Automated Summary
Key Facts
Aptly Technology Corporation (Aptly) sued Yunjun Wu, Richard Lu, and DeManaCo, LLC (Defendants) for breach of contract and tortious interference with a Microsoft managed service contract. Wu, as Aptly's Vice President, directed Microsoft to use competitor Biblioso instead of Aptly for the Bing Answers project. Biblioso then subcontracted the work to DeManaCo, co-owned by Lu and Wu's husband. The trial court found Wu breached her employment agreement and tortiously interfered with Aptly's business relationship, awarding damages of $633,044.94 for lost profits from January 2021 to 2023. The court also ruled in favor of Defendants on one misappropriation of trade secrets claim, awarding them attorney fees, but the appellate court reversed this fee award as an abuse of discretion.
Transaction Type
Managed service engagement for IT consulting services between Aptly Technology Corporation and Microsoft Corporation
Issues
- The court denied Defendants' request for appellate attorney fees due to non-compliance with RAP 18.1(b), which requires a dedicated section in the opening brief for such requests. Defendants failed to include this required section.
- The court reversed the trial court's attorney fee award in favor of Defendants on the step-by-step template misappropriation claim. The appellate court found no evidence Aptly acted in bad faith, as there was a tenable basis for the claim and no improper motive.
- The court affirmed the trial court's rulings in favor of Aptly Technology Corporation on its breach of contract and tortious interference claims against Yunjun Wu and Richard Lu. Defendants argued the findings on causation and damages were erroneous, but the appellate court concluded substantial evidence supported the trial court's decisions.
- The court affirmed the trial court's denial of attorney fees for the gross margin calculator and sample communications misappropriation claims. The record showed factual bases for these claims and no evidence of improper motive by Aptly.
Holdings
- The appellate court affirmed the trial court's denial of attorney fees for the misappropriation claims involving the gross margin calculator and sample communications, as these claims were supported by evidence showing exclusive Aptly access and confidentiality measures, with no indication of improper motive by Aptly.
- The appellate court reversed the trial court's award of attorney fees to Defendants on the misappropriation claim related to the step-by-step template, finding that Aptly's claim had a factual basis (Microsoft and Aptly collaborated on the template) and no evidence of bad faith or improper motive.
Remedies
- The trial court initially granted Defendants $68,516.50 in attorney fees under RCW 19.108.040 for their successful defense against the misappropriation claim related to the 'step-by-step template.' However, the appellate court reversed this award, concluding the trial court abused its discretion by finding the claim was not made in bad faith. The other two misappropriation claims resulted in denied fee awards, which the appellate court affirmed.
- The trial court awarded Aptly Technology Corporation $633,044.94 in damages for breach of contract and tortious interference with business expectancy claims. This amount reflects lost profits from January 2021 to a revised end date in 2023, as determined after a motion to reopen the trial. The appellate court affirmed this portion of the award.
Monetary Damages
633044.94
Legal Principles
- The court applied Washington's Uniform Trade Secrets Act (UTSA) to award attorney fees for bad faith claims, requiring evidence of intentionally frivolous claims for improper purposes like harassment. The trial court's ruling was reversed in part because Aptly's claim about the step-by-step template had a tenable basis and no evidence of improper motive.
- The appellate court applied a deferential standard of review, upholding the trial court's findings if supported by substantial evidence. This included not retrying factual disputes and deferring to the trial court's credibility determinations.
Precedent Name
- Demelash v. Ross Stores, Inc.
- Thola v. Henschell
- Gemini Alum. Corp. v. Cal. Custom Shapes, Inc.
- Larsen v. Walton Plywood Co.
- Rogerson Hiller Corp. v. Port of Port Angeles
- DTM Research, L.L.C. v. AT&T Corp.
- FLIR Sys., Inc. v. Parrish
- In re Recall of Pearsall-Stipek
Cited Statute
- Washington's Uniform Trade Secrets Act (UTSA)
- Rule 18.1 of the Rules of Appellate Procedure (RAP)
Judge Name
- Judge Feldman
- Judge Cohen
Passage Text
- The trial court correctly noted, as Larsen confirms, 'damages need only be reasonably ascertainable.'... The court then explained it accepted 'in part' the analysis of both Aptly's and Defendants' damages experts.
- I always emphasize vendor quality is important... It is easy for me to choose Aptly because they already prove the vendor quality in history. Aptly already proposed the managed service mode to me.
- [T]he Court hereby GRANTS IN PART Defendants' motion for attorneys' fees... because that claim, along with the testimony of Ms. Rosa Li that supported it, was factually baseless, Aptly made that claim of misappropriation in bad faith for purposes of RCW 19.108.040.
Damages / Relief Type
- Defendants awarded $68,516.50 in attorney fees for one misappropriation claim, later reversed by the appellate court.
- Aptly awarded $633,044.94 in damages for breach of contract and tortious interference.