ROBERT MADDEN HILL, Circuit Judge.
Coastal Distributing Company, Inc., (Coastal) appeals from the adverse entry of judgment by the district court in its suit against NGK Spark Plugs (U.S.A.), Inc., (NGK-USA) and NGK Spark Plug Company, Ltd., (NGK, Ltd.) (collectively referred to as NGK).
I. FACTS AND PROCEDURAL HISTORY
NGK has sold spark plugs in the United States since the 1960's through a network of distributors. One of its early distributors was Coastal, a Louisiana corporation with its place of business in New Orleans. Coastal's president and sole shareholder was Wayne Ryon. By 1972 NGK had contracted with approximately ten distributors.
Under the terms of Coastal's first distributorship agreement in 1972, NGK granted Coastal the exclusive right to promote NGK spark plugs in Louisiana and Arkansas. Other NGK distributors elsewhere signed similar agreements, thus dividing up the country into several exclusive territories. Thereafter, Coastal signed yearly agreements with NGK.
In 1976 Coastal signed a distributorship agreement with NGK which significantly differed from prior agreements. The restriction on NGK to refrain from appointing new distributors in Coastal's area was deleted. A similar agreement was signed for 1977, and it continued in effect from 1977 to 1982 without formal renewal. In 1982 Coastal signed another agreement which also had no provision for exclusivity.
A short time before NGK decided to delete the exclusivity provisions of the distributorship agreements, NGK also established a rebate system for its distributors. NGK rebated a few cents for each spark plug sold by a distributor to qualifying companies. Before NGK would pay the rebates, it required proof of sales by the submission of invoices which included information about each distributor's customers. Coastal provided NGK with such information and received rebates.
By 1978 NGK had decided to expand its distribution program by selling directly to its distributors' customers. NGK used information obtained from its rebate program to determine who these new distributors should be. In the fall of 1978 NGK began signing up new distributors, the first being a wholesale distributor in Oregon.
In January 1979 Ryon met with Shozo Uemachi, president of NGK-USA. According to Ryon, Uemachi told Ryon that he would never sell to any of Ryon's customers. Uemachi's version of the meeting was that no such promise was made. NGK in 1979 began signing direct distribution agreements with Coastal's larger customers, and many more were signed up later. In December 1979 Ryon accepted NGK's offer of a consulting position with NGK, but this agreement expressly stated that it did not alter any prior commitments between Ryon and NGK.
On June 3, 1981, Coastal filed suit against NGK. Although Coastal later abandoned its various antitrust claims, it proceeded on the common law counts of fraud, unfair competition, and breach of contract. NGK raised several defensive issues, including the statute of limitations for fraud and unfair competition, waiver of fraud, and illegality of the oral contract. The case was submitted to the jury on special issues.
However, the jury answered several defensive issues favorably to NGK. The jury found that Coastal waived the acts which constituted fraud, and that the oral agreement was an unreasonable restraint of trade. Furthermore, on statute of limitations issues, the jury found that Coastal was aware that NGK was going to sign up Coastal's customers prior to June 3, 1979, which was two years before suit was filed.
The district court found that the jury's answers to the defensive issues were dispositive of Coastal's claims and entered judgment in favor of NGK. Coastal now appeals.
II. UNFAIR COMPETITION AND FRAUD
A. Accrual of the Causes of Action.
Because the district court applied a two-year statute of limitations to the claims for fraud and unfair competition, the jury finding that Coastal was aware two years before filing suit of NGK's intentions to sign up Coastal's customers will bar these claims if this awareness marked the accrual of these causes of action. See Tex.Rev.Civ.Stat.Ann. art. 5526 (Vernon Supp.1985).
Coastal argues that its unfair competition claim, based on NGK's wrongful acquisition and use of its customer information, did not accrue until damage resulted to Coastal. Coastal claims that its cause of action instead accrued when NGK "caused legal injury" to Coastal by signing up Coastal's customers beginning in late 1979. Thus, Coastal argues, its unfair competition claim is not barred by even a two-year statute of limitations.
A leading Texas case has summarized the accrual determination:
Atkins v. Crosland, 417 S.W.2d 150, 153 (Tex.1967) (citations omitted). The Atkins court approved the following test from 54 C.J.S. Limitations of Actions § 168 (1948) (footnotes omitted):
A Texas court has more recently clarified the importance of the time when the breach of duty or wrongful act occurred:
Dotson v. Alamo Funeral Home, 577 S.W.2d 308, 311 (Tex.Civ.App. — San Antonio 1979, no writ) (citation omitted). See also Fusco v. Johns-Manville Products Corp., 643 F.2d 1181, 1183 (5th Cir.1981) (interpreting Texas law).
The district court held, and we agree, that the accrual date for Coastal's unfair competition claim runs from NGK's wrongful use of Coastal's customer information rather than the date that NGK began to sign up Coastal's customers.
Coastal makes a similar argument concerning the fraud claim. According to Coastal, because an element of fraud is
Texas law on the accrual of a cause of action for fraud had been summarized as follows:
Quinn v. Press, 136 Tex. 60, 140 S.W.2d 438, 440 (1940). See also Glenn v. Steele, 141 Tex. 565, 61 S.W.2d 810 (1933). The rule is sometimes phrased as "the statute would begin to run when plaintiff knew of the alleged wrongdoing or knew of facts sufficient to exercise such inquiry as would have been made in the exercise of reasonable diligence." Ryan v. Collins, 496 S.W.2d 205, 211 (Tex.Civ.App. — Tyler 1973, writ ref'd n.r.e.).
We conclude that the fraud was perpetrated when Coastal, relying on the false representations of NGK, gave its confidential customer information to NGK and sold NGK spark plugs exclusively. The material, intentional false statements caused Coastal to give up something of value and to change its position in reliance on NGK's representations. See, e.g., Stone v. Lawyers' Title Insurance Co., 554 S.W.2d 183, 185 (Tex.1977) (elements of actionable fraud). After Coastal discovered that NGK had misrepresented its intentions and was going to sign up NGK's customers, the cause of action accrued and the statute of limitations began to run.
B. Applicable Period of Limitations.
There are three relevant Texas statutes of limitation. The two-year statute, Tex.Rev.Civ.Stat.Ann. art. 5526 (Vernon 1958), previously applied to various torts as well as to "[a]ctions for debt where the indebtedness is not evidenced by a contract in writing." Article 5526 was amended, effective August 27, 1979, and has deleted the provision for actions for debt.
Texas courts have long applied the two-year limitations period of article 5526 to actions based on fraud. E.g., Quinn v. Press, 135 Tex. 60, 140 S.W.2d 438 (1940); Atomic Fuel Extraction Corp. v. Slick's Estate, 386 S.W.2d 180, 191-92 (Tex.Civ.App. — San Antonio 1964, writ ref'd n.r.e.). However, Coastal argues that an action for fraud is an "action for debt" and that the amendment of articles 5526 and 5527 on August 27, 1979, just after the causes of action accrued in June 1979, which provided for a four-year limitation period for actions for debt, altered the statutory scheme to now include all actions for fraud under the four-year period of article 5527. We disagree.
Texas courts after the 1979 amendments have continued to apply the two-year period of article 5526 to actions based on fraud. See Mooney v. Harlin, 622 S.W.2d 83, 84 (Tex.1981) (citing Quinn and Ryan v. Collins, 496 S.W.2d 205, 210 (Tex.Civ.App. — Tyler 1973, writ ref'd n.r.e.)); see also Hays v. McNeice, 641 S.W.2d 695 (Tex.App. — Amarillo 1982, no writ); Spellings v. Lawyers Title Insurance Corp., 644 S.W.2d 804 (Tex.App. — Corpus Christi 1982, writ ref'd n.r.e.). This Court, when applying Texas law, has acted similarly. See Neeley v. Bankers Trust Co., 757 F.2d 621, 632 (5th Cir.1985); Bauman v. Centex Corp., 611 F.2d 1115, 1118 (5th Cir.1980).
Coastal claims that actions for fraud previously were covered by article 5526 only because they were characterized as "actions for debt where the indebtedness is not evidenced by a contract in writing," the now-deleted portion of the two-year statute. We are unwilling to so construe the Texas statute in a manner contrary to the Texas courts' interpretation. Moreover, pre-1979 decision by Texas courts applied article 5526 even to fraud involving a written contract; this indicates that an action for fraud may not be an "action for debt" at all. See Quinn, 140 S.W.2d at 440; Atomic Fuel, 386 S.W.2d at 191-92.
Coastal next argues that the residual statute of limitations, article 5529, provides a four-year period of limitations for its unfair competition claim because no other statute applies. Alternately, Coastal claims that the amended article 5527 now provides a four-year period because unfair competition is actually an "action for debt." We disagree with both contentions.
The unfair competition claim, based on NGK's wrongful acquisition and use of Coastal's trade secrets, is a tort governed by the two-year limitations period of article 5526. Texas courts have previously applied the two-year limitation to the misappropriation of trade secrets. See Reynolds-Southwestern Corp. v. Dresser Industries, Inc., 438 S.W.2d 135, 140 (Tex.Civ.App. — Houston [14th Dist.] 1969, writ ref'd n.r.e.); see also Crutcher-Rolfs-Cummings, Inc. v. Ballard, 540 S.W.2d 380, 387 (Tex.Civ.App. — Corpus Christi 1976, writ ref'd n.r.e.), cert. denied, 433 U.S. 910, 97 S.Ct. 2978, 53 L.Ed.2d 1095 (1977). A federal court has likewise applied the two-year statute to a claim for breach of confidence based on a misuse of a trade secret. See Kinnear-Weed Corp. v. Humble Oil & Refining Co., 150 F.Supp. 143, 160 (E.D.Tex.1956), aff'd, 259 F.2d 398 (5th Cir.1958), cert. denied, 361 U.S. 903, 80 S.Ct. 210, 4 L.Ed.2d 158 (1959). Coastal has not persuaded
III. BREACH OF THE ORAL CONTRACT
A remaining claim is Coastal's breach of contract theory. The district court applied the finding of the jury, that this oral contract was an unreasonable restraint of trade, to bar recovery on this claim.
Coastal also objects to the district court's instructions on unreasonable restraint of trade. It argues, first, that the jury was misinstructed as to the relevant market; second, that the instructions gave inadequate guidance as to what constitutes an unreasonable restraint of trade. The district court allowed both sides to object to the instructions, either in open court or in writing. Coastal's stated objection to the unreasonable restraint of trade instruction was, "We don't feel it [has] a substantial foundation in the evidence." Fed.R.Civ.P. 51 provides that "[n]o party may assign as error the giving or the failure to give an instruction unless he objects thereto before the jury retires to consider its verdict, stating distinctly the matter to which he objects and the grounds of his objection." A party may not object to an instruction on one ground at trial and then attempt to rely on a different ground on appeal. See Sinclair Refining Co. v. Howell, 222 F.2d 637, 641 (5th Cir.1955); 9 C. Wright & A. Miller Federal Practice and Procedure § 2554 (1971).
Coastal has failed to properly preserve the objection to the court's charge that it now urges on appeal. We do not believe that an objection based on an insubstantial foundation in the evidence alerted the court to any objection Coastal had to the specific content of any of the instructions. Instead we find that Coastal's objection focused on the sufficiency of the evidence presented to the court, a matter which is beyond the scope of this appeal since Coastal had not appealed from any denial of a motion for a directed verdict on this issue.
However, review of an unobjected to error in the jury charge is permitted when "the error is so fundamental as to result in a miscarriage of justice," Farrar v. Cain, 756 F.2d 1148, 1150 (5th Cir.1985). Such a miscarriage occurs when an erroneous charge "is probably responsible for an incorrect verdict, leading to a result that is manifestly unjust." Brooks v. Great Lakes Dredge-Dock Co., 754 F.2d 536, 538 (5th Cir.), modified on other grounds, 754 F.2d 539 (5th Cir.1985). Our review of the court's charge as it related to the relevant market and to conduct that can constitute an unreasonable restraint of trade leads us to the conclusion that no fundamental error occurred or that a miscarriage of justice resulted.
Accordingly, the judgment of the district court is AFFIRMED.
Tex.Rev.Civ.Stat.Ann. art. 5526 (Vernon Supp.1985).
The prior version had provided:
Tex.Rev.Civ.Stat.Ann. art. 5526 (Vernon 1958).