Bank Financial Services Group v. Meyer-Chatfield

J-S59037-14
NON-PRECEDENTIAL DECISION SEE SUPERIOR COURT I.O.P 65.37
BANK FINANCIAL SERVICES GROUP, : IN THE SUPERIOR COURT OF
STEVEN GOLDBERG, STEVEN : PENNSYLVANIA
GOLDBERG SOLE PROPRIETORSHIP, :
ARNOLD WINICK, AND DAVID PAYNE, :
:
Appellants :
v. :
:
MEYER-CHATFIELD CORP., :
:
------------------------------------------- :
:
MEYER-CHATFIELD CORP. :
:
v. :
:
BANK FINANCIAL SERVICES GROUP; :
STEVEN GOLDBERG AND DAVID PAYNE :
:
Appellants : No. 1092 EDA 2014
Appeal from the Order Entered March 17, 2014,
in the Court of Common Pleas of Montgomery County,
Civil Division, at No(s): 2013-30326 & 2013-29858
BEFORE: SHOGAN, J., LAZARUS, J., and STRASSBURGER, J.*
MEMORANDUM BY STRASSBURGER, J.: FILED OCTOBER 07, 2014
Bank Financial Services Group (BFS), Steven Goldberg, Arnold Winick,
Order for Special -Chatfield and against
Appellants. Appellants also appeal from an order entered on March 26,
*Retired Senior Judge assigned to the Superior Court.
J-S59037-14
Hearing under PA.R.Civ.P. 1531(f)(1) and Motion to Dissolve Injunction
March 17, 2014, and remand to the trial court for additional proceedings.
The trial court summarized the facts underlying this case.
Meyer-Chatfield is in the business of providing bank-owned
product. BOLI is a single premium life insurance contract
specifically designed for banks to earn tax free income, among
other benefits. Since its beginning in 1992, Meyer-Chatfield has
been engaged in the design, marketing, sales and servicing of
BOLI products to the banking community nationwide. Meyer-
Chatfield has developed highly sophisticated programs to
analyze and meet the needs of its existing customers and to
identify, cultivate and establish strategic relationships and
contractual and business relationships with new customers.
Meyer-Chatfield has expended substantial time, money, and
effort to recruit, train and supervise a team of professional
marketing and sales consultants to carry out its programs.
On March 3, 2003, Steven Goldberg executed a sales
representative agreement with Meyer-
salesperson, earning in excess of $2 million in commissions in
multiple years. [The contract included a non-compete
agreement.]
***
The Goldberg Contract was entered into for an initial (1)
and was automatically renewed every
either party notified the other party in writing at least three (3)
months prior to the end of the Term or any renewal thereof that
it elects to terminate [the Goldberg Contract], in which event
[the Goldberg Contract] shall expire upon the expiration of the
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Arnold Winick became a BOLI sales representative for
Meyer-Chatfield in 2002 and teamed up with Goldberg. Although
Winick did not have a contract with Meyer-Chatfield, he, much
like Goldberg, was a beneficiary of extensive and ongoing
training from Meyer-Chatfield and became an extremely
successful BOLI salesperson.
On August 16, 2013, Goldberg left Meyer-Chatfield and
a direct competitor of Meyer-
Goldberg to BFS, along with numerous other employees,
including David Payne, Joseph Byrd and David Schwartz.
Trial Court Opinion, 5/30/2014, at 1-3.
On October 2, 2013, Meyer-Chatfield filed a complaint and petition for
preliminary injunction against Appellants. On October 7, 2013, BFS,
Goldberg, the Steven Goldberg Sole Proprietorship, Winick and Payne filed a
complaint for declaratory judgment and a special/preliminary injunction
against Meyer-Chatfield. The two matters were later consolidated.
A hearing was held on October 18, 2013. At that hearing, the trial
and the trial court took the matter under advisement.
The next hearing was held on January 29, 2014. The parties
confirmed that they were trying to work through discovery disputes and had
also begun settlement negotiations. Appellants brought their witnesses and
were prepared to proceed with the hearing; however, Appellants then
argued that Meyer-Chatfield brought a surprise expert witness, forensic
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analyst Louis Cinquanto, and asked for a protective order with respect to his
testimony. The trial court deni
schedule, permitted him to testify first.
The trial court summarized that testimony as follows.
-Chatfield hired Louis Cinquanto to perform a forensic
computer investigation. Cinquanto, who testified at the January
29, 2014 hearing in this matter, is a certified computer forensic
examiner and Chief Operations Officer and senior forensic
examiner at Cornerstone Legal Consultants, a litigation
consulting firm that performs computer preservation, analysis,
expert testimony, and trial presentation services. Cinquanto
conducted an in-depth investigation of the computer records of
Goldberg, Winick, Byrd and Schwartz. Meyer-Chatfield alleges
that the discovery of this investigation demonstrates that
Goldberg, Winick, Byrd and Schwartz unlawfully accessed,
downloaded and copied Meyer-
proprietary information and data from its computers shortly
before leaving Meyer-Chatfield to join BFS. Furthermore,
Cinquanto testified about how the former Meyer-Chatfield
employees used methods to conceal their activities on their
computers, including finding a program used to erase temporary
files on the computer Goldberg used at Meyer-Chatfield.
s
service that allows the sending and receiving of data or files by
way of the internet. In addition, Payne used a flash drive three
-
In sum, Cinquanto concluded in his testimony that the
former Meyer-Chatfield employees engaged in a systematic
pattern of concealment and destruction of data that would have
indicated what specific Meyer-Chatfield data [Appellants]
accessed and sent to outside persons or companies. He added
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in all of his years as a computer
forensic [analyst].
Trial Court Opinion, 5/30/2014, at 3-6.
Cinquanto did not complete his testimony until the late afternoon, so
the trial court scheduled another hearing, which occurred on February 28,
2014. At that hearing, the trial court permitted argument with respect to
the grant of interim relief pending the resolution of the preliminary
injunction. Meyer-
ry sizeable portion of
Meyer-
-Chatfield would
go out of business. Appellants argued in response to Meyer-
contentions; no testimony was taken; and, the trial court took the matter
under advisement and scheduled a two-day hearing.
On March 13, 2014, the trial court signed an order, which states the
following.
AND NOW, this 13th day of March 2014, it is hereby
ORDERED and DECREED as follows:
[Appellants] Steven Goldberg and [BFS] and any of their
respective partners, agents, joint ventures and any persons or
entities acting for or on their behalf including but not limited to
BFS Northeast, Arnold Winick, David Payne, David Schwartz and
Joseph Byrd (collectively, [Appellants]) are hereby enjoined and
shall immediately cease and desist from: (i) diverting existing
BOLI business away from Meyer-Chatfield (ii) soliciting or
inducing or attempting to induce any existing bank client of
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Meyer-Chatfield not to do business with Meyer-Chatfield or to
cease doing business with Meyer-Chatfield and (iii) contacting,
soliciting or communicating in any way with existing bank clients
of Meyer-Chatfield (including those identified in Exhibit 2 of the
Affidavit of Bennett S. Meyer in support of the Petition.)
IT IS FURTHER ORDERED AND DECREED that [Appellants]
are temporarily enjoined from servicing its BOLI policies in
regard to Customers Bank other than the Northwestern Mutual
BOLI policy sold to Customers Bank by BFS in September 2013.
IT IS FURTHER ORDERED AND DECREED that [Appellants]
may provide monthly reports strictly necessary for the servicing
This Interim Special Injunction Order shall take effect
immediately upon the posting of a bond by Meyer-Chatfield in
the amount of One Thousand Dollars ($1,000.00) and shall
continue in force until further Order of the Court.
Interim Order for Special Injunction, 3/17/2014.
On March 19, 2014, Appellants filed a motion to dissolve the injunction
and for a hearing pursuant to Pa.R.C.P. 1531(f)(1).1 The trial court entered
1
That rule provides that
[w]hen a preliminary or special injunction involving freedom of
expression is issued, either without notice or after notice and
hearing, the court shall hold a final hearing within three days
after demand by the defendant. A final order shall be filed in the
office of the prothonotary within twenty-four hours after the
close of the hearing. If the final hearing is not held within the
three-day period, or if the final order is not filed within twenty-
four hours after the close of the hearing, the injunction shall be
deemed dissolved.
Pa.R.C.P. 1531(f)(1).
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an order denying that motion on March 26, 2014. On March 27, 2014,
Appellants filed a notice of appeal referencing both orders.2,3
Before we reach the issues raised on appeal by Appellants, we
because it has not yet heard all of the evidence.4 The trial court observed
the following.
Hearings in this matter were held on October 18, 2013, January
29, 2014 and February 28, 2014. These preliminary injunction
hearings have not been completed. An appeal cannot be taken
from a temporary interim injunction order entered during the
course of multiple hearings on a petition for preliminary
2014 is interlocutory, and this appeal should be quashed.
Trial Court Opinion, 5/30/2014, at 6.
Although neither party responds specifically to the tri
observation, the statement of jurisdiction presented by Appellants sets forth
at 1. That rule provides that a party is entitled to an interlocutory appeal as
of right from
2
We observe that the filing of one appeal from multiple orders is
discouraged generally. See TCPF Ltd. P'ship v. Skatell, 976 A.2d 571, 574
(Pa. Super. 2009).
3
The trial court did not order a concise statement of errors complained of on
appeal pursuant to Pa.R.A.P. 1925 and none was filed.
4
Hearings on this matter have been scheduled and postponed on numerous
occasions. A review of the trial court docket reveals that hearings are
scheduled currently for the end of October 2014.
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[a]n order that grants or denies, modifies or refuses to modify,
continues or refuses to continue, or dissolves or refuses to
trial but before entry of the final order. Such order is
immediately appealable, however, if the order enjoins conduct
previously permitted or mandated or permits or mandates
conduct not previously mandated or permitted, and is effective
before entry of the final order.
Pa.R.A.P. 311(a)(4)(ii).
This Court has also explained that
[a]n order which grants a request to enjoin certain conduct, as
matter specifically authorized for appeal as of right by Rule
311(a)(4). Injunctive relief is considered an extraordinary
equitable remedy and it is to be granted only where the moving
party has established that immediate and irreparable harm,
which cannot be compensated by damages, will result if the
injunction is denied. Furthermore, the party seeking to enjoin
certain conduct must demonstrate that greater injury would
result by refusing the injunction than by granting it.
Pennsylvania Orthopaedic Soc. v. Independence Blue Cross, 885 A.2d
542, 547 (Pa. Super. 2005) (internal citations omitted).
Instantly, the
entered on March 13, 2014 clearly enjoined the conduct of Appellants, and is
therefore immediately appealable pursuant to Pa.R.A.P. 311(a)(4).
Moreover, the order dated March 26, 2014 which denied Appel
to dissolve the injunction is also appealable under the same rule.
Accordingly, we conclude that we have jurisdiction to review these orders.
We set forth our well-settled standard of review.
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A trial court has broad discretion to grant or deny a
preliminary injunction. Bell Fuel Corp. v. Cattolico, 375
Pa.Super. 238, 244, 544 A.2d 450, 453 (1988), appeal denied,
520 Pa. 612, 554 A.2d 505 (1989). 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. Temtex Products, Inc. v. Kramer, 330 Pa.Super. 183,
197, 479 A.2d 500, 507 (1984) (quoting Singzon v.
Commonwealth Dept. of Public Welfare, 496 Pa. 8, 10 11,
436 A.2d 125, 126 27 (1981)). We may reverse if the trial
court's ruling amounted to an abuse of discretion or a
misapplication of law. Bell Fuel, 375 Pa.Super. at 244, 544 A.2d
at 453.
WPNT Inc. v. Secret Commc'n Inc., 661 A.2d 409, 410 (Pa. Super.
1995).
The procedure applicable to actions for injunctive relief is governed by
Pa.R.C.P. 1531. That rule provides, in relevant part, as follows.
(a) A court shall issue a preliminary or special injunction[5] only
after written notice and hearing unless it appears to the
satisfaction of the court that immediate and irreparable injury
will be sustained before notice can be given or a hearing held, in
which case the court may issue a preliminary or special
injunction without a hearing or without notice. In determining
whether a preliminary or special injunction should be granted
and whether notice or a hearing should be required, the court
may act on the basis of the averments of the pleadings or
5
use of the many similarities between preliminary and special
injunctions, the two types tend to merge into one and the words are used
interchangeably. Although the former equity rules made minor distinctions
between them, the Pennsylvania Rules of Civil Procedure treat them exactly
sake of consistency, we will refer to the injunction granted in this case as a
preliminary injunction.
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petition and may consider affidavits of parties or third persons or
any other proof which the court may require.
***
(c) Any party may move at any time to dissolve an injunction.
Pa.R.C.P. 1531(a) and (c) (footnote added).
This rule has been interpreted as follows.
This court has acknowledged that there is no absolute right to a
hearing on a preliminary injunction. Bell Fuel, 375 Pa.Super. at
248, 544 A.2d at 455; Franklin Decorators, Inc. v. Hende
Jon Furniture Showrooms, Inc., 339 Pa.Super. 449, 489 A.2d
indicate that a hearing is the preferred procedure. It is the rare
preliminary injunction that can correctly be denied without a
hearing and no preliminary injunction can be granted and
continued without a hearing, whether before or after the
initial grant Bell Fuel, 375 Pa.Super. at 249, 544 A.2d at 455
(emphasis added). See also Pubusky v. D.M.F. Inc., 428 Pa.
461, 239 A.2d 335 (1968).
In Pubusky, supra, the trial court initiated a hearing on
the requested preliminary injunction. Interrupting defendant's
cross-examination of plaintiff and preventing defendant from
presenting any evidence or testimony on his own behalf, the
lower court discontinued the hearing and granted plaintiff a
preliminary injunction. This state's Supreme Court vacated the
decree and remanded the case for an evidentiary hearing after
entitled to a hearing before [a preliminary] injunction should
Id. at 463, 239 A.2d at 336 37. The court in Pubusky
further noted that even when circumstances support the
issuance of an ex parte injunction, a hearing is not excused, but
merely delayed for a limited time. Id. at 463 n. 1, 239 A.2d at
337 n. 1. See also Ogontz Controls Co. v. Pirkle, 329
Pa.Super. 8, 13 14, 477 A.2d 876, 879 (1984), appeal after
remand, 346 Pa.Super. 253, 499 A.2d 593 (1985) (although the
trial court conducted a hearing within five days of issuing an ex
parte injunction, it erred by continuing the preliminary injunction
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without allowing the objecting party to present evidence at the
abbreviated hearing)[.]
WPNT Inc., 661 A.2d at 411.
We frequently have said that a preliminary injunction
should not issue at least until the rights of the plaintiff are
clearly established. It also is fundamental that all of the parties
are entitled to a hearing before such an injunction should issue.
While the testimony at a hearing for a preliminary injunction
which seeks only to preserve the status of the parties until the
issue is finally determined need not always be as extensive as
that at a final hearing, the litigants should not be deprived of
their right to fully cross-examine all adverse witnesses, nor of
the opportunity to present testimony which is relevant to the
question of whether or not the injunction should issue. These
basic rights were overlooked in this case.
Pubusky v. D. M. F. Inc., 239 A.2d 335, 336-37 (Pa. 1968) (internal
quotations and citations omitted).
As the trial court points out, the hearing in this matter has not been
completed. See
complete, and the court has reached no final conclusion on whether to issue
hus, the trial court misapplied law by
granting a preliminary injunction under these circumstances.
for such relief. Accordingly, we vacate the March 17, 2014.
Order vacated. Case remanded. Jurisdiction relinquished.
Judge Lazarus joins the memorandum.
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Judge Shogan concurs in the result.
Judgment Entered.
Joseph D. Seletyn, Esq.
Prothonotary
Date: 10/7/2014
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