Opinion
No. C4-02-1192.
Filed February 4, 2003.
Appeal from the District Court, St. Louis County, File No. C501601718.
Bridget A. Brine, (for appellant)
Patrick M. Spott, Jeremy M. Hurd, Orman, Nord Spott Law Offices, (for respondent Michael A. Coombe)
Kenneth D. Butler, (for respondent Hayes Subaru, Inc.)
Considered and decided by Peterson, Presiding Judge, Randall, Judge, and Willis, Judge.
This opinion will be unpublished and may not be cited except as provided by Minn. Stat. § 480A.08, subd. 3 (2002).
UNPUBLISHED OPINION
Appellant challenges the district court's refusal to compel discovery and its grant of summary judgment to respondents. Appellant argues that (1) the district court abused its discretion by concluding that the information sought in discovery was not reasonably calculated to lead to the discovery of admissible evidence and (2) summary judgment was premature because appellant was denied the opportunity to discover evidence of damages. Because we conclude that the district court abused its discretion, we reverse and remand.
FACTS
Appellant Sonju Two Harbors LLC, an automotive dealer, employed respondent Michael A. Coombe beginning in 1997. In March 1999, Sonju promoted Coombe to general sales manager. As a condition of the promotion, Coombe signed a noncompete agreement that prohibited employment with any automotive dealer within 120 miles of Sonju for a period of 24 months after the termination of Coombe's employment with Sonju. Coombe also agreed not to disclose any "strategic information" or to use such information for the benefit of a third party.
Coombe resigned from Sonju in May 2000. In July 2001, Coombe began employment with respondent Hayes Subaru, Inc., an automotive dealer located within 120 miles of Sonju. Sonju learned of Coombe's employment with Hayes and sued both, alleging that Coombe breached, and Hayes tortiously interfered with, the noncompete agreement. As part of its discovery, Sonju served Hayes with a series of interrogatories about Hayes's customers. The interrogatories sought the names and addresses of Hayes's customers who (1) were customers after Coombe began working for Hayes and (2) bought a vehicle, traded in a vehicle, or had a vehicle serviced by Hayes. The interrogatories also sought information about the make and model of the vehicles bought, traded in, or serviced and about whether the purchases were financed. Hayes objected to each of the interrogatories about its customers on the basis of relevance.
Sonju moved the district court for an order compelling discovery. Sonju argued that the information about Hayes's customers was necessary for calculating damages and that relevance was not an appropriate objection at the discovery stage. The district court denied Sonju's discovery motion, holding that the information sought was not reasonably calculated to lead to the discovery of admissible evidence. The court reasoned that the interrogatories were based on the assumption that customers buying vehicles from Hayes after Coombe began working there did so solely because of Coombe, an assumption that the district court found to be without merit. The district court further reasoned that "the information sought * * * could potentially lead to intrusion into the personal and private affairs" of Hayes's customers.
The district court ultimately granted summary judgment to Coombe and Hayes, finding that Sonju had failed to show damages resulting from the breach and tortious interference because Sonju was "incapable of calculating lost profits or customers * * * without speculating." This appeal follows.
DECISION
Sonju argues that the district court abused its discretion by refusing to grant Sonju's motion to compel discovery. The district court "has wide discretion to issue discovery orders and, absent clear abuse of that discretion, normally its order with respect thereto will not be disturbed." Shetka v. Kueppers, Kueppers, Von Feldt Salmen, 454 N.W.2d 916, 921 (Minn. 1990).
The Minnesota Rules of Civil Procedure provide that
[p]arties may obtain discovery regarding any matter, not privileged, which is relevant to the subject matter involved in the pending action, whether it relates to the claim or defense of the party seeking discovery[.] * * * The information sought need not be admissible at the trial if the information sought appears reasonably calculated to lead to the discovery of admissible evidence.
Minn.R.Civ.P. 26.02(a). The goal of discovery is to "ascertain facts or information which may be used for proof or defense of an action. Such information may be discovered by leads from other discoverable information." Jeppesen v. Swanson, 243 Minn. 547, 560, 68 N.W.2d 649, 656 (1955).
The district court concluded that the information Sonju sought through its interrogatories could not "i[n] any way be reasonably calculated to lead to the discovery of admissible evidence." We disagree. Sonju sought Hayes's customer information to compare it with its own customer list, which would allow Sonju to determine how many of its former customers became Hayes's customers during the period of Coombe's employment. A loss of customers would translate to lost profits and, therefore, is related to Sonju's claim of damages. See Kjesbo v. Ricks, 517 N.W.2d 585, 588 (Minn. 1994) (requiring a showing of damages in an action for tortious interference); B Y Metal Painting, Inc. v. Ball, 279 N.W.2d 813, 816 (Minn. 1979) (requiring a showing of lost profits to establish damages for breach of a noncompete agreement). While the customer information alone may not prove damages, it is either admissible or reasonably calculated to lead to the discovery of admissible evidence. If Sonju were to discover former customers who are now customers of Hayes, Sonju could seek further discovery to show that it lost customers, and thereby profits, to Hayes because of Coombe's breach and Hayes's tortious interference.
Further, the district court's concern about intrusion into the private affairs of Hayes's customers is an insufficient ground to deny Sonju's discovery motion. The district court could issue a protective order to guard against unnecessary disclosure of the information, review the information in camera, or both. See Minn.R.Civ.P. 26.03 (allowing the district court to issue a protective order); Erickson v. MacArthur, 414 N.W.2d 406, 409 (Minn. 1987) (noting that the in camera approach "strikes a fair balance" between the interests of the party seeking to maintain confidentiality and those of the party seeking discovery).
Because the information that Sonju sought through its interrogatories was within the scope of permissible discovery, and because procedures such as the issuance of a protective order or in camera review would address concerns about the sensitivity of the information, the district court abused its discretion by denying Sonju's motion to compel discovery. The district court's grant of summary judgment to Coombe and Hayes on the ground that Sonju had failed to prove damages was, therefore, premature. See U.S. Bank Nat'l Ass'n v. Angeion Corp., 615 N.W.2d 425, 433-34 (Minn.App. 2000) (noting that summary judgment may be premature when discovery has been minimal and the information needed to survive summary judgment is in the moving party's sole possession), review denied (Minn. Oct. 25, 2000). We therefore reverse the district court's summary-judgment order and remand for further proceedings not inconsistent with this opinion.
Reversed and remanded.