Computer Aid, Inc. v. Ferree, M.

J. A25008/16
NON-PRECEDENTIAL DECISION – SEE SUPERIOR COURT I.O.P. 65.37
COMPUTER AID, INC., : IN THE SUPERIOR COURT OF
: PENNSYLVANIA
Appellant :
:
v. : No. 525 MDA 2016
:
MARC FERREE AND QUIVADORE, LLC :
Appeal from the Order Entered March 21, 2016,
in the Court of Common Pleas of Dauphin County
Civil Division at No. 2016 CV 1336 EQ
BEFORE: FORD ELLIOTT, P.J.E., SHOGAN, J., AND STEVENS, P.J.E.*
MEMORANDUM BY FORD ELLIOTT, P.J.E.: FILED FEBRUARY 21, 2017
Computer Aid, Inc. (“appellant”), appeals the March 21, 2016 order of
the Court of Common Pleas of Dauphin County that denied its emergency
motion for a preliminary injunction.
The procedural history and factual background, as set forth by the trial
court, is as follows:
Procedural History
On February 18, 2016, [appellant] filed a
Complaint and an Emergency Motion for a
Preliminary Injunction. This Court scheduled a
hearing on the Preliminary Injunction for March 2,
[2016]. Following the hearing, this Court ordered
briefs from both parties. They were received and
reviewed and this Court denied the motion for
preliminary injunction on March 21, [2016]. This
Court received a timely notice of appeal on
* Former Justice specially assigned to the Superior Court.
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March 30, 2016, as well as a statement of errors
complained of on appeal.
Factual Background
[Marc] Ferree worked for [a]ppellant as an
employee of a subcontractor. As such, he signed a
contract that included a non-solicitation agreement.
The testimony at the hearing indicated that [Ferree]
believed his contract was with his employer, while
[a]ppellant contends the contract was with them.
[Appellant] contends that [Ferree] is violating the
agreement by taking a customer of [appellant’s] --
PennDOT.
[Ferree] owns and operates [] Quivadore with
his wife. In Dec. 2015, PennDOT terminated its
contract with [appellant] and the new prime
contractor is OST. [Appellant] did keep some work
with PennDOT. Quivadore is subcontracted through
OST and provides the same services that [Ferree]
provided when he subcontracted through [appellant].
[Appellant] requests that [Ferree and
Quivadore] be enjoined from further interactions and
business with PennDOT until Dec. 31, 2016.
Trial court opinion, 4/19/16 at 1-2.
In the emergency motion for preliminary injunction, appellant alleged:
2. As stated in the Complaint, [] Ferree is
violating the non-solicitation provision of a
validly entered and legally binding “Computer
Aid, Inc. Subcontractor Protection of
Proprietary Materials Agreement” (the
“Protection Agreement”) by improperly taking
a customer of [appellant’s] – the
Commonwealth of Pennsylvania, Department
of Transportation (“PennDOT”).
3. As described in the Complaint, [Ferree and
Quivadore’s] continued breach of the
Protection Agreement has caused and will
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continue to cause, irreparable harm which
cannot be compensated by damages and which
includes the loss of business goodwill, a
customer and income, as set forth more fully in
the Complaint.
4. [] Ferree’s actions have resulted in
[appellant’s] loss of work for specific computer
consulting and programming services.
5. As described in the Complaint, [appellant] has
a protectable business interest in that it
initiated and nurtured the relationship between
[] Ferree and PennDOT and trained him on the
technological requirements of the PennDOT
job.
6. [] Ferree’s actions . . . are without justification
and violative of the contractual provisions that
do not permit him to solicit or take customers
of [appellant’s] within a year of termination of
his subcontractor relationship with [appellant].
7. [] Ferree operates through [] Quivadore, LLC.
Injunctive relief should also apply to Quivadore
to the same extent it would apply to [] Ferree,
and [] Ferree should not be permitted to,
indirectly through Quivadore, violate the terms
of the Protection Agreement.
Plaintiff’s Emergency Motion for Preliminary Injunction, 2/18/16 at 2, ¶¶ 2-7.
Following oral argument and the submission of briefs, the trial court
denied the emergency motion for preliminary injunction:
[W]e determined that [appellant] did not face
an immediate and irreparable harm that could not be
adequately compensated by the awarding of
monetary damages.
[Appellant] claimed loss of business goodwill,
loss of a customer and loss of income. Taken in
reverse order, loss of income is in fact loss of money
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and can be remedied by monetary damages. Loss of
a customer was not clear to us here. While
[appellant] lost a “seat” to Quivadore and Ferree,
[appellant] remains a PennDOT vendor. Further,
[appellant] maintained the rest of its “seats” at
PennDOT. Lastly, while loss of business goodwill is a
non-monetary consideration, again we find no
evidence that [appellant] actually lost any business
goodwill. They remain a PennDOT vendor and no
evidence was presented to show that PennDOT was
in any way dissatisfied with [appellant’s] work.
This one prerequisite was not fulfilled and as
such we determined that [appellant] was not entitled
to an emergency preliminary injunction.
Trial court opinion, 4/19/16 at 3-4.
On appeal, appellant raises the following issue for this court’s review:
“Did the lower court err in denying [appellant’s] emergency motion for
preliminary injunction where there was no reasonable basis for the lower
court’s holding that [appellant] did not prove immediate and irreparable
harm which could not be adequately compensated in damages?”
(Appellant’s brief at 2 (capitalization omitted).)
At the outset, we note our standard of review from an order granting
or denying a preliminary injunction:
A trial court has broad discretion to grant or deny a
preliminary injunction. When reviewing a trial
court’s grant or refusal of a preliminary injunction,
an appellate court does not inquire into the merits of
the controversy, but rather examines only the record
to ascertain whether any apparently reasonable
grounds existed for the action of the court below.
We may reverse if the trial court’s ruling amounted
to an abuse of discretion or a misapplication of law.
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WPNT, Inc. v. Secret Communication, Inc. t/d/b/a WDVE FM, 661
A.2d 409, 410 (Pa.Super. 1995) (citations omitted).
Our supreme court has set forth the following prerequisites for a
preliminary injunction:
To obtain a preliminary injunction, a petitioner must
establish that: (1) relief is necessary to prevent
immediate and irreparable harm that cannot be
adequately compensated by money damages;
(2) greater injury will occur from refusing to grant
the injunction than from granting it; (3) the
injunction will restore the parties to their status quo
as it existed before the alleged wrongful conduct;
(4) the petitioner is likely to prevail on the merits;
(5) the injunction is reasonably suited to abate the
offending activity; and (6) the public interest will not
be harmed if the injunction is granted.
Brayman Const. Corp. v. Com., Dept. of Transp., 13 A.3d 925, 935 (Pa.
2011).
Appellant contends that there was no reasonable basis for the trial
court’s denial of its emergency motion for a preliminary injunction because
appellant proved immediate and irreparable harm which could not be
adequately compensated in damages. Appellant argues that the trial court
erred because it failed to consider relevant facts appropriate to an
irreparable harm argument. Appellant specifically argues that the trial court
erred when it focused on whether the loss of goodwill, the loss of a
customer, and the loss of income represented the irreparable harm suffered
by appellant when Ferree took the “slot” or “seat” at PennDOT under the
auspices of Quivadore rather than appellant. Appellant asserts that the trial
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court should have considered appellant’s damaged relationship with
PennDOT.
Michael Brion (“Brion”), account manager for appellant for the work
Ferree did for PennDOT, testified that with respect to the staff augmentation
contract, appellant had been the managing staffing provider for the
Commonwealth which arranged for the hiring of individuals submitted by
various vendors including appellant to fill the Commonwealth’s needs. After
January 1, 2016, appellant lost the contract as managing staffing provider
but remained a vendor. (Notes of testimony, 3/2/16 at 9-13.) Brion
explained that appellant had over 120 slots in staff augmentation at
PennDOT and had lost one, Ferree’s. (Id. at 34, 50.) Brion further
explained that Ferree had a large portion of appellant’s expertise on a critical
application, such that Ferree’s decision to leave E & E IT Consulting (“E &
E”), the company with which he actually had an employment relationship,
for Quivaadore injured appellant. (Id. at 55.)
The trial court concluded that this change did not constitute irreparable
harm which could not be compensated for in money damages because
appellant failed to establish that it lost a customer but rather just lost one
“slot” at PennDOT.
This court discerns no abuse of discretion or misapplication of the law
by the trial court. Appellant had already lost its position as prime contractor
for the staff augmentation contract prior to Ferree’s change. Appellant
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remained a vendor in good standing to supply other “slots” to PennDOT
through the new prime contractor, OST. While Ferree may or may not have
violated the restrictive covenant, his actions associating himself with the
new vendor, Quivadore, did not cause irreparable harm.1 Even if there were
irreparable harm, this court determines that the trial court did not
1
For support, appellant cites John G. Bryant Co., Inc. v. Sling Testing
and Repair, Inc., 369 A.2d 1164 (Pa. 1977). In Bryant, our supreme
court affirmed the grant of a preliminary injunction to enforce a restrictive
covenant in an employment agreement. William H. Crochiere (“Crochiere”)
accepted employment as a sales representative with the John G. Bryant
Company (“Bryant”) and a related company that were in the business of
selling and servicing devices that were used in industrial material lifting.
Shortly after he began working, Crochiere signed employment agreements
with the two companies which provided that, upon the termination of
employment, Crochiere could not engage in a competitive business within
the sales territory of Bryant for three years after the termination of
employment. A subsequent agreement permitted Crochiere to solicit
business for his new company within the sales territory but not with clients
of Bryant. Crochiere violated this agreement by selling to Bryant customers.
Bryant obtained an injunction. Crochier appealed to our supreme court
which affirmed. Id., 369 A.2d at 1165-1166.
The Pennsylvania Supreme Court reasoned that the breach of the
agreement did not establish irreparable harm but it was the “threat of
unbridled continuation of the violation and the resultant incalculable damage
to the former employer’s business that constitutes the justification for
equitable intervention.” Id., 369 A.2d at 1167.
Bryant can be distinguished from the present case on the basis that it
involved a non-competition clause in the context of an employment
agreement where, in the present case, there was no employment contract
between appellant and Ferree. A non-solicitation agreement is the basis for
the alleged injunction here. Second, Ferree’s action does not present a case
of “unbridled continuation of the violation” because it only involves him
changing his status with respect to PennDOT and not an attempt to obtain
other “slots” that appellant controlled at PennDOT or otherwise damage
appellant’s business.
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abuse its discretion when it determined that any damages could be
calculated. Damages could be calculated based on the amount appellant
would have received minus the amount it would have paid to E & E.2
Order affirmed.
Judgment Entered.
Joseph D. Seletyn, Esq.
Prothonotary
Date: 2/21/2017
2
Although appellant argues that the trial court’s analysis of loss of income
and loss of a customer were not relevant to a determination of irreparable
harm, appellant raised these items as reasons for why it suffered irreparable
harm in its motion for injunctive relief.
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