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06/02/88 Geldermann, Incorporated, v. William Mullins Et Al.

June 2, 1988

GELDERMANN, INCORPORATED, PLAINTIFF-APPELLEE

v.

WILLIAM MULLINS ET AL., DEFENDANTS-APPELLANTS

DEFENDANTS NOW BRING THIS INTERLOCUTORY APPEAL PURSUANT TO SUPREME COURT RULE 307(A)(1) (107 ILL. 2D R. 307(A)(1)). (NOTARO

v.

NOR-EVAN CORP. (1983), 98 ILL. 2D 268, 456 N.E.2D 93.) DEFENDANTS CONTEND THAT THE TRIAL COURT ERRED IN REFUSING TO STAY THE LITIGATION AND COMPEL ARBITRATION.



APPELLATE COURT OF ILLINOIS, FIRST DISTRICT, FOURTH DIVISION

524 N.E.2d 1212, 171 Ill. App. 3d 255, 121 Ill. Dec. 164 1988.IL.865

Appeal from the Circuit Court of Cook County; the Hon. Albert Green, Judge, presiding.

APPELLATE Judges:

JUSTICE LINN delivered the opinion of the court. JIGANTI, P.J., and JOHNSON, J., concur.

DECISION OF THE COURT DELIVERED BY THE HONORABLE JUDGE LINN

Plaintiff, Geldermann, Inc., brought an action in the circuit court of Cook County against defendants, William Mullins, David Mueller, and Merrill Lynch, Pierce, Fenner and Smith, Inc. Plaintiff alleged, inter alia, that defendants misappropriated its personal property. Defendants filed a claim with the Chicago Board of Trade arbitration committee. Defendants also filed a motion in the trial court to stay the litigation and compel arbitration. The trial court denied defendants' motion and ordered defendants to answer the complaint.

We reverse the order of the trial court and remand with directions.

Background

The record shows that defendant Mullins is a futures commission merchant. During the late 1970's and early 1980's, he developed Farm Marketing Program I, a computer program to aid farmers in hedging against future changes in the prices of their crops. The program generates specific trades for farmers in the commodity futures markets. The program bases its Conclusions on the recommendations of certain non-Exchange-related publications that provide advice on future market trends. Mullins developed the program while working on his family farm. Mullins paid for its development and used the program for his own benefit.

Plaintiff is a commodities broker and a member of the CBOT. Mullins agreed to become an independent contractor for plaintiff in October 1983. Mullins worked in the grain division, farm marketing group, of plaintiff's Chicago office. Mullins continued to improve the program during his employment. Sometime in 1984, Mullins modified the program to increase its capacities (Farm Marketing Program II). In 1985, plaintiff hired a consulting firm to further improve the program. Plaintiff paid the consulting firm approximately $25,000 for the improved program (Farm Marketing Program III), but Mullins also paid part of the cost.

Plaintiff alleged that on or about June 19, 1987, Mullins directed defendant Mueller to obtain from one of its employees a copy of the program's source code, which is its blueprint. Mueller told the employee that he needed the blueprint to improve the program for plaintiff's customers. Mullins then hired an independent computer software programmer, without plaintiff's knowledge, to modify the program (Farm Marketing Program IV). Mullins, Mueller, the independent programmer and one of plaintiff's employees worked together, using plaintiff's offices and equipment without authorization. After they designed Farm Marketing Program IV, Mullins and Mueller left plaintiff in August 1987 to work for defendant Merrill Lynch, Pierce, Fenner & Smith.

Plaintiff further alleged that upon leaving its employ, and also without its knowledge or consent, Mullins and Mueller took Farm Marketing Programs III and IV and other confidential customer information. Additionally, the information was not a matter of public knowledge. It was subject to company policies and procedures intended to keep such information secret.

In its multicount complaint, plaintiff pled breach of fiduciary duty, misappropriation of trade secrets, conversion, fraud, tortious interference with prospective business advantage, and breach of contract. Plaintiff sought both compensatory and punitive damages, and injunctive relief.

Defendants did not answer the complaint. Instead, they filed a claim with the CBOT arbitration committee. They alleged that Mullins had a proprietary interest in Farm Marketing Program III. Defendants further alleged that Mullins and the others did not modify or take Farm Marketing Program III. Rather, Farm Marketing Program IV was a completely new program that differed significantly from Farm Marketing Program III. Further, plaintiff still used and benefitted from all of the existing versions of the program. Defendants sought: (1) a declaration that Mullins has at least as equal a proprietary interest in Farm Marketing Program III as plaintiff; (2) a ...


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