                             In the
 United States Court of Appeals
               For the Seventh Circuit
                          ____________

No. 02-3441
THE OSLER INSTITUTE, INC.,
                                              Plaintiff-Appellant,
                                 v.

LOIS FORDE,
                                             Defendant-Appellee.
                          ____________
            Appeal from the United States District Court
     for the Southern District of Indiana, Terre Haute Division.
     No. TH01-019-C-M/H—Larry J. McKinney, Chief Judge.
                          ____________
     ARGUED APRIL 10, 2003—DECIDED JUNE 26, 2003
                    ____________


 Before BAUER, RIPPLE, and EVANS, Circuit Judges.
  EVANS, Circuit Judge. The Osler Institute sued its for-
mer employee, Lois Forde, after she began working for a
rival company. Although neither party filed any disposi-
tive motions, the district court snuffed out Osler’s hopes
of recovery before trial when it sua sponte granted judg-
ment in Forde’s favor. Osler appeals.
  The Osler Institute is a test preparation company head-
quartered in Indiana. Osler runs 60 to 70 seminars a year
to help doctors prepare for specialty medical board exami-
nations. Dr. Joseph Selliken is Osler’s founder and presi-
dent, and for most of the company’s history he and his
wife have been the sole members of its board of directors.
2                                                No. 02-3441

  In 1995 Osler hired Lois Forde—Dr. Selliken’s second
cousin—on a part-time basis to coordinate a few semi-
nars a year. Forde’s job involved mainly administrative
tasks, many of which revolved around the guest lectur-
ers who taught the substantive material at the seminars.
These tasks included choosing the lecturers for a semi-
nar from Osler’s lists, arranging the logistics of the lectur-
ers’ participation, taking the lecturers to dinner, adminis-
tering evaluations of the lecturers, and helping to deter-
mine if a lecturer would receive a bonus. In addition, Forde
reported any problems at the seminar to Osler. When
Forde began her job, she signed an employment agree-
ment containing a non-compete clause.
  Three years after Forde started working for Osler, Dr.
Selliken offered her a position on the board of directors.
Forde conditioned her acceptance on an independent au-
dit of Osler’s financial status and indemnity insurance—
conditions Osler never met. Nevertheless, after Dr. Sel-
liken’s offer, Forde attended four board meetings. She was
a vocal participant and even kept minutes for the meet-
ings, referring to herself as the “secretary designate.”
Forde downgraded herself to “guest” at the last meeting—
apparently recognizing that her conditions to becoming
an official board member were not going to come to pass.
Osler never listed Forde as a director on its annual
state filings.
  Time passed, and at an Osler seminar in January 2000,
Forde commented—in front of others—that Dr. Selliken
may have taken a volunteer patient at a seminar to a
motel and that his behavior was inappropriate. On April
15, 2000, Forde and Osler parted ways (it’s unclear wheth-
er Forde quit or was fired, but it doesn’t matter for our
purposes). That same month, Dr. Peter Rosenbaum con-
tacted Forde and invited her to work for PsyPrep, a new
psychiatry board preparation company run by former
Osler lecturers. Forde knew the members of PsyPrep
No. 02-3441                                                3

through her work at Osler. Despite Forde’s employment
agreement with Osler and the clear connection between
Osler and the members of PsyPrep, she accepted Dr.
Rosenbaum’s invitation, invested a small sum of money
in the company, and began working for PsyPrep. Forde’s
work consisted of administrative tasks, like obtaining
business licenses and a post office box for the company,
and taking calls for PsyPrep on a line she installed in
her home, and marketing work, such as developing a
brochure for PsyPrep’s first planned seminar in April
2001 and inquiring about advertising possibilities.
  Dr. Selliken soon learned of Forde’s work with PsyPrep,
and he wasn’t pleased. He couldn’t find Forde’s employ-
ment agreement (with the noncompete clause), so he tried
to get her to sign a new one. Forde refused. Later, Dr.
Selliken located Forde’s 1995 employment agreement
and, in January 2001, sent a copy of that agreement
to her—along with a draft of the complaint in this case.
Facing a possible federal lawsuit, Forde sprang into ac-
tion. By the end of January, she had resigned from PsyPrep,
received her initial investment back, and turned over all
of her PsyPrep materials. Without any more assistance
from Forde, PsyPrep went on to offer its first board re-
view course in April 2001, holding three or four courses
that year.
  Osler moved ahead with this lawsuit—Forde’s resigna-
tion from PsyPrep and family relationship with Dr. Selliken
notwithstanding. Osler claimed that Forde breached
her employment agreement and fiduciary duties, inten-
tionally interfered with its relationship with its lecturers,
and slandered Dr. Selliken. Neither party filed any dis-
positive motions and the case appeared to be headed for
trial—until the pretrial conference on July 8, 2002. At
the pretrial conference, Chief Judge Larry J. McKinney
said he was concerned about issues raised in the parties’
trial briefs. Specifically, Judge McKinney pointed to prob-
4                                              No. 02-3441

lems with the validity of Forde’s employment agreement,
the calculation of damages, and Osler’s interference with
business relationships and slander claims. Based on these
concerns, Judge McKinney vacated the July 22, 2002,
trial setting and told the parties to prepare for oral argu-
ment on the issues in the trial briefs instead.
  Oral argument was held and, about a month later, Judge
McKinney issued a ruling dismissing all of Osler’s claims.
The breach of contract claim failed because Judge
McKinney determined the underlying employment agree-
ment was invalid. Judge McKinney did not find that
Forde had any fiduciary duties to Osler, dooming the
breach of fiduciary duty claim. The intentional interfer-
ence with business relationships count was jettisoned
due to a lack of evidence that Forde engaged in illegal
conduct—an element of the claim. Finally, Osler’s last
claim, slander, was dismissed as a sanction for dilatory
actions during discovery.
   On appeal, Osler doesn’t question the dismissal of its
slander claim. As far as the other claims, Osler protests
that the district court didn’t give sufficient notice that
it was contemplating entering judgment sua sponte. Also,
while Osler doesn’t formally identify the merits of the
district court’s decision as an issue on appeal, it devotes
a portion of its brief to that topic, so we’ll address the
merits of Judge McKinney’s opinion, too. First, the pro-
cedural issue.
  As a preliminary note of clarification, we are aware
that the district court never explicitly said that it was
entering summary judgment sua sponte, but that’s clear-
ly what happened. In the absence of pending dispositive
motions, the district court looked to matters outside the
complaint to determine that Forde was entitled to judg-
ment as a matter of law. We find the district court’s state-
ment that it was ruling on Forde’s motions in limine a
No. 02-3441                                                 5

little mysterious (Forde hadn’t filed any motions in limine),
but the solution to that puzzle doesn’t impact our analy-
sis, so we’ll leave it unsolved.
  With that speed bump out of the way, we can analyze
whether it was cricket for the district court to enter sum-
mary judgment on its own motion. Granting summary
judgment sua sponte is permissible, although it is a haz-
ardous procedure which warrants special caution. See
Jones v. Union Pac. R.R. Co., 302 F.3d 735, 740 (7th
Cir. 2002) (citing Peckmann v. Thompson, 966 F.2d 295,
297 (7th Cir. 1992), and Sawyer v. United States, 831 F.2d
755, 759 (7th Cir. 1987)). When there are no issues of
material fact in dispute, a district court may grant sum-
mary judgment on its own motion—as long as the losing
party is given notice and an opportunity to come forward
with its evidence. See Celotex Corp. v. Catrett, 477 U.S. 317,
326 (1986); Goldstein v. Fidelity and Guar. Ins. Underwrit-
ers, Inc., 86 F.3d 749, 750 (7th Cir. 1996) (“The party
against whom summary judgment is entered must have
notice that the court is considering dropping the ax on [it]
before it actually falls.”). In short, summary judgment
should not take a party by surprise. See Choudhry v.
Jenkins, 559 F.2d 1085, 1089 (7th Cir. 1977).
  Despite Osler’s protests to the contrary, the district
court’s entry of judgment should not have caught it off
guard. Judge McKinney made numerous comments alert-
ing Osler that its claims were in peril. For example, dur-
ing the pretrial conference (after Forde submitted her
trial brief arguing that much of the case could be decided
as a matter of law), Judge McKinney said:
    • “These trial briefs raise some troublesome issues,
      which I would like to discuss a little bit today” and
      that some of the arguments “appear to be rela-
      tively dispositive of some issues that may or may
      not be presented at trial.”
6                                               No. 02-3441

    • After finding out that counsel for Osler had only
      received Forde’s trial brief a few minutes earlier,
      Judge McKinney said, “Well, it is a pretty serious
      trial brief. . . . I would suggest that you need more
      than two minutes to look at this because there is
      an issue here on defamation that is fairly disposi-
      tive. There are issues on the interference with con-
      tractual relationships, and there are some serious
      matters about the validity of the employment con-
      tract signed by Miss Forde. So some of those issues
      could, in fact, impact the Court’s jurisdiction in this
      case.”
    • Judge McKinney ended the conference by telling the
      parties that he was vacating the trial date so that he
      could hear arguments on these issues instead
      and then he would “reset this case about 30 days
      later, or not, depending on what we decide.” He told
      counsel to bring their clients to the argument.
  Following the conference, Judge McKinney issued an
order stating that “it is apparent that there are several
issues that may be resolved before trial as a matter of
law” and that “[i]t is clear that these issues must be
resolved before the case is presented to a jury.” At the
end of the oral argument itself, Judge McKinney con-
cluded by saying “I’ll do my best to give you a ruling on
this without too much delay.”
  Judge McKinney’s statements seem clear to us. He
said, point blank, that Forde had raised issues of law
that should be resolved before trial and, after deciding
those questions, there might not be a trial. Osler didn’t
object, ask for clarification, or in any way show that it
was confused about the district court’s actions during
either the pretrial conference or the oral argument. Based
on Judge McKinney’s statements and Osler’s acquiescence
to the proceedings, we have to ask what Osler thought the
No. 02-3441                                               7

judge was doing, if not potentially disposing of the case,
or at least a major slice of it, without a trial.
  Osler says that it thought that the judge would address
jurisdictional issues, the reasonableness of the duration
and scope of the employment agreement, the appropriate-
ness of the liquidated damages provision, and “matters
specifically raised in the trial briefs.” Osler’s answer es-
sentially concedes that it knew the district court planned
to resolve some issues of law—it just didn’t think Judge
McKinney would address all the issues of law. But Forde’s
trial brief raised all of the matters the district court
addressed, not just those Osler notes. Why would Osler
think the district court was going to address some ques-
tions of law and not others—particularly when Judge
McKinney specifically mentioned that he wanted to dis-
cuss other points, like the validity of the employment
agreement, at the pretrial conference? Osler clearly knew
the issues that were bothering the judge. It wasn’t am-
bushed by an argument that it couldn’t possibly address.
See Aviles v. Cornell Forge Co., 183 F.3d 598, 604-05 (7th
Cir. 1999) (court improperly granted sua sponte sum-
mary judgment on issue raised in movant’s reply brief).
Furthermore, it knew these issues were potentially dis-
positive. See, e.g., Simpson v. Merchants Recovery Bureau,
Inc., 171 F.3d 546, 550 (7th Cir. 1999) (sua sponte sum-
mary judgment reversed when court said party should
submit a list of cases prior to filing amended complaint,
with no mention of summary judgment). Judge McKinney
gave Osler sufficient notice that he was considering sum-
mary judgment.
  Aside from the notice issue, Osler raises two other
procedural concerns about the entry of summary judg-
ment. Osler didn’t list these arguments as part of its
issue on appeal but, for what it’s worth, we find both
without merit. First, Osler says that the district court
didn’t allow it sufficient time under the local rules to
8                                                No. 02-3441

respond to the sua sponte summary judgment motion. See
S.D. Ind. L.R. 56.1(b) (nonmovant has 30 days to respond
to summary judgment motion). The district court did not
abuse its discretion applying the local rules, see Borcky
v. Maytag Corp., 248 F.3d 691, 697 (7th Cir. 2001), when
Osler agreed to the timing of the date set for oral argu-
ment at the July 8 pretrial conference. Second, Osler
quibbles with the district court’s statement of the facts,
asserting it could have marshaled more evidence to sup-
port its claims and the district court relied on unsup-
ported statements. The first part of this argument is
unsuccessful because Osler had sufficient notice that
summary judgment was afoot and that it needed to de-
fend its claims—a squandered opportunity is not grounds
for reversal. See Divane v. Krull Elec. Co., 194 F.3d 845,
848-49 (7th Cir. 1999). As far as the district court’s reliance
on unsupported statements, Osler doesn’t tell us what
statement the district court relied upon that was unsup-
ported and affects the outcome of this case. To sum up,
while sua sponte summary judgment is not a recom-
mended path for a district court to take, Judge McKinney
did not commit any procedural errors in this case.
  Having determined that the district court’s decision to
enter summary judgment sua sponte was not erroneous
in and of itself, we turn to the disposition of Osler’s sub-
stantive claims, which we review de novo. See Kaplan v.
Shure Bros., Inc., 266 F.3d 598, 601-02 (7th Cir. 2001).
  Osler contends that Forde’s work with PsyPrep breached
the noncompetition clause in the parties’ employment
agreement. Judge McKinney dismissed this claim, finding
the parties’ employment agreement void. Under Indiana
law, which applies in this case, covenants not to compete
in employment agreements are disfavored and must be
reasonably necessary to protect an employer’s interests.
See Ackerman v. Kimball Int’l, Inc., 652 N.E.2d 507, 509-
10 (Ind. 1995). A non-compete agreement is reasonably nec-
No. 02-3441                                               9

essary if an employer shows “the former employee has
gained a unique competitive advantage or ability to harm
the employer.” Titus v. Rheitone, Inc., 758 N.E.2d 85, 92
(Ind. Ct. App. 2001). In other words, the employer must
show some reason why it would be unfair to let the for-
mer employee compete with it. See id.
  Osler asserts that it had a protectible interest in
Forde’s future employment because she administered
lecturer evaluations, knew the criteria used on the evalua-
tions, was responsible for reporting complaints, dis-
cussed who should receive bonuses, and had developed
relationships with lecturers. In essence, Osler worries that
a person in Forde’s position could cultivate a relationship
with its best lecturers—knowing who might be unhappy
and willing to jump ship—and convince them to form a
competing company. We see three problems with Osler’s
evidence. First, some of the things Forde learned, like
the names of the lecturers, were a matter of public knowl-
edge and not protectible confidential information. See
Titus, 758 N.E.2d at 93 (confidential customer informa-
tion protectible). Second, Forde’s job primarily consisted
of administrative tasks. Osler may not restrict Forde
from using any general organizational or administrative
skills. See Brunner v. Hand Indus., Inc., 603 N.E.2d 157,
160 (Ind. Ct. App. 1992) (citing Donahue v. Permacel Tape
Corp., 127 N.E.2d 235, 240 (Ind. 1955)) (no protectible
property interest in employee’s general knowledge, informa-
tion, or skills, even if gained in the course of her employ-
ment). Third, Forde’s job with PsyPrep did not utilize
any of the potentially protectible information she might
have learned. While Osler may have a protectible interest
in the goodwill of its lecturers, there’s no evidence that
Forde misappropriated that goodwill. See Unger v. FFW
Corp., 771 N.E.2d 1240, 1244 (Ind. Ct. App. 2002)
(protectible interest found when disgruntled former em-
ployee harmed goodwill by using employer’s confidential
10                                                No. 02-3441

customer list). Forde’s position at PsyPrep involved only
administrative and marketing tasks—there’s no evidence
that Forde did anything to harm the goodwill between Osler
and its lecturers. Thus, Osler has failed to show that the
noncompete clause was reasonably necessary, so it is
void, and Osler’s breach of contract claim must fail.
   We can make short work of Osler’s claim that Forde
breached her fiduciary duties. To sustain this claim, Osler
must identify the source of any fiduciary duties. Osler
says Forde’s fiduciary duties arose from her role as a
de facto director. A de facto officer or director is someone
who assumes an office or position under color of right or
title and exercises the duties of the office. See In re Bankers
Trust, 403 F.2d 16, 20 (7th Cir. 1968). As noted in review-
ing the similar doctrine of de facto public officers, a de facto
officer must claim her office. See Sullivan v. City of Evans-
ville, 728 N.E.2d 182, 190 (Ind. Ct. App. 2000) (analyz-
ing ability to collaterally attack decisions of de facto
officers). Forde never claimed that she was a director or
an officer. Although she attended four board meetings
and took notes, the minutes of each meeting listed her as
a “board member designate” (or even just “guest”) and
stated that she would not join the board until an independ-
ent audit was completed and she had indemnity insur-
ance. The district court correctly found that Forde was not
a de facto director. Osler doesn’t argue that there is
any other source of fiduciary obligations, so its breach of
fiduciary duty claim fails.
  Osler’s last claim is that Forde intentionally interfered
with its relationship with the lecturers who formed
PsyPrep. Judge McKinney dismissed this claim because
Osler did not show Forde’s conduct was illegal—an ele-
ment that Osler now contends is not necessary (this is
apparently a new belief because Osler’s trial brief does
mention illegality in connection with this claim). While
intentional interference with contractual relationships
No. 02-3441                                             11

does not require illegal conduct, intentional interference
with business relationships does. See Levee v. Beeching,
729 N.E.2d 215, 220-23 (Ind. Ct. App. 2000). We’re aware
that the latest Indiana Supreme Court case mention-
ing intentional interference with business relationships
did not list illegal conduct as an element. Felsher v. Uni-
versity of Evansville, 755 N.E.2d 589 (Ind. 2001). But
Felsher cited Levee—which lists illegal conduct—in support
of the elements of the claim. See Felsher, 755 N.E.2d at
598 n.21. We don’t think this was a mere oversight on
the part of the Indiana Supreme Court. Barring more
specific guidance on the matter, a showing of illegal con-
duct, which Osler did not make, is required for inten-
tional interference with business relationships under
Indiana law.
 The judgment of the district court is AFFIRMED.

A true Copy:
      Teste:

                       ________________________________
                       Clerk of the United States Court of
                         Appeals for the Seventh Circuit




                  USCA-02-C-0072—6-26-03
