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09/12/89 Curtis Brostron, v. Floyd C. Warmann

September 12, 1989

CURTIS BROSTRON, PLAINTIFF-APPELLEE AND CROSS-APPELLANT

v.

FLOYD C. WARMANN, DEFENDANT (BECKER BROTHERS, INC., ET AL., MOVANTS-APPELLANTS AND CROSS-APPELLEES)

RESOLUTION OF THE ISSUE ON APPEAL RESTS WITH THE APPLICATION OF THE ILLINOIS TRADE SECRETS ACT (ACT). (ILL. RE

v.

STAT. 1987, CH. 140, PAR. 351 ET SEQ.) THE ACT PROVIDES:



APPELLATE COURT OF ILLINOIS, THIRD DISTRICT

546 N.E.2d 3, 190 Ill. App. 3d 87, 137 Ill. Dec. 379 1989.IL.1410

Appeal from the Circuit Court of Peoria County; the Hon. William J. Voelker, Jr., Judge, presiding.

APPELLATE Judges:

JUSTICE KNECHT delivered the opinion of the court. LUND and SPITZ, JJ., concur.

DECISION OF THE COURT DELIVERED BY THE HONORABLE JUDGE KNECHT

The nonparty movants, Becker Bros., Inc. (Becker), an Illinois construction firm, and Vickie W. Kovki (Kovki), its employee, appeal from an order of discovery entered in aid of an action pending in another jurisdiction. 107 Ill. 2d R. 204(b).

The facts of that action are not in dispute: In August of 1983, the plaintiff, Curtis Brostron (Brostron), and the defendant, Floyd C. Warmann (Warmann), entered into a general partnership to develop a nursing home project in Cedar Hill, Missouri. In turn, Warmann, as managing partner, entered into a contract with Becker to construct the project. In January of 1987, the general partnership was terminated through the separate sales of the individual interests of Brostron and Warmann. Following the termination of the general partnership, Brostron filed an action against Warmann in the circuit court of St. Louis County, Missouri. The action alleged, inter alia, Warmann breached the partnership agreement, and its attendant fiduciary duties, in entering into the contract with Becker for a "sum grossly in excess of the actual costs of construction." As relief, Brostron sought an accounting for an equal share of the general partnership assets, attorney fees, court costs, and punitive damages.

On July 28, 1988, as part of the pretrial discovery in the Missouri action, Brostron filed a petition to order discovery against Becker and its employees in the circuit court of Peoria County, Illinois. (107 Ill. 2d R. 204(b).) The circuit court allowed the petition on August 11, 1988. On August 22, 1988, pursuant to that petition, Brostron served Kovki with discovery subpoenas for both her deposition and the financial documents of Becker on the nursing home project.

On September 6, 1988, Becker and Kovki responded with a motion to quash, or otherwise limit, the discovery subpoenas. The motion set forth four alternative objections to the discovery subpoenas: (1) the discovery requests were overly broad in nature; (2) the requested financial documents and information were irrelevant to the issues in the pending action; (3) the documents would disclose confidential and private information (see Ill. Rev. Stat. 1987, ch. 140, par. 351 et seq.); and (4) production would be unduly burdensome.

On November 21, 1988, following argument on the motion, the circuit court limited the discovery subpoenas on the basis the requested financial documents would disclose information properly protectable as a trade secret. (Ill. Rev. Stat. 1987, ch. 140, par. 351 et seq.) Despite this limitation, the circuit court ordered discovery of financial documents and information relevant to the issues in the pending action. Lastly, the circuit court entered a protective order restricting access, reproduction, and retention of all financial documents and information so disclosed in that action.

On December 19, 1988, Becker and Kovki filed notice of appeal from that order of discovery. On December 29, 1988, Brostron filed notice of cross-appeal from the same order. He has since withdrawn the cross-appeal.

The issue on appeal is whether the circuit court abused its discretion in ordering disclosure of all documents and information on the "gross profits" earned by Becker in constructing the nursing home project.

"'Trade secret' means information, including but not limited to, technical or non-technical data, a formula, pattern, compilation, program, device, method, technique, drawing, process, financial data, or list of actual or potential customers or supplies, that:

(1) is sufficiently secret to derive economic value, actual or potential, from not being generally known to other persons who can obtain economic ...


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