Donald Dean Oberfoell, individually and Do-Bid Holdings, LLC, d/b/a Do-Bid Online Auctions, Appellants,

This opinion will be unpublished and
may not be cited except as provided by
Minn. Stat. § 480A.08, subd. 3 (2016).

STATE OF MINNESOTA
IN COURT OF APPEALS
A17-0575

Donald Dean Oberfoell, individually and Do-Bid Holdings, LLC,
d/b/a Do-Bid Online Auctions,
Appellants,

vs.

Bartley Nathaniel Kyte, a/k/a Bart Kyte, individually and
d/b/a 2 Rivers Auctions, LLC, and d/b/a 2riversauctions.com,
Respondents.

Filed January 22, 2018
Affirmed
Smith, Tracy M., Judge

St. Louis County District Court
File No. 69VI-CV-15-156

Bryan M. Lindsay, The Trenti Law Firm, Virginia, Minnesota (for appellants)

R. Thomas Torgerson, Hanft Fride, Duluth, Minnesota (for respondents)

Considered and decided by Hooten, Pres iding Judge; Smith, Tracy M., Judge; and
Smith, John, Judge.


 Retired judge of the Minnesota Court of A ppeals, serving by appoi ntment pursuant to
Minn. Const. art. VI, § 10.

2
U N P U B L I S H E D O P I N I O N
SMITH, TRACY M., Judge
Respondent Bartley Kyte worked for appe llant Donald Oberfoell’s online-auction
business until Kyte left to start his own online-auction business. Appellants (Oberfoell and
his business Do-Bid Holdings, LLC) asserted a number of claims against respondents (Kyte
and his business 2 Rivers Auctions, LLC), incl uding breach of contra ct not to compete,
violation of the Minnesota Uniform Trad e Secrets Act (MUTSA), and conversion.
Following a bench trial, the district court ru led in favor of respondents and dismissed all
claims with prejudice. Because we conclude that the district cour t properly determined
that the noncompete agreement was unenforceable, that appellants did not establish a trade-
secret violation, and that a ppellants’ conversion claim was precluded by their statutory
trade-secrets claim, we affirm.
FACTS
Oberfoell is the owner and operator of Oberfoell Auctioneers, which has operated
live auctions in northern Minnesota since the 1980s. Oberfo ell and his wife own Do-Bid
Holdings LLC, which does bu siness as Do-Bid Auctions and provides facilities to
Oberfoell’s other properties.
Kyte began working fo r Oberfoell in early 2009, with no contra ct in place, when
Oberfoell Auctioneers had just begun to operate an online- auction business through Do-
Bid.com. Kyte initially performed task s such as taking p hotographs and writing
descriptions of auction items. As he contin ued to work for Oberfoell, Kyte was included

3
in more business activities and eventually took ov er the computer wo rk for Oberfoell’s
online-auction business.
In late December 2009, at Oberfoell’s request, Kyte signed an “Association
Agreement” containing a noncompete clause. In relevant part, the agreement read:
Associate further covenants an d promises that, if for any
reason, the relationship of auctio n/real estate sales broker and
associate shall be terminated between the signatories, associate
shall not, directly or indirectly, for a period of 5 years from the
date of discontinuance of the relation, engage in the activity of
general auction and real estate sales, as either broker, sales
person, independent contractor or employee, within an area
extending 150 miles from Mt. Iron, Minnesota.

In 2012, Oberfoell hired Charles Crep to create a number of process manuals and
documents for the operation of Oberfoell Auctioneers and its affiliates, including an Excel
spreadsheet for auction listings that was scripted to automatic ally populate certain fields.
A nearly identical spreadsheet was later found on Kyte’s computer after he left Oberfoell
Auctions and started his own online auction business.
In the late summer of 2014 , Kyte informed Oberfoell that he would be leaving his
employment after the scheduled fall auctions were finished. In October, Kyte stopped
working for Oberfoell.
In early 2015, Kyte began conducting onlin e auctions through his new business,
2 Rivers Auctions. In late March, two of Oberfoell’s employees left Oberfoell’s
employment and began working for Kyte at 2 Rivers.
Appellants sued respondents, alleging breach of contract, breach of duty of loyalty,
tortious interference with business relations, conversion, and violation of MUTSA. After

4
a bench trial, the district court determ ined that the noncompete agreement was
unenforceable and dismissed all of appellants’ claims with prejudice. Appellants challenge
the district court’s dismissal of their breach-of-contract, conversion, and MUTSA claims.1
D E C I S I O N
I. The district court did not err in determining that the noncompete clause in the
association agreement was unenforceable.

Noncompete covenants are to be “car efully scrutinized by courts” and are
“traditionally disfavored as restraints on an individual’s ability to make a living.” Klick v.
Crosstown State Bank of Ham Lake, Inc., 372 N.W.2d 85, 87 (Minn. App. 1985). “Because
restrictive covenants are agreem ents in restraint of trade, they are enforc ed only to the
extent reasonably necessary to protect a legitimate business interest.” Webb Publ’g Co. v.
Fosshage, 426 N.W.2d 445, 450 (Minn. App. 1988). It is not within the scope of this
court’s review “to make the essentially factual finding of whether the [restrictive] covenant
was reasonable.” Klick, 372 N.W.2d at 87-88. As such , this court will not set aside a
district court’s determinations regarding whether a restrictive covenant is reasonable unless
those findings are clearly erroneous. Id. at 88.

1 In their brief on appeal, appellants include the tortious-interference-with-contract claim
in the list of legal issues but do not address it further. Because appellants failed to brief
this issue they ha ve waived it. See Melina v. Chaplin, 327 N.W.2d 19, 20 (Minn. 1982)
(concluding issues not briefed on appeal are waived); State v. Modern Recycling, Inc., 558
N.W.2d 770, 772 (Minn. App. 1997) (“An assignment of error based on mere assertion and
not supported by any argument or authorities in appellant’s brief is waived and will not be
considered on appeal unless prejudicial erro r is obvious on mere inspection.”) (quotation
omitted).

5
A. The district court properly found no legitimate, protectable interest.

“[R]estrictive covenants are enforced to th e extent reasonably necessary to protect
legitimate business interests. Legitimate in terests that may be protected include the
company’s goodwill, trad e secrets, and confidential information.” Medtronic, Inc. v.
Advanced Bionics Corp. , 630 N.W.2d 438, 456 (Minn. App. 2001). The district court
found that appellants “failed to demonstrat e a legitimate business purpose for which the
non-compete agreement is necessary to prot ect.” Appellants argue that the noncompete
agreement was necessary to sa feguard Oberfoell’s goodwill, as well as his trade secrets
and confidential information, and therefore was reasonably protecting a legitimate business
interest.
1. Goodwill

Appellants contend that Oberfoell had a legitimate business interest based on Kyte’s
increasing involvement with c lients throughout his employment “to the point that [Kyte]
was operating the business and effectively became the face of [Oberfoell’s] operations.”
Appellants’ argue that, “[t]hrough his increasing role in [the] business, [Kyte] was in [a]
position to acquire a close pe rsonal hold upon many of [O berfoell’s clients] and in
consequence a substantial portion of [Oberfoell’s goodwill].”
To support their argument, appellants cite to cases that stand for the proposition that
a purchase of a business can incorporate the purchase of customer goodwill, which can be
protected by a reasonab le noncompete agreement with the seller. See, e.g. , Bess v.
Bothman, 257 N.W.2d 791, 794 (Min n. 1977) (“A party may purchase the goodwill of a
business and, to protect his investment, require the seller not to compete with the business

6
sold. But such a restraint of trade is valid only if it is reasonable, and a restraint that
provides more protection to the purchaser th an is necessary to secure the goodwill he
purchased is unreasonable and therefore illegal.”). Appellants also point to cases where an
employee had a “route” that made the employee the customers’ exclusive contact with the
employer’s business, see Menter Co. v. Brock, 147 Minn. 407, 410-11, 180 N.W. 553, 555
(1920) (discussing milk and laundry route cases), or where a professional employee built
up a client base with the employer’s patients, see Granger v. Craven, 159 Minn. 296, 300,
199 N.W. 10, 12 (1924) (involving a medical practice). Appellants suggest that, similar to
these cases, Kyte carried his employer’s good will because he frequen tly interacted with
customers to the point that they associated him with Ob erfoell’s business and this
association created a legitimate business in terest that was pr operly protected by a
noncompete agreement.
The record supports the district court’s finding of no legitim ate business interest
based on customer relationships. The reco rd indicates that Kyte’s responsibilities at
Oberfoell Auctions grew throughout his em ployment and that, although his employment
began with relatively basic tasks, such as photographing auction items and writing
descriptions, he eventually ran the online auction website. But appellants never identified
any of Oberfoell’s customers—most notably the customers Kyte allegedly had regular
contact with—or submitted the company’s buyer or seller list into evidence. Significantly,
appellants not only introduced no evidence of its customer lists, th ey also produced no
evidence of any improper use of those lists. In the cases appellants rely on, there was more
than just, as appellants assert, a “strong possibility” that customers would follow a former

7
employee; a significant number of customers were actually shown to have done just that.
See Saliterman v. Finney, 361 N.W.2d 175, 176 (Minn. App. 1985) (enforcing noncompete
agreement where former empl oyee violated a restrictive covenant by establishing a
competing dental practice with in three miles of former employer’s office and actively
soliciting prior employer’s patients using confidential patient lists); Granger, 159 Minn. at
297, 199 N.W. at 11 (enforcing noncompete agreement against physician’s assistant after
assistant actively advertised new medical practice in the local newspaper).
Furthermore, appellants did not establish th at Kyte was even in a position to carry
Oberfoell’s goodwill based on his contact with customers during his employment with
Oberfoell. Kyte testified th at he worked more closely than Oberfoell did with “some”
sellers and would work with these sellers on “multiple occasions.” And at the height of his
work, Kyte managed the online website. Yet ther e is no evidence in the record that Kyte
was the “face” of the online auction company or customers’ exclusive contact with
Oberfoell’s business. Nor is there any evidence suggesting that customers who had worked
with Kyte were hesitant to continue business with Oberfoe ll after Kyte’s departure, let
alone that any customer actually followed Kyte to his new business at 2 Rivers Auctions.
Based on the lack of evidence regarding Oberfoell’s customer loyalty, or even who
exactly Oberfoell’s customers were, we conclude that the district court did not clearly err
in finding that appellants failed to establish the existence of a protectable goodwill interest.
2. Trade Secrets and Conf idential Information

Appellants also argue that Oberfoell’s client list, as well as hi s “business records,
proprietary information and affiliate traini ng and process manuals ” warranted protection

8
by a noncompete agreement, presumably because they qualified as either trade secrets or
confidential information. See Medtronic, 630 N.W.2d at 456. Appellants identify two
types of information that they argue qualify as protectable under a noncompete agreement:
(1) the bidder and seller lists (collectively “client list”) and (2) the processes and materials
prepared by Crep. We address each in turn.
Client List
Customer lists that are generally availa ble are not considered trade secrets. See,
e.g., Widmark v. Northrup King Co., 530 N.W.2d 588, 592 (Minn. App. 1995) (identity of
seed dealer’s customers was not trade secr et under MUTSA, when customers’ identities
could be ascertained by seller from purchase orders placed by dealer, which included
customer’s name and address), review denied (Minn. Jun. 14, 1995)
These customer lists do not qualify because all the elements of a trade secret are not
met. Here, either the information was readily ascertainably by others, or Oberfoell failed
to take reasonable efforts to maintain its se crecy, or both. Oberfoell testified that
information on his clients, including clients’ full name, was available in formats regularly
accessed by employees and indepe ndent contractors. Although only Kyte and Oberfoell
had master passwords allowing them to download the complete customer list from a work
computer, bidder-list information was available on the invoices that employees and other
company affiliates used regularly. Crep also had access to the bidder list while providing
services to Oberfoell. Similarly, sellers’ names and contact information were listed in the
sales contracts that were written by salespeople and receptionists. Copies of the seller list
were also available on the front desk computers, which were accessible without passwords,

9
and all salespeople had access to this list upon request. Hard copies of the seller list were
available in the reception areas of Oberfoell’s offices, areas to which the public had access.
Moreover, Oberfoell never gave his employe es or independent contractors—including
Crep—a confidentiality policy. Based on the number of people who had access to
Oberfoell’s client information without passwords or a confidentiality agreement, the record
supports the district court’s implicit finding that appellants’ client list was not confidential
or a trade secret.
In addition, appellants argue that “[Kyte’s] ability to misappropriate the client list
and compete against [Oberfoell] warranted protecting the information through the use of a
covenant not to compete . . . .” (Emphasi s added.) Yet, in se eking to enforce the
agreement, appellants again point solely to cases in which courts have enforced
noncompete agreements agai nst former employees who no t only had the ability to
misappropriate clients but actua lly did so by copying their em ployer’s list and soliciting
former clients. See Equip. Advertis er, Inc. v. Harris , 271 Minn. 451, 136 N.W.2d 302
(1965); Thermorama, Inc. v. Buckwold , 267, Minn. 551, 125 N.W.2d 844 (1964). As
previously discussed, in this case there is no evidence in the record that Kyte solicited any
of Oberfoell’s clients or copied his bidder or seller lists. In fact, Oberfoell hired a forensic
expert who found no such lists on Kyte’s computer.
Materials created by Crep
Appellants also argue that “processes, procedures and systems” developed by Crep
for Oberfoell’s auction business were protectable interests, again presumably because they
were confidential or trade secrets. At tria l, Oberfoell presented evidence regarding a

10
variety of documents and spreadsheets commissioned by Oberfoell to assist “in updating,
streamlining, and improving his company systems.”
Appellants argue that the district court ap plied an improper standard to determine
whether a protectable intere st was present by requiring appellants to demonstrate
“something in the nature of a trade secret or a heightened level of protection” rather than
looking at whether Oberfoell used “reasonable effort[s]” to prot ect the information. It is
true that merely confidential information, not just trade secrets, may be a protected interest.
See Medtronic, 630 N.W.2d at 456. Yet here, no do cument created by Crep was ever
marked as confidential, nor do es the record indicate that Crep’s employment agreement
addressed, let alone defined, confidential information. The district court did not state that
it was applying only a trade-secret analysis when it considered whether appellant had
established a protectable interest.
Moreover, even under appella nt’s suggested “reasonable effort[s]” standard, the
record supports the district court’s finding of no protectable interest. The training manuals,
processes, and documents that Crep created were distributed to Oberfoell’s employees and
affiliates. While Oberfoell in itially asked Crep to sign a conf identiality agreement, Crep
refused and never signed one. Throughout his work for Oberfoell, Crep was not directed
to mark any of the documents he prepared as confidential or trade secret, nor did he do so.
We conclude that it was not a clear error to find no protectable interest under these facts.

11
B. The district court did not clea rly err in finding the noncompete
agreement unreasonable.

The district court invalidated the noncompete agreement based not only on lack of
a protectable interest but al so on the scope of the agr eement. When examining the
reasonableness of a restrictive covenant, the district court should consider “the nature and
character of the employment, the nature and extent of the business, the time for which the
restriction is imposed, the territorial extent of the covenant, and other pertinent conditions.”
Dynamic Air, Inc. v. Bloch, 502 N.W.2d 796, 799 (Minn. App. 1993).
In this case, the noncompete agreement prohibited Kyte from working in the auction
business within 150 miles of where Oberfoell Auctioneers was located, for five years after
his association with Oberfoe ll ended. The district cour t found both th e geographic
restriction and duration of the agreement unreasonable.
Geographic restriction

Appellant argues that the 150-mile re striction was reasona ble and supported by
Oberfoell’s testimony that this geographic area was necessary for him to maintain his
customer base. At trial, Oberfoell stated that the majority of his bidders and sellers resided
in the geographic area specified in the noncompete agreement. Oberfoell explained that
this 150-mile radius was the “farm area” he had cultivated and that he continued to require
this geographic area to support his auction busi ness. Oberfoell testified that such a large
farm area was required to support his auc tion company in the Iron Range because there
were fewer people living there, as compared to the Twin Cities.

12
As respondents point out, Oberfoell did no t submit evidence that Kyte interacted
with customers in the geographic radius specified by the noncompete agreement during his
employment with Oberfoell. The only eviden ce justifying this geographic area was
Oberfoell’s own testimony that most of his cu stomers lived within th is 150-mile radius.
No customer lists were submitted into eviden ce with the actual addresses of bidders or
sellers. Moreover, as the distri ct court noted, “the 150 mile re striction is arbitrary in the
context of an online auction business.” Base d on the record, it was not clearly erroneous
for the district court to find that Oberfoell failed to establish that this geographic restriction
was necessary. Therefore, the district court did not clearly err in finding the geographic
scope of the noncompete agreement unreasonable.
Duration

Appellants argue the five-year time restriction was necessary because 35% to 40%
of Oberfoell’s clients would typically return or refer new clients back to him within a five-
year cycle. Respondents argue that “[Oberfoell’s] evidence, even if believed, does not
address the relevant factors necessary to establish an enforceable non-compete
[agreement].”
When assessing the duration of a restrictive covenant, courts consider two factors:
“(1) the length [of time] n ecessary to obliterate the identification between employer and
employee in the minds of the employer’s cust omers, and (2) the length of time necessary
for an employee’s replacemen t to obtain licenses and le arn the fundamentals of the
business.” Dean Van Horn Consulting Assocs. v. Wold , 395 N.W.2d 405, 408-09 (Minn.
App. 1986). Applying this analysis, the distri ct court found that the five-year restriction

13
was unreasonable because, “based on the nature of the work, it would not take a significant
period of time to train a replacement and [Oberfoell’s] customers could become
accustomed to [respondent] Kyte’s replacement quickly.”
The district court’s reasoning is supported by the record. Oberfoell never hired a
replacement for Kyte or trained an existing employee to perform Kyte’s job after his
departure. Oberfoell simply delegated Ky te’s previous work to other employees.
Likewise, while Oberfoell may have mentored Kyte and taught him about the auction
business, Kyte was able to begin running the online website with in a few months of
commencing employment, and there is no evidence that Kyte received extensive training
to learn to do computer work for Oberfoell’s business. See Klick , 372 N.W.2d at 89
(affirming unenforceability of noncompete agreement wher e testimony suggested that
“appellant’s motivation for the restrictive c ovenant was not to pr otect its legitimate
interests in preventing unfair competition, but to protect its ‘investment’ in respondent by
forcing him to remain with the [employer] for a long time”).
Appellants also did not establish that a five-year restriction was necessary to allow
customers to stop associating Kyte with Ob erfoell’s business. Kyte’s departure was
announced for several weeks on Oberfoell Auctioneer’s website. As respondents point out,
“Oberfoell did not produce any evidence show ing that anyone contact ed Oberfoell after
Kyte’s departure seeking to deal with Kyte, or that if they did, [tha t they] refused to deal
with Oberfoell because Kyte was no longer available.”
Appellants cite Davies & Davies Agen cy, Inc. v. Davies , 298 N.W.2d 127
(Minn. 1980), as analo gous to this case. Davies involved a five-yea r, 50-mile-radius

14
noncompete agreement between an insura nce company and its former employees. Id. at
129. In that case, however, the Minnesota Supreme Court affirmed the district court’s
determination that the five-year restriction was unreasonable and unenforceable and that
the temporal restriction should be reduced to one year. Id. at 131-32. Thus, even in Davies,
the five-year duration was found to be unre asonable. Based on the record here, we
conclude the district court’s finding that the five-year restriction was unreasonable is not
clearly erroneous.
Blue Penciling
In the alternative, appellants request that, should the district court’s finding that the
noncompete agreement was unreasonable in scope be affirmed, this court should remand
the case to the district court to “blue pencil” the covenant and enforce it as revised. Under
the blue-pencil doctrine, if the district court finds that a restrictive covenant is unreasonable
as written, it may modify the covenant “to render it reasonable and enforceable.” Dynamic
Air, 502 N.W.2d at 800; see also Davies, 298 N.W.2d at 131-32 (approving district court’s
modification of five-year restriction to one y ear). This court reviews the district court’s
decision to blue pencil a restrictive covenant for an abuse of discretion, and the same abuse
of discretion standard is app lied when reviewing a district court’s decision not to blue
pencil a restrictive covenant. Klick, 372 N.W.2d at 88-89.
“While it is certainly within the power of the trial cour t to modify [a noncompete
agreement], no cases say that a court must do so.” Id. at 88. As discussed above, the record
supports the district court’s findings rega rding the unreasonableness of scope of the

15
noncompete agreement. The district court did not abuse its discretion in declining to blue
pencil the agreement.
II. The district court did not err in find ing that appellants’ claimed business
information did not qualify as a trade secret.

Appellants challenge the dismissal of their claim under MUTSA, Minn. Stat.
§§ 325C.01-.08 (2016), arguing that the district court erred in determining that Oberfoell’s
business processes, forms, and client list do not constitute a tr ade secret. To prevail on a
MUTSA claim, a plaintiff must show both th e existence and misappropriation of a trade
secret. Electro-Craft Corp. v. Controlled Motion, Inc., 332 N.W.2d 890, 897 (Minn. 1983).
MUTSA defines a trade secret as information that (1) is not generally known or readily
ascertainable by others, (2) derives independen t economic value from secrecy, and (3) is
the subject of efforts that are reasonable u nder the circumstances to maintain secrecy.
Minn. Stat. § 325C.01, subd. 5(i), (ii); see also Electro-Craft , 332 N.W.2d at 899-901
(applying statutory test). If an employee acquires a trade secret without express notice that
it is a trade secret, th en the employee must know or have reason to know that the owner
expects secrecy. Minn. Stat. § 325C.01, subd. 5.
The district court found that Oberfoe ll’s business informa tion “is not overly
complex, is generally known and is readily ascertainable,” and that “[appellants] failed to
demonstrate that they put forth reasonable effo rts to maintain the secrecy of the claimed
trade secrets.” A district court’s findings on whether information is generally known or
readily ascertainable by others, and on whether information is the subject of efforts that are

16
reasonable under the circumstances to maintain secrecy, are findings of fact that we review
for clear error. Electro-Craft, 332 N.W.2d at 899, 901-02.
Crep’s materials
Appellants argue that “processes develope d by Charlie Crep in 2012 which were
employed in [Oberfoell’s] business operations ar e trade secrets.” Appellants assert that
this information was protected by passwords and implicitly argue that this password
protection made the information not generally available and constituted a reasonable effort
to maintain secrecy.
Although appellants offer no authority sta ting that a password alone is enough to
maintain the secrecy of a busin ess’s trade secret, “[s]ecrecy need not be total; depending
on the circumstances, only partial or qualified secrecy will do,” and we must determine if
appellant took reasonable efforts to maintain secrecy. Jostens, Inc. v. Nat’l Comput. Syss.,
Inc., 318 N.W.2d 691, 700 (Minn. 1982) (citing Com-Share, Inc. v. Comput. Complex, Inc.,
338 F. Supp. 1229, 1234-35 (E.D. Mich. 19 71) (finding that computer software was
protected because plaintiff marked each page as confidential and built passwords into the
system to prevent unauthorized access)). In Electro-Craft, the Minnesota Supreme Court
held that the existence of tr ade-secret protection depends upon a “continuing course of
conduct by the employer” that creates a “conf idential relationship.” 332 N.W.2d at 901.
“This relationship, in turn, creates a reciprocal duty in the employee to treat the information
as confidential insofar as the employer has so treated it.” Id.
Here, the record does not establish this confidential relationship. No testimony was
introduced suggesting that Crep’s processes and documents were password protected, and

17
Crep testified that his process manuals were distributed to Oberfoell’s affiliates. None of
Crep’s materials were marked as trade secrets or confidential. The district court did not
clearly err in finding that this information was generally known and readily ascertainable
and that the secrecy was not reasonably maintained.
Client list
Customer identity and location are generally not considered to be trade secrets. See,
e.g., Widmark, 530 N.W.2d at 592 (affirming district court’s finding of no trade secrets
when identities of customers were “read ily ascertainable” from purchase orders and
plaintiff presented no specific evidence of reasonable efforts to keep identities of customers
secret), review denied (Minn. Jun. 14, 1995). Here, th e same customer information that
was on the allegedly confidential client list was also regularly included on invoices and
sales contracts. Numerous employees and i ndependent contractors, none of whom were
subject to a confidentiality agreement, had acces s to this information and worked with it
on a regular basis. While the master bidder list was password protected, the seller list was
not. In addition, neither the bidder list nor the seller list was marked as confidential.
Appellants argue that, nevertheless, Obe rfoell “set the expectation within his
business that disclosure of company informa tion was not permissible.” Yet, neither the
record nor appellants’ brief explains how Oberfoell communicated this expectation at large
to his employees, independent contractors, or affiliates. The transcript pages that
appellants cite in support refer only to an exchange between Kyte and Oberfoell in 2012 in
which Oberfoell reprimanded Kyte for sharing passwords with a third party and informed
Kyte that the bidder list was of “considerable value.” There is no evidence of any general

18
business policy or conversatio ns between Oberfoell and ot her workers who had regular
access to company information.
Based on the record, the district court did not clearly err in finding that the materials
created by Crep, as well as Ob erfoell’s client list, were generally known and readily
ascertainable by others and not reasonably protected by Oberfoell. Therefore, we conclude
that the district court did not err in conclu ding that appellants failed to establish the
existence of a trade secret and in dismissing their claim under MUTSA.
III. The district court properly concluded th at appellants’ conversion claim was
displaced by its trade secrets claim.

Appellants argue that the district court erred in dismissing their conversion claim as
displaced by MUTSA. Statutory interpretation presents a question of law, which we review
de novo. Halvorson v. Cty. of Anoka, 780 N.W.2d 385, 389 (Minn. App. 2010).
Minn. Stat. § 325C.07 establishes when a common-law claim is displaced by a
statutory misappropriation-of-trade-secrets claim:
(a) Except as provided in paragraph (b), sections
325C.01 to 325C.07 displace conflicting tort, restitutionary,
and other law of this state providing civil remedies for
misappropriation of a trade secret.
(b) Sections 325C.01 to 325C.07 do not affect:
(1) contractual remedies, whether or not based upon
misappropriation of a trade secret; (2) other civil remedies that
are not based upon misappropria tion of a trade secret; or
(3) criminal remedies, whether or not based upon
misappropriation of a trade secret.
The district court determined that a ppellants’ conversion claim was displaced
because it was based on the same documents, information, and processes alleged to be trade
secrets under MUTSA. Appellants conced e they brought a conve rsion claim as an

19
alternative claim “in the event that the information did not qualify as a trade secret.”
Appellants cite no case in support of their a ssertion that the district court erred in
determining that their common-law claim was statutorily displaced.
Two federal district court decisions are persuasive in support of the conclusion that
appellants’ conversion claim was statutorily displaced. In Superior Edge, Inc. v. Monsanto
Co., a Minnesota federal district court granted a motion to dismiss a conversion claim when
“there [was] no information that [plaintiff] al lege[d] was converted that it [did] not also
allege [to be] a trade secret.” 964 F. Supp. 2d 1017, 1039-40 (D. Minn. 2013). Similarly,
in SL Montevideo Tech., Inc. v. Eaton Aerospace, LLC, the federal district court denied a
rule 12 motion to dismiss a claim under MU TSA but granted the motion to dismiss
common-law conversion and tortious-interference claims because the common-law claims
alleged nothing more than misappropriation of trade secrets. 292 F. Supp. 2d 1175, 1179-
80 (D. Minn. 2003).
As in Monsanto and SL Montevideo , appellants identify no allegedly converted
information that differs from th e information claimed to be a trade secret. Therefore, we
conclude that the district court properly dismissed appellants’ conversion claim.
Affirmed.