McCann Construction Specialties Co. v. Bosman

Citations: 358 N.E.2d 1340; 44 Ill. App. 3d 1020; 3 Ill. Dec. 655; 1977 Ill. App. LEXIS 2032Docket: 76-318

Court: Appellate Court of Illinois; January 10, 1977; Illinois; State Appellate Court

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The Illinois Appellate Court case McCann Construction Specialties Company v. Mark Bosman et al. involves an appeal regarding a temporary injunction preventing the defendants from soliciting business from a customer list belonging to the plaintiff. The plaintiff claimed that the defendants unlawfully acquired a confidential customer list containing 1,600 names and addresses, compiled over several years, and sought an injunction, an accounting of profits, and damages. The trial court held hearings where Richard McCann, plaintiff's president, testified about the development and management of the customer list, which was maintained in a secure manner across different locations. The defendants contended that the evidence presented was insufficient to justify the injunction. It was established that the defendants received the customer list from Robert Crittenden, a former employee of the plaintiff, who had obtained it unlawfully. The court ultimately reversed the trial court's decision and remanded the case for further proceedings.

McCann identified Ralph Olsen as the only specific customer order lost by the plaintiff from his customer list. Maddon, the defendant corporation's secretary-treasurer, testified that Ralph Olsen had been a customer since before mid-August 1975 and that an order worth $317.18 was shipped to Olsen Construction Co. on July 11, 1975. Maddon stated that the defendant corporation began operations in late May 1975 and received the plaintiff's customer list in early August 1975 from a former employee, Crittenden. This list, which has since been destroyed, was used alongside other lists to create a mailing list for the defendant corporation. Maddon also held positions in three companies involved in manufacturing anchor bolts and related products, and the defendants employed several salesmen with prior experience in the concrete supply industry. The competition in the Chicago area consisted of 25 to 50 companies, with a subset focusing on concrete supply. The defendant corporation's customer list compilation included various sources, and the plaintiff's list served as the primary reference for catalog mailing preparations. On December 17, 1975, the trial court decided to grant a temporary injunction, which was formalized on June 8, 1976, preventing the defendants from soliciting business from most of the plaintiff's listed customers, except for 410 names previously found on other lists. The court determined that there was sufficient evidence of unfair competition and economic advantage gained by the defendants through the appropriation of the plaintiff's customer list. The defendants argued that the injunction was erroneous due to insufficient proof regarding the wrongful acquisition of the customer list, its status as a trade secret, the existence of actual damages, and the balance of harm caused by the injunction versus the injury to the plaintiff.

Evidence was insufficient to establish that the defendants wrongfully appropriated the plaintiff's customer list or that the list constituted a trade secret. The defendants only received the list from Crittenden, a former employee of the plaintiff, and there was no indication that Crittenden was induced or compensated by the defendants for obtaining it. The customer list, while potentially qualifying as a trade secret, lacked the necessary protective measures from the plaintiff, who maintained multiple copies of the list in accessible locations without secure protection. Furthermore, the names on the list were likely publicly available through directories. Consequently, the court concluded that the customer list did not qualify as a trade secret, leading to the reversal of the trial court's temporary injunction. The ruling allows for further proceedings on the plaintiff's claims for accounting and damages, without addressing other arguments from the defendants. The judgment of the circuit court of Du Page County is reversed and remanded for further proceedings.