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Crystal Valley Sales, Inc. v. Anderson

Court of Appeals of Indiana

November 26, 2014

CRYSTAL VALLEY SALES, INC., CHARLES KLINE, and NANCY KLINE, Appellants-Plaintiffs,
v.
JONATHAN ANDERSON, NATIONAL SALES COMPANY, INC., RODGER ANDERSON, CAMCO MANUFACTURING, and NORM GEIBLE, Appellees-Defendants

Page 647

APPEAL FROM THE ELKHART SUPERIOR COURT. The Honorable Evan S. Roberts, Judge. Cause No. 20D01-1302-PL-50.

ATTORNEYS FOR APPELLANTS: MARK F. CRINITI, PAUL EDGAR HAROLD, LaDue Curran & Kuehn LLC, South Bend, Indiana.

ATTORNEYS FOR APPELLEES NATIONAL SALES COMPANY, INC., and RODGER ANDERSON: REBECCA BUTLER POWER, AMBER J. BRESSLER, Butler Power Law, P.C., Elkhart, Indiana.

ATTORNEYS FOR APPELLEES CAMCO MANUFACTURING, INC., and NORM GEIBLE: JAMES M. LEWIS, MARK D. KUNDMUELLER, Tuesley Hall Konopa LLP, South Bend, Indiana.

CRONE, Judge. RILEY, J., and MATHIAS, J., concur.

OPINION

Page 648

CRONE, Judge

Case Summary

Crystal Valley Sales, Inc. (" Crystal Valley" )[1] appeals the trial court's dismissal of its civil conspiracy claims against National Sales Company, Inc., Rodger Anderson, Camco Manufacturing, Inc., and Norm Geible (collectively " Appellees" ) for failure to state a claim.[2] Crystal Valley contends that its amended complaint sufficiently states a claim against Appellees for civil conspiracy, and Appellees assert that a civil conspiracy allegation is insufficient absent an allegation of an underlying tort. Finding that Crystal Valley's amended complaint failed to sufficiently allege an underlying tort against Appellees, we affirm.

Facts and Procedural History

The facts as alleged in Crystal Valley's amended complaint are as follows:

10. Crystal Valley warehouses and sells a variety of products to various OEM [original equipment] manufacturers in Elkhart, Indiana, including RV manufacturers, manufactured-home builders, cargo-trailer dealers, and marine-craft fabricators.
11. Crystal Valley's business is highly competitive without much product differentiation amongst competitors. As a result, Crystal Valley and its competitors rely significantly on the goodwill they generate through representative contact with their customers and suppliers and by keeping sensitive customer, supplier, and other business information confidential.
12. [Jonathan] Anderson began working for Crystal Valley in July 2002.
13. From July 2002 through June 30, 2007, J. Anderson served as a sales manager for Crystal Valley.
14. From July 1, 2007 through February 15, 2013, J. Anderson was Crystal Valley's Vice President and general Manager, and was also one of three shareholders in the company. J. Anderson is currently still an owner of Crystal Valley, holding a 5% percent [sic] interest in the company at all times since July 1, 2007.

Page 649

15. At all times since July 1, 2007, the remaining 95% of Crystal Valley has been owned by Charles Kline and Nancy Kline.
16. As Crystal Valley's Vice President and General Manager, J. Anderson had contact with Crystal Valley's customers in the OEM industry, including, but not limited to, Keystone RV (" Keystone" ) and RV Surplus and Salvage, Inc. n/k/a RV Parts Nation (" RV Parts" ).
17. For many of Crystal Valley's customers, J. Anderson was Crystal Valley's primary sales representative and frequently worked at the customer's facility performing cycle-counting for the products that Crystal Valley sold to the customer.
18. Through his contacts with Crystal Valley's customers, J. Anderson generated goodwill between Crystal Valley and its customers while working for, and receiving compensation from, Crystal Valley.
19. Through his contacts with Crystal Valley's customers and also through his work as Crystal Valley's Vice President and General Manager, J. Anderson also learned confidential information about Crystal Valley's customers, including, but not limited to: contact information, product specifications, customer priority, buying patterns, rates of usage, payment history, and pricing information.
20. As Crystal Valley's Vice President and General Manager, J. Anderson also had contact with Crystal Valley's suppliers, including, but not limited to, Camco Manufacturing, Inc. (" Camco" ).
21. Through his contacts with Crystal Valley's suppliers, J. Anderson generated goodwill between Crystal Valley and its suppliers while working for, and receiving compensation from, Crystal Valley.
22. Through his contacts with Crystal Valley's suppliers and also through his work as Crystal Valley's Vice President and General Manager, J. Anderson also learned confidential information about Crystal Valley's suppliers including, but not limited to: supplier identity, net-pricing information, profit margins, and credit terms.

The Employment Agreement

23. On July 1, 2007, Crystal Valley and J. Anderson entered into a Stock and Employment Agreement (the " Agreement" ). ...
24. Section 5 of the Agreement (the " Non-competition Provision" ) contains the following restrictive covenants against J. Anderson:
[Noncompete. During his employment and for one year thereafter, J. Anderson agrees not to engage directly or indirectly in competition with Crystal Valley by doing business or assisting another person or enterprise in soliciting any customer of Crystal Valley on behalf of another business or enterprise other than for Crystal Valley or by soliciting or placing orders with any of Crystal Valley's suppliers for critical products purchased by Crystal Valley from that supplier for the preceding twelve months.]
....

While employed at Crystal Valley, J. Anderson diverted supplier Camco to his dad's company, National Sales

26. While still employed as Crystal Valley's Vice President and General Manager, J. Anderson diverted one of Crystal Valley's critical suppliers, Camco, to National Sales, for the purpose

Page 650

of competing against Crystal ...

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