author: BARATTA, J.,

text:
    O’Donnell v. Lehigh Valley Rail Management, LLC

      C.P. of Lycoming County,
    No. C-48-CV-2010-14005

      Gerard J. Martillotti, for plaintiffs.

      J Lawson Johnston and Christopher Hoare, for defendants.
    October 22, 2013
   BARATTA, J.,

This matter is a personal injury action arising out of an incident that allegedly took place on or about January 10, 2009. The facts giving rise to this action are as follows:

The plaintiffs, Gerard O’Donnell and Colleen O’Donnell, filed their complaint on December 15, 2010 and reinstated it on January, 11,2011 against the defendants Lehigh Valley Rail Management LLC (“LVRM”) and Lehigh Valley Industrial Park (“LVIP”) (collectively referred to as the “Lehigh Valley defendants”). According to count I of the complaint, plaintiff Gerard O’Donnell (“Mr. O’Donnell”) was employed by Delaware and Hudson Railway Company, Inc. d/b/a/ CP Rail System (“D&H” or “Canadian Pacific”) at all times relevant to this cause of action. On the day of the incident, January 10, 2009, at approximately 1:00 a.m., Mr. O’Donnell and his crew members allegedly went to the LVRM facility to re-crew and pick up their locomotive engines (the “power”) that had been left by a prior crew. As Mr. O’Donnell commenced with his work, he allegedly stepped in a hole and the ballast gave way, allegedly causing him injury after he hyperextended his knee. According to the complaint, the injury occurred when Mr. O’Donnell, “despite his best efforts, was unable to maintain his footing due to the hazardous conditions in and around the rail area.” Mr. O’Donnell further avers that his injuries resulted from the Lehigh Valley defendants’ negligent acts and omissions, and their failure to provide him with a safe place to work, among other acts of negligence. As a result, the plaintiffs demand judgment against the Lehigh Valley defendants in an amount in excess of fifty thousand dollars ($50,000.00), plus interest and costs.

In count II of the complaint, plaintiff Colleen O’Donnell (“Mrs. O’Donnell”) presents a loss of consortium claim. The plaintiffs allege that they are lawfully married and reside together as husband and wife. Mrs. O’Donnell further avers that “[a]s a direct result of all negligent acts and omissions by the defendants as herein alleged,” she has suffered “the loss of society and services of [Mr. O’Donnell].”

On February 11, 2011, the Lehigh Valley defendants filed their answer with new matter to plaintiff’s complaint, denying ownership of the area in question and stating that they did not owe a duty of care to the plaintiffs. (See defendants’ answer with new matter to plaintiff’s complaint at ¶¶ 5, 27, 34.) On April 21 2011, LVRM and LVIP joined Canadian Pacific as an additional defendant in this action, bringing claims for indemnification and contribution based on a contract. (See writ joining additional defendant). Depositions and a site inspection conducted in August and September 2011 revealed that Norfolk Southern Rail, Inc. (“Norfolk Southern”) owned the tracks closest to the area where Mr. O’Donnell alleged sustained his injuries (hereinafter referred to as “Valley 18”).

Deposition testimony occurring in August and September 2011 revealed information about the ownership and control of Valley 18. John Gregory Robertson, director of operations at LVRM, testified that he did not know if Norfolk Southern had ever been contacted by either LVRM or Canadian Pacific about using Valley 18. (See deposition testimony of John Gregory Robertson 09/07/2011 at 18.) Patrick R. Loughlin, manager of LVRM, testified that LVRM’s discretion as to the location of the storage of the power “had changed through the years as this operation has changed,” and that “up until two years ago, all traffic was taken up Valley 18 and dropped off to the Shimersville yard.” (Deposition testimony of Patrick R. Loughlin 07/14/11 at 9-10.) Mr. Loughlin further demonstrated on a series of maps that Valley 18 was owned by Norfolk Southern. (See id. at 27-44.)

On October 11, 2011, the plaintiffs filed their amended complaint joining Norfolk Southern as an additional defendant. The plaintiffs filed a second amended complaint on February 23,2013. In both of their responsive pleadings to the amended complaint and the second amended complaint, LVRM and LVIP denied ownership and control of valley 18. (See LVRM and LVIP answer and new matter to complaint ¶¶ 5-7; see also LVRM and LVIP answer and new matter to second amended complaint ¶¶ 5-7.)

On June 13, 2013, defendant Norfolk Southern’s motion for summary judgment was granted by this court. As a result, all of the claims against Norfolk Southern were dismissed with prejudice.

On June 21, 2013, LVRM and LVIP filed their motion for summary judgment, along with their supporting brief, and a praecipe to list case for argument. On July 17,2013, the plaintiffs filed an opposition to defendants’ motion for summary judgment and a supporting brief. On August 27, 2011, the Lehigh Valley defendants filed a reply brief in this court.

This matter was placed on the September 3, 2013 argument list for a determination based on the oral argument and briefs.

Legal Standard

Pennsylvania Rule of Civil Procedure 1035.2 states:

After the relevant pleadings are closed, but within such time as not to unreasonably delay trial, any party may move for summary judgment in whole or in part as a matter of law
(1) whenever there is no genuine issue of any material fact as to a necessaiy element of the cause of action or defense which could be established by additional discovery or expert report, or
(2) if, after the completion of discovery relevant to the motion, including the production of expert reports, an adverse party who will bear the burden of proof at trial has failed to produce evidence of facts essential to the cause of action or defense which in a jury trial would require the issues to be submitted to the jury.

Further, under Pa.R.C.P. Rule 1035.3(a), the nonmoving party may not rest upon mere allegations or denials of the pleadings but must file a response within thirty (30) days after service of the motion. In other words, the nonmoving party has a clear and affirmative duty to respond to a motion for summary judgment. Harber Phila. Ctr. City Office Ltd. v. LPCI Ltd. P’ship, 764 A.2d 1100, 1104 (Pa. Super. Ct. 2000). Also, Pa.R.C.P. Rule 1035.3(d) specifically provides that “[sjummary judgment may be entered against a party who does not respond.” Id.

Summary judgment may be granted only in the clearest of cases where the record shows that there are no genuine issues of material fact and that the moving party is entitled to judgment as a matter of law. P.J.S. v. Pa. State Ethics Comm’n, 723 A.2d 174, 176 (Pa. 1999) (citing Marks v. Tasman, 589 A.2d 205 (Pa. 1991)). Summary judgment is only appropriate in the clearest of cases, because an order favorable to the moving party will prematurely end an action. Scopel v. Donegal Mut. Ins. Co., 698 A.2d 602, 605 (Pa. Super. Ct. 1997) (citations omitted). The moving party has the burden of proving the non-existence of any genuine issue of material fact. O’Rourke v. Pa. Dep’t of Corr., 730 A.2d 1039, 1041 (Pa. Commw. Ct. 1999) (citing Kee v. Turnpike Comm’n, 722 A.2d 1123 (Pa. Commw. Ct. 1998)). “Failure of a non-moving party to adduce sufficient evidence on an issue essential to his case and on which it bears the burden of proof...establishes the entitlement of the moving party to judgment as a matter of law.” Murphy v. Duquesne Univ. of the Holy Ghost, 777 A.2d 418, 429 (Pa. 2001) (quoting Young v. PennDOT, 744 A.2d 1276, 1277 (Pa. 2000)) (omission in original) (internal quotation marks omitted). The record must be viewed in the light most favorable to the non-moving party, and all doubts as to the existence of a genuine issue of material fact must be resolved against the moving party. Ertel v. Patriot-News Co., 674 A.2d 1038, 1041 (Pa. 1996) (citation omitted).

Under the Nanty-Glo Rule, summary judgment may not be granted where the moving party relies exclusively on oral testimony, either through testimonial affidavits or deposition testimony to establish the absence of a genuine issue of material fact. Nanty-Glo Borough v. American Surety Co., 163 A.523, 524 (Pa. 1932); see also Penn Center House, Inc. v. Hoffman, 553 A.2d 900, 903 (Pa. 1989); White v. Owens Corning Fiberglas, Corp., 668 A.2d 136, 142 (Pa. Super. Ct. 1995); Garcia v. Savage, 586 A.2d 1375, 1377-78 (Pa. Super. Ct. 1991); O’Rourke, 730 A.2d at 1041 (citing Kaplan v. Se. Pa. Transp. Auth., 688 A.2d 736 (Pa. Commw. Ct. 1997)).

A trial court’s entry of summary judgment will only be reversed in instances where there was an abuse of discretion or an error of law by the trial court. Moses v. T.N.T. Red Star Express, 725 A.2d 792, 795 (Pa. Super. Ct. 1999) (citing Sebelin v. Yamaha Motor Corp., 705 A.2d 904, 906 (Pa. Super. Ct. 1998)).

Discussion

Lehigh Valley Industrial Park (LVIP) owns and operates an industrial park which is serviced by freight trains. In fact, there are train tracks which traverse the LVIP property. However, the record also establishes that Norfolk Southern owns the train track at the property line of LVIP; in other words, once a train leaves the border of LVIP, the train then travels upon property under the possession of Norfolk Southern and upon tracks owned by Norfolk Southern.

Apparently, Lehigh Valley Rail Management (LVRM) both owns train track and also operates as a controller of train traffic, in other words, LVRM provides freight logistics by directing the flow of train traffic. The record was not clear as to whether or not LVRM owned the tracks that are located in LVIP. However, the record suggests that both LVIP and LVRM exercised authority only over the train tracks and train traffic within the Industrial Park.

Prior to Mr. O’Donnell’s injury, some of the business owners within the Industrial Park had complained about the diesel fumes generated from engines which were idling while within the confines of LVIP. As a result, LVRM had been directing that train engines, after having delivered their freight cars, park off of LVIP property and onto the Norfolk Southern tracks.

There was no evidence of written or oral agreements between LVIP, LVRM, and Norfolk Southern as it related to “parking” on the Norfolk Southern track.

Mr. O’Donnell’s employer, Canadian Pacific, delivered freight cars to LVIP. After delivery, the LVRM directed Canadian Pacific engineers to “park” their engine off of the LVIP property and onto the train tracks owned by Norfolk Southern. The Canadian Pacific engineers parked the engine at issue on that part of Norfolk Southern track identified as “Valley 18.” Mr. O’Donnell attempted to access the Canadian Pacific engine at Valley 18 when he allegedly stepped into a hole and injured his knee.

The controlling issue in this case is whether the Lehigh Valley defendants owed a duty to the plaintiffs to prevent harm to Mr. O’Donnell from a known or obvious danger. To establish a viable cause of action in negligence, the pleader must aver the following elements in his complaint:

1. A duty, or obligation, recognized by the law, requiring the actor to conform to a certain standard of conduct, for the protection of others against unreasonable risks.
2. A failure on the [actor’s] part to conform to the standard required: a breach of the duty.
3. A reasonably close causal connection between the conduct and the resulting injury.
4. Actual loss or damage resulting to the interest of another.

Ney v. Axelrod, 732 A.2d 719, 721 (Pa. Super. Ct. 1999).

Additionally, “the mere happening of an accident does not entitle the injured person to a verdict; a plaintiff must show that defendant owed him a duty and that duty was breached.” Id. (citing Engel v. Parkway Co., 266 A.2d 685, 687 (Pa. 1970). Moreover, “unless there is a duty upon the defendant in favor of the plaintiff which has been breached, there can be no cause of action based upon negligence.” In determining whether a duty exists, duty “is predicated on the relationship existing between the parties at the relevant time, and necessarily requires some degree of knowledge.” Morena v. South Hills Health System, 462 A.2d 680, 684 (Pa. 1983).

Ultimately, whether a duty exists is a question of fairness. See Campo v. St. Luke’s Hospital, 755 A.2d 20, 24 (Pa. Super. Ct. 2000). The analysis “involves a weighing of the relationship of the parties, the nature of the risk and the public interest in the proposed solution.” Id. Moreover, the analysis “depends on many factors and is necessarily rooted in public policy considerations, i.e., or ideas of history, morals, justice, and society in general in determining where the loss should fall.” Id.

Here, the plaintiffs allege in their second amended complaint that the Lehigh Valley defendants owed them a duty of care because LVRM was “owner and operator of rail tracks and rail equipment in Bethlehem, Pennsylvania” and LVIP “was owner of the land in which Lehigh Valley Rail Management LLC operated their [Vc] rail operations.” (Second amended complaint filed 02/23/12 at ¶ 6, 7.) As such, we must analyze whether the Lehigh defendants owed a duty of care to the plaintiffs as landowners or possessors of Valley 18.

In Pennsylvania, it has long been the law that “the duty of a possessor of land towards a third person entering the land has been measured by the status of the entrant at the time of the accident.” Palange v. City of Philadelphia, Law Dept., 640 A.2d 1305, 1308 (Pa. Super. Ct. 1994). The restatement (second) of torts defines an “invitee” in the following manner:

(1) An invitee is either a public invitee or a business visitor.
(2) A public invitee is a person who is invited to enter or remain on land as a member of the public for a purpose for which the land is held open to the public.
(3) A business visitor is a person who is invited to enter or remain on land for a purpose directly or indirectly connected with business dealings with the possessor of the land.

Restatement (Second) of Torts § 332 (1965); see also id.

Possessors of land owe a duty to protect invitees from foreseeable harm, or “conditions on the land which are known or discoverable by the possessor.” Carrender v. Fitterer, 469 A.2d 120, 123 (Pa. 1983). Moreover, the possessor of land is subject to liability only if he:

(a) knows or by the exercise of reasonable care would discover the condition, and should realized that it involves an unreasonable risk of harm to such invitees, and
(b) should expect that they will not discover or realize the danger, or will fail to protect themselves against it, and
(c) fails to exercise reasonable care to protect them against danger.

Restatement (Second) of Torts § 343; see also Carrender, 503 A.2d at 123.

“As a general rule, a landlord out of possession is not liable for injuries sustained by persons on his or her property unless the landlord has retained a right to control the portion of the premises on which the injury occurred.” Ott v. Unclaimed Freight Co., 577 A.2d 894 (Pa. Super. Ct. 1990). Moreover, “a landlord who retains control is only liable if, by exercise of reasonable care, the landlord could have discovered the condition and risk involved and made it safe.” Forgang v. Universal Gym Co., 621 A.2d 601 (Pa. Super. Ct. 1993).

In their brief, the plaintiffs argue that the Lehigh Valley defendants owed Mr. O’Donnell a duty of care for one of two reasons, or, perhaps, a combination of the two: (1) due to the agreement between the Lehigh Valley defendants and Canadian Pacific that allowed Canadian Pacific to access and use the Lehigh yard, the Lehigh Valley defendants had a legal duty to warn about the alleged unsafe conditions on Valley 18; and/or (2) that the Lehigh Valley defendants failed to instruct Canadian Pacific that Valley 18 was owned by Northern Pacific, and that such actions were negligent and led to Mr. O’Donnell’s injuries.

Apparently, the plaintiffs’ initial theory was that the duty of care of LVIP and LVRM to the plaintiffs rises out of the ownership, possession and/or control of the property upon which the defendant was injured. Since the record is clear that LVIP and LVRM did not own or possess Valley 18, the plaintiffs now present an alternative theory asserting that because LVIP and LVRM wanted the Canadian Pacific engine off of the confines of the LVIP and the Canadian Pacific engine was directed to park onto the Norfolk Southern track, the Lehigh Valley defendants were exercising control over Valley 18, much as a landowner out of possession. In fact, the plaintiffs’ brief baldly argues that “Canadian Pacific and LVRM entered into a business agreement that benefited both parties” and that the Lehigh Valley defendants “retained control of Canadian Pacific movements and the placement and storage of its trains, cars and engines.” As a result, the plaintiffs argue that they acted as the landowner or possessors of Valley 18.

At best, the record established that LVIP and/or LVRM told the Canadian Pacific engineers to park their engine outside of the LVIP property and onto the Norfolk Southern track.

Plaintiffs have failed to create a factual record that establishes any business agreement or other mechanism by which LVIP and/or LVRM exercised or retained control of the Norfolk Southern property known as Valley 18. A directive to park off of the LVIP property and onto the Norfolk Southern property does not create a duty related to the maintenance of the Norfolk Southern property. Based upon the record, we can only assume that the Canadian Pacific engineers were free to take their engine anywhere they wanted to, including to drive it back home, but if they wanted to park it, the Lehigh Valley defendants would not allow them to do so at the LVIP.

The second theory, that the Lehigh Valley defendants breached a duty to plaintiffs because they would not allow the Canadian Pacific engineers to park their engine at the LVIP property, but instead directed the Canadian Pacific engineers to park the engine onto another’s property, and that the Lehigh Valley defendants failed to provide a “safe haven” on the other property for the Canadian Pacific engine to park, is not recognized as a viable theory of liability in Pennsylvania.

There is no issue of material fact in this case. Further, the plaintiffs cannot establish the existence of a duty of care as it relates to Valley 18 or to the injured plaintiff. The Lehigh Valley defendants, LVIP and LVRM, are entitled to summary judgment

Wherefore, we enter the following order:

ORDER OF COURT

And now, this day of October, 2013, upon consideration of defendants Lehigh Valley Rail Management LLC and Lehigh Valley Industrial Park, Inc.’s motion for summary judgment and the plaintiffs, Gerard O’Donnell and Colleen O’Donnell’s, opposition thereto and the record herein, it is hereby ordered that said motion is granted.

      . We can only assume that there are times after a delivery is made that the freight company operating the engine is not prepared to drive their engine away because it may require a replacement crew and/ or freight logistics require the engine to wait until another pick-up is scheduled.


source: Caselaw Access Project

author: TUNNELL, J.,

license: Public Domain

text:
    Housing Authority of Chester County. v. Pappas

      C.P. of Chester County,
    No. 2012-00551

      Colleen M. Frens, for plaintiff

      Jeffrey P. Bryman, for defendant.

      DonaldF. Kohler, Jr., guardian ad litem for Kenneth J. Pappas.
    October 31, 2013
   TUNNELL, J.,

FINDINGS OF FACT

1. On December 22, 2009, defendant executed a Lease Agreement and Addenda thereto (the “Lease”) with the Housing Authority of the County of Chester, Pennsylvania (the “Housing Authority”) for the premises located at 508 E. Miner Street, Apartment 7, West Chester, Pennsylvania 19382. (P-1).

2. The apartment is located in an independent living facility. The Housing Authority rented the premises to defendant in reliance upon information he provided regarding his physical needs and his ability to live independently. (P-1 at^A).

3. The parties stipulated prior to trial that the Lease is valid and binding upon the parties. (Stipulation, dated 9/11/13).

Lease and Addenda

4. The Lease and addenda thereto impose obligations on defendant and set forth the Housing Authority’s remedies if defendant fails to perform his obligations and violates the Lease. (P-1).

5. Paragraph 7 of the Lease, “Obligations of Tenant,” sets forth various material conditions of the Lease. (P-1 at pp. 7-9).

6. The Housekeeping Standards Addendum (“Housekeeping Standards”) to the Lease contains the housekeeping standards that a tenant must follow to avoid violating the Lease terms. Paragraph B of the Housekeeping Standards states that “[t]he Tenant is required to abide by the standards set forth below. Failure to abide by the Housekeeping Standards is a violation of the lease terms and can result in eviction.” (P-1 at pp. 24-25).

7. Paragraph 12 of the Lease governs termination of the Lease. It states that the Housing Authority “shall not terminate or refuse to renew the Lease other than for serious or repeated violation of material terms of the Lease such as failure to make payments due under the Lease or to fulfill the Tenant obligations set forth herein, or for other good cause....” (P-1 atpp. 11-12).

8. Pursuant to paragraph 6 of the Lease, the Housing Authority is obligated to notify tenants of the specific grounds for any proposed adverse action by the Housing Authority, including proposed lease terminations. Paragraph 6.H. 1 provides that in the case of termination, a notice of lease termination that complies with paragraphs 12.B and C of the Lease shall constitute adequate notice of such action. (P-1 at p. 6).

Defendant’s Lease Violations

9. Defendant’s Lease required him to maintain his apartment in a clean and sanitary manner. (P-1 at p.24, P-1 at Housekeeping Standards B).

10. Over the course of his tenancy, defendant repeatedly violated material terms of the Lease by consistently maintaining his apartment in an unsafe, filthy, and cluttered condition.

December 6,2010 Inspection

11. On December 6, 2010, the Housing Authority conducted a Uniform Physical Condition Standards (“UPCS”) inspection of defendant’s apartment. (P-2).

12. During the inspection, the Housing Authority took photographs of defendant’s apartment to document any Lease violations. (P-3).

13. The Housing Authority determined at the inspection that defendant violated the following paragraphs of the Lease:

a. Paragraphs 7.E, F, G, & I and the Housekeeping Addendum when defendant created a health and safety hazard in his apartment by allowing an excessive amount of clutter, debris, and dirt to accumulate; and,
b. Paragraph 7.0 when defendant failed to report to the Housing Authority that there were conditions in his apartment that required repair and that created a health and safety issue.

(P-2).

14. After the inspection, the Housing Authority sent a letter to defendant notifying him that he failed the inspection and had violated material terms and conditions of the Lease. (P-2).

June 13,2011 Inspection

15. On June 13,2011, the Housing Authority conducted a UPCS inspection of defendant’s apartment and the inspector documented the findings with photographs. (P-4, 5).

16. The Housing Authority determined at the inspection that defendant violated the following paragraphs of the Lease:

a. Paragraph 7 and the Housekeeping Addendum when defendant blocked ingresses and egresses from his apartment by taping cardboard to the living room, kitchen, and bedroom windows in his apartment; and,
b. Paragraph 7 and Housekeeping Addendum when defendant created health and safety hazards in his apartment by storing car tires and car fenders in his apartment and having dirty undergarments strewn about his kitchen. (P-4).

17. After the inspection, the Housing Authority sent a letter to defendant notifying him that he failed the inspection and had violated material terms and conditions of the Lease.

(P-4).

August 1,2011 Inspection

18. On August 1, 2011, the Housing Authority again conducted a UPCS inspection of defendant’s apartment and the inspector documented the findings with photographs. (P-6).

19. The Housing Authority determined that defendant violated the following paragraphs of the Lease:

a. Paragraph 7 and the Housekeeping Addendum when defendant created health and safety hazards in his apartment by allowing an excessive amount of debris and clutter to accumulate in his apartment; and,
b. Paragraph 7 when defendant failed to report to the Housing Authority that there were conditions in his apartment that required repair and that created a health and safety issue. (P-4).

20. Thereafter, the Housing Authority began proceedings to evict defendant.

Notice to Quit

21. On August 25, 2011, the Housing Authority sent defendant a notice to wuit pursuant to paragraph 12 of the Lease. (P-8).

22. The notice to quit identified in over three pages defendant’s repeated violations of the material terms and conditions of the Lease and directed defendant to vacate the premises on or before September 26, 2011. (P-8).

23. The notice to quit also detailed defendant’s rights under the Lease’s grievance procedure and federal regulations that govern the Housing Authority. (P-8).

24. Lastly, the notice to quit informed defendant that the Housing Authority would file a landlord and tenant complaint if he did not vacate as requested. (P-8).

25. Defendant did not exercise his rights under the grievance procedure and he did not vacate his apartment on or by September 26, 2011.

Subsequent Lease Violations

26. On November 18, 2011 and December 14, 2011, the Housing Authority again conducted inspections of defendant’s apartment and determined that defendant had violated the same material terms and conditions of the Lease that he violated on December 6, 2010, June 13, 2011, and August 1, 2011. (P-9,10).

27. On November 18, 2011, the Housing Authority determined that defendant had violated Paragraph 7 of the Lease when he created a health and safety hazard in his apartment by allowing an excessive amount of clutter to accumulate in his apartment. (P-9).

28. On December 14, 2011, the Housing Authority determined that defendant had violated material terms and conditions of the Lease again by failing a housekeeping inspection. (P-10).

29. The Housing Authority initiated a Landlord Tenant action in District Court 15-1-04, Docket Number MJ-15104-LT-0065-2011 on December 22,2011.

30. The district court held a hearing on January 4,2012 and awarded the Housing Authority possession, rent in arrears, and costs.

31. Defendant appealed the district court’s decision and the Housing Authority initiated the present action.

DISCUSSION

A bench trial in this eviction action was held on October 24, 2013. At trial, plaintiff introduced requisite and sufficient evidence of its claim. It did so through Housing Authority employee, John Kostyal, Director of Public Housing at the Housing Authority, who was competent to testify about the facts and documents central to this case. Mr. Kostyal has served as the director of the Housing Authority since 2005 and previously worked in public housing in Allentown, Pennsylvania. He testified that he is responsible for supervising the Housing Authority staff and consults with that staff on a routine basis. Mr. Kostyal also serves as the custodian of records for the Housing Authority. He testified that he is familiar with the Housing Authority inspection reports and related documents that are relevant to the action. He testified that such documents were created in the regular course of the Housing Authority’s business.

Mr. Kostyal also testified at length about the condition of defendant’s apartment at the time of the various inspections. According to Mr. Kostyal, defendant’s premises is an independent living apartment within an independent living facility. He testified that minimum housekeeping standards are required of both tenants and the Housing Authority in accordance with federal regulations. The Housing Authority, in turn, must ensure that tenants meet these standards. Furthermore, the Lease’s housekeeping addenda and paragraph 7 also set forth standards regarding the condition of tenant’s residences. Mr. Kostyal then testified about the multiple housekeeping inspections of defendant’s apartment that revealed material and repeated violations of the Lease. Through Mr. Kostyal, plaintiff offered into evidence well over one hundred photographs of defendant’s apartment at the time of the inspections and the photographs were admitted without objection. (P-3,5,7,10,11). The history of the inspections follow.

On December 6, 2010, the Housing Authority conducted an inspection of defendant’s apartment. (P-2). The inspection report recorded violations of the most serious nature, level L-3. (P-2). Mr. Kostyal testified that the inspection report and photographs taken of defendant’s apartment during the inspection noted a kitchen stove with missing grates, debris covering the top of the stove and other garbage and debris strewn throughout the apartment. The inspection report also identified an inoperable GFI outlet. Mr. Kostyal testified that the Lease requires that a tenant who has a condition in his apartment that requires repair must notify the Housing Authority of the condition. The Housing Authority has an “800” number, with a 24-hour answering service, that tenants may call with problems or they can complete a work order. Defendant presented no evidence that he took advantage of any of those reporting channels.

On June 13, 2011, the Housing Authority conducted another inspection of defendant’s apartment and again photos were taken of the apartment during the inspection. The inspection once again revealed various housekeeping violations, including cardboard taped to living room, kitchen and bedroom windows which blocked the egresses, car tires and fenders in the apartment and dirty undergarments in the kitchen. (P-4). On August 1, 2011, the Housing Authority conducted yet another inspection of defendant’s apartment. At that inspection, there were two L-3 violations — an inoperable GFI plug and a non-functioning kitchen exhaust fan. (P-6) Both items, according to Mr. Kostyal’s testimony, should have been reported to the Housing Authority under the terms of the Lease.

On August 25, 2012, the Housing Authority sent defendant a notice to quit which outlined his multiple and repeated Lease violations and demanded that he vacate the premises on or before September 26, 2011. (P-8). Mr. Kostyal testified that defendant did not vacate by September 26,2011, but continued to occupy the apartment and violate the terms of his Lease. Inspections conducted on November 18, 2011 and December 14, 2011 revealed the same type of violations that were observed in the previous inspections. (P-9-11). During these inspections, the inspectors found debris, trash and clutter throughout the apartment, including the kitchen, and appliances that required servicing. (P-9-11).

At trial, defendant did not challenge the findings of the inspectors or the observations contained in their reports. Rather, defendant argued that plaintiff failed to wait the requisite time before filing its eviction action and as a result the court lacked jurisdiction over the action. In the alternative, defendant argued that the Lease violations, which defendant does not dispute, were not significant enough to be considered “material” breaches warranting termination. Given the evidence presented at trial and the plain language of the Lease, the court finds both of these arguments to be without merit.

A. The August 25, 2011 Notice to Quit Is Valid.

Pursuant to Section 501 of the Pennsylvania Landlord and Tenant Act, a landlord who wishes to evict a tenant must first give written notice to the tenant of their intention to do so. 68 P.S. §250.501. A landlord may only take such action in the following circumstances: “(1) Upon the termination of a term of the tenant, (2) or upon forfeiture of the lease for breach of its conditions, (3) or upon the failure of the tenant, upon demand, to satisfy any rent reserved and due. 68 P.S. §250.501(a). The notice to quit must also specify the date by which the tenant must vacate the premises. If the Lease is for a term of more than one year, the notice shall specify that the tenant must vacate within 30 days of the date of service of the notice. 68 P.S. §250.501(b).

In addition, pursuant to federal law governing public housing authority leases, the Housing Authority prior to a lease termination must provide notice that is (1) written, (2) states the specific reasons for the termination, (3) informs the tenant of the tenant’s right to make a reply, and (4) informs the tenant of their rights under the Housing Authority’s Grievance Procedure. 24 C.F.R. §966.4(1)(3). Section 966.4 allows the Housing Authority to combine the notices required by state and federal law. It provides that a “notice to vacate which is required by State or local law may be combined with, or run concurrently with, a notice of lease termination under paragraph (l)(3)(i) of this section.” 24 C.F.R. §966.4(l)(3)(iii). Paragraphs 12.B & C in the Lease incorporate these state and federal requirements and require the Housing Authority to notify the tenant that the Housing Authority will file a landlord tenant complaint if the tenant does not vacate by the date specified in the notice to quit. (P-1 at p. 11).

Defendant acknowledged in his pre-trial filings that the required state and federal notice periods can run concurrently and that the August 25, 2011 Notice was issued by the Housing Authority. (See defendant’s pretrial memorandum and answer and new matter). Although the challenge was never raised in defendant’s answer and new matter, defendant contended at trial that a Housing Authority letter dated December 12, 2011 (D-13) was the controlling notice to quit. According to defendant, the Housing Authority failed to wait the requisite period of time (30 days) before it filed its eviction action on December 22,2011.

Defendant argued that by issuing both the August 25th and the December 12th letters, the Housing Authority intended the two notices (federal and state) to run consecutively. Defendant contends that a reference in the December 12th letter to a “previous letter” notifying defendant of the Housing Authority’s intent to terminate the lease necessarily referred to the August 25th letter and thus demonstrates on its face that the two notice periods ran consecutively. Other than argument and the letters themselves, defendant offered no evidence to support his contention.

The Housing Authority’s director, Mr. Kostyal, testified, however, that that the “letter” referenced in the December 12th letter was not the August 25th letter. Mr. Kostyal testified that the December 12th letter referred to other correspondence about rent issues that the Housing Authority issued to various tenants. Although the letters referred to by Mr. Kostyal were not offered into evidence, the court finds Mr. Kostyal’s testimony persuasive. Defendant failed to offer any evidence to contradict this testimony. Moreover, the court’s own reading of the two disputed letters leads the court to conclude that the Housing Authority issued the two letters independently of one another and the letters were not meant to serve as consecutive notices of the Housing Authority’s intent to terminate the Lease.

The August 25th letter is four pages in length and lists three different sections of the Lease (paragraphs 3, 5 and 7) that the Housing Authority deemed defendant to have violated. (P-8). As for one of those sections, “7. Obligations of Tenant,” the letter further delineates three separate subparts that defendant violated. (Id.) All of the violations related to the safety and physical condition of his apartment — the violations which form the basis of the Housing Authority’s present action. With regard to paragraph 3 “Rent,” the letter cites eight prior eviction notices issued by the Housing Authority in the twelve months prior to the letter. {Id.).

In stark contrast, the December 12th letter is one page. It lists defendant’s violation as only the failure to pay rent in the amount of $218.00 plus late charges. (D-13) There is no mention of housekeeping violations or other safety concerns, which dominated the August letter. Rather, it states that the previous letter issued by the Housing Authority (the language defendant basis his argument upon) was “for the above lease violations” — which by the letter’s plain language is the failure to pay rent. Therefore, the court finds the Housing Authority’s notice to quit to be valid and the court’s jurisdiction over this matter proper.

B. Defendant Committed Serious and Repeated Violations of Material Terms of the Lease and the Housekeeping Addendum.

Pennsylvania courts apply general principles of contract law to residential leases and traditional contract remedies are available to both the landlord and the tenant. Bayne v. Smith, 965 A.2d 265, 266 (Pa. Super. 2009) (citing Pugh v. Holmes, 384 A.2d 1234, 1240 (Pa. Super. 1978), aff’d, 405 A.2d 897 (Pa. 1979)). In Pennsylvania, to maintain a cause of action for breach of contract, a plaintiff must establish: (1) the existence of a contract, including its essential terms; (2) a breach of a duty imposed by the contract; and (3) resulting damages. Lackner v. Glosser, 892 A.2d 21, 30 (Pa. Super. 2006) (citing Gorski v. Smith, 812 A.2d 683, 692 (Pa. Super. 2002). Abreach of contract is the failure, without justification, to perform all or any part of what is promised in a contract. Ringgold Sch. Dist. v. Abramski, 426 A.2d 707, 711 (Pa. Commw. 1981) (quoting Restatement of Contracts §314). The purpose of damages in a breach of contract action is to return the parties to the position they would have been in but for the breach. Pittsburgh Constr. Co. v. Griffith, 834 A.2d 572, 580 (Pa. Super. 2003) (citing Birth Ctr. v. St. Paul Co., Inc., 787 A.2d 376 (Pa. 2001). Here, the parties stipulated that the Lease is a valid and binding contract. (See stipulation, dtd. September 11, 2013.) The court, therefore, needs only to focus on whether defendant breached the contract to which he was bound and what damages, if any are appropriate.

The Lease and addenda thereto impose specific obligations on tenants. The Lease makes clear that if a tenant fails to perform those obligations, he/she violates the Lease. That being said, paragraph 12 of the Lease provides that the Housing Authority “shall not terminate or refuse to renew the Lease other than for serious or repeated violation of material terms of the Lease such as failure to make payments due under the Lease or to fulfill the Tenant obligations set forth herein, or for other good cause....” (P-1 at pp. 11 -12.) Paragraph 12 also incorporates the grounds for termination under the federal law that governing public Housing Authority leases. See 24 C.F.R. §966.4. Federal law specifically includes “failure to fulfill household obligations” as grounds for lease termination. 24 C.F.R. 966.4(l)(2)(i)(B).

The evidence at trial demonstrated that defendant breached the Lease and Housekeeping Addendum by committing repeated and serious violations of the material terms and conditions of the Lease. Paragraph 7 of the Lease imposes specific obligations upon defendant and clearly states that the conditions required of defendant are “material conditions of the Lease.” (P-1 at p. 7). The testimonial and substantial photographic evidence presented at trial demonstrated that defendant violated paragraph 7, specifically subparts E, F, G, I, and O, on December 6, 2010, June 13, 2010, August 1, 2011, November 18, 2011, and December 14, 2011 by maintaining his apartment and appliances therein in a unclean, unsafe and cluttered condition. The material violations committed by defendant included housing car parts in his apartment, covering apartment windows with cardboard, and failing to report to the Housing Authority conditions in his apartment that required maintenance. These repeated violations of paragraph 7 of the Lease constitute a valid basis for termination of the Lease.

Additionally, the Housekeeping Addendum, which defendant agreed he is bound by, is an integral part of the Lease and it too states that failure to abide by those standards is a violation of the Lease and “can result in eviction.” (P-1 at pp. 24-25). Defendant likewise violated the Housekeeping addendum on December 6, 2010, June 13, 2010, August 1,2011, November 18,2011, and December 14, 2011 by maintaining his apartment in an unclean and unsafe manner as described above. Consequently, these repeated violations of the Housekeeping addendum gave the Housing Authority additional grounds for termination. See Alleghany Co. Housing Auth. v. Johnson, 908 A.2d 336 (Pa. Super. 2006)(finding serious and material violations of housing authority leases, such as failure to fulfill tenant obligations, to be grounds for eviction).

Defendant does not deny that his apartment was kept in the condition photographed by plaintiff during the various inspections. Rather, defendant argued at trial that the Housing Authority did not establish that the violations were material and warranted the Lease termination. According to defendant, although his apartment may not have been the neatest, the alleged violations were not serious and should have been excused.

In support of his position, defendant relied upon requests for admissions that he served upon the Housing Authority during the discovery phase of this litigation. (D-3). Defendant served the Housing Authority with requests for admissions in August 2012, which plaintiff did not respond to within the time permitted or within the time period agreed to by counsel. Defendant asserted that the facts deemed admitted by plaintiff as a result of its failure to timely answer the requests support his contention that there was no material breach of the Lease. Plaintiff did answer the requests for admissions in December, 2012 and argued at trial that the requests should not be deemed admitted facts since the Housing Authority eventually did respond to the requests and referenced the footnote in Stimmler v. Chestnut Hill Hosp., 981 A.2d 145, 160 (Pa. 2009) discussing such instances. The court need not make a formal determination regarding plaintiff’s late response, because even if it considers defendant’s requests for admission as “deemed facts,” such facts do not support a finding that there was no material breach.

Defendant served eight requests for admissions. Request nos. 1 (rent) and 6 (drug activity and safety of others) are not relevant to the trial issues. Defendant’s request for admission no. 6 apparently was meant to track the language in paragraph 12 of the Lease that allows termination of the Lease for “violation of any laws pertaining to drug related criminal activity and other criminal activity which threatens safety or peaceful occupancy by other Tenants.” (P-11 at p. 11). The Housing Authority did not pursue its claim for unpaid rents nor did it assert that defendant had committed any acts related to drug activity or other such activity affecting the safety of others. These requests, therefore, are not relevant to the present action.

Request nos. 2-5 and 8 relate to defendant’s physical condition. As an initial matter, prior to trial the court, by order dated October 1, 2013, granted plaintiff’s motion in limine and precluded evidence at trial of defendant’s allegedphysical disability. Nonetheless, the court permitted defendant to introduce his requests for admission into evidence, some of which tangentially refer to defendant’s physical condition. Like the others, these requests do not support defendant’s argument that there was no breach or that any breach should have been excused.

Defendant’s position at trial is inconsistent with the averments in his answer and new matter and with the representations he made to the Housing Authority when he executed the Lease and affirmed that he was capable of living in its independent living facility, in spite of having kidney issues. Moreover, there was no evidence offered during the case by defendant that he had requested an accommodation that was then denied by the Housing Authority — a necessary showing for any such defense. See Lebanon County. Housing Auth. v. Landek, 967 A.2d 1009 (Pa. Super. 2009)(stating tenant’s request for reasonable accommodation necessary to establish reasonable accommodation defense).

The remaining request no. 7 deals with defendant’s suggestion that he, like other non-Housing Authority residents of apartments in Chester County, does not need to keep his residence in any particular condition. Request no. 7 states that as long as they “obey the law and do not damage the residences in which they reside... residents of the [Housing Authority] facility have rights similar to the rights of persons that occupy apartments in this County...including the right whether to be exquisitely neat housekeepers....” (D-13). Even if admitted to, this statement has nothing to do with and, in fact, ignores the contract entered into between the parties and which defendant agrees boundhimto certain terms and conditions. Whether the parties admit that defendant has the same housekeeping “rights” as any other tenants in Chester County, the fact remains that defendant entered into a contract with the Housing Authority that imposed upon him certain additional, and perhaps in defendant’s view more burdensome, housekeeping obligations, conditions and standards. These obligations are contractual in nature and defendant accepted the Housing Authority’s terms and conditions in exchange for the housing he received. The housekeeping obligations that non-contracting residents may have (or not have) has no bearing on the present case. This argument simply fails to dispose of the overwhelming evidence of defendant’s breach of the Lease.

C. The Housing Authority is Not Entitled to Attorneys’ Fees under the Lease.

In its request for relief, the Housing Authority seeks costs and fees from defendant in connection with this eviction action, including attorneys’ fees. The Housing Authority points to paragraphs 3 and 12 of the Lease as support for its request. The court finds that although an award of costs is appropriate, attorneys’ fees are not warranted under the Lease given the present circumstances.

The plain language of paragraph 3 makes it clear that the authorization of attorneys’ fees specified therein relates to actions involving rent collection, which is not the present action. Paragraph 3 of the Lease is entitled “3. PAYMENTS DUE UNDER THE LEASE” and the first paragraph there under is entitled “Rent.” (P-1 at p.2). The “rent” paragraph describes in detail how rent is to be paid and what might occur if the rent obligation is not met. In the middle of the paragraph, the Lease provides that the “[tjenant shall be liable for all legal fees if judgment is in favor of the Authority and for collection of fees if account is turned over to a collection agency for collection of the vacated tenant delinquent account.” It then goes on to speak further about the rent obligations of tenant. This is not a rent collection action, nor a termination proceeding based upon unpaid rent. Therefore, this provision does not support the Housing Authority’s contention that it is entitled to attorneys’ fees in this case. The other Lease provision that mentions attorneys’ fees, and to which the Housing Authority directs the courts’ attention, is Paragraph 12 dealing with Lease terminations. (P-1 at p. 11). Paragraph 12 provides that the required notice of termination must state that if a landlord tenant complaint is filed by the Housing Authority after a tenant fails to quit the premises, the tenant “may be required to pay the costs of court and attorneys’ fees if the Tenant loses the case.” Unlike paragraph 3, there is no language here requiring the imposition of fees. The court finds, therefore, that in the absence of a contractual provision mandating the imposition of attorneys’ fees, such relief will not be granted.

Conclusions of Law

1. Plaintiff and defendant entered into a valid Lease that was binding upon the parties.

2. Paragraph 12 of the Lease states that the Housing Authority “shall not terminate or refuse to renew the Lease other than for serious or repeated violation of material terms of the Lease such as failure to make payments due under the Lease or to fulfill the Tenant obligations set forth herein, or for other good cause....” (Lease, pp. 11-12.)

3. Paragraph 7 of the Lease imposes obligations on tenant and states material conditions of the Lease.

4. Defendant committed serious and repeated violations of paragraph 7 of the Lease on December 6,2010, June 13, 2011, August 1,2011, November 18,2011, and December 14,2011.

5. On August 25,2011, the Housing Authority issued a notice to quit to defendant in accordance with paragraph 12 of the Lease.

6. The notice to quit complied with the Lease, the Landlord and Tenant Act, 68 P.S. §250.501, and the federal laws that govern Housing Authority leases.

7. As a result of defendant’s material breach, plaintiff is entitled to judgment in its favor and against defendant for possession of the premises and costs and fees, excluding attorneys’ fees.

An appropriate order follows.

ORDER

And now, this 31 st day of October, 2013, following trial by the court sitting without a jury on October 24, 2013, the court finds in favor of plaintiff, Housing Authority of Chester County, and against defendant, Kenneth J. Pappas, for possession of the premises and for the costs and fees incurred in this action, excluding attorneys’ fees.


text:
    SunGard Business Systems, LLC v. McCloskey

      C.P. of Chester County,
    No. 2013-07190

      John J. Cunningham, IV and Mary-Ellen H. Allen, for the plaintiff.

      Theodore Poretz and Adrienne M. Ward, for defendants.
    November 1, 2013
   TUNNELL, J.,

This case primarily concerns whether any restrictive covenants were violated after defendant McCloskey went to work for another employer and, if so, whether injunctive relief should be granted to the plaintiff at least preliminarily.

A. PROCEDURAL HISTORY

The matter commenced on July 24, 2013 with the filing by SunGard Business Systems, LLC of a complaint seeking injunctive relief and monetary damages along with a motion for special and preliminary injunctions. Count I alleges a breach of noncompetition and nonsolicitation provisions contained in an amendment to defendant McCloskey’s sales compensation agreement. Count II invokes the doctrine of inevitable disclosure. Count III sets forth a claim for unfair competition. Count IV is an action for promissory estoppel. Count V is an action for breach of fiduciary duty. All of these counts are against McCloskey. Count VI alleges tortious interference with SunGard’s contractual relations by defendants Innovest Systems and Administrative Systems, LLC.

Although not made parties, individuals named Charleton Moore, Natalie Wyatt and Jeffrey McCuen, who are former SunGard employees now employed by the defendants, are alleged to be using confidential information they acquired in order to compete against SunGard.

The court convened a conference on SunGard’s motion for special injunction on August 1, 2013. It issued an order on the following day, August 2, 2013, essentially by agreement of the parties, enjoining McCloskey from selling or participating in the marketing of any products of defendant Innovest Systems, and from soliciting SunGard employees to leave SunGard to become employed by Innovest or Administrative Systems. The order permitted McCloskey to sell or participate in the marketing of Administrative Systems products pending further order of the court.

The hearing on the request for the preliminary injunction occurred October 15-16,2013.

The court makes the following:

B. FINDINGS OF FACT

SunGard Business Systems, LLC

SunGard Business Systems, LLC is a subsidiary of SunGard. The parent company is a Fortune 500 multinational company with 125 affiliates, 17,000 employees and over $4 billion in revenues in 2012. It sells some 350 software applications to a variety of businesses in the financial, educational and public sectors. It also provides continuity assurance and data center hosting among many other services.

SunGard Business Services, LLC (hereinafter “SunGard”) offers software and IT services to the wealth management industry. Its TRUST suite of products includes Global Plus, which is accounting software marketed to very large banks and trust companies. Its Omni products include Omni Payments, which is a software system that automates, organizes and integrates a check writing and benefit disbursement process.

In the retirement sector, SunGard sells Relius software which does record-keeping and administrative solutions for employee benefit professionals. It can manage pension plans. Under the Relius umbrella, SunGard markets Government Forms, which generates Form 1099’s and tax returns.

ASI and Innovest

Administrative Systems Inc. (“ASI Inc.”) was a California corporation. Its main product was ASIPay, a software system used to write checks, process tax forms, and provide secure print and mail services to the employee benefits and retirement industry. Historically, ASIPay was used by financial institutions to complement and supplement the trading and record keeping platforms offered by larger companies including SunGard and SEI. In early 2013, it had about 30 employees and was owned by Bluff Point Associates, Inc. (“Bluff Point”), a private equity firm. On or about April 30, 2013, ASI Inc.’s shares were acquired by Administrative Systems, LLC (“ASI, LLC” or “ASI”), a company organized by Innovest. Upon the acquisition of its shares, ASI Inc. was dissolved. ASI, therefore, is now wholly owned by Innovest, although it operates as a separate, free-standing enterprise with separate executives, separate systems and a separate sales forces. ASIPay competes with Omni Payments, a product of SunGard’s Omni business unit. Robert Hickman (“Hickman”) is ASI’s CEO.

Innovest Systems, LLC (“Innovest”), based in New York, provides secure, integrated, real-time trust accounting and reporting systems to trust companies, wealth management firms and other institutions. It has about 50 employees. Innovest’s trust platform competes with Global Plus, a product of SunGard’s TRUST business unit. It does not compete with Omni Payments. William Thomas (“Thomas”) is Innovest’s CEO. Prior to April 30, 2013, Innovest was owned by a trust for the benefit of the children of the principal of Bluff Point. Following the acquisition of ASI Inc., Bluff Point became a member.

Innovest, although now ASI’s parent, continues to be operated as a separate and freestanding enterprise. It maintains a separate sales force, dedicated to selling Innovest’s products, independent of ASI, and the two sales forces do not interface. Recently, ASI and Innovest did merge one small component of their businesses, Relationship Management, for administrative efficiencies by having a single manager oversee each company’s respective customer service staff. None of the individuals under scrutiny, McCloskey, Moore, Wyatt or McCuen, are involved in the relationship management function in any way.

In September 2012, Innovest and ASI Inc. entered into a distribution agreement, whereby Innovest agreed to seek to sell the ASI Pay product to Innovest customers as an additional capability, and ASI Inc. agreed to share with Innovest a percentage of the revenues that resulted from any successful distribution effort. On or about December 10, 2012, Innovest and ASI Inc. issued a press release to announce the distribution relationship. It was not clear whether SunGard was aware of this.

Later in 2012, Innovest and ASI Inc. began to discuss a possible business combination and terms were reached around March 2013. By agreement dated April 30, 2013, Innovest acquired all of ASI Inc.’s shares and merged them into a new, wholly-owned subsidiary, ASI, LLC. Both entities are run separately.

McCloskey

Gregory B. McCloskey was a SunGard sales person until February 1, 2013, when he began work as Senior Vice President, Business Development, at ASI Inc. McCloskey worked within SunGard’s TRUST business suite, selling Trust’s Global Plus product. Global Plus is the trust accounting and reporting platform sold to the trust departments of very large financial institutions. He never sold Omni Payments, the SunGard product that is competitive with ASIPay, nor any other product of the Omni or Relius business suites.

McCloskey was hired by ASI, Inc. to seek out potential acquisition target companies as well as bring in opportunities for ASI Inc. to partner with other companies in the distribution of ASIPay, much like the distribution agreement Innovest and ASI Inc. entered into in 2012. In addition, McCloskey was assigned sales responsibilities for the ten (10) top Tier 1 financial institutions. This takes about 5% of his time. McCloskey estimates that since his departure from SunGard, 95% of his time has been spent in non-sales related pursuits, namely in seeking potential mergers and acquisitions.

McCloskey began seeking new employment in 2012, following a dispute over his 2011 compensation that consumed much of that year, culminating in McCloskey’s hiring his own counsel to deal with SunGard on his behalf. In late 2012, as part of a networking effort, he sent his resume to an old friend, Glen Schmidt, who was working at Innovest. Innovest and McCloskey both recognized that McCloskey could not become employed by Innovest by reason of a noncompetition provision contained in the Amended Compensation Plan for 2011 that resolved his 2011 compensation dispute. Instead, Innovest’s CEO, Thomas, forwarded McCloskey’s resume to ASI Inc.’s Hickman, who interviewed him for the open position of Vice President, Sales. At about the same time, ASI Inc. was also interviewing Moore for the position; Moore’s resume had been forwarded by a headhunting firm. Neither knew that the other was being interviewed until very late in the process.

Ultimately, ASI Inc. concluded that both Moore and McCloskey were good candidates, and it was determined to offer the vice president sales position to Moore and to create a new position, senior vice president for business development, for McCloskey. McCloskey accepted the business development position on or about January 18, 2013, gave notice to SunGard, which included the fact that he was going to work for ASI Inc., and started work there on or about February 1,2013.

McCloskey did not know that there had been discussions between ASI Inc. and Innovest over a potential merger until sometime after he left SunGard. He had no role in Innovest’s decision to acquire ASI Inc.

As an ASI, LLC employee, McCloskey’s role has not changed. He continues to devote himself substantially to seeking out business combinations and partnering opportunities for ASI. To the limited extent McCloskey is engaged in any sales (he estimates 5% of his time is devoted to seeking sales opportunities from the ten (10) largest Tier 1 financial institutions) it is only for the ASIPay product. He does not sell (and has never sold) any Innovest products. Though he participates in ASI’s regular sales conference calls, he does not participate in Innovest sales calls, and does not interface with its sales force. When he attends Innovest’s Board of Director’s meetings to report on his activities, he is excused when the discussion turns to Innovest sales.

SunGard contends that McCloskey should nonetheless be enjoined from working for ASI because (a) it violates the non-compete provision of the Amendment to the 2011 Sales Compensation Plan; (b) he will necessarily have to use SunGard’s trade secrets in his role at ASI; and (c) he is barred from soliciting SunGard customers under the terms of a 1993 agreement executed between him and Premier Systems, a company SunGard later acquired.

The 2011 Amended Sales Compensation Plan

As a member of the Global Plus sales force, McCloskey’s compensation consisted of a base salary and commissions for software systems he sold. In December 2010, as McCloskey was well along the way of making two large sales of Global Plus, McCloskey and his boss, Todd Moyer (“Moyer”), reached agreement on a commission structure for 2011; in essence, McCloskey and Moyer agreed that he would be paid 2% of all revenues he generated up to $20 million, and 3% of all revenues that exceeded $20 million. On that basis, McCloskey closed the first of the two deals in the first quarter of 2011, selling the Global Plus system to the Canadian Western Trust for a total contract value of $5.2 million.

In June 2011, McCloskey was delivered a written copy of the Amendment to the 2011 Sales Compensation Plan, made retroactive to January 1, 2011. The written Sales Compensation Plan bore little resemblance to the compensation plan to which he felt he and Moyer had already agreed, and in reliance on which he had already closed one large contract. SunGard unilaterally decided that McCloskey would receive 2% of all revenues up to $27.5 million and required him to share 30% of these reduced revenues with a newly hired subordinate, who had played no significant role in either of the two sales efforts.

McCloskey rejected the proposed Amendment to the 2011 Sales Compensation Plan, but while he made his objections known, he continued seeking to close a much larger Global Plus transaction with another customer, Key Bank. Ultimately, he closed the Key Bank transaction in October 2011, a total contract value to SunGard of approximately $30.1 million.

Under McCloskey’s agreement with Moyer, these two sales entitled McCloskey to compensation in the amount of $850,000. SunGard contends that under the retroactive Amendment to the 2011 Sales Compensation Plan, he would have been paid $288,606 less.

McCloskey and SunGard finally reached agreement in December 2011; except for a last minute reduction in the amount by $25,000, SunGard agreed to pay to McCloskey what SunGard, through Moyer, had agreed to pay him one year earlier. Though he felt he was entitled to $850,000, McCloskey ultimately agreed to accept $825,000 (for having obtained $35.1 million in revenue for SunGard). McCloskey left SunGard before the last $72,152.48 installment was paid, and therefore received only approximately $753,000 of the $825,000 he had earned in commissions.

SunGard also requested that McCloskey agree to a post-employment noncompetition provision — he previously had no non-compete restriction of any kind with SunGard — and also to a nonsolicitation provision. Ultimately, McCloskey agreed. The four companies whose names appear in the non-compete provision, including Innovest, were suggested by McCloskey. SunGard never insisted on any of them by name or description.

In pertinent part, the Amendment to 2011 Sales Compensation Plan, dated December 5, 2011, provides that for twelve (12) months following the termination of his SunGard employment:

[McCloskey] shall not...render any material services for any of the following companies or their affiliates or successors: FIS/Metavante Systems, Fi-Tek, Innovest Systems or Accutech Systems.

The terms “material,” “affiliates” and “successors” were not defined in the Amendment. For the same 12-month period, McCloskey also agreed that he would not:

solicit or contact, for the purpose or with the effect of competing or interfering with any business of the Company, (i) any customer or acquisition target under contract with the Company at any time during the two years preceding the termination date; (ii) any prospective customer or acquisition target that received or requested a proposal, offer or letter of intent from the Company at any time during the two years preceding the termination date; (iii) any affiliate of any such customer or prospect; or (iv) any of the individual customers or acquisition targets established by the Company, [McCloskey] or others at the Company during the period of [McCloskey’s] employment with the Company.

McCloskey testified that he understood that this provision applied only to competing with the business he did at SunGard, that is, Global Plus. Since ASI does not compete with Global Plus as well as the fact that he would not be particularly engaged in sales activities, he believed that his new employment did not constitute a violation of this provision. McCloskey has not solicited any entity to compete with the Global Plus business he did at SunGard.

Moore

Charleton (“Chip”) Moore was employed as a salesperson in the Relius business unit of SunGard, headquartered in Jacksonville, Florida, primarily within its retirement segment.

SunGard asserts that Moore is bound by the terms contained in an Employment Agreement he executed on or about May 5, 1993 with Corbel & Co. (“the Corbel Employment Agreement”), a Florida corporation later acquired by SunGard in about 1997. Corbel was engaged in the business of selling software that created probate forms, a business that Moore was not involved in at SunGard, and with which he is not presently competing. In pertinent part, the Corbel Employment Agreement provides that for two (2) years following the termination of Moore’s employment, he may not “render services on behalf of himself or any person organization or entity which is engaged in, or about to become engaged in, research on, development of, or marketing or selling of, any Trade Secrets... which resemble or compete with any Trade Secrets... that are used, published or sold by [Corbel & Co.].” The Corbel Employment Agreement attaches as “Schedule A” a “Description of Corbel & Co. Business Activities,” which specifies that Corbel prepares “(i) various types of legal forms and document preparation services; (ii) technical consulting advice concerning the services offered; (iii) an on-line computer system consisting of various functions and capabilities; and (iv) a computerized probate support systems.”

SunGard also asserts that Moore is bound by “Exhibit A Restrictive Covenants” pursuant to the “Management Non-Qualified Time-Based Class A Option Agreement” (the “Option Agreement”) Moore signed in exchange for SunGard options. Paragraph 8 of the Option Agreement, entitled “Forfeiture”, provides that if “the Company determines that Optionee is not in compliance with one or more of the Restrictive Covenants...the Company may cancel any unexercised portion. The Company shall also have the following (and only the following) additional remedies...” The two exclusive remedies listed thereafter are a) “rescission” or clawback of “any gain realized upon the sale of any Shares acquired upon the exercise of the Option,” and b) “the right to offset, against any Shares any cash amounts due to optionee...any amounts to which the Company is entitled as a result of Optionee’s violation of the Restrictive Covenants...” Injunctive relief and money damages are excluded. SunGard has indicated that it will forfeit any options due to Moore by reason of his employment at ASI. McCloskey is also party to an Option Agreement with SunGard, and the same analysis applies. SunGard has forfeited, or is in the process of forfeiting, the SunGard options.

SunGard also asserts that Moore wrongfully solicited Wyatt, to whom she reported at SunGard, to join him at ASI. He did arrange for an interview for her at ASI, but she had apparently expressed an interest to leave SunGard. The court was not persuaded that Moore enticed Wyatt in any way.

Wyatt

Natalie Wyatt was a salesperson in SunGard’s Relius business unit. Wyatt was assigned only to new customer sales at Relius; her geographic territory covered a number of states. She joined ASI, LLC on or about July 1, 2013, and is exclusively engaged in the sale of ASIPay. She does nothing to compete with Relius.

Wyatt was the only one among the four persons under scrutiny who signed a standard SunGard Employment Agreement on or about July 7, 2006 (the “Wyatt Employment Agreement”). In pertinent part, the Wyatt Employment Agreement provides that for twelve (12) months, she will not compete “with any part of SunGard’s ISS Business.” The term “SunGard’s ISS Business” (standing for SunGard’s investment support systems business) is defined as:

involving] the provision of data processing and related services using SunGard’s proprietary software and databases...including software for investment accounting, portfolio management, risk management, securities and derivative instrument trading and accounting, employee benefit plans, trust accounting, investment performance analysis, stock, bond and mutual fund accounting, general ledger accounting and any other investment support and financial applications, and all related software and services which SunGard may in the future develop internally or obtain through acquisition...”

As broad as this definition is, it says nothing about check writing software, the only business of ASI, LLC, and its inapplicability is made clear by this important carve-out:

If my responsibilities are limited to a defined territory or market, then this noncompetition provision will apply only to the territory or market for which I was responsible during the last two years of my employment with SunGard.

Wyatt, who is selling check-writing software to retirement departments of financial institutions, is now engaged in an entirely separate “market” from the noncompeting market she served while employed as a Relius salesperson for SunGard.

The Wyatt Employment Agreement also contains a nonsolicitation provision, which, for twelve (12) months, prevents her “for the purpose or with the effect of competing or interfering with or harming any part of SunGard’s ISS Business” from soliciting “(1) any customer under contract with SunGard at any time during the last two years of [her] employment; (2) any prospect that received or requested a proposal or offer from SunGard at any time during the last two years of [her] employment; (3) any affiliate of any such customer or prospect; (4) any of the individual contacts established by SunGard or [Wyatt] or others at SunGard during [Wyatt’s] employment at SunGard or (5) any SunGard employee or contractor.”

No evidence was adduced during the preliminary injunction hearing that Wyatt has violated this provision, broad as it is, in any way, or that she is likely to. No SunGard customer has switched or threatened to switch to ASI as a result of her efforts. It bears mention that the term “SunGard’s ISS Business” on its face seems to include all financial software, whether or not Wyatt had anything to do with its sale, and categories of people whose identities Wyatt could not possibly know. There was no demonstration that she had any ability to know what prospect “received or requested a proposal” from SunGard in the last two years of her employment, who “the affiliates of any such customer and prospect” might be, or who the “individual contacts established by SunGard...or others” during her employment might be. This could undoubtedly be a list of thousands of people entirely unknown to Wyatt and explains why the Wyatt Employment Agreement expressly carved out her ability to work in a different “territory or market” from what she did at SunGard.

McCuen

Alone among the four ex-SunGard employees mentioned in the complaint, Jeffrey McCuen, a member of the sales force in the Omni business unit, left SunGard to join Innovest in February 2013.

It is undisputed that there is no non-compete or nonsolicitation agreement to which McCuen is a party. There is no evidence that Innovest “enticed” McCuen to join Innovest by raising his salary, or that he took any of SunGard’s confidential documents with him. Indeed, at the hearing, the president of SunGard, Mike Rogalski, testified that McCuen was free to compete with them.

C. ANALYSIS OFTHERESTRICTIVE COVENANTS

A covenant not to compete is a restrictive covenant relied upon by employers to shield their protectable business interests, J C. Ehrlich Co., Inc. v. Martin, 979 A.2d 862, 864 (Pa. Super. 2009), and “precludes the former employee from competing with his [her] prior employer for a specified period of time and within a precise geographic area.” Hess v. Gebhart, 570 Pa. 148, 157, 808 A.2d 912, 917 (2002). Although post-employment noncompetition agreements are not per se unenforceable, Wellspan Health v. Bayliss, 869 A.2d 990, 996 (Pa. Super. 2005), they “are not favored in Pennsylvania and have been historically viewed as a trade restraint that prevents a former employee from earning a living.” Hess, supra; InterMetro Indus. Corp. v. Kent, 2007 WL 1140637 at *5 (M.D. Pa. 2007). For that reason, covenants not to compete must be strictly construed against the employer. All-Pak, Inc. v. Johnston, 694 A.2d 347, 351 (Pa. Super. 1997); Citadel Broad. Co. v. Gratz, 52 Pa. D. & C.4th 534, 545 (Lacka. Cty. 2001).

Noncompetition covenants are enforceable under Pennsylvania law if: (1) the restrictive covenant is incident to an employment relationship between the parties; (2) the restrictions imposed by the covenant are reasonably necessary for the protection of the employer; and (3) the restrictions imposed are reasonably limited in duration and geographic scope. See Hess, supra; J. C. Ehrlich Co., supra; Citadel Broad., 52 Pa. D. & C.4th at 544-45.

Consideration

To be effective, the noncompetition covenant must be supported by adequate consideration. See Sidco Paper Co. v. Aaron, 465 Pa. 586, 591, 351 A.2d 250, 252 (1976). If a covenant not to compete is executed at the inception of employment, the consideration supporting the covenant is the job itself. See e.g., Barb-Lee Mobile Frame Co. v. Hoot, 416 Pa. 222, 225-26, 206 A.2d 59, 61 (1965). However, when an employee enters into a noncompetition agreement subsequent to the commencement of employment, the restrictive covenant must be supported by new consideration in order to be enforceable. Maintenance Specialties, Inc. v. Gottus, 455 Pa. 327, 330, 314 A.2d 279, 280 (1974); Davis & Warde, Inc. v. Tripodi, 420 Pa. Super. 450, 455, 616 A.2d 1384, 1387 (1992). Such new consideration must be in the form of some corresponding benefit to the employee or favorable change in employment status, Ruffing v. 84 Lumber Co., 410 Pa. Super. 459, 466, 600 A.2d 545, 548 (1991), as in the case of a promotion, see Records Ctr., Inc. v. Comprehensive Management, Inc., 363 Pa. Super. 79, 85, 525 A.2d 433, 435-36 (1987), or an increase in pay. See Zambelli Fireworks Mfg. Co., Inc. v. Wood, 2009 W.L. 159182 (2009), affirmed in part, vacated in part, 592 F.3d 412 (3d. Cir. 2010) at *11; Citadel Broad., 52 Pa. D. & C.4th at 546.

McCloskey argues that the restrictive covenants were not supported by adequate and separate consideration, appearing as they did for the first time in the amendment to the 2011 Sales Compensation Plan. He was emphatic in his view that his employer at the time, SunGard, had welshed on a deal previously struck. The court was in no position to adjudge that, and was reticent to go behind the document itself. What was clear is that both McCloskey and SunGard, through their respective counsel, hammered out an arm’s length transaction over a period of time, ultimately producing the amendment dated December 5, 2011. That agreement, in its preface, recites:

WHEREAS, the parties dispute the terms that apply to commissions earned by Employee in 2011;
WHEREAS, the parties wish to resolve their dispute over the applicable commission plan for Employee for 2011.

After its execution, Mr. McCloskey remained an employee for a number of weeks.

It cannot seriously be gainsaid that the agreement, and the restrictive covenants contained therein, were not “incident” to an employment relationship. The court interprets the document to be a settlement agreement, negotiated and bargained for by counsel for the parties. This court has no intention of inquiring into the sufficiency of the consideration, in the absence of fraud. Bayne v. Proctor & Gamble Distrib. Co., 87 Pa. Super. 195, 202 (1926), noting that a very slight advantage to one party is sufficient consideration to support a contract. Mutual promises made mutually binding are sufficient consideration to support a contract. This contract recites that “INTENDING TO BE LEGALLY BOUND, and in consideration of the mutual agreements stated herein, the Company and the Employee hereby agree as follows.”

The parties battled to a compromise acceptable to both of them. The deal is supported by consideration.

Did McCloskey violate the restrictive covenants?

Innovest Systems was one of five companies specifically named in the noncompetition clause contained in the Amendment to the 2011 Sales Compensation Plan. McCloskey went to work for Administrative Systems, Inc., unaware that there were some discussions underway between his new employer and Innovest concerning acquisition. That acquisition was announced in April 2013. By continuing to work for Administrative Systems, LLC post-merger, SunGard argues that in practical effect McCloskey is rendering “material service” to Innovest on and after April 30, 2013. McCloskey testified and argues that he did nothing wrongful, that he had no control, input or even knowledge about the merger, and that it would be harsh to now require him to quit his employment with Administrative Systems, LLC. He urges the court not to interpret the “affiliates and successors” language to that end, but to apply it prospectively; when McCloskey accepted employment, he had breached nothing.

McCloskey and his new employer were aware of the noncompetition clause and took precautions so as not to violate it. McCloskey testified he understood this provision applied only to competing with the sales business he did at SunGard, that is selling Global Plus. Since ASI does not compete with Global Plus, and since he only engaged in sales activities for 5% of his time, he reasoned his new employment did not constitute a violation of this covenant. His activities for ASI and its member, Bluff Point, were in identifying potential mergers and acquisitions. McCloskey did no mergers and acquisitions work of any kind while at SunGard. He stepped away from Innovest meetings when sales discussions were to occur.

The court cannot read the literal language agreed to by McCloskey within the noncompetition clause any other way: he agreed that he would not perform “any material services” for “Innovest Systems” or its “affiliates or successors”. The court declines to read in the suggested prospective term urged upon it. The court concludes that ASI, LLC is an affiliate of Innovest Systems and that McCloskey is performing material services for it.

McCloskey is regarded by the court as being in breach of the noncompetition covenant as written. But because the covenant is overbroad, the court intends to modify it.

As to the nonsolicitation provision, another type of restrictive covenant, the evidence at the hearing was that McCloskey did not contact any of his former customers. Nor did the evidence preponderate for the proposition that McCloskey knowingly contacted any customer, prospective customer, or affiliate of a customer with the purpose or effect of competing or interfering with any of SunGard’s business. He is not using any of the knowledge he acquired at SunGard in order to perform his functions with his new employer. He does not have to rely on trade secrets of SunGard in order to do his job, and the reverse was true. David Battrich, formerly an ASI sales employee, became reemployed by SunGard. It was conceded by SunGard that Battrich did not need to contact his former customers or utilize any secret data of ASI in order to do his job at SunGard.

The court does not discern that McCloskey is in violation of the nonsolicitation clause.

Protectable Business Interests

Pennsylvania law “permits equitable enforcement of employee covenants not to compete only so far as reasonably necessary for the protection of the employer’s protectable business interests.” Hess, 570 Pa. at 162, 808 A.2d at 920 (citation omitted). Hence, “[t]he presence of a legitimate, protectable business interest of the employer is a threshold requirement for an enforceable noncompetition covenant.” Wellspan Health, 869 A.2d at 997. Generally, legitimate business interests that can be protected through restrictive covenants include trade secrets or confidential proprietary information, customer goodwill, and unique or extraordinary skills developed through specialized training. Hess, 570 Pa. at 163, 808 A.2d at 920; Wellspan Health, 869 A.2d at 996-97. Customer goodwill is considered a protectable interest even when the goodwill has been acquired through the efforts of the employee. Sidco Paper Co., 465 Pa. at 591, 351 A.2d at 252-53.

The evidence at the hearing demonstrated that SunGard took appropriate steps to safeguard its legitimate interests. On the other hand, much of what a good salesperson like McCloskey and the others need is either in the public domain or readily available. This includes the names and addresses of the top tier buyers of their services, the names and contact information of the departmental personnel who purchase various systems (albeit over a one (1) to three (3) year process), and the price the salesperson has to beat in order to sell a competing system. As mentioned, SunGard’s witnesses conceded this. Accordingly, such information is not protectable as a trade secret in the first instance.

Balancing of Competing Interests

In those instances where a noncompetition agreement imposes restrictions that are deemed to be broader than necessary to protect the former employer’s interests, the Supreme Court has “repeatedly held that a court of equity may grant enforcement limited to those portions of the restrictions that are reasonably necessary for the protection of the employer.” Hess, 570 Pa. at 162-63, 808 A.2d at 920; see also Sidco Paper Co., 465 Pa. at 595, 351 A.2d 254, Victaulic Co. v. Tieman, 499 F.3d 227, 235 (3d Cir. 2007) (“To be reasonably necessary for the protection of the employer, a covenant must be tailored to protect legitimate interests.”). In making that determination, the reviewing court must balance “the employer’s protectable business interests against the interest of the employee in earning a living in his or her chosen profession, trade or occupation,” and thereafter balance those competing interests “against the interest of the public.” Hess, 570 Pa. at 164, 808 A.2d at 920; J. C. Ehrlich Co., 979 A.2d at 864-65. Thus, post-employment restrictive covenants are subject to a more stringent test of reasonableness than covenants not to compete which are ancillary to the sale of a business. See Hess, supra; Thermo-Guard, Inc. v. Cochran, 408 Pa. Super. 54, 65, 596 A.2d 188, 194 (1991); Citadel Broad., 52 Pa. D. & C.4th at 545. The court must make a “searching inquiry” of all the circumstances surrounding enforcement of these kinds of covenants to determine its reasonableness. Insulation Corp. of Am. v. Brobston, 446 Pa. Super. 520, 667 A.2d 729, 735 (1995). Thus, reasonableness must be determined on a case-by-case basis. Id. at 735, n. 7. The determination of reasonableness is a factual one with the party claiming unreasonableness as a defense against enforcement of the covenant bearing the burden of proof. Wellspan Health, 869 A.2d at 999.

The Blue Pencil

A consequence of its “broad powers to modify the restrictions imposed on the former employee to include only those restrictions reasonably necessary to protect the employer,” All-Pak, Inc., 694 A.2d at 350-51, is that the court may reform or “blue pencil” the covenant by removing offensive portions or supplying new, limiting language and thereafter enforcing the covenant as reformed. See Wellspan Health, 869 A.2d at 996, n.2 (Pa. Super. 2005), Thermo-Guard Inc., 408 Pa. Super, at 65 n.9, 596 A.2d at 194 n.9 (1991); Zambelli Fireworks Mfg. Co. v. Wood, 592 F.3d 412 (2010); Hillard v. Medtronic, Inc., 910 F. Supp. 173, 177 (M.D. Pa. 1995).

Taking all of these principles into account, in this case the court concludes that the noncompetition covenant in the amendment to the 2011 Sales Compensation amounts to overreaching on SunGard’s part in its efforts to protect its interests. It is true that the covenant appears to be limited insofar as it singles out five companies to which McCloskey was not to provide material services. It is also true that McCloskey had a hand in drafting it; most employees do not. In either event, it remains the responsibility of the court to scrutinize the effect of the covenant as applied to the facts and, if need be to achieve a proper balance, further shape its terms. And, in actuality, since there are so few potential employers to whom McCloskey could turn, the effect of this clause is much more drastic than would initially appear.

The court credits McCloskey for finding employment doing a very different kind of activity, mergers and acquisitions, from the work he performed for so many years for SunGard and the predecessor company it acquired, Premier Systems, Inc. Many former employees, because of their specialized training and knowledge, do not have that capability.

McCloskey does not engage with any of his former contacts. He absents himself from sales meetings. He uses no trade secret information of SunGard’s. And yet, SunGard asserts that he nonetheless be precluded from earning a living this way.

This covenant is overbroad.

McCloskey is not in fact competing under the foregoing analysis in any way that is SunGard’s legitimate concern. SunGard’s desire to impose what really amounts to a virtual ban of McCloskey from the relevant marketplace is not legitimate.

In order to ensure enforcement of only those restrictions which are reasonably necessary for the protection of SunGard Business Systems, LLC’s valid business interests, McCloskey’s noncompetition agreement will be reformed so as to permit McCloskey’s employment with ASI, LLC, notwithstanding any derivative benefit that might accrue to Innovest Systems. See Wellspan Health, 869 A.2d at 1002 (finding noncompetition covenant reasonable as to York and Adams counties, but unreasonable with respect to Lancaster County); Thermo-Guard, Inc., 408 Pa. Super, at 65, 596 A.2d at 194 (to protect former employer’s interest in customer goodwill developed by former employees, limited injunction was issued prohibiting employees “from contacting or developing any relationship with any of Thermo-Guard’s present customers or prospective customers who became known to [the employees] through their employment with Thermo-Guard.”); Zambelli Fireworks, 2009 W.L. 159182, at *16 (employee enjoined only “from contacting or developing any business relationship with any of Zambelli’s present or prospective customers who had contact with or became known to [employee] through his employment with Zambelli for the two-year restrictive time period.”); Hillard, 910 F. Supp. at 176 (former employee “is not prohibited from competing ‘in any manner’ with Medtronic, he is restricted only from involvement with certain products on which he worked within the prior two-year period when he was employed by Medtronic.”). The court’s modified prohibition adequately protects SunGard’s legitimate interest in customer goodwill while simultaneously respecting McCloskey’s right to earn a living in his chosen field.

If the nonsolicitation covenant should be in conflict with this modification of the noncompetition covenant, the latter shall govern.

As to the other individuals, the Corbel Employment Agreement signed by Charleton Moore is unenforceable for two reasons. First, under Florida law, a noncompetition agreement may only be assumed by a subsequent employer if the agreement expressly authorizes its assignment or assumption, and the Corbel Employment Agreement has no such provision. FI. St. §542.33 provides that a non-compete can only be assigned when the employee consents to the assignment. See DePuy Orthopaedics, Inc. v. Waxman, 95 So. 3d. 928, 935 (1st DCA Fl. 2012) (explaining that §542.33, which was repealed in 1996 and superseded by FI. St. §542.335, remains in force for restrictive covenants entered into before July 1, 1996). Second, even if enforceable, Moore has never engaged in any of the activities set forth in the “Description of Corbel & Co. Business Activities” while employed at SunGard. Case law in Pennsylvania is to same effect. See All-Pak, Inc., 694 A.2d at 351 (restrictive covenants contained in employment contracts are unassignable absent the consent of the employee). Consequently, SunGard is not entitled to injunctive relief for any alleged violation of the Option Agreement.

The court is not persuaded that Wyatt was in violation of her employment agreement. There is no evidence that Wyatt has violated the broad language of the restrictive provisions. She is working in an entirely different “market” than the “market” she served at SunGard and therefore her non-competing employment at ASI is expressly not a violation of her SunGard employment agreement.

SunGard did not show that McCuen has its confidential materials. As with the others, SunGard lost no customers, and does not believe itself in danger of doing so, as a result of any of McCuen’s efforts. No injunction will enter therefor.

That brings us to a discussion of the practice of “cross-selling” by SunGard’s salespersons. McCloskey, for example, only sold SunGard’s Global Plus product. If he came across an opportunity to market SunGard’s Reliance product to a customer, he was encouraged, if not required, to cross-sell by passing the information back to the Reliance group for follow-up. That is all the referring salesperson did, however. Moore, Wyatt and McCuen did the same thing.

SunGard tried to make the case that because McCloskey could cross-sell in this fashion, he had essentially marketed all of SunGard’s major products. If accepted by the court, this would further broaden the reach of restrictive covenants. From the evidence it seemed to the court, however, that these opportunities were infrequent and the results were negligible.

D. STANDARD OF REVIEW FOR PRELIMINARY INJUNCTIONS

To establish its right to the issuance of a preliminary injunction, SunGard must demonstrate six factors, namely that: (1) an injunction is necessary to prevent immediate and irreparable harm which cannot be adequately compensated by damages; (2) greater injury would result from refusing an injunction than from granting it; (3) an injunction will properly restore the parties to their status as it existed immediately prior to the alleged wrongful conduct; (4) its right to relief is clear, i.e., SunGard is likely to prevail on the merits; (5) the injunction sought is reasonably suited to abate the offending activity; and (6) a preliminary injunction will not adversely affect the public interest. Pennsylvania Gaming Control Bd. v. City Council of Philadelphia, 593 Pa. 241, 277-78, 928 A.2d 1255, 1277 (2007); Pennsylvania State Ed. Assoc. v. Commonwealth, Office of Open Records, 981 A.2d 383, 385 (Pa. Commw. 2009).

Imminence of Harm

Since the harm resulting from the violation of a noncompetition agreement is difficult to quantify, “[t]he great weight of modem authority” holds that a party “who has been or will be injured” by the breach of a restrictive covenant “is ordinarily entitled to the equitable remedy of injunction....” Records Ctr., Inc., 363 Pa. Super. at 86, 525 A.2d at 436 (citation omitted). As the Supreme Court of Pennsylvania has observed, “[i]t is not the initial breach of a covenant which necessarily establishes the existence of irreparable harm but rather the threat of the unbridled continuation of the violation and the resultant incalculable damage to the former employer’s business that constitutes the justification for equitable intervention.” John G. Bryant Co., Inc. v. Sling Testing and Repair, Inc., 471 Pa. 1, 7, 369 A.2d 1164, 1167 (1977). Thus, “Pennsylvania courts have uniformly recognized that a violation of a noncompetition agreement results in harm which is not compensable by money damages.” Zambelli Fireworks, 2090 W.L. 159182, at *16.

All six of these factors must have been proven at the hearing for the preliminary injunction. In the court’s estimation, what is clearly missing is the imminence of harm. SunGard’s witnesses could not identify that any harm had actually occurred. They explained that their sales cycles could be one to two or even more years in length and, consequently, they might not know of any harm until sometime in futuro. That may well be, but the requirements of the law are unflinching. The harm must not only be irreparable but it must be immediate.

The court is satisfied that SunGard reacted in a sufficiently timely way in filing its action. It does not agree with the defendants’ characterizations that SunGard was dilatory in getting to the courthouse. But the immediacy of injury must be demonstrated. The reason it is required is because a preliminary injunction is issued early in a proceeding and limited to occasions when the threatened harm would impair the court’s ability to grant an effective remedy.

A preliminary injunction will not be issued merely to allay the apprehensions or to soothe the anxieties of the parties; more than a concern of a risk of future harm must be demonstrated. As the Third Circuit Court of Appeals well put it, “an injunction may not be used simply to eliminate a possibility of a remote future injury, or a future invasion of rights, be those rights protected by statute or by the common law.” Continental Group, Inc. Amoco Chem. Corp., 614 F.2d 351, 358-59 (3d. Cir. 1980).

For these reasons, an appropriate order follows.

ORDER

And now, this 1st day of November, 2013, upon consideration of the motion of plaintiff SunGard Business Systems, LLC for a preliminary injunction, the responses thereto and the parties’ memoranda of law, and after a hearing held on the motion on October 15-16, 2013, the preliminary injunction is denied; the court’s earlier order entered August 5, 2013 is vacated, and any injunctive relief therein is dissolved; the noncompetition covenant in the amendment to the 2011 Sales Compensation Plan of defendant McCloskey is modified so as to permit McCloskey to engage in the mergers and acquisitions work he has been doing for Administrative Systems, LLC, including up to 5% in sales activities; the nonsolicitation covenant in the same plan shall not be interpreted to the contrary;

It is further ordered that the security previously posted by the plaintiff with the prothonotary of Chester County in the amount of $ 1.00 on August 2,2013 may be returned to the plaintiff, less poundage if any.