Nordon, LLC v. Schlisman, A. ( 2021 )

J-A10039-21
NON-PRECEDENTIAL DECISION - SEE SUPERIOR COURT I.O.P. 65.37
NORDON, LLC : IN THE SUPERIOR COURT OF
: PENNSYLVANIA
:
v. :
:
:
ANDREW SCHLISMAN :
:
Appellant : No. 1056 EDA 2020
Appeal from the Judgment Entered June 8, 2020
In the Court of Common Pleas of Bucks County Civil Division at No(s):
No. 2014-03020
NORDON, LLC : IN THE SUPERIOR COURT OF
: PENNSYLVANIA
Appellant :
:
:
v. :
:
:
ANDREW SCHLISMAN : No. 1186 EDA 2020
Appeal from the Judgment Entered June 8, 2020
In the Court of Common Pleas of Bucks County Civil Division at No(s):
No. 2014-03020-40
BEFORE: PANELLA, P.J., OLSON, J., and COLINS, J.*
MEMORANDUM BY COLINS, J.: FILED JUNE 28, 2021
These are cross-appeals from a judgment following a non-jury trial
entered by the Court of Common Pleas of Bucks County in favor of Nordon,
LLC (Nordon) and against its former employee Andrew Schlisman (Schlisman)
in a breach of contract action in which Nordon sought damages and injunctive
____________________________________________
* Retired Senior Judge assigned to the Superior Court.
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relief for violation of a non-competition agreement and payment of the unpaid
portion of a loan to Schlisman. The trial court found in favor of Nordon and
against Schlisman both on Nordon’s claims and on counterclaims that
Schlisman had filed against Nordon. The trial court awarded Nordon
$293,684.54 in damages, but denied injunctive relief. For the reasons set
forth below, we affirm the trial court’s judgment in its entirety.
Nordon is a food service equipment distributor and marketing agent.
N.T., 12/9/19, at 27. Schlisman first worked for Nordon from 2001 to 2004.
Trial Court Decision and Order, 3/31/20, at 1-2; N.T., 12/10/19, at 91, 93. In
connection with that employment, Schlisman had agreed to a non-competition
agreement that prohibited him from soliciting Nordon’s customers and
employees for a two-year period after leaving his employment in an area
consisting of eastern Pennsylvania, southern New Jersey, and northern
Delaware. Trial Court Decision and Order, 3/31/20, at 2; N.T., 12/10/19, at
91, 93; Plaintiff Ex. 4 at 2. In 2005, Schlisman left Nordon to run a competitor
of Nordon that he had acquired, Gavin & Associates (Gavin). Trial Court
Decision and Order, 3/31/20, at 2. This departure was amicable. Id.
In late 2008, Gavin and Schlisman were in financial difficulty and
Schlisman approached Nordon to see if it had any interest in acquiring Gavin.
Trial Court Decision and Order, 3/31/20, at 3; N.T., 12/9/19, at 43-44, 109;
N.T., 12/10/19, at 103-10. In early 2009, Nordon and Schlisman reached an
oral agreement under which Gavin would transfer its contracts with restaurant
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industry manufacturing companies over to Nordon and Nordon would assume
outstanding debts of Gavin and Schlisman and would hire Schlisman and
Gavin’s other employees. Trial Court Decision and Order, 3/31/20, at 3; N.T.,
12/9/19, at 45-53, 112, 115-18. Because the amount of Gavin’s and
Schlisman’s debts was not known at that time, the parties did, however, not
finalize all terms of the agreement in 2009 and contemplated that a written
agreement would be executed setting the amount that Nordon was to pay and
memorializing all the terms of the agreement once that information was
determined. Trial Court Decision and Order, 3/31/20, at 3-4; N.T., 12/9/19,
at 44-51; N.T., 12/10/19, at 31. In February 2009, in accordance with the
parties’ oral agreement, Nordon hired Schlisman as its Vice President of
Contract Sales. Trial Court Decision and Order, 3/31/20, at 4; N.T., 12/9/19,
at 49-52.
In April 2010, after determining the amount of the debt that it would
pay, Nordon drafted a written Asset Purchase Agreement between it, Gavin,
and Schlisman and provided the draft agreement to Schlisman for his review.
Trial Court Decision and Order, 3/31/20, at 5; N.T. 12/10/2019 at 34-37.
Schlisman did not object to any of the terms of the Asset Purchase Agreement,
and Nordon and Schlisman, individually and on behalf of Gavin, signed the
Asset Purchase Agreement on July 7, 2010. Trial Court Decision and Order,
3/31/20, at 5-6; 12/9/19, at 61, 67; N.T. 12/10/2019 at 38-39, 44, 79, 129,
134-36. The Asset Purchase Agreement provided that Nordon purchased the
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rights to Gavin’s contracts with certain restaurant industry manufacturing
companies listed in Section 1.2(a) of the agreement, including Duke
Manufacturing Company (Duke), Stero, and Somat Company (Somat), and
that Nordon would pay a total of $262,176.54 to Gavin and to third parties on
Gavin’s and Schlisman’s behalf for these rights. Plaintiff Ex. 1 at 1-2. At the
time the Asset Purchase Agreement was signed, only part of the $262,176.54
had been paid by Nordon and the parties agreed that $93,834.04 would be
paid beginning June 19, 2010 in 28 equal monthly installments. N.T.,
12/9/19, at 65; N.T., 12/10/19, at 143; Plaintiff Ex. 1 at 2.
The Asset Purchase Agreement contained the following non-competition
agreement:
3.1 Covenant Not to Compete. [Gavin] and [Schlisman] each
agree, for so long as [Schlisman] remains an employee of
[Nordon] and for the longer of (a) two (2) years following
the termination of [Schlisman’s] employment with
[Nordon] and (b) two (2) years following the date
[Nordon] makes the last Monthly Payment to the Bank (as
described in Section 1.3(b) above) (the “Non-Competition
Period”), not to compete with [Nordon] in any manner or
capacity by engaging, directly or indirectly, in the business
of acting as a manufacturer’s representative or marketing
agent to any of the companies listed in Section 1.2(a)
above (the “Covered Business”), or otherwise own, be
employed by, consult with or otherwise render services to any
person or entity engaged in the Covered Business within the
territory defined by the Manufacturers’ Agents Association for the
Foodservice Industry (“MAFSI”) as “Section 4” as in effect as of
the date of this Agreement (and as such Section may be expanded
by MAFSI during the Non-Compete Period) (the “Covered Area”).
…
* * *
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3.3 Agreement Not To Interfere. During the Non-Competition
Period, each of [Gavin] and [Schlisman] agree not to take any
action to interfere with the relationships between [Nordon] or any
subsidiary or affiliate of [Nordon], and their respective suppliers,
customers, clients, or business partners. Each of [Gavin] and
[Schlisman] further agree not to induce or attempt to
induce any manufacturer, customer, supplier, client,
business partner, or other business relation of [Nordon] or
any subsidiary or affiliate of [Nordon] to withdraw, curtail
or cease doing business with [Nordon] or any subsidiary or
affiliate of [Nordon], as applicable.
3.4 Non-solicitation Agreement. During the Non-Competition
Period, each of [Gavin] and [Schlisman] agree not to,
directly or indirectly, induce or attempt to induce any
employee of [Nordon] or any subsidiary or affiliate of [Nordon]
to leave the employ of [Nordon] or any subsidiary or affiliate
of [Nordon], as applicable.
3.5 Special Remedies and Enforcement. [Gavin] and
[Schlisman] each hereby acknowledge and agree that the
breach of any provision of Article III of this Agreement will
cause [Nordon] irreparable injury and damage, and
consequently [Nordon] shall be entitled, in addition to and
without limitation of all other remedies available to it, to
injunctive and equitable relief to prevent a breach or
continued breach of this Agreement, or any part of it, and to
secure the enforcement of this Agreement. Such equitable
remedies shall be cumulative and non-exclusive, being in addition
to any and all other remedies [Nordon] may have. [Gavin] and
[Schlisman] each hereby waive any requirement for securing or
posting a bond in connection with [Nordon] obtaining any
injunctive or other equitable relief. Further, [Gavin] and
[Schlisman] each agree that any breach of any provision of
Article III of this Agreement shall automatically toll and
suspend the period of restraint for the amount of time that
the breach continues.
Plaintiff Ex. 1 at 4-5 (emphasis added).
Schlisman remained employed by Nordon until November 2013. Trial
Court Decision and Order, 3/31/20, at 7; N.T., 12/9/19, at 68-73. At
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Schlisman’s request, Nordon loaned Schlisman $35,000 in July 2013 without
interest, to be repaid by $250 deductions from Schlisman’s pay each pay
period. Trial Court Decision and Order, 3/31/20, at 7; N.T., 12/9/19, at 79;
N.T., 12/10/19, at 52-55, 122-24; Plaintiff Exs. 12, 13. Schlisman advised
Nordon on November 1, 2013 that he intended to leave and start his own
business and sent Nordon notice of his resignation on November 13, 2013,
stating that his resignation was effective November 5, 2013. Trial Court
Decision and Order, 3/31/20, at 7-8; N.T., 12/9/19, at 73-78, 85; N.T.,
12/10/19, at 156, 160; Plaintiff Ex. 18. On November 20, 2013, Schlisman
formed a competing business, Platinum Marketing Company (Platinum). Trial
Court Decision and Order, 3/31/20, at 8; N.T., 12/9/19, at 84, 93-94; N.T.,
12/10/19, at 184. Shortly after leaving Nordon, Schlisman solicited Duke to
contract with Platinum, and Duke, Stero, and Somat terminated their
contracts with Nordon and signed manufacturer representative contracts with
Platinum. Trial Court Decision and Order, 3/31/20, at 8-9; N.T., 12/9/19, at
85-90; N.T., 12/10/19, at 160-70; Plaintiff Exs. 23, 25, 34, 37, 38, 41, 42,
43. Schlisman also hired the Nordon employee who worked with Duke and
represented to Duke that he was going to hire her over a month before she
left Nordon’s employ. Trial Court Decision and Order, 3/31/20, at 9; N.T.,
12/9/19, at 83-84, 91-92, 170-71; N.T., 12/10/19, at 170-73, 241-43. At
the time that Schlisman left Nordon, $31,508 of the $35,000 had not been
paid back and has never been paid. Trial Court Decision and Order, 3/31/20,
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at 7, 15; N.T., 12/9/19, at 79-81, 93, 167; N.T., 12/10/19, at 55-57, 124-25;
Plaintiff Exs. 14, 19 at 2.
On April 29, 2014, Nordon filed suit against Schlisman, seeking
injunctive relief to enforce the non-competition agreement and breach of
contract damages for the violation of the non-competition agreement and for
the unpaid balance of the July 2013 loan.1 In its complaint, captioned as
“Nordon, Inc. v. Andrew Schlisman,” Nordon identified itself as “Nordon, Inc.”
and alleged that it “is a Delaware limited liability company.” Complaint ¶1.
The complaint also alleged that “Nordon, Inc.” was the party that entered into
the Asset Purchase Agreement with Gavin and Schlisman that was attached
as an exhibit to the complaint, although the agreement states that it is
between Gavin, Schlisman, and “Nordon, LLC, a Delaware limited liability
company.” Id. ¶¶1, 8 & Ex. A at 1. Nordon filed a petition for a preliminary
injunction on April 29, 2014, but there was no hearing or ruling on the petition
for a preliminary injunction and Nordon took no further action to obtain any
injunctive relief between 2014 and 2019. Docket Entries at 1-3. Schlisman
filed an answer and new matter denying that the Asset Purchase Agreement’s
non-competition agreement was enforceable, denying that he breached his
contract with Nordon, and asserting counterclaims against Nordon for
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1 Nordon’s complaint also asserted claims that Schlisman misappropriated two
items of merchandise, but those claims were abandoned by Nordon at trial.
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fraudulent inducement to sign the Asset Purchase Agreement, breach of
contract, unjust enrichment, and unpaid wages.
The trial court held a two-day bench trial of Nordon’s claims and
Schlisman’s counterclaims on December 9 and 10, 2019. At the close of the
evidence the trial court directed the parties to file proposed findings of fact
and conclusions of law after the transcripts of testimony were filed. On
February 27, 2020, shortly before the parties filed their proposed findings of
fact and conclusions of law, Nordon filed a motion for leave to amend to
change the name of the plaintiff from “Nordon, Inc.” to “Nordon LLC.” On
March 4, 2020, the trial court entered an order granting the motion to amend
and ordering that “the pleadings in this matter are amended to reflect Nordon
LLC as Plaintiff.” Trial Court Order, 3/4/20.
On March 31, 2020, the trial court entered its decision adjudicating the
parties’ claims. In this decision, the trial court found that the Asset Purchase
Agreement’s non-competition agreement was enforceable and that Schlisman
breached it. Trial Court Decision and Order, 3/31/20, at 10-14. The trial court
also found that Nordon had loaned Schlisman $35,000 that Schlisman failed
to fully pay back. Id. at 15. The trial court rejected all of Schlisman’s
counterclaims, finding that Nordon did not fraudulently induce him to sign the
Asset Purchase Agreement, that Nordon did not breach its agreement with
him and Gavin, and that Nordon that did not owe him any money. Id. at 15-
16. The trial court awarded Nordon $262,176.54 in damages for Schlisman’s
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breach of the non-competition agreement and $31,508 in damages on the
loan claim, but denied Nordon’s request for an injunction. Id. at 15-17.
Both parties timely filed motions for post-trial relief. The trial court
entered an order on April 30, 2020 denying Schlisman’s motion for post-trial
relief and an order on June 4, 2020 denying Nordon’s motion for post-trial
relief. Judgment was entered on June 8, 2020 in favor of Nordon and against
Schlisman in the amount of $293,684.54. Both parties filed timely appeals
from this judgment.2
Schlisman in his appeal argues 1) that the trial court erred in granting
Nordon’s motion to amend; 2) that he was entitled to judgment
notwithstanding the verdict (JNOV) on Nordon’s claim for breach of the non-
competition agreement because there was no enforceable non-competition
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2 Schlisman filed his appeal prematurely on April 29, 2020. Because judgment
was subsequently entered on June 8, 2020, his appeal is timely and is properly
before us. Pa.R.A.P. 905(a)(5) (“A notice of appeal filed after the
announcement of a determination but before the entry of an appealable order
shall be treated as filed after such entry and on the day thereof”); Century
Indemnity Co. v. OneBeacon Insurance Co., 173 A.3d 784, 788 n.1 (Pa.
Super. 2017). Nordon’s cross-appeal, filed June 8, 2020, was likewise timely,
as it was filed on the day that final judgment was entered, even though it was
filed more than 14 days after Schlisman’s notice of appeal. Norton also filed
an application in this Court to correct the caption in Schlisman’s appeal, which
was captioned “Nordon, Inc. v. Andrew Schlisman, Appellant,” to “Nordon LLC
v. Andrew Schlisman, Appellant.” Because the parties “as they appeared on
the record of the trial court at the time the appeal was taken,” Pa.R.A.P.
904(b)(1), were Nordon, LLC and Schlisman, we grant this application and
have amended the caption in these appeals to identify the plaintiff in
Schlisman’s appeal as “Nordon, LLC.” We have also corrected the date of the
judgment appealed in both appeals and the identity of the appellant in
Nordon’s appeal.
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agreement; 3) that he was entitled to JNOV on that claim even if the non-
competition agreement was enforceable, because Nordon had breached its
contract with him and Gavin and his conduct did not constitute a breach the
non-competition agreement; and 4) that the damages award was excessive.
Nordon challenges only the trial court’s denial of injunctive relief. We address
each of these issues in turn.
Nordon’s Motion to Amend
Schlisman argues that the trial court erred in granting Nordon’s motion
to amend because the amendment substituted a new plaintiff after the statute
of limitations had expired. We do not agree.
Under Pennsylvania Rule of Civil Procedure 1033, “[a] party, either by
filed consent of the adverse party or by leave of court, may at any time
change the form of action, add a person as a party, correct the name of a
party, or otherwise amend the pleading.” Pa.R.C.P. 1033(a) (emphasis
added). Leave to amend should be liberally granted at any stage of the
proceedings, unless the delay in seeking to amend has prejudiced the adverse
party or the amendment is prohibited by law. Blackwood, Inc. v. Reading
Blue Mountain & Northern Railroad Co., 147 A.3d 594, 598 (Pa. Super.
2016); Hill v. Ofalt, 85 A.3d 540, 557 (Pa. Super. 2014); Miller v. Stroud
Township, 804 A.2d 749, 754 (Pa. Super. 2002). A plaintiff may amend its
complaint to correct the name of a person that is already a party to the action
after the statute of limitations has expired, but may not amend to add or
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substitute a new and different party that had no notice of the action. Phillips
v. Lock, 86 A.3d 906, 915-16 (Pa. Super. 2014); Jacob’s Air Conditioning
& Heating v. Associated Heating & Air Conditioning, 531 A.2d 494, 496
(Pa. Super. 1987); Pa.R.C.P. 1033(b), (c). The test for whether an
amendment changing the name of a party is permissible after expiration of
the statute of limitations is
whether the proposed amendment merely corrects a party name
or adds a new party to the litigation. If an amendment constitutes
a simple correcting of the name of a party, it should be allowed,
but if the amendment in effect adds a new party, it should be
prohibited.
Phillips, 86 A.3d at 915 (quoting Jacob’s Air Conditioning & Heating).
Here, the amendment changing the name of the plaintiff from “Nordon,
Inc.” to “Nordon, LLC” was a correction of the name of an existing party, not
a substitution of a new party, and caused no surprise or prejudice. The
complaint was clear on its face that the plaintiff was the Delaware limited
liability company that entered into the Asset Purchase Agreement with
Schlisman, the entity that is in fact Nordon, LLC. Complaint ¶¶1, 8 & Ex. A at
1; Defendant Ex. 4.3 The entity Nordon, Inc. is a Pennsylvania corporation,
not a name for a different Delaware limited liability company. Defendant Ex.
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3 Counsel for Schlisman asserted at oral argument that the change to Nordon,
LLC cannot be a mere change of name because Nordon, LLC was not in
existence at the time that the parties reached an oral agreement in February
2009. This contention is patently false. Schlisman’s own trial exhibit
demonstrates that Nordon, LLC was formed in October 2006 and was therefore
in existence at the time of all the negotiations and agreements at issue.
Defendant Ex. 4.
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2. The trial court therefore did not err in granting Nordon’s motion to amend.
See Rullex Co., LLC v. Tel-Stream, Inc., 232 A.3d 620, 623 n.3 (Pa. 2020)
(stating with respect to a change of the plaintiff’s name from “Rullex, Inc.,”
the name in the complaint, to “Rullex Co., LLC,” the name of the entity that
was a party to the contracts attached as exhibits to the complaint, “we do not
consider this minor inconsistency as having any substantive relevance”).
Enforceability of the Non-Competition Agreement
Whether the trial court erred in denying Schlisman’s motions for JNOV
is a question of law subject to our plenary review. Shamnoski v. PG Energy,
858 A.2d 589, 593 (Pa. 2004); Phillips v. A–Best Products Co., 665 A.2d
1167, 1170 (Pa. 1995). There are two bases on which JNOV may be granted:
(1) where the movant is entitled to judgment as a matter of law and (2) where
the evidence is such that no two reasonable minds could disagree that the
judgment should have been in favor of the movant. Linde v. Linde, 220 A.3d
1119, 1140 (Pa. Super. 2019); United Environmental Group, Inc. v. GKK
McKnight, LP, 176 A.3d 946, 959 (Pa. Super. 2017). In determining whether
either of these bases for JNOV has been established, this Court must view the
evidence in the light most favorable to the party that prevailed at trial. Linde,
220 A.3d at 1140; Reott v. Asia Trend, Inc., 7 A.3d 830, 835 (Pa. Super.
2010), aff'd, 55 A.3d 1088 (Pa. 2012). Questions of credibility and conflicts
in the evidence are for the factfinder to resolve and this Court cannot reweigh
the evidence. Shamnoski, 858 A.2d at 593; United Environmental Group,
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176 A.3d at 962. If there is any basis upon which the factfinder could have
properly made its award, the denial of the motion for JNOV must be affirmed.
Linde, 220 A.3d at 1140; United Environmental Group, 176 A.3d at 962.
A non-competition agreement entered into incident to an employment
relationship between the parties is enforceable if it is supported by
consideration, its restrictions are designed to protect the employer’s legitimate
interests, and it is reasonably limited in duration and geographic scope.
Rullex Co., 232 A.3d at 624-25; Socko v. Mid-Atlantic Systems of CPA,
Inc., 126 A.3d 1266, 1274 (Pa. 2015). Non-competition agreements ancillary
to agreements for the purchase and sale of a business or its assets are also
enforceable if designed to protect legitimate interests of the purchaser.
Scobell Inc. v. Schade, 688 A.2d 715, 718 (Pa. Super. 1997); Geisinger
Clinic v. DiCuccio, 606 A.2d 509, 518 (Pa. Super. 1992); Worldwide
Auditing Services, Inc. v. Richter, 587 A.2d 772, 776 (Pa. Super. 1991).
Non-competition agreements ancillary to the purchase and sale of a business
or its assets are subject to a less rigorous reasonableness examination than
non-competition agreements entered into solely as part of an employment
relationship. Pittsburgh Logistics Systems, Inc. v. BeeMac Trucking,
LLC, 249 A.3d 918, 935 (Pa. 2021); Scobell, 688 A.2d at 718; Worldwide
Auditing Services, 587 A.2d at 776.
A non-competition agreement is not enforceable unless consideration is
given in exchange for the covenant not to compete. Rullex Co., 232 A.3d at
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624-29; Socko, 126 A.3d at 1274-76; Shepherd v. Pittsburgh Glass
Works, LLC, 25 A.3d 1233, 1243 (Pa. Super. 2011). Employment of the
party agreeing not to compete is sufficient consideration if the parties agree
to the non-competition provision at the start of the employment relationship
or the employee knows that the non-competition agreement is a condition of
employment at the time he starts the job. Rullex Co., 232 A.3d at 625-28;
Socko, 126 A.3d at 1275; Pulse Technologies, Inc. v. Notaro, 67 A.3d
778, 781 (Pa. 2013). After the employment relationship has begun, continued
employment on the same terms is not sufficient consideration for a non-
competition agreement, and, absent new consideration at the time of the non-
competition agreement, the non-competition agreement is not enforceable.
Rullex Co., 232 A.3d at 627; Socko, 126 A.3d at 1275-76. If there is an oral
agreement to the substantive terms of the non-competition provision at the
outset of employment, however, there is consideration for the non-
competition agreement, even if the written agreement is not executed until a
later date. Rullex Co., 232 A.3d at 626-28.
Schlisman argues that the non-competition agreement was not
enforceable on three grounds: 1) that there was no consideration because the
Asset Purchase Agreement was signed over a year after the parties agreed to
Nordon’s acquisition of Gavin’s manufacturer contracts and Schlisman began
his employment with Nordon; 2) that the restrictions that it imposed were not
reasonable; and 3) that there was no intent that the Asset Purchase
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Agreement would be enforceable because Nordon allegedly told him that he
was signing the Asset Purchase Agreement only for accounting purposes.
None of these arguments has merit.
Contrary to Schlisman’s contentions, the non-competition agreement
was contemporaneous with the start of Schlisman’s employment. While
Schlisman signed the Asset Purchase Agreement in July 2010, over a year
after he began his employment, the trial court found that the parties had
reached an oral agreement by early 2009, before he started his employment,
and that part of this oral agreement was an agreement that Schlisman would
be subject to a two-year non-competition agreement. Trial Court Decision
and Order, 3/31/20, at 4, 13; Trial Court Opinion, 6/4/20, at 4, 16. This
finding is supported by the evidence at trial. Nordon’s witnesses testified that
one of the terms of the oral agreement that it negotiated with Schlisman was
that he would be subject to such a non-competition agreement and that
Schlisman knew when he started his employment that he was subject to such
a non-competition agreement. N.T., 12/9/19, at 48-49, 120; N.T., 12/10/19,
at 30-31, 77-78. Because the trial court found that Schlisman agreed to the
non-competition agreement at the start of his employment, his employment
constituted consideration for the non-competition agreement, even though
the written Asset Purchase Agreement was not executed at that time. Rullex
Co., 232 A.3d at 626-28.
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Moreover, Schlisman received additional consideration for the non-
competition provision at the time that he signed the Asset Purchase
Agreement. The trial court found that although the parties had reached an
agreement in early 2009, they had not agreed on critical terms such as the
amount of the debt that Nordon would pay and that in early 2009 they were
performing some of the terms before they reached an agreement on the
amount that Nordon would pay. Trial Court Decision and Order, 3/31/20, at
3-4; Trial Court Opinion, 6/4/2020, at 3-4, 13. Those findings are supported
by the record. N.T., 12/9/19, at 45-53, 55-57, 63-66, 97, 110; N.T.,
12/10/19, at 13-14, 67, 70-71, 74.
For a contract to be binding, the parties must agree to the essential
terms of the contract and those essential terms must be sufficiently definite
for a court to determine whether there is compliance with its terms. United
Environmental Group, 176 A.3d at 963; Krebs v. United Refining Co. of
Pennsylvania, 893 A.2d 776, 783 (Pa. Super. 2006); Lackner v. Glosser,
892 A.2d 21, 30-32 (Pa. Super. 2006). Because the parties had not agreed
on the amount of Gavin’s and Schlisman’s debt that Nordon would pay before
the Asset Purchase Agreement was signed, Nordon was not legally bound to
pay amounts of that debt that it had not yet paid. Nordon agreed in the Asset
Purchase Agreement to pay over $90,000 of Gavin’s and Schlisman’s debt that
it had not paid when the parties signed the Asset Purchase Agreement.
Plaintiff Ex. 1 at 2. Nordon’s agreement to make those additional payments
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was therefore new consideration given to Schlisman in July 2010 for his
agreement to the Asset Purchase Agreement, including its non-competition
provision.
Schlisman’s claim that the restrictions imposed by the non-competition
agreement were unreasonable is likewise without merit. The non-competition
period set by the Asset Purchase Agreement is two years. Plaintiff Ex. 1 at 4.
A two-year non-competition period in an agreement for sale of a business or
business assets is reasonable and enforceable. Worldwide Auditing
Services, 587 A.2d at 774-77; Geisinger Clinic, 606 A.2d at 514, 518-19.
The scope of the restriction was also reasonable because it was geographically
limited to the eastern Pennsylvania, New Jersey and Delaware area where
Nordon does business and barred only Schlisman’s representation of specific
manufacturers that were the subject of the Asset Purchase Agreement and
interference with Nordon’s relationship with its other customers and clients,
not Schlisman’s ability to work as a manufacturer’s representative for other
food service equipment manufacturers, even in that region. Plaintiff Ex. 1 at
1-2, 4; N.T., 12/9/19, at 66. Contrary to Schlisman’s contentions, the fact
that the non-competition agreement barred him from representing the
manufacturers that he brought to Nordon makes the restriction reasonable,
not unreasonable, as those were the very companies that were the value that
Nordon was receiving in consideration for its payment of over $260,000 of his
and Gavin’s debts.
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Schlisman’s remaining argument, that the Asset Purchase Agreement
was only for accounting purposes and not intended to be binding fails because
it was a disputed issue of fact that the trial court resolved in Nordon’s favor
and against Schlisman. The trial court rejected Schlisman’s testimony on
which this claim is based as not credible and found that Nordon did not tell
Schlisman that the Asset Purchase Agreement was only for accounting
purposes and would not be enforced. Trial Court Decision and Order, 3/31/20,
at 15-16; Trial Court Opinion, 6/4/2020, at 13-14. Those findings are
supported by the record. N.T., 12/10/19, at 34-45, 81-83; Defendant Ex. 19.
Because facts found by the trial court and supported by the record
establish that there was consideration for the Asset Purchase Agreement’s
non-competition agreement and that it was reasonable and intended by the
parties to be enforceable, the trial court did not err in rejecting Schlisman’s
challenges to the enforceability of the non-competition agreement and
denying his motion for JNOV.
Schlisman’s Breach of the Non-Competition Agreement
Schlisman argues that he could not be liable for breach of the non-
competition agreement because Nordon breached the parties’ contract in 2009
and 2010 by failing to timely pay off Gavin’s debts. This argument fails
because it is contrary to the trial court’s factual findings.
If a party materially breaches a contract, the other party is relieved of
its obligations under the contract, and the party who materially breached
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cannot enforce the contract against the other party. Linde v. Linde, 210
A.3d 1083, 1091-92 (Pa. Super. 2019); McCausland v. Wagner, 78 A.3d
1093, 1101 (Pa. Super. 2013). The trial court, however, found that Nordon’s
obligation under the contract was to pay the amount of debt set forth in the
Asset Purchase Agreement in accordance with its terms and that Nordon did
not breach its contract with Schlisman and Gavin. Trial Court Decision and
Order, 3/31/20, at 4-6, 16; Trial Court Opinion, 6/4/2020, at 13. These
findings are supported by the evidence. N.T., 12/9/19, at 50-51, 55-57, 63-
66, 97; N.T., 12/10/19, at 13-14, 19, 66-67, 70-76, 111, 143-44.
Schlisman also argues that he did not violate the non-competition
provision of the Asset Purchase Agreement 1) because its restrictions had
already terminated; 2) because he only represented the manufacturers that
he brought to Nordon; and 3) because he allegedly did not induce his assistant
at Nordon to leave Nordon. None of these arguments has merit.
The first two of these arguments are invalidated by the language of the
Asset Purchase Agreement. The Asset Purchase Agreement clearly provided
that the two-year non-competition period was to last until the expiration of
two years after the last payment by Nordon or two years after Schlisman’s
Nordon employment ended, whichever was longer. Plaintiff Ex. 1 at 4 (stating
that the non-competition provisions were in effect “for the longer of (a) two
(2) years following the termination of [Schlisman’s] employment with
[Nordon] and (b) two (2) years following the date [Nordon] makes the last
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Monthly Payment to the Bank (as described in Section 1.3(b) above)”)
(emphasis added). The non-competition period was therefore in effect from
November 2013 to November 2015, when Schlisman engaged in his
competing activities, even though Nordon’s last payment under the Asset
Purchase Agreement was more than two years before November 2013. The
Asset Purchase Agreement also clearly prohibited Schlisman from
representing the manufacturers that he brought to Nordon, including the
specific companies that he represented immediately after leaving Nordon,
Duke, Stero and Somat. Plaintiff Ex. 1 at 1-2, 4.
The third argument, that Schlisman did not induce a Nordon employee
to leave to work for him, was a disputed issue of fact that the trial court
resolved against Schlisman. Not only did the evidence show that the
employee left Nordon to join Schlisman’s marketing company in March 2014,
but Schlisman admitted in his testimony that in January 2014, while that
employee was still employed by Nordon, he represented to one of the
manufacturers that he solicited that the employee would be employed by his
marketing company doing all of the same sales support work that she was
doing for Nordon. N.T., 12/9/19, at 83-84, 91-92, 170-71; N.T., 12/10/19,
at 169-73, 241-43. The trial court could therefore reasonably infer that he
began offering to hire her while she was still a Nordon employee.
Because the evidence at trial was sufficient for the trial court to find that
Nordon did not breach its contract with Schlisman and Gavin and that
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Schlisman did breach the non-competition provisions of that contract, the trial
court properly denied Schlisman’s other motions for JNOV.
The Trial Court’s Damages Award
Schlisman asserts that the trial court’s damage awards for the loan claim
and the breach of the non-competition agreement are not supported by the
record.4 We do not agree.
Schlisman challenges the $31,508 that the trial court awarded Nordon
on the loan claim on the ground that Nordon allegedly owed him Gavin
commissions that it collected and commissions for 2013 that exceeded the
loan balance and should have been applied to pay back the loan. This
argument, like so many of Schlisman’s arguments in this appeal, fails because
it is based on disputed factual contentions that the trial court rejected. The
trial court found that Schlisman’s claims of entitlement to commissions were
not credible and found that Nordon did not owe him any unpaid commissions.
Trial Court Decision and Order, 3/31/20, at 7, 15-16; Trial Court Opinion,
6/4/20, at 7. These findings are supported by the evidence. N.T., 12/9/19,
at 48, 53-54, 79-80, 120, 167; N.T., 12/10/19, at 12-13, 15-16, 30-32, 45-
52, 56-57, 79-80.
____________________________________________
4 Schlisman frames this argument as a request that this Court order a
remittitur. That relief, however, is unavailable here. Remittitur can only be
granted where the case was tried to a jury, not where the damages award
was made by a judge after a bench trial. Refuse Management Systems,
Inc. v. Consolidated Recycling & Transfer Systems, Inc., 671 A.2d 1140,
1149 (Pa. Super. 1996).
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Schlisman asserts that the $262,176.54 in damages that the trial
awarded for breach of the non-competition agreement was excessive and
unsupported because Nordon did not introduce any evidence of profits that it
lost or that Schlisman received from his representation of manufacturers in
violation of non-competition agreement.
The determination of damages is within the province of the trial court
as fact-finder, and will not be disturbed on appeal absent a showing that the
amount awarded resulted from prejudice, partiality or corruption, or that the
award does not bear a reasonable resemblance to the evidence of damages
at trial. Witherspoon v. McDowell-Wright, 241 A.3d 1182, 1187 (Pa.
Super. 2020); Boehm v. Riversource Life Insurance Co., 117 A.3d 308,
328 (Pa. Super. 2015). The amount of damages need not be determined with
complete precision, but need only be proved with reasonable certainty, and
evidence of damages may include probabilities and inferences.
Witherspoon, 241 A.3d at 1188; Morin v. Brassington, 871 A.2d 844, 852
(Pa. Super. 2005).
The fact-finder may make a just and reasonable estimate of the
damage based on relevant data, and in such circumstances may
act on probable and inferential, as well as upon direct and positive,
proof. Thus, the law does not demand that the estimation of
damages be completely free of all elements of speculation.
Witherspoon, 241 A.3d at 1187-88 (quoting Delahanty v. First
Pennsylvania Bank, 464 A.2d 1243 (Pa. Super. 1983)). Moreover,
uncertainty as to the amount of damages does not bar a recovery where it is
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clear that the defendant’s conduct caused damages. Smith v. Penbridge
Assocs., Inc., 655 A.2d 1015, 1021 (Pa. Super. 1995); Standard Pipeline
Coating Co. v. Solomon & Teslovich, Inc., 496 A.2d 840, 846 (Pa. Super.
1985).
Nordon introduced evidence that Schlisman, in the November 2013 to
November 2015 non-competition period, received $268,055.99 in
commissions from Duke, Stero, and Somat, and another manufacturer that
the non-competition agreement prohibited Schlisman from representing.
Plaintiff Ex. 53; N.T., 12/10/19, at 180-81. In addition, the evidence showed
that Nordon paid $262,176.54 under the Asset Purchase Agreement to acquire
the representation of those manufacturers and that Schlisman’s violation of
the non-competition agreement deprived Nordon of that business. Plaintiff
Ex. 1 at 1-2; N.T., 12/9/19, at 85-90; Plaintiff Exs. 23, 24, 25. Given this
evidence, the trial court’s damages award is a reasonable estimate of the
damages that Nordon suffered as a result of Schlisman’s breach of the non-
competition agreement. Accordingly, we affirm on this issue.
The Denial of Injunctive Relief
Nordon argues in its cross-appeal that because the non-competition
agreement was enforceable and Schlisman had violated it, the trial court erred
in denying its request for an injunction barring Schlisman from representing
the manufacturers that he took from Nordon. This argument, too, is without
merit.
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A permanent injunction may be granted only where the plaintiff has
established that its right to relief is clear, that an injunction is necessary to
avoid an injury that cannot be compensated by damages, and that greater
injury will result from refusing rather than granting injunctive relief. Kuznik
v. Westmoreland County Board of Commissioners, 902 A.2d 476, 489
(Pa. 2006); Eagleview Corporate Center Association v. Citadel Federal
Credit Union, 243 A.3d 764, 773 (Pa. Cmwlth. 2020). The equitable defense
of laches applies to claims for injunctive relief and is grounds for denial of an
injunction where the plaintiff has delayed in seeking an injunction and that
delay has prejudiced the defendant. Holiday Lounge, Inc. v. Shaler
Enterprises Corp., 272 A.2d 175, 176-77 (Pa. 1971); Martin v. Adams
County Area Vocational Technical School Authority, 313 A.2d 785, 786-
87 (Pa. Cmwlth. 1973).
The trial court denied injunctive relief on the grounds that the two-year
non-competition period expired in 2015, that Nordon was fully compensated
by the damages award, and that Nordon’s delay in pursuing injunctive relief
made it inequitable to grant an injunction. Trial Court Decision and Order,
3/31/20, at 15; Trial Court Opinion, 6/18/2020, at 2.
Nordon argues that the expiration of the two-year period does not bar
an injunction because the Asset Purchase Agreement extends the non-
competition period during the period that Schlisman is in violation. Both of
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the trial court’s other grounds, however, are sufficient by themselves to
support its denial of injunctive relief.
The fact that Nordon was awarded over $200,000 in damages
establishes that Nordon did not satisfy the requirement of injunctive relief that
it show that it suffered an injury that cannot be compensated by damages. In
addition, the trial court found that Nordon took no action to have it issue an
injunction until 2019, four years after the end of the non-competition period
and that the delay made an injunction punitive and inequitable. Nordon’s
request for injunctive relief was therefore also barred by laches.
Nordon cites no authority holding that a trial court is required to grant
an injunction under these circumstances. Worldwide Auditing Services, on
which Nordon relies, does not support grant of an injunction here. In
Worldwide Auditing Services, this Court affirmed a trial court’s injunction
enforcing a non-competition agreement beyond the non-competition period
where the parties’ contract provided that violation would extend the non-
competition period. 587 A.2d at 774-77. The injunction in that case, however,
was granted before the original two-year competition period had expired, id.
at 774-75, not four years after the original non-competition period expired,
and there was no finding that the plaintiff delayed seeking injunctive relief.
In addition, although the plaintiff in Worldwide Auditing Services received
both injunctive relief and a damages award, this Court specifically noted that
the damages award might constitute an adequate remedy at law that would
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negate the plaintiff’s right to injunctive relief, but did not resolve the issue
because it was waived. Id. at 773 n.1.
Because the trial court properly found that Nordon failed to satisfy the
requirements for a permanent injunction and also properly found that
Nordon’s request for an injunction was barred by laches, we affirm its denial
of injunctive relief.
Conclusion
For the foregoing reasons, we conclude that the trial court did not err
in granting Nordon’s motion to amend, in denying Schlisman’s motions for
JNOV and his challenges to the damages award, or in denying injunctive relief.
Accordingly, we affirm the trial court’s judgment.
Judgment affirmed. Application to correct caption in 1056 EDA 2020
granted.
Judgment Entered.
Joseph D. Seletyn, Esq.
Prothonotary
Date: 6/28/2021
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