was also not generally accessible

by employees of Black Diamond, except for those employees who helped create it. The

financial information was primarily on a password-protected computer, and the

financial records were not available to anyone unless a nondisclosure agreement was

signed. Testimony established that the judgment against the former member of Black

Diamond was also based on the loss of the financial information. Accordingly, we find

that Black Diamond’s client list, tax returns, and quarterly profit-and-loss statements

are trade secrets under the Ohio Revised Code. We sustain Black Diamond’s first

assignment of error.

        Damages Are Not Necessary To Establish Misappropriation

        {¶8}       In its second assignment of error, Black Diamond claims that the trial

court erred as a matter of law in requiring proof of damages for a claim of

misappropriation of trade secrets. Under R.C. 1333.61, “misappropriation” means any

of the following:

        (1) Acquisition of a trade secret of another by a person who knows or has

        reason to know that the trade secret was acquired by improper means;




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       (2) Disclosure or use of a trade secret of another without the express or

       implied consent of the other person by a person who did any of the

       following:

              (a) Used improper means to acquire knowledge of the trade

              secret;

              (b) At the time of disclosure or use, knew or had reason to know

              that the knowledge of the trade secret that the person acquired

              was derived from or through a person who had utilized improper

              means to acquire it, was acquired under circumstances giving rise

              to a duty to maintain its secrecy or limit its use, or was derived

              from or through a person who owed a duty to the person seeking

              relief to maintain its secrecy or limit its use;

              (c) Before a material change of their position, knew or had reason

              to know that it was a trade secret and that knowledge of it had

              been acquired by accident or mistake.

Misappropriation of trade secrets is a recognized tort in Ohio for which damages may

be obtained. Fred Siegel Co., L.P.A. v. Arter & Hadden, 85 Ohio St.3d 171, 707 N.E.2d

853 (1999), citing Wiebold Studio, Inc. v. Old World Restorations, Inc., 19 Ohio App.3d

246, 484 N.E.2d 280 (1st Dist.1985); see R.C. 1333.63. But, as evident from the text of

the statute, proof of damages is not an element for a valid claim of misappropriation.

Therefore, we sustain Black Diamond’s second assignment of error.

 Misappropriations Occurred, but the Trial Court Was Correct Not To
   Afford Additional Relief beyond the Return of the Trade Secrets

       {¶9}   In its third assignment of error, Black Diamond claims that the trial

court erred in finding that no misappropriation of trade secrets occurred, as that




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                     OHIO FIRST DISTRICT COURT OF APPEALS


finding was contrary to the manifest weight of the evidence. Black Diamond argues

that misappropriations occurred when Boehm refused to return some of Black

Diamond’s records for over a year and again when Boehm shared confidential

information covered under the nondisclosure agreement with an employee of Black

Diamond, Drew Winter, and with his accountant, Ronald Evans.

       {¶10} In the first instance, Boehm retained the records to prepare for litigation

and later returned them, after being ordered to do so by the trial court. It is undisputed

that Boehm initially acquired the records properly as part of his due diligence and

pursuant to his nondisclosure agreement with Black Diamond. Black Diamond claims

that retaining the records, however, violated a clause in the nondisclosure agreement

regarding the return of confidential information, and was therefore an improper use of

a trade secret. The “use of trade secrets of another without the express or implied

consent of the other person by a person who * * * [u]sed improper means to acquire

knowledge of the trade secret” is a misappropriation. “Improper means” includes * * *

breach * * * of a duty to maintain secrecy * * *. R.C. 1333.61(A). Boehm breached his

duty to maintain secrecy of the records by retaining them for himself beyond the period

for which he had Black Diamond’s consent. Boehm’s retention of records that he had

an obligation to return, even though he kept them to prepare for litigation, was a

misappropriation under Ohio’s Uniform Trade Secrets Act.

       {¶11} In the second instance, Boehm denied sharing the records with Drew

Winter. There is no evidence in the record that Boehm shared the records with Winter.

Black Diamond only presented evidence that Boehm discussed an audit of the company

by the Ohio Department of Job and Family Services, which Boehm argued was a public

record. The trial court agreed with Boehm. There is no indication that the trial court so

lost its way in weighing the evidence presented with regards to Winter as to cause a




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                      OHIO FIRST DISTRICT COURT OF APPEALS


manifest miscarriage of justice warranting a reversal. See State v. Thompkins, 78 Ohio

St.3d 380, 387, 678 N.E.2d 541 (1997), citing State v. Martin, 20 Ohio App.3d 172,

175, 485 N.E.2d 717 (1st Dist.1983).

       {¶12} Boehm admitted to sharing the records with his accountant as part of his

due diligence and claimed his accountant did not retain a copy of the documents. This

was permitted so long as Boehm had his accountant also sign a nondisclosure

agreement. This was a technical misappropriation under Ohio’s Uniform Trade Secrets

Act.   Boehm shared records that he was under obligation to keep secret without

obtaining an executed nondisclosure agreement.           Accordingly, we sustain Black

Diamond’s third assignment of error in part.

       {¶13} While we have sustained Black Diamond’s three assignments of error,

Black Diamond has still not demonstrated a right to relief warranting a reversal of the

trial court’s judgment. The trial court found that Black Diamond was no longer entitled

to injunctive relief under R.C. 1333.62, because Boehm had already returned the

financial records during the litigation, and there was no other action to enjoin. The trial

court found that Black Diamond was not entitled to damages under R.C. 1333.63,

because there was no evidence put forth demonstrating actual loss or unjust

enrichment from Boehm sharing the records with his accountant, and insufficient

evidence put forth to award a reasonable royalty. Nor was there a liquidated-damages

clause upon which Black Diamond could rely. Our review fails to persuade us that the

factfinder clearly lost its way and created such a manifest miscarriage of justice that we

must reverse the judgment of the trial court and order a new trial. See Thompkins at

386-387.

       {¶14} The trial court did not explicitly address whether Black Diamond was

entitled to attorney fees under R.C. 1333.64, which Black Diamond argued it was




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                     OHIO FIRST DISTRICT COURT OF APPEALS


because Boehm’s appropriation was willful. Under R.C. 1333.64, a court may award

attorney fees to the prevailing party if the misappropriation is willful and malicious.

Black Diamond did not argue before the trial court that Boehm’s misappropriation was

malicious. “Willful and malicious” has been interpreted as meaning “actual malice,”

given the common and ordinary meaning of the words. Becker Equip., Inc. v. Flynn,

12th Dist. Butler No. CA 2002-12-313, 2004-Ohio-1190, ¶ 16.

       “Willful” means voluntary and intentional, but not necessarily malicious.

       “Malicious” is the adjective for “malice,” which is defined as the intent,

       without justification or excuse, to commit a wrongful act; reckless

       disregard of the law or of a person’s legal rights; ill will; wickedness of

       heart. The combined definitions of “willful” and “malicious” are, in turn,

       similar to the definition of “actual malice” used for purposes of

       determining the appropriateness of a punitive damages award at

       common law * * *.

(Internal quotations omitted.) Id.

       {¶15} Here, it is undisputed that Boehm allowed his accountant to view the

financial records in order to assess the profitability of an investment with Black

Diamond.    Boehm protected the information to some extent by not allowing the

accountant to keep the information. Black Diamond knew that Boehm shared the

records, and merely wanted Boehm’s accountant to sign a nondisclosure agreement. It

was not against the manifest weight of the evidence for the trial court to conclude that

Black Diamond did not prove Boehm’s misappropriation was malicious or without just

cause. Consequently, Black Diamond was not entitled to attorney fees. We, therefore,

determine that the trial court’s entry of judgment in favor of Boehm at the close of

Black Diamond’s case was proper under the standards set forth under Civ.R. 41(B)(2).




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                      OHIO FIRST DISTRICT COURT OF APPEALS


                                      Conclusion

        {¶16} Although we sustain Black Diamond’s first and second assignments of

error in full and third assignment of error in part, we nonetheless affirm the judgment

of the trial court.

                                                                      Judgment affirmed.

M OCK , P.J., and Z AYAS , J., concur.

Please note:

        The court has recorded its own entry on the date of the release of this opinion.




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