Smartcomm License Services, L.L.C. v. Jon Palmieri

¶1 Smartcomm License Services, L.L.C. (Smartcomm) appeals

the trial court’s grant of summary judgment in favor of Appellees David

Alcorn Professional Corporation; David and Elizabeth Alcorn, Janus

Spectrum, L.L.C. (collectively, the Alcorn Defendants); and Jon Palmieri.

Smartcomm also appeals the trial court’s denial of an application for an

order to show cause. For the following reasons, we affirm.

FACTS AND PROCEDURAL HISTORY

¶2 Smartcomm was organized to help consumers prepare and

file applications to purchase cellular spectrum licenses2 from the Federal

Communications Commission (FCC). Smartcomm hired Kent Maerki,

1 The Honorable John C. Gemmill, Retired Judge of the Court of

Appeals, Division One, has been authorized to sit in this matter pursuant

to Article 6, Section 3, of the Arizona Constitution.

2 In 2004 and 2005, the FCC announced that a large number of 800

MHz licenses vacated by Sprint, usable for cellular and broadband

multimedia services, would become available for purchase at some later

date. Smartcomm’s business model was to prepare the applications ahead

of the release date, so that its clients would be the first in line to purchase

the licenses.

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David Alcorn Professional Corporation (DAPC), and Jon Palmieri as

independent contractors to solicit customers for Smartcomm. Smartcomm

entered into separate agreements with all three independent contractors

and furnished each with company materials Smartcomm alleged were

confidential and contained trade secrets. The contracts contained

confidentiality provisions that required the return of the confidential

company materials upon termination of the agreement. However, the

contracts did not contain non-compete provisions. Smartcomm eventually

terminated its arrangement with Maerki, DAPC, and Palmieri for breach of

contract. Smartcomm claims that, in the course of their business

relationship, Maerki, David Alcorn, and Palmieri obtained Smartcomm’s

client list and retained copies of documents containing trade secrets

following their terminations, which they then used to form a competing

company, Janus Spectrum, L.L.C. (Janus).

¶3 Smartcomm initially filed suit only against Maerki, but later

amended its complaint to include the Alcorn Defendants and Palmieri. The

first amended complaint included claims of breach of contract (Claim

Three), breach of the covenant of good faith and fair dealing (Claim Four),

misappropriation of trade secrets (Claim Seven), unfair competition (Claim

Eight), tortious interference with business relations (Claim Nine), breach of

the duty of loyalty (Claim Eleven), aiding and abetting (Claim Thirteen),

and conspiracy (Claim Fourteen).

¶4 This case languished in the discovery process, with all parties

alleging discovery abuses. Indeed, the trial court ultimately struck the

answer filed by Maerki and associated defendants (collectively, the Maerki

Defendants) as a discovery sanction and entered default judgment against

the Maerki Defendants for approximately $28 million. Although the

Maerki Defendants are not parties to this appeal, Smartcomm relied upon

the default judgment against the Maerki Defendants in its attempt to

overcome a motion for partial summary judgment.

¶5 Over the course of addressing four motions for partial

summary judgment, the trial court resolved all claims against Smartcomm.

After the court entered final judgment and awarded Appellees their

attorneys’ fees, Smartcomm appealed, arguing the court erred in resolving

each partial summary judgment. Additionally, Smartcomm argues the trial

court erred when it denied an application for an order to show cause

regarding allegations the Alcorn Defendants and Palmieri violated a

permanent injunction against contacting Smartcomm’s clients. We have

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jurisdiction over Smartcomm’s timely appeal pursuant to Arizona Revised

Statutes (A.R.S.) §§ 12-120.21(A)(1)3 and -2101(A)(1).

DISCUSSION

¶6 We review a trial court’s grant of summary judgment de novo,

viewing the evidence in the light most favorable to the non-prevailing

party. Salib v. City of Mesa, 212 Ariz. 446, 450, ¶ 4 (App. 2006) (citing Romley

v. Arpaio, 202 Ariz. 47, 51, ¶ 12 (App. 2002)). Summary judgment is proper

if no genuine issues of material fact exist and the moving party is entitled

to judgment as a matter of law. Ariz. R. Civ. P. 56(a); Orme Sch. v. Reeves,

166 Ariz. 301, 305 (1990). Summary judgment is also proper when the facts

supporting a claim “have so little probative value, given the quantum of

evidence required,” that no reasonable person could find for its proponent.

Orme Sch., 166 Ariz. at 309.

I. Motion for Partial Summary Judgment on Damages (Damages

MPSJ)

¶7 The Alcorn Defendants filed the Damages MPSJ in November

of 2013, arguing Smartcomm had failed to establish any material fact of

damages. Both parties filed numerous supplemental pleadings on this

motion and had ample time and opportunity to produce the necessary

documents. The trial court ultimately granted summary judgment on all

but one claim in favor of the Alcorn Defendants, finding Smartcomm did

not “establish either the fact of damages or an amount of damages

attributable to Defendants’ conduct.” The court denied the Alcorn

Defendants’ summary judgment on Smartcomm’s misappropriation of

trade secrets claim (Claim Seven). Smartcomm appeals the ruling, arguing:

(1) the court erred by entering judgment before the close of discovery, and

(2) Smartcomm presented sufficient evidence of damages.

¶8 We reject Smartcomm’s argument that the trial court erred by

ruling upon the Damages MPSJ before the close of discovery. Although

Smartcomm raised the issue within its response to the Damages MPSJ,4

Smartcomm later waived the claim when it moved to vacate the summary

3 Absent material changes from the relevant date, we cite the current

version of rules and statutes.

4 Indeed, Smartcomm successfully obtained additional time to obtain

“crucial discovery” prior to filing its response. See Ariz. R. Civ. P. 56(d)

(previously Rule 56(f)).

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judgment, admitting: “Smartcomm is not arguing that it did not have an

opportunity to present evidence. Rather, it is arguing that the Court

ignored evidence Smartcomm presented and made fundamental errors in

applying the law to the evidence before it.” Having taken this position,

Smartcomm is estopped from now claiming it “was denied the opportunity

to address [discovery deficiencies] because of the trial court’s ruling

prematurely granting summary judgment.” Cf. Adams v. Bear, 87 Ariz. 288,

294 (1960) (“[A] party is bound by his judicial declarations and may not

contradict them in . . . subsequent proceedings involving the same parties

and questions.”) (citations omitted); Martin v. Wood, 71 Ariz. 457, 459 (1951)

(proscribing “the mischiefs” that would occur “from the destruction of all

confidence in the intercourse and dealings of men, if they were allowed to

deny that which by their solemn and deliberate acts they have declared to

be true”) (quoting Hatten Realty Co. v. Baylies, 290 P. 561, 566 (Wyo. 1930));

Miles v. Franz Lumber Co., 14 Ariz. 455, 457 (1913) (“[A party] should not be

permitted to ‘blow hot and cold’ with reference to the same transaction or

insist at different times on the truth of each of two conflicting allegations

according to the promptings of his private interest.”).

¶9 Smartcomm next argues it presented sufficient evidence of

damages at summary judgment. Smartcomm presented three theories of

recovery for damages: (1) refund obligations incurred when Smartcomm’s

clients lost licenses to competing Janus clients, (2) all of Janus’s profits, and

(3) attorneys’ fees incurred filing a series of applications with the FCC

urging them to reject Janus clients’ license applications.

A. Refund Obligations

¶10 A party claiming damages must disclose “a computation and

measure of each category of damages alleged by the disclosing party, the

documents and testimony on which such computation and measure are

based, and the name, address, and telephone number of each witness whom

the disclosing party expects to call at trial to testify on damages.” Ariz. R.

Civ. P. 26.1(a)(7). If a party fails to produce evidence to support its claims

for damages, summary judgment is appropriate. See United Dairymen of

Ariz. v. Schugg, 212 Ariz. 133, 139, ¶ 21 (App. 2006). Likewise, when “vital

information is readily available to a party, it can only be presumed from the

failure to produce it that the inference is adverse.” State Tax Comm’n v.

Graybar Elec. Co., 86 Ariz. 253, 257 (1959) (citing Alger v. Brighter Days Mining

Corp., 63 Ariz. 135, 141 (1945)).

¶11 Despite specific requests from the Alcorn Defendants on at

least four occasions, Smartcomm did not produce sufficient evidence of the

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existence of any refund damages. “Refund damages,” for purposes of this

litigation, were defined as the partial refunds Smartcomm owed its clients

when its clients’ applications for a license were unsuccessful. Initially,

Smartcomm failed to even allege refund damages, instead arguing only it

could recover all of Janus’s allegedly ill-gotten profits as damages. Resting

entirely on the ill-gotten profits theory, Smartcomm argued the Alcorn

Defendants had exclusive control of the evidence needed to prove damages.

¶12 After repeated requests from the Alcorn Defendants to

disclose supporting documents such as contracts, refund checks, names of

clients who received refunds, and affidavits from witnesses, Smartcomm

finally filed supplemental disclosure statements purporting to address the

refund damages. Those disclosure statements, which Smartcomm attached

to its first supplemental response to the Damages MPSJ, contained a

spreadsheet that grouped Smartcomm’s refund obligations into four

categories. Only the first category identified refunds Smartcomm had

already paid. The other three categories contained, at best, speculative

calculations of future losses.

¶13 Although Smartcomm’s chief executive officer verified the

ninth and tenth supplemental disclosures, the speculative nature of the

claims contained within those disclosures failed to establish a genuine issue

of material fact. See Coury Bros. Ranches v. Ellsworth, 103 Ariz. 515, 521 (1968)

(“Damages that are speculative, remote or uncertain may not form the basis

of a judgment.”). Affidavits and testimony by plaintiffs, without

supporting documentation, may be found insufficient to overcome

summary judgment. See Gilmore v. Cohen, 95 Ariz. 34, 36 (1963) (holding the

plaintiffs’ testimony, without supporting business and tax records, was

insufficient to overcome summary judgment); Desert Palm Surgical Grp.,

P.L.C. v. Petta, 236 Ariz. 568, 583, ¶ 42 (App. 2015) (concluding the plaintiff’s

testimony and conclusory statements regarding damages, “unsupported by

any documentary evidence,” were speculative).

¶14 In this case, we find that neither the ninth nor tenth

supplemental disclosures created a genuine issue of material fact sufficient

to avoid summary judgment. Despite multiple discovery requests by the

Alcorn Defendants, Smartcomm only produced the names of seven clients

whom Smartcomm claimed had received refunds of around $127,000 to

support its claimed damages in excess of $17 million. Of these seven clients,

Smartcomm only disclosed two refund check stubs, and one of those does

not match the descriptions listed within Smartcomm’s spreadsheet.

Further, Smartcomm failed to attach any contracts or affidavits from clients

who assertedly received those refunds. This was the only disclosure of

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alleged refunds Smartcomm ever produced before the trial court ruled on

the Damages MPSJ. Such paltry evidence in support of the substantial

damage assertion, particularly when Smartcomm was in exclusive

possession of the documents necessary to support its refund obligations

claim, has “so little probative value, given the quantum of evidence

required,” that no reasonable person could find for its proponent. Orme

Sch., 166 Ariz. at 309; see also Graybar Elec., 86 Ariz. at 257 (citing Alger, 63

Ariz. at 141).

¶15 The only other evidence Smartcomm presented was the $28

million default judgment entered against the Maerki Defendants by a

commissioner of the superior court. In its second supplemental response

to the Damages MPSJ, Smartcomm advised the trial court it had presented

evidence of its damages at the default judgment hearing through exhibits

and testimony, but it did not attach the exhibits or testimony to its

supplemental response.5 Smartcomm instead argued that the default

judgment was conclusive proof that Smartcomm had both disclosed and

proved its damages because the damages were “essentially the same

against not just the Maerki Defendants, but all of the Defendants.”

¶16 Smartcomm’s reliance upon the default judgment is

misplaced. The Alcorn Defendants were not parties to that proceeding and

did not have an opportunity to defend their interests. Moreover, because

the trial court did not oversee the default judgment against the Maerki

Defendants, it had no way to review the evidence produced at that hearing,

whether testimonial or documentary, that ultimately prompted the

commissioner’s determination of damages. Additionally, the minute entry

from the default hearing states, “[t]he court must take all of the allegations

as established for purposes of determining damages against the defaulted

Maerki Defendants,” indicating Smartcomm proceeded with a much lower

burden of proof than that required to withstand summary judgment.

5 Smartcomm references the exhibits in its opening brief, but does not

indicate where those exhibits might be found within the record. Moreover,

the record does not indicate the exhibits were ever submitted to the trial

court or entered into evidence. Thus, although Smartcomm argues

“Appellees cannot plausibly claim that the evidence presented at the

Default Judgment Hearing should not be considered against them here,”

we are unable to determine whether that is the case, or otherwise consider

the evidence. See GM Dev. Corp. v. Cmty. Am. Mortg. Corp., 165 Ariz. 1, 4

(App. 1990) (“An appellate court’s review is limited to the record before the

trial court.”) (citing Schaefer v. Murphey, 131 Ariz. 338, 343 (App. 1981), and

Cimino v. Always, 18 Ariz. App. 271, 272 (1972)).

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Although we express no opinion as to whether the commissioner applied

the correct burden of proof to the damages hearing, we hold that, in

evaluating whether summary judgment was appropriate, Smartcomm’s

allegations presented in another court before another judicial officer could

not be taken as established fact. See Ariz. R. Civ. P. 56(e) (stating a party

opposing summary judgment “may not rely merely on allegations or

denials of its own pleading,” but rather “must . . . set forth specific facts

showing a genuine issue for trial”). Stated simply, Smartcomm was

required to produce evidence of its asserted refund obligations but failed to

do so.

B. Attorneys’ Fees from FCC Litigation

¶17 As part of its claim for damages, Smartcomm sought recovery

of more than $400,000 in attorneys’ fees accrued when it petitioned the FCC

to reject competing applications from Janus clients. Much like the refund

damages, Smartcomm first raised this issue late in the pleadings and

provided no documented evidence to support its claim. Smartcomm’s only

reference to these attorneys’ fees appeared in its ninth supplemental

disclosure, in which Smartcomm alleged: “Janus’s unfair competition also

caused Smartcomm to file its Petition to Deny with the FCC, in which it

incurred substantial attorneys’ fees and costs.” At summary judgment,

Smartcomm did not provide a calculation of its fees or any documents to

support the allegation.6 In no fashion was Smartcomm’s evidence in

support of this claim sufficient. See, e.g., Schweiger v. China Doll Rest., Inc.,

138 Ariz. 183, 188 (App. 1983) (detailing the information required to

substantiate a claim for attorneys’ fees). Accordingly, Smartcomm failed to

produce sufficient evidence at summary judgment to support its claims for

damages related to attorneys’ fees, and we affirm the trial court’s summary

judgment as it pertains to attorneys’ fees.

C. Janus’s Profits

¶18 A party opposing summary judgment must contest the

accuracy of the moving party’s evidence with specific, admissible facts. See

Ariz. R. Civ. P. 56(e); Florez v. Sargeant, 185 Ariz. 521, 526-27 (1996).

“Affidavits that contain inadmissible evidence . . . may provide a ‘scintilla’

or create the ‘slightest doubt’ and still be insufficient to withstand a motion

for summary judgment.” Orme Sch., 166 Ariz. at 309 (citations omitted).

6 Indeed, the first time Smartcomm provided the trial court with a

dollar amount for its alleged attorneys’ fees was in its motion for new trial.

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¶19 After the Alcorn Defendants filed the Damages MPSJ,

Smartcomm sought Rule 56(d) relief for additional discovery, arguing the

Alcorn Defendants had not disclosed Janus’s financial documents, which

Smartcomm needed to calculate its damages. Smartcomm argued the trial

court could require the defendants to disgorge their profits because they

had misappropriated Smartcomm’s trade secrets. The trial court granted

the request, and, a few months later, Janus filed for bankruptcy. As part of

its bankruptcy proceedings, Janus filed several financial documents

detailing its operating expenses and profits. Janus and the Alcorn

Defendants also had their electronic devices imaged and produced by a

third party, which was then disclosed to Smartcomm.

¶20 Smartcomm again relied upon its ninth and tenth

supplemental disclosure statements. The ninth disclosure statement

references the bankruptcy documents and provides specific calculations

from them. However, the documents themselves were not disclosed. While

the documents themselves may have been admissible, Smartcomm’s

allegations, even when verified, that it saw the financial documents and

accurately calculated the damages, are not. Accordingly, we conclude

Smartcomm failed to present sufficient evidence at summary judgment of

Janus’s profits.

¶21 Under each of the three theories of recovery Smartcomm

asserted, it failed to provide the trial court with sufficient evidence to

survive summary judgment, and we affirm the court’s grant of partial

summary judgment in favor of the Alcorn Defendants on Claims Three,

Four, Eight, Nine, Eleven, Thirteen, and Fourteen.7

D. Palmieri Motion for Partial Summary Judgment

¶22 Following the trial court’s grant of summary judgment in

favor of the Alcorn Defendants, Palmieri filed his own MPSJ on all claims

except Claim Seven (misappropriation of trade secrets) on the same basis.

Smartcomm responded only by referencing what had been its unsuccessful

pleadings from the Alcorn Damages MPSJ and provided no new arguments

or evidence. Consistent with its earlier decision, the trial court ruled in

favor of Palmieri, citing Smartcomm’s failure to make any new argument.

We affirm the court’s grant of summary judgment for the reasons stated in

Part I(A)-(C), supra.

7 The remaining claim, alleging misappropriation of trade secrets, was

dismissed in a later summary judgment. See infra Part II.

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II. Partial Summary Judgment on Trade Secret Claims

¶23 Smartcomm argues the trial court erred in finding there was

no genuine dispute as to any material fact regarding Count Seven, alleging

misappropriation of trade secrets. In a supplemental disclosure,

Smartcomm alleged the defendants misappropriated nine trade secrets.

Smartcomm described the first two alleged trade secrets as “Smartcomm’s

list of customers,” and “Smartcomm’s list of Independent Marketing

Representatives.” The other seven alleged secrets were part of an

“advertisement” or marketing package Smartcomm distributed broadly to

over three thousand potential customers.

¶24 “To establish a claim for misappropriation of a trade secret,

the claimant must first prove a legally protectable trade secret exists.” Calisi

v. Unified Fin. Servs., L.L.C., 232 Ariz. 103, 106, ¶ 14 (App. 2013). Arizona

has adopted the Uniform Trade Secrets Act (UTSA), A.R.S. §§ 44-401 to

-407, which defines “trade secret” as:

information, including a formula, pattern, compilation,

program, device, method, technique or process, that both:

(a) Derives independent economic value, actual or potential,

from not being generally known to, and not being readily

ascertainable by proper means by, other persons who can

obtain economic value from its disclosure or use.

(b) Is the subject of efforts that are reasonable under the

circumstances to maintain its secrecy.

A.R.S. § 44–401(4). Thus, “the two-part inquiry under the UTSA focuses on:

first, whether the subject matter of the information is secret; and second,

whether reasonable efforts have been taken to keep the information secret.”

Calisi, 232 Ariz. at 106, ¶ 15 (citing A.R.S. § 44-401(4), and Enter. Leasing Co.

of Phx. v. Ehmke, 197 Ariz. 144, 149-50, ¶¶ 15, 22 (App. 1999)).

A. Marketing Materials

¶25 We need not decide whether the subject matter of the

marketing materials that Smartcomm alleges were misappropriated was

secret because it failed to produce evidence that it made reasonable efforts

to protect the information. The material facts in this regard are not in

dispute. Smartcomm admitted it sent its marketing package, complete with

what it asserts to have been highly profitable “trade secrets,” to over three

thousand potential clients. The recipients were not employees or even

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existing clients of Smartcomm, but potential clients and can aptly be

described as “the public at large.” Moreover, the marketing materials were

sent to these potential clients without first obtaining a non-disclosure

agreement or otherwise preventing subsequent distribution or use by the

recipients.

¶26 Smartcomm, relying upon Ehmke, argues that the mass

mailing was a “limited publication for a restricted purpose,” and therefore

it did not relinquish its secrecy. See Ehmke, 197 Ariz. at 150, ¶ 23 (noting

“the owner of a trade secret does not relinquish its secret by disclosure to

employees on a necessary basis or by limited publication for a restricted

purpose”) (citing Metallurgical Indus., Inc. v. Fourtek, Inc., 790 F.2d 1195, 1200

(5th Cir. 1986)). However, as noted in Ehmke, “public revelation would

dispel all secrecy.” Id.; see also Ruckelshaus v. Monsanto Co., 467 U.S. 986,

1002 (1984) (“If an individual discloses his trade secret to others who are

under no obligation to protect the confidentiality of the information, or

otherwise publicly discloses the secret, his property right is extinguished.”)

(citing Harrington v. Nat’l Outdoor Advert. Co., 196 S.W.2d 786, 791 (1946),

and 1 R. Milgrim, Trade Secrets § 1.01[2] (1983)). By mailing the marketing

materials to over three thousand potential clients — persons with no

obligation to maintain the “secret” or limit its use — without first obtaining

a non-disclosure agreement, Smartcomm let the proverbial cat out of the

bag and cannot now, through this litigation or otherwise, get it back in.

B. Customer and Independent Marketing Representative

(IMR) Lists

¶27 “If the party with the burden of proof on the claim or defense

cannot respond to the motion [for summary judgment] by showing that

there is evidence creating a genuine issue of fact on the element in question,

then the motion for summary judgment should be granted.” Orme Sch., 166

Ariz. at 310. “[A]n opposing party may not rely merely on allegations or

denials of its own pleading.” Ariz. R. Civ. P. 56(e).

¶28 We need not decide whether the “list of customers” or IMR

list are trade secrets because Smartcomm failed to sufficiently disclose the

lists at summary judgment such that the trial court could even evaluate the

issue. Smartcomm alleged within its complaint that Maerki and Palmieri

misappropriated the customer and IMR lists and used them to contact

Smartcomm’s customers on behalf of Janus. When asked to clarify which

list Smartcomm referred to, Smartcomm, in circular fashion, in essence

replied, “the one you stole.” The following exchange at an October 2015

oral argument highlights the deficiency of Smartcomm’s evidence:

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THE COURT: . . . I understand the work, as you had described

it, to compile this list. But where is that list? They don’t seem

to know where that list is. . . . So where is this list that you

contend constitutes a trade secret?

[SMARTCOMM]: Well, they have it, of course, through Mr.

Maerki.

THE COURT: I understand — no, that’s not good enough. . . .

You can’t say, you got it from Maerki. They’re entitled to

know what this list is so they can challenge the compilation

on this list of whether it’s a trade secret.

¶29 Smartcomm alleged the defendants stole its list of customers.

It was not Appellees’ burden to establish Smartcomm’s claims at summary

judgment. Smartcomm could not rest merely upon allegations, but instead

was required to sufficiently disclose the subject matter of the alleged trade

secrets so Appellees could challenge whether the lists constituted and

remained trade secrets.

¶30 When pressed for a more specific disclosure, Smartcomm

advised the list was in the repository of documents that “everyone” had

access to, which the trial court also found inadequate:

THE COURT: You understand why that response is

problematic, don’t you? If you were faced with a response

that says, among the documents I gave you is a list, I’m sure

you’d be the first one to say, how am I supposed to figure it

out? How about if I guess wrong? Their response is, if there’s

a list, give me the stinking list. And that’s their argument.

And they’ve been trying to get it. The fact that it might be

within a number of documents somewhere, frankly I don’t

think is good enough.

Even on appeal, Smartcomm does not identify any client list or IMR list in

the record. Instead, Smartcomm directs the Court to its seventh

supplemental disclosure, which contains only the same basic descriptions

— “Smartcomm’s list of customers,” and “Smartcomm’s list of Independent

Marketing Representatives.”8

8 Smartcomm’s sixth supplemental disclosure contains a lengthy

description of how Smartcomm developed its “proprietary leads database”

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¶31 Smartcomm argues it was only required to describe the

subject matter of the lists, not actually disclose them. To support its

argument, Smartcomm cites a federal case out of California, Brocade

Communications Systems, Inc. v. A10 Networks, Inc., 873 F. Supp. 2d 1192, 1214

(N.D. Cal. 2012), which is neither binding upon this Court, nor does it stand

for the proposition that a party may effectively respond to a motion for

summary judgment by providing a generic description of its evidence, as

Smartcomm would have us believe:

[A]lthough Brocade does not list individual customer names,

Brocade has sufficiently “described the subject matter of the

trade secret with sufficient particularity to separate it from

matters of general knowledge in the trade or of special

knowledge of those persons who are skilled in the trade, and

to permit defendant to ascertain at least the boundaries within

which the secret lies.”

Id. at 1215 (quoting Whyte v. Schlage Lock Co., 101 Cal. App. 4th 1443, 1453

(2002)) (emphasis in original). Unlike Smartcomm, the Brocade plaintiff

described the subject matter of the trade secret with particularity, such that

the defendant could easily identify the list at issue, and in a manner

justifying its treatment as a trade secret. Smartcomm refused to identify

with sufficient particularity which documents, among the thousands in the

repository, it considered trade secrets.

¶32 After years of discovery, and days before the scheduled trial,

Smartcomm stood before the trial court with only bare assertions and

inferences. On this record, we can reach no other determination than that

Smartcomm failed to respond to the motion for summary judgment with

“evidence creating a genuine issue of fact.” Orme Sch., 166 Ariz. at 310. On

appeal, Smartcomm likewise fails to reference any evidence in the record

sufficient to permit its claim to be heard by a jury. Accordingly, we affirm

the trial court’s partial summary judgment on the trade secret claim.

from FCC microfiche records. However, Smartcomm does not contend this

“leads database” is actually the customer list it claims was

misappropriated.

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III. Partial Summary Judgment on Alcorn’s Personal Liability

¶33 Because we affirm summary judgment in favor of the Alcorn

Defendants on all claims, we need not consider the separate grant of partial

summary judgment on Claims Three, Four, and Eleven.

IV. Dismissal of Request for Order to Show Cause

¶34 Smartcomm also appeals the trial court’s denial of its

application for an order to show cause as “moot.”9 Smartcomm filed two

applications for orders to show cause, one in 2013, the other in 2015, both

alleging Palmieri and the Alcorn Defendants had violated a permanent

injunction against contacting Smartcomm’s clients. The 2013 application

argued Palmieri and the Alcorn Defendants had sent two emails to people

on the no-contact list, in violation of subsection (3) of the injunction. Then,

before the 2013 matter was resolved, Smartcomm filed the 2015 application,

which it argued was “independent” of the 2013 application. The 2015

application, however, argued that both the Palmieri and the Alcorn

Defendants violated subsections (1), (3), and (5) of the injunction and

admitted the two applications had “some obvious overlap” for

subsection (3). The trial court denied the 2013 application as moot, and,

after considering the 2015 application, found sanctions were not warranted.

¶35 Because the two applications overlapped on subsection (3),

and the 2015 application added nothing new to the 2013 application’s

subsection (3) arguments, it was not an abuse of discretion to deny the 2013

application as moot. All the 2013 application arguments were subsumed

within the 2015 application, which the trial court denied, finding sanctions

were not warranted. Accordingly, we affirm the denial of the 2013

application.

9 The Alcorn Defendants argue Smartcomm failed to provide any case

authority or record citations to support this argument. See ARCAP 13(a)

(specifying what information should be contained in appellate briefs). In

its reply brief, Smartcomm likewise alleges similar deficiencies in the

answering briefs. In our discretion, we deny the relief requested by the

parties under ARCAP 13 and decide the issues on the merits. See Clemens

v. Clark, 101 Ariz. 413, 414 (1966) (“[T]his Court is reluctant to perform the

duties of counsel for either party to an appeal; however, . . . we remain

inclined to decide cases on their merits.”).

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V. Motion to Take Judicial Notice

¶36 The night before this Court’s scheduled oral argument,

Smartcomm filed a motion requesting we take judicial notice of a recent

order issued against Janus and the Alcorn Defendants in the United States

District Court for the District of Arizona. There, the Securities and

Exchange Commission filed suit against Janus and the Alcorn Defendants

for violating registration requirements of the Securities Act and

participated in a fraudulent investment scheme. Smartcomm asserts the

District Court’s approximation of Janus’s ill-gotten gains at $6,172,260 is

“virtually identical to the claims and damages disclosed by [Smartcomm]

in this action.” In our discretion, we decline to take judicial notice of this

order.10



* * *



10 Were we to take notice of the District Court’s findings on the

ill-gotten gains, we would necessarily also take notice of its finding that the

broadband frequency licenses “had little or no value.” Such a finding

would altogether undermine Smartcomm’s trade secret claims because for

something to be a trade secret, it must “derive[] independent economic

value.” A.R.S. § 44-401(4).

¶37 The trial court’s orders are affirmed.

¶38 We award Appellees reasonable attorneys’ fees and costs to

be determined upon compliance with ARCAP 21(b), pursuant to A.R.S.

§ 12-341.01 and the contracts between the parties.