author: RUFE, J., J.,

text:
    Labor & Logistics Management Inc. v. Wallover

      Douglas L. Smillie, and Jay H. Karsch, for plaintiff.

      Thomas Martin, for defendant.
    April 18, 2005
   RUFE, J., J.,

The defendants, David Wallover and Winner Logistics Inc., have served upon us a notice of appeal to the Pennsylvania Superior Court relating to rulings made in our January 24, 2005 order. In particular, the defendants challenge our decision imposing an injunction as a result of finding certain documents and information obtained by the defendants constitute misappropriated trade secrets. We offer this opinion as an explanation of our decision.

Plaintiff, Labor & Logistics Management Inc., is a New Jersey corporation in the business of providing contract truck drivers to its customers. Labor & Logistics’ customers are typically companies who do not employ truck drivers themselves or companies that need additional or replacement truck drivers to satisfy their business needs. Labor & Logistics has 10 offices in seven states to accommodate customer requirements. At each location, Labor & Logistics employs a location and driver manager to oversee the day-to-day operations of the business.

In September of 2000, plaintiff hired David Wallover as a driver lease manager for their Delanco, New Jersey location. The terms of Wallover’s employment were outlined in a standard offer letter dated September 21,2000. The offer letter explained that Wallover’s employment would be governed by an employment agreement that was discussed during the interview process with Curtis Ball, the founder and president of Labor & Logistics. At trial, Ball testified that he explained to Wallover that all management employees were required to sign an employment contract that contained nonsolicitation, noncompetition and noninterference covenants. Specifically, the agreement barred employees from competing with Labor & Logistics within a 50-mile radius of its Delanco, New Jersey office for a period of two years. Ball also stated no driver lease manager was ever hired without signing the agreement and that Wallover did not object to the covenants.

While at Labor & Logistics, Wallover had access to the company’s customer lists, prospective customer lists and driver lists. According to Ball, these lists are the products of “years of soliciting and interacting” with present and prospective customers. He described the lists as difficult to obtain outside of Labor & Logistics and constitute more than mere name and phone number compilations. Ball explained that the lists include sales histories, products customers typically shipped, pricing data, names of competitors and other information that would assist a driver in transporting a specific customer’s goods. After gaining employment as a driver lease manager, Labor & Logistics provided Wallover access to a copy of the list to use in the course of his employment.

To protect the privacy and confidentiality of the lists, Labor & Logistics requires employees with access to the lists to sign noncompete and nonsolicitation covenants. As a further safeguard, only the territorially relevant customer list is maintained at each location; the master list is kept only in the Labor & Logistics coiporate office. In addition, the list is preserved on a password-protected computer at each location and any hard copies of the list are to be maintained in a locked cabinet.

In the early summer of 2002, Robert Latronica, an employee of Labor & Logistics, conducted a routine review of personnel records. At that time, Latronica informed Ball that a signed noncompete agreement was missing from Wallover’s personnel file; he also reported that Wallover’s was the only personnel file missing the noncompete agreement. As corporate records indicated Wallover had in fact signed the agreement, Ball instructed Latronica to review the file again. Two days later, Latronica informed Ball that Wallover’s file did not contain the agreement. Ball then told Latronica to have Wallover sign another agreement. Despite several requests by management of Labor & Logistics, including Ball himself, Wallover refused to sign an agreement. At that time, on July 31, 2003, Labor & Logistics terminated Wallover for refusing to sign the agreement and requested all confidential information be returned.

In the month after Wallover was terminated from Labor & Logistics, Curt Roble incorporated Winner Logistics, a company in the same business as Labor & Logistics, i.e., the leasing of commercial truck drivers. Prior to the incorporation of Winner Logistics, Roble had no experience in the day-to-day operations or management of a truck-driver leasing company. The person who provided the knowledge to begin the business was Wallover, the only other Winner Logistics’ employee besides Roble at that time. Wallover drafted all the necessary forms, including the driver service agreement, owner/operator agreement, waiver and release agreement, and other marketing documents used in the contract truck-driver industry. Some of these documents were virtually identical to agreements Wallover had in his possession while employed at Labor & Logistics. Wallover also provided the pricing information so that Winner Logistics could set a “competitive rate” for its services.

As Winner Logistics had no customers and Roble had little or no knowledge of the industry, the solicitation of customers became Wallover’s responsibility. Among others, Wallover began contacting businesses that he serviced while an employee of Labor & Logistics. At the time of the December 13, 2004 trial, Winner Logistics had approximately 15 customers. Of these customers, no less than 10 or 11 were customers with Labor & Logistics during the course of Wallover’s employment. Similar to Labor & Logistics, Winner Logistics maintained these customer names within a password-protected computer database so that the information would not be disclosed to competitors.

As a result of Wallover and Winner Logistics’ solicitation, Labor & Logistics estimates they suffered a 10 to 15 percent loss of business. On December 2, 2002, Labor & Logistics filed the instant equity action against Wallover and Winner Logistics seeking injunctive relief and damages. The complaint alleges Wallover breached the restrictive covenants in his employment contract and misappropriated trade secrets by soliciting businesses from Labor & Logistics’ customer list. After the pleading and discovery phase concluded, we held a trial on the merits on December 13,2004. At trial, we heard evidence regarding Wallover and Winner Logistics’ alleged liability relating to the misappropriation of trade secrets and Wallover’s breach of restrictive covenants contained in his employment contract. We did not hear evidence to determine the existence of any damages, leaving the issue of damages to be decided on a subsequent date.

At the end of the trial, the parties agreed to submit briefs and we took the matter under advisement. On January 24, 2005, we issued the following findings of fact and order:

“From the evidence presented at the hearing on December 13, 2004, we make the following:
“Findings of Fact
“(1) Defendant David Wallover never executed a written contract of employment with plaintiff Labor and Logistics Management Inc. (LLM) and never agreed orally not to compete with LLM in the event of his termination of employment with LLM.
“(2) Defendant David Wallover is not prohibited by written or oral contract from engaging in business in direct competition with plaintiff.
“(3) Notwithstanding the absence of a contract of employment, defendant Wallover was subject to a common-law duty not to violate plaintiff’s rights to the security and confidentiality of its trade secrets.
“(4) Plaintiff’s customer lists were developed over a period of time through the collection of bits of information from a variety of sources. The customer lists, therefore, constitute trade secrets.
“(5) Defendants are hereby prohibited from initiating any contact with any of plaintiff’s customers such as they existed on July 31, 2002.
“(6) Other forms and documents wholly or substantially copied or duplicated from plaintiff’s forms and documents do not constitute trade secrets subject to employee confidentiality, as the same were easily obtainable in the open market or could be easily created.
“Accordingly, we enter the following
“Order
“And now, January 24,2005, defendants are enjoined and prohibited from having any contact with such of plaintiff’s customers as existed on July 31, 2002, for a period of two years from the date of this order.”

On January 29,2005, Wallover and Winner Logistics filed for an emergency motion for reconsideration of our January 24, 2005 order and, in the alternative, a motion for a stay pending appeal. We heard argument on February 4, 2005, and denied the motion for reconsideration and the motion for stay pending appeal. Subsequently, we received Wallover and Winner Logistics’ notice of appeal.

In their concise statement of matters complained of on appeal, Wallover and Winner Logistics complain that our January 24,2005 order is not supported by sufficient evidence to find that Labor & Logistics’ customer list constituted a trade secret and that such information was misappropriated. Wallover and Winner also argue the issuance of an injunction in this case is an error as a matter of law because: (1) Labor & Logistics presented no evidence that an injunction was necessary to prevent irreparable harm; (2) Labor & Logistics’ delay in bringing this matter to the court for disposition conclusively establishes there is no immediate irreparable harm being suffered; (3) that the injunction we issued is overbroad and would prevent Winner Logistics from engaging in lawful competitive activity; (4) the injunction is contrary to public interest and would prevent non-parties from exercising their right to make a choice regarding what company supplies services to them; (5) the injunction is contrary to the court’s finding that Wallover is not subject to any contractual restrictions on his right to compete and that Wallover did not utilize any of Labor & Logistics’ trade secrets in the conduct of their business; (6) the injunction is contrary to the public policy of this Commonwealth; and (7) there is no evidence to support an injunction against Winner Logistics. We now discuss the contentions outlined in the defendants’ appeal to the Superior Court.

TRADE SECRETS

Defendants first argue that we erred in finding that Labor & Logistics’ customer list constitutes a trade secret. Pennsylvania courts have generally adopted the definition of a trade secret as provided by section 757 of the Restatement of Torts. Tyson Metal Products Inc. v. McCann, 376 Pa. Super. 461, 465, 546 A.2d 119, 121 (1988). Section 757 states that a trade secret “consists] of any formula, pattern, device or compilation of information which is in one’s business, and which gives him an opportunity to obtain an advantage over competitors who do not know or use it. It may be a formula for a chemical compound, a process of manufacturing, treating or preserving materials, a pattern for a machine or other device, or a list of customers.” Restatement of Torts §757, comment b (1939).

When making a determination as to whether information should be protected as a trade secret, courts have considered the following: “(1) the extent to which the information is known outside of the owner’s business; (2) the extent to which it is known by employees and others involved in the owner’s business; (3) the extent of measures taken by the owner to guard the secrecy of the information; (4) the value of the information to the owner and to his competitors; (5) the amount of effort or money expended by the owner in developing the information; and (6) the ease or difficulty with which the information could be properly acquired or duplicated by others.” Tyson Metal Products, 376 Pa. Super, at 465, 546 A.2d at 121.

Although the concept of a trade secret is a nebulous one that requires a case-by-case analysis of the facts presented, courts of the Commonwealth have determined that customer lists warrant protection as trade secrets. Morgan’s Home Equipment Corp. v. Martucci, 390 Pa. 618, 136 A.2d 838 (1957); O.D. Anderson Inc. v. Cricks, 815 A.2d 1063, 1072-73 (Pa. Super. 2003); A. M. Skier Agency Inc. v. Gold, 747 A.2d 936 (Pa. Super. 2000).

In Morgan’s Home Equipment, our Supreme Court explained why certain customer lists are protected as trade secrets.

“In many businesses, permanent and exclusive relationships are established between customers and salesmen. The customer lists and customer information which have been compiled by such firms represent a material investment of employers’ time and money. This information is highly confidential and constitutes a valuable asset. Such data has been held to be property in the nature of a ‘trade secret’ for which an employer is entitled to protection, independent of a nondisclosure contract, either under the law of agency or under the law of unfair trade practices.” Morgan’s Home Equipment, 390 Pa. at 623, 136 A.2d at 842. (footnote omitted)

Moreover, there seems to be little significance, if any, as to whether the information from the customer list is utilized from the former employee’s memory or from a wrongfully obtained physical list; either way, courts have held the information was entitled to protection. Renee Beauty Salons Inc. v. Blose-Venable, 438 Pa. Super. 601, 603, 652 A.2d 1345, 1346 (1995).

Since the decision to protect information as a trade secret is made on a case-by-case basis, a brief summary of the relevant case law is helpful. In Morgan’s Home Equipment, our Supreme Court upheld an injunction against former employees of a company engaged in the door-to-door selling of household products. Upon gaining employment with the company, the employees were given a confidential list of customers to whom they would sell products and from whom they would collect weekly payments. After resigning from Morgan’s, several employees began a rival company and solicited their former customers. In enjoining the former employees from soliciting their former customers, the Supreme Court stated that the customer lists were confidential, particular secrets of Morgan’s, and thus, warranted protection as a trade secret. Morgan’s Home Equipment, 390 Pa. 618, 136 A.2d 838 (1957).

In Colteryahn Dairy Inc. v. Schneider Dairy, 415 Pa. 276, 203 A.2d 469 (1964), the issue was whether a former employee of a milk delivery company could be enjoined from soliciting former customers. Our Supreme Court focused on the relationship of the employee with the customer when determining if a customer list deserved protection as a trade secret. The court considered important the natural attrition of customers in the dairy delivery business and that it was the drivers who were responsible for maintaining their dairy routes by establishing personal relationships with their customers. In declining to provide the customer list trade secret protection, the court found one of the most important factors in retaining a customer was the “personality and resourcefulness” of the delivery driver, not the time and effort of the employer to compile the list. Id.

Similar to Colteryahn Dairy, the court in Renee Beauty Salons, 438 Pa. Super. 601, 652 A.2d 1345 (1995), distinguished Morgan’s Home Equipment by focusing on the nature of the employ ee/customer relationship and held that the customer list of a particular beauty salon did not constitute a trade secret. There, a number of employees left their employer and began a competing salon. Soon thereafter, the former employees began soliciting customers they serviced while employed by their former employer. The court stated that in a business such as beauty salons, “intense relationships and loyalty to the service providers] often develop. As such, customers naturally will follow the employee to the new employer, rather than remain customers of the former employer.” Id. at 609, 652 A.2d at 1349. The court also noted that it was an encouraged practice for salons to encourage new employees to solicit their former customers. Presented with these facts, the court refused to protect the customer list as a trade secret and stated, “[a]n injunction will not make Renee patrons of those who desire to go elsewhere.” Id. at 609, 652 A.2d at 1349.

More recently, the Superior Court in O.D. Anderson, 815 A.2d 1063 (Pa. Super. 2003), heard a matter in which a tour bus company sought to enjoin a former employee from soliciting their potential “repeat” customers. The customer list in question contained not only the names, telephone numbers and addresses of former customers, but also the previous travel dates and destinations of those customers. With such information, the customer list became an important part of the company’s “repeat” business. In upholding the injunction, the court noted the list contained more than mere names of customers and held the confidential manner in which the compilation was maintained and its value to the company allowed for the information to be shielded as a trade secret. Id.

Turning to the present matter, the record establishes that Labor & Logistics’ customer list is compiled with confidential and valuable information. As in O.D. Anderson, the data contained not only the names, addresses and telephone numbers of customers, but also included more particular information regarding each customer. The list included sales histories, products those customers typically shipped, pricing data, names of competitors and other information that would assist a driver in transporting a specific customer’s goods. Moreover, the data on the list was not readily obtainable by the public.

Testimony revealed that, although a competitor could potentially obtain similar information, it would take substantial effort to do so. The list was the product of “years of soliciting and interacting” with present and prospective customers. As Labor & Logistics engaged in business transactions with a client, employees upgraded the company customer list by entering data into labeled fields of a spreadsheet. The information was entered to provide more efficient future service to customers and to assist Labor & Logistics drivers in their delivery routes.

In addition, the safeguards taken by Labor & Logistics to protect the information provides further evidence of its value. To keep the list confidential, only employees who signed the noncompete and nonsolicitation covenants were provided access to the list. When not being used, employees were told to store the list in a locked cabinet drawer. All copies of the list stored on computers were password-protected and the master list was maintained at corporate headquarters to prevent any of the particular office managers from having access to the entirety of Labor & Logistics’ customer information. In fact, Curt Roble, the founder of Winner Logistics, testified that he considers his own customer list — the majority of which is comprised of former Labor & Logistics’ customers — confidential. As they consider the information confidential, Winner Logistics also maintains their list on a password-protected computer. These safeguards were implemented at Winner Logistics, as indicated by Wallover, to prevent the information from being obtained by competitors. Wallover suggested that if the list were not kept confidential, Winner Logistics may lose an advantage over their competitors. Finally, Labor & Logistics took the unusual step of terminating the services of Wallover only when it was discovered it did not have a noncompete covenant signed by him and that he refused its request to have him execute such a covenant.

Considering the evidence presented, we also believe the instant case is easily distinguishable from Colteryahn Dairy and Renee Beauty Salons. In those cases the courts focused on the intimate nature of the employee/customer relationship when determining the customer lists were not protectable trade secrets. Here, such a close relationship was not shown to exist. No evidence was presented that the “personality and resourcefulness” of Wallover allowed Labor & Logistics to retain customers; nor was there testimony regarding the existence of an “intense relationship ... [or] loyalty” between Wallover and customers. As such, we believe the facts of this matter closely resemble that of O.D. Anderson, and find the customer list warrants protection as a trade secret as it is not just “a list of customers, but a collection of information about the customers over an extended period of time” that is valuable and confidential to the business of Labor & Logistics.

MISAPPROPRIATION OF THE CUSTOMER LIST

Defendants further claim that, even if the information compiled in Labor & Logistics’ customer list constituted a trade secret, there was insufficient evidence to find that either Wallover or Winner Logistics misappropriated that protected information. The necessary criterion to establish a claim for misappropriation of trade secrets is well established. Van Products Co. v. General Welding and Fabricating Co., 419 Pa. 248, 259, 213 A.2d 769, 775 (1965). To establish this claim, the employer must demonstrate: “(1) [the existence of] a trade secret. . . ; (2) that it was of value to [him] and important in the conduct of his business; (3) that by reason of discovery of ownership [he] had the right to the use and enjoyment of the [trade] secret; and (4) that the secret was communicated to the employee while he was in a position of trust and confidence under such circumstances as to make it inequitable and unjust for him to disclose it to others, or to make use of it himself, to the prejudice of his employer.” A. M. Skier Agency, 747 A.2d at 940 (citing Gruenwald v. Advanced Computer Applications Inc., 730 A.2d 1004, 1012-13 (Pa. Super. 1999); see also, O.D. Anderson, 815 A.2d at 1072.

As Labor & Logistics has already established the customer list is a protectable trade secret, it is clear from the record that the remaining criteria are also satisfied. First, it is undisputed that the customer list was important and of value to Labor & Logistics’ business. Testimony reveals that the extensive data was compiled through years of solicitation and interacting with customers. To utilize this information, Labor & Logistics constructed a spreadsheet database with a variety of fields so that employees could enter customer data as it was obtained. The value and importance of the list is also demonstrated by the aforementioned methods used to safeguard it. As further support, Wallover admitted during his testimony that Winner Logistics protected their information to sustain an advantage over their competitors. On the facts presented, it would be difficult to find the customer list was not important and valuable to Labor & Logistics.

It is equally apparent that Labor & Logistics had a right to the use and enjoyment of the customer list. Compiled through interactions with clients and customers, Labor & Logistics’ employees spent years developing the information on the list. As a product of these efforts, Labor & Logistics had a clear right to use the information. Likewise, it is undisputable that Wallover was in a position of trust while he worked at Labor & Logistics. Although we found no evidence that Wallover actually signed the nonsolicitation and noncompete clauses, his testimony reveals he knew that those employed in his position were required to sign the covenants. Moreover, Labor & Logistics provided Wallover a copy of the customer list. Wallover knew the list was to be protected and was only made available to employees in management positions. In view of this evidence, it is clear that the protected information was conveyed to Wallover while he was in a position of trust and that it would be inequitable for him and Winner Logistics to use this information to the prejudice of Labor & Logistics. Accordingly, we believe Wallover and Winner Logistics misappropriated Labor & Logistics’ customer list.

THE PERMANENT INJUNCTION

Defendants next argue that we erred in issuing a permanent injunction that prohibits them from contacting certain Labor & Logistics’ customers for a period of two years. Although defendants make a laundry list of challenges relating to the issuance of the injunction, we will address all the issues as appealed to the Superior Court.

In order for a plaintiff to prevail in an action seeking a permanent injunction, he must establish a “clear right to relief.” Wellspan Health v. Bayliss M.D., 2005 WL 407523, *2 (Pa. Super. 2005) (citing Buffalo Township v. Jones, 571 Pa. 637, 644, 813 A.2d 659, 663 (2002)). Unlike a claim for a preliminary injunction, a party seeking a permanent injunction does not need to establish either irreparable harm or the need for immediate relief Buffalo Township, 571 Pa. at 644, 813 A.2d at 663; Wellspan Health, 2005 WL at *2. Instead, a plaintiff must demonstrate that an “actual and substantial injury has occurred and/or is threatened in the future.” Wellspan Health, 2005 WL at *2; Peugeot Motors of America Inc. v. Stout, 310 Pa. Super. 412, 425, 456 A.2d 1002, 1008 (1983). Where such an injury has been established, a court may properly issue a permanent injunction if such relief is necessary to prevent a legal wrong for which the law provides no adequate remedy. Buffalo Township, 571 Pa. at 644, 813 A.2d at 663; Wellspan Health, 2005 WL at *2; Soja v. Factoryville Sportsmen’s Club, 361 Pa. Super. 473, 479, 522 A.2d 1129, 1131 (1987).

In their first two challenges, defendants argue there was insufficient evidence to establish that an injunction was necessary to prevent immediate and irreparable harm. Here, as the italicized language above indicates, immediate and irreparable harm is a required showing of a plaintiff seeking a temporaiy injunction, not a permanent injunction. In order to obtain the injunction, Labor & Logistics needed to prove an actual or substantial injury had occurred or would be threatened in the future. Although this issue was not appealed and is thus waived, we note that Labor & Logistics has shown an actual injury that has occurred and that is threatened to occur in the future. Labor & Logistics claims to already have lost 10 to 15 percent of their business due to the solicitations of Winner Logistics. This clearly establishes an actual injury that has already occurred. Moreover, if Winner Logistics was not enjoined from contacting companies from the customer list, Labor & Logistics’ loss of business profits could continue and possibly be exacerbated through further solicitation. Because this continued loss of revenue threatens the economic vitality of Labor & Logistics, we found the law provides no adequate remedy for these prospective injuries and issued the injunction.

We next turn to defendants’ contention that the injunction issued by this court is overbroad and would prevent defendants from engaging in lawful activity. An examination of Pennsylvania case law offers little guidance as to the appropriate scope of an injunction. Nevertheless, the Superior Court has held it is entirely within the discretion of the trial court to determine the proper scope of an injunction. Christopher M’s Hand Poured Fudge Inc. v. Hennon, 699 A.2d 1272, 1277 (Pa. Super. 1997). At a minimum, “trade secret injunctions... [should be] ‘broad enough to ensure that the information is protected.’ ” Id. (citing ST Handling Systems Inc. v. Heisley, 753 F.2d 1244, 1265 (3d Cir. 1985)).

As explained at the February 4, 2005 oral argument on defendants’ motion for reconsideration, we believe our injunction to be relatively narrow. In our order dated January 24, 2005, we enjoined defendants from having any contact with Labor & Logistics’ customers as existed on July 31, 2002, for a period of two years. The order did not enjoin defendants from soliciting Labor & Logistics’ prospective or non-customers; nor did it impose any geographic limitations on Winner Logistics’ business. The only restriction was for Winner Logistics to cease any contact with Labor & Logistics’ customers that existed on July 31, 2002. As such, we believe the scope of the injunction was minimally expansive to ensure that the information from the customer list was protected. In addition, we are confused by the argument that the injunction prevents defendants from engaging in lawful competitive activity. The only reason the injunction was issued was to remedy defendants’ wrongful misappropriation of Labor & Logistics’ customer list. Thus, defendants’ wrongful activity renders the argument meritless.

Defendants also argue the injunction is contrary to the public interest as it will prevent non-parties to this litigation from exercising their right to make a choice regarding what company supplies them services. The instant injunction was issued to protect Labor & Logistics from the unfair competition of Winner Logistics stemming from the wrongful usurpation of protected information. Although the economic principles of free trade are a concern in any trade secrets case, it is not the only consideration. We found the misappropriation of valuable and confidential Labor Sl Logistics’ information outweighed the concerns of a customer’s right to make a choice regarding which company supplies them services. In reaching this decision, it is important to note that there is no evidence that Labor & Logistics holds a monopoly on the truck-driver leasing business. Therefore, as our order does not enjoin third parties from seeking the services of truck-driver leasing companies other than Winner Logistics, we fail to see how our order is contrary to the public interest.

Defendant also maintains the injunction is contrary to our finding that Wallover is not subject to any contractual restrictions on his right to compete and that defendants have not utilized any of Labor & Logistics’ trade secrets in the conduct of their business. Initially, it is true that we did not find Wallover was subject to any contractual restrictions relating to his right to compete or solicit.

We did find, however, that Wallover was subject to a common-law duty not to violate Labor & Logistics’ right to the security and confidentiality of its trade secrets— the customer list. In offering such a challenge, it seems that defendant has not completely read our findings, does not understand them or believes that a common-law duty of confidentiality does not exist. Either way, we believe defendant is mistaken. Moreover, as to defendants’ claim that we did not find the trade secrets were misappropriated, we must concede such finding is not explicitly stated in our memorandum opinion and order. Notwithstanding, we believe the findings of fact clearly imply that defendants misappropriated the customer list.

Defendants next argue that the injunction is “contrary to the public policy of this Commonwealth.” We believe this concise statement is too vague to address on appeal. When a party is ordered to file a concise statement of matters complained of on appeal, the failure to file a statement results in a waiver of all issues. Commonwealth v. Lord, 553 Pa. 415, 417-18, 719 A.2d 306, 308 (1998). Likewise, the filing of a vague statement “is the functional equivalent of filing no concise statement at all.” Commonwealth v. Dowling, 778 A.2d 683, 687 (Pa. Super. 2001). Our Superior Court has stated:

“The trial court may not frame issues for an appellant, either by guessing or anticipating— the appellate courts have emphasized that a trial court’s unsolicited discussion of issues not raised by an appellant in his 1925(b) statement by guessing, anticipating, or predicting the issues would not save the issues from being waived.” Commonwealth v. Lemon, 804 A.2d 34, 38 (Pa. Super. 2002).

In Dowling, the appellant made the following argument on appeal: “Did the trial court err and deprive the appellant from receiving a fair trial by prohibiting counsel from cross-examining the complainant with respect to matters impeaching his credibility?” The Superior Court determined the issue was waived as it lacked sufficient specificity to allow a trial court to address any issue on appeal. Dowling, 778 A.2d at 686.

When compared to Dowling, the concise statement filed here lacks the specificity to allow this court to properly identify or address the issue on appeal. Courts of the Commonwealth have identified many public policies to be considered by a trial court. The concise statement filed by defendants provides no guidance as to which policy the issuance of the injunction contradicts. Therefore, as it is improper for this court to guess or attempt to predict defendants’ issues on appeal, this challenge to our ruling is waived.

Finally, defendants maintain that there was no evidence to support the issuance of an injunction against Winner Logistics. To enjoin Wallover from soliciting Labor & Logistics’ customers, but not Winner Logistics, would defeat the purpose of the injunction. The facts established that Wallover, through his employment with Winner Logistics, misappropriated protected information by soliciting and doing business with Labor & Logistics’ customers. As Labor & Logistics’ former customers now contract with Winner Logistics, not Wallover himself, we fail to see any purpose in issuing an injunction that does not include Winner Logistics. As such, we see no merit in defendants’ appeal.

      .N.T., 12/13/2004 trial at 13.

      . N.T., 12/13/2004 trial at 14.

      . See 12/13/2004 trial exhibit P-2.

      . N.T., 12/13/2004 trial at 18-20; plaintiff’s trial memorandum at 2.

      . N.T., 12/13/2004 trial at 20.

      . See generally, 12/13/2004 trial exhibits P-3, P-4 and P-5.

      . N.T., 12/13/2004 trial at 23; plaintiff’s trial memorandum at 2.

      . N.T., 12/13/2004 trial at 22.

      . N.T., 12/13/2004 trial at 22.

      . N.T., 12/13/2004 trial at 26.

      . Testimony at the 12/13/2004 trial indicated that no Labor & Logistics employee recalls presenting WalEover with a noncompete agreement or witnessing him sign one. N.T., 12/13/2004 trial at 103-104.

      . N.T., 12/13/2004 trial at 114-18.

      . N.T., 12/13/2004 trial at 121-23.

      . N.T. 12/13/2004 trial at 119.

      . N.T., 02/04/2004 argument at 17.

      . N.T., 12/13/2004 trial at 177.
      At trial the following testimony was elicited from Wallover:
      “Court: Isn’t it true you protect your customer and driver information because you don’t want it released to competitors?
      “A: That is a simple statement but I guess so, yes ...
      “Court: For whatever advantage it gives you, you don’t wish to give any information you have to your competitors, do you?
      “A: No.”

      . N.T., 02/04/2005 argument at 17.

      . N.T., 02/04/2005 argument at 26-29.

      . N.T., 12/13/2004 trial at 177.

      . N.T., 02/04/2005 argument at 26.

      . N.T., 12/13/2004 trial at 177.

      . TM.T., 02/04/2005 argument at 17.

      . If defendant contends the latter, Morgan’s Home Equipment and its progeny clearly establish otherwise. 390 Pa. at 624, 136 A.2d at 842 (“The duty of the servant not to disclose the secrets of the master may arise from an express contract, or it may be implied from their confidential relations.”).

      . Pennsylvania courts have upheld injunctions barring a former employee and their new employer from utilizing protected customer lists. See Morgan’s Home Equipment, 390 Pa. 618, 136 A.2d 838 (1957); A. M. Skier Agency Inc. v. Gold, 747 A.2d 936 (2000).


source: Caselaw Access Project

author: KUNSELMAN, P.J.,

license: Public Domain

text:
    Guard Insurance Group v. D.N. Betters Drywall Inc.

      Joel E. Hausman, for plaintiff.

      Craig E. Wynn, for defendant.
    March 23, 2005
   KUNSELMAN, P.J.,

This is an action by an insurance company to recover premiums it claims to be due from the defendant on an insurance contract which provided coverage for workers’ compensation. From the testimony and evidence, we make the following

FINDINGS OF FACT

(1) The plaintiff, Guard Insurance Group, is a corporation with offices located in the City of Wilkes-Barre, Pennsylvania.

(2) The defendant, D.N. Betters Dry wall Inc., is a corporation with offices located in the City of Aliquippa, Beaver County, Pennsylvania.

(3) At Betters’ request, Guard issued its policy of insurance to provide workers’ compensation coverage to Betters for a period of one year.

(4) Under the terms of the policy, the premium was to be computed by multiplying a rate, determined from classifications of persons to whom workers’ compensation benefits might be awarded which classifications were determined based upon exposure or risk, against the premium basis. The premium basis includes payroll and amounts paid or payable for the services of offices, employees and independent contractors who themselves had no workers’ compensation insurance coverage. (Plaintiff’s exhibit 1, pp. 4-5.)

(5) The initial premium was an estimated premium based upon Betters’ estimated payroll. The final premium was to be determined when the policy ended based upon actual premium basis.

(6) With regard to the final premium, the policy provided as follows:

“(E) Final premium
“The premium shown on the information page, schedules, and endorsements is an estimate. The final premium will be determined after this policy ends by using the actual, not the estimated, premium basis and the proper classifications and rates that lawfully apply to the business and work covered by this policy. If the final premium is more than the premium you paid to us, you must pay us the balance. If it is less, we will refund the balance to you. The final premium will not be less than the highest minimum premium for the classifications covered by this policy. If this policy is canceled, final premium will be determined in the following way unless our manuals provide otherwise:
“(1) If we cancel, final premium will be calculated pro rata based on the time this policy was in force. Final premium will not be less than the pro rata share of the minimum premium.
“(2) If you cancel, final premium will be more than pro rata; it will be based on the time this policy was in force, and increased by our short rate cancellation table and procedure. Final premium will not be less than the minimum premium.
“(F) Records
“You will keep records of information needed to compute premium. You will provide us with copies of those records when we ask for them.
“(G) Audit
“You will let us examine and audit all your records that relate to this policy. These records include ledgers, journals, registers, vouchers, contracts, tax reports, payroll and disbursement records, and programs for storing and retrieving data. We may conduct the audits during regular business hours during the policy period and within three years after the policy period ends. Information developed by audit will be used to determine final premium. Insurance rate service organizations have the same rights we have under this provision.” Plaintiff’s exhibit 1, p. 5.

(7) The policy issued by Guard to Betters ended on February 1, 2001.

(8) Guard arranged for an audit pursuant to the policy provisions hereinabove quoted.

(9) The audit was conducted by Charles Rossi, an employee of Regional Reporting Inc., an independent contractor.

(10) Charles Rossi asked Kelly Vincent, Betters’ Office Manager, to provide him with documentation from which he could perform the audit, including copies of W-2 forms of Betters’ employees, 1099 forms provided to Betters’ subcontractors and certificates of workers’ compensation insurance coverage of those subcontractors who had that coverage.

(11) Rossi submitted an audit report to Guard which, among other things, reported payments by Betters to a subcontractor named “Escobedo, Juan” in the amount of $141,909.

(12) The audit report submitted by Rossi further reported that Escobedo had other subcontractors working for him but had no workers’ compensation insurance coverage.

(13) Rossi had not asked Kelly Vincent any questions about Escobedo and she did not provide him with any information that indicated Escobedo had either employees or subcontractors working for him.

(14) Neither Betters nor Guard know how Rossi concluded that Escobedo had other subcontractors working for him, and Rossi did not testify.

(15) As a result of the audit report, Guard submitted an invoice to Betters for the balance due on the final premium in the amount of $10,639.

(16) If the amount paid by Betters to Escobedo is not considered in the computation of the final premium, the final premium due is $1,680.

Discussion

The only evidence of the actual premium basis was the audit report of Mr. Rossi, plaintiff’s exhibit 2. When exhibit 2 was offered, counsel for Betters objected to it because it contained conclusions of Rossi which were not verified. At that time, the court overruled the objection, concluding that the objection went to the weight of the exhibit, not to its admissibility. While we believe our ruling was not clear error based upon the record at that time, we now conclude that the report is not trustworthy, at least with regard to the inclusion of the amount paid to Escobedo in the computation of the actual premium basis.

The Uniform Business Records as Evidence Act allows the admission of such a report if it is “[a] record of an act... if the custodian or other qualified witness testifies to its identity and the mode of preparation, and it was made in the regular course of business at or near the time of the act,... and if, in the opinion of the tribunal, the sources of information, method and time of preparation were such as to justify its admission.” 42 Pa.C.S. §6108(b).

Similarly, the Pennsylvania Rules of Evidence provide, in relevant part:

“The following statements, as hereinafter defined, are not excluded by the hearsay rule, even though the declarant is available as a witness:...
“(6) A . . . report, ... of acts, . . . made . . . from information transmitted by a person with knowledge, if kept in the regular course of a regularly conducted business activity, and if it was the regular practice of that business activity to make the ... report, all as shown by the testimony of... [a] qualified witness,... unless the source of the information or other circumstances indicate lack of trustworthiness.” Pa.R.E. 803(6).

When exhibit 2 was offered, the testimony indicated that the auditor, Rossi, had secured the information from Betters’ office manager. However, Betters’ office manager testified that she did not provide Rossi with information concerning independent contractors employed by Escobedo. We find her testimony to be credible. Therefore, we conclude that Rossi’s source of information did not justify the admission of evidence as to Escobedo’s remuneration under the Uniform Business Records as Evidence Act, nor was. the source of his information in this regard trustworthy to justify its admission under Pa.R.E. 803(6).

Consequently, we will find in favor of Guard and against Betters, but limit our award to a recovery for a final premium due after excluding the amount paid to Escobedo by Betters.

DECISION

The court finds in favor of the plaintiff, Guard Insurance Group, and against the defendant, D.N. Betters Drywall Inc., in the amount of $1,680.


author: MINORA, J.,

text:
    Shapiro v. Marian Radiological Associates Inc.

      Mitchell A. Smolow, for plaintiff.

      Michael R. Mey, for defendants.
    March 23, 2005
   MINORA, J.,

I. INTRODUCTION

Currently before the court is the plaintiff’s motion for partial judgment on the pleadings. The underlying action arises out of a contractual dispute between the parties, particularly concerning the alleged non-payment of plaintiff’s salary as governed by the subject written employment agreements which governed plaintiff’s employment and compensation as a radiologist on behalf of Marian Radiological Associates Inc.

By way of procedural background agreed to by the parties, the plaintiff, through former counsel, filed a writ of summons on April 20, 2000, naming Marian Radiological Associates Inc. and Northeast Imaging Consultants P.C. as defendants. The writ was properly served on April 25, 2000.

Discovery in aid of preparing the complaint was subsequently conducted. On October 8,2002, current counsel entered his appearance, and on October 21, 2002, prior counsel withdrew. On December 3, 2002, plaintiff, through current counsel, filed his complaint, naming Romas Dovydaitis M.D., Suman A. Patel M.D. and Peter Gregory M.D. as additional defendants. The complaint was properly served on January 2, 2003.

Defendants filed preliminary objections to the complaint on January 20, 2003, and plaintiff responded by filing an amended complaint on February 7, 2003.

On March 6, 2003, plaintiff served on defendants’ counsel a notice of praecipe to enter judgment by default.

Defendants filed preliminary objections to the amended complaint on March 17, 2003, 18 days late. On March 19, 2003, plaintiff filed his preliminary objections to defendants’ preliminary objections to the amended complaint.

Defendants filed their answer to plaintiff’s preliminary objections on April 23, 2003, approximately 16 days late. On July 18, 2003, the undersigned granted plaintiff’s preliminary objections to defendants’ preliminary objections to the amended complaint and ordered defendants to file an answer within 20 days.

On August 13, 2003, after defendants failed to file an answer within the time ordered by the court, plaintiff filed a second notice of praecipe to enter judgment by default. On August, 18, 2003, 11 days late, defendants filed their answer to the amended complaint and new matter, and on September 5, 2003, plaintiff filed his answer to defendants’ new matter.

The pleadings are now finally closed.

On November 5, 2003, the plaintiff filed a motion for partial judgment on the pleadings along with a supportive brief.

On January 12,2004, the defendants filed an answer to plaintiff’s motion for partial judgment on the pleadings and a supportive brief.

A reply memorandum in support of plaintiff’s motion for judgment on the pleadings was filed on February 26, 2004.

The undersigned entertained oral argument on March 25, 2004. At that time, at the parties’ request, we put a hold on disposition of this motion to allow the parties to attempt an amicable resolution. Since it is now apparent that this is not going to happen, we will dispose of plaintiff’s motion for partial judgment on the pleadings.

II. ISSUE(S)

Should plaintiff’s motion for partial judgment on the pleadings be granted as to liability limiting the court to a further determination of damages?

III. DISCUSSION

A. The General Standards for a Motion for Judgment on the Pleadings

Pa. Rule of Civil Procedure 1034 states:

“(a) after the relevant pleadings are closed, but within such time as not to unreasonably delay the trial, any party may move for judgment on the pleadings ...
“(b) The court shall enter such judgment or orders as shall be proper on the pleadings.”

We note that a motion for judgment on the pleadings is similar to a demurrer and may only be granted when there are no disputed issues of fact and the moving party is entitled to judgment as a matter of law. Miller v. Nelson, 768 A.2d 858 (Pa. Super. 2001), reargument denied, appeal denied, 566 Pa. 665, 782 A.2d 547 (2001).

Moreover, in order to grant a motion for judgment on the pleadings, the facts must be undisputed and the law so clear that trial would be a fruitless exercise. Welsh v. City of Philadelphia, 156 Pa. Commw. 299, 627 A.2d 248 (1993).

We can consider only the pleadings and attachments thereto in deciding a motion for judgment on the pleadings. Booher v. Olczak, 797 A.2d 342 (Pa. Super. 2002).

We further note that neither party admits conclusions of law or unjustified inferences. Mellon Bank N.A. v. National Union Insurance Company of Pittsburgh, Pa., 768 A.2d 865 (Pa. Super. 2001); Hammerstein v. Lindsay, 440 Pa. Super. 350, 655 A.2d 597 (1995).

Also, the court must look to the overall pleadings to determine if material fact issues have been admitted. See Bevans v. Township of Hilltown, 72 Pa. Commw. 227, 299, 457 A.2d 977 (1983).

With those principles in mind, we can now examine plaintiff’s motion for partial judgment on the pleadings.

We must note that the pleadings are clear that the salary dispute issue was resolved by the contractual arbitration decision of Charles Galat C.P.A. (See exhibit “D” to plaintiff’s complaint)

While the process itself certainly seems on its face to have due process deficiencies, those matters, including the denial of a hearing, have to be brought to the court’s attention via a petition to vacate or modify the arbitrator’s award within 30 days of said award. See Snyder v. Cress, 791 A.2d 1198 (Pa. Super. 2002); 42 Pa.C.S. §7342(b).

Obviously, such a petition has never been filed by the plaintiff and the decision of Charles Galat C.P.A. is arguably final. (See exhibit “B” to plaintiff’s complaint, paragraph 4(c)(vii) — The arbitration clause for salary and bonus.)

We also note that the defendants have never motioned the court for confirmation and judgment of the arbitrator’s award as per 42 Pa.C.S. §7342(b) which states:

“(b) Confirmation andjudgment — On application of a party made more than 30 days after an award is made by an arbitrator under section 7341 (relating to common-law arbitration), the court shall enter an order confirming the award and shall enter a judgment or decree in conformity with the order ....” (emphasis added)

See Lowther v. Roxborough Memorial Hospital, 738 A.2d 480, 485 (Pa. Super. 1999), appeal denied, 563 Pa. 637, 758 A.2d 1194 (2000).

Therefore, the arbitrator’s award sits in limbo at this juncture, due to the inaction of both plaintiff and defendants.

However, plaintiff cannot escape the fact that he never filed a petition to vacate or modify the arbitrator’s decision of June 7, 2000. Therefore, this court lacks jurisdiction over this matter at this point. See Snyder v. Cress, supra; Lowther v. Roxborough Memorial Hospital, supra.

Since subject matter jurisdiction is never waived and can be raised sua sponte by the court, we have no choice but to dismiss plaintiff’s complaint since we have discovered by our analysis that we have no subject matter jurisdiction. See Commonwealth v. Danysh, 833 A.2d 151 (Pa. Super. 2003).

Ultimately, since Pa.R.C.P. 1034(b) allows us to enter such judgment or order as shall be proper on the pleadings, our analysis as set forth above gives us no choice but to dismiss plaintiff’s complaint for lack of subject matter jurisdiction.

We note procedurally that, had the defendants motioned the court to confirm, the arbitrator’s award as per 42 Pa.C.S. §7342(b), all of the previous pretrial wrangling could have been avoided.

An appropriate order will follow.

ORDER

And now to wit, March 23,2005, upon due consideration of plaintiff’s motion for partial judgment on the pleadings and the court’s consideration of the able written and verbal arguments of counsel, and the court’s own analysis regarding subject matter jurisdiction, it is hereby ordered and decreed that plaintiff’s complaint is dismissed for lack of subject matter jurisdiction, thus rendering plaintiff’s motion for partial judgment on the pleadings moot, and closing this file.

      . Said decision of Charles Galat C.P.A. was served on June 7, 2000. (See exhibit “D” to plaintiff’s complaint.)


author: RENN, J,

text:
    Lloyd v. Lloyd

      Andrew B. Brown, for plaintiff.

      Richard S. Friedman, for defendant.
    February 3, 2005
   RENN, J,

This matter is before the court in the context of pretrial custody proceedings. Mother, Julia M. Lloyd, has filed a request to obtain the expert reports (presumably in the form of a “custody evaluation”) of Father’s expert, whom Father, Charles Joseph Lloyd, does not intend to call as a witness. We will grant the request.

FACTUAL AND PROCEDURAL BACKGROUND

From the record and from arguments heard, we determine the following facts. On July 8, 2004, Charles Joseph Lloyd filed a petition for modification from a previous court order entered on August 14, 1998. The parties attended a conciliation conference which resulted in an interim order for custody, pending trial on August 19, 2004. Father requested psychological and drug evaluations of all relevant parties, including the children, Julia M. Lloyd’s paramour, and Father’s wife. Mother attended all sessions necessary to complete the report. It is reported that Mother’s paramour refused to cooperate with the evaluations.

Father listed Dr. Shienvold as an expert witness on Father’s pretrial memorandum, which was submitted to the court on or about September 22, 2004, stating the following therein:

“Counsel for Father suggested that [sic] the custody conciliation that a custody evaluation would be appropriate. Mother, through counsel, refused this request. Father thereafter demanded a custody evaluation and home study be performed by Arnold Shienvold Ph.D., a well recognized expert. The evaluation and home study have not yet begun, and it is felt that Dr. Shienvold’s evaluation is necessary to make a determination as to the best interests of the children.” (emphasis added)

After being notified by Father, on or about January 12, 2005, that Dr. Shienvold would not be testifying and the report would not be utilized by Father at trial, Mother filed a petition for special relief on January 19, 2005, requesting a copy of the report that was completed by Dr. Shienvold.

ISSUES

Can a party to custody litigation be compelled to disclose or make available for inspection by an opponent, a report made, or information and data collected by an expert hired by that party if the expert will not be used as a witness at trial?

DISCUSSION

General Observations

Discovery in Custody Cases Generally

It has long been the general rule that no discovery is permitted in “simple” custody matters, absent leave of court. Pa.R.C.P. 1930.5. However, motions for special relief and requests for examination of individuals are provided for specifically in the rules for custody matters. Pa.R.C.P. 1915.8 and 1915.13. We have previously held that issues concerning a parent’s mental health, as well as a child’s, is a proper area of inquiry in custody litigation. See Abram v. Abram, 116 York 129 (2003).

We conclude, therefore, that the issue presented by Mother in her petition for special relief is properly before us to request discovery in this case.

Custody Litigation — Best Interests of Child

In any custody case, we are charged with determining the best interests of the child involved. In order to do that, we are required to ensure that a complete record has been developed to enable us to consider the many factors which we are required to consider in determining the best interests of the child. T.B. v. L.R.M., 753 A.2d 873 (Pa. Super. 2000):

“Thus, we emphasize, a full inquiry is essential to determine what serves a child’s best interest; all pertinent facts surrounding the contesting parties must be fully explored and developed____The paramount focus is the best interest of the child involved, not the respective rights of the contesting parties.” Id. at 890. (citations omitted)

Competing with these principles are individual interests in keeping matters such as medical treatment and psychological counseling private. See Abram v. Abram, 116 York 129 (2003).

Limitations on Discovery

Discovery in custody cases is limited by Rules of Civil Procedure which are applicable to custody actions. See Pa.R.C.P. 1930.5(a), 1915.8 and Pa.R.C.P. 4001.

Co-existing with these rules are statutory privileges which limit the availability of information which might be discovered or used at trial (see, for instance, the psychiatrist-patient privilege at 42 Pa.C.S. §5944), and protections afforded to attorney work product, generally embodied in Pa.R.C.P. 4003.3. We note at the outset that we have concluded, for the purposes of this analysis, that the facts known and opinions held by Father’s expert were “acquired or developed in anticipation of litigation or for trial,” thus triggering the application of Rule 4003.5, and are not matters which came to the attention of the expert during the course of treatment of any of the parties involved in this case.

Father rests his argument on a further limitation placed upon discovery of expert material by Pa.R.C.P. 4003.5:

“(3) A party may not discover facts known or opinions held by an expert who has been retained or specially employed by another party in anticipation of litigation or preparation for trial, and who is not expected to be called as a witness at trial, except a medical expert as provided in Rule 4010(b) or except on order of court as to any other expert upon a showing of exceptional circumstances ....”

First, we note that the general provisions of Rule 4003.5 provide for discovery of the identity of an expert, and facts known and opinions held by that expert, who is expected to be called as a witness at trial. Father noted in his pretrial memorandum, quite emphatically, we might add, that he intended to call his expert as a witness at trial. He placed Mother on notice of that intention, and Mother relied on that in forgoing her own expert. We noted Dr. Shienvold as an expert witness in our pretrial order.

We conclude, therefore, that listing Dr. Shienvold as an expert “witness” constitutes an “expectation” that the expert will be used as a witness at trial, and, accordingly, the limitation on discovery imposed by Rule 4003.5 is not applicable, and discovery of “facts known and opinions held” by the expert is permitted.

Status of an Expert in Custody Litigation

Experts in custody cases are somewhat different than experts in, for instance, an auto accident case, in that the expert is necessarily made known to the other side early on in the case so that the other party can attend appointments for assessments which are conducted by the expert. Experts can be utilized on the motion of either party, or on the court’s own motion. Pa.R.C.R 1915.8. In the present case, our interim order for custody pending trial set forth the time limits for requesting an expert and directed all parties to cooperate in obtaining the evaluations. It allocated the costs of the evaluations between the parties. If parties do not cooperate with the evaluations, sanctions may be imposed by the court. Pa.R.C.P. 1915.8(g). In other cases, experts may be hired to advise and assist counsel in determining whether a client has a viable cause of action, to investigate pretrial matters, or to assist during the course of a trial, all of which may be done without court order, or even without the knowledge of the other side. Not so in custody litigation.

It may be argued that Rule 1915.8(c) only permits a report prepared at the request of a party to be delivered only to that party:

“(c) Where the expert evaluation is obtained upon motion of a party, the expert shall deliver to that party a detailed written report setting out the findings, results of all tests made, diagnosis and conclusions ....” (emphasis added)

However, the rule is silent about delivery to the opposing party. See Durakovich v. Psychological Associates of Pennsylvania P.C., 2002 SU 05184-01 (York Cty. 2003, Blackwell, J.). The very next section requires that “[e]ach expert’s report shall be filed and/or served ... (2) within 60 days after full payment of the expert fee(s) where one or both parties are directed to pay.” Thus, the rule appears to contemplate that every expert’s report will be filed in a custody case, thus making it available to all parties.

Father argues that the exception to Rule 4003.5(3) regarding medical examinations is not applicable to the present case. We disagree. As the above discussion should illustrate, an expert in a child custody case, regardless of who “hires” the expert, is very similar to an “independent” medical examiner, which is the subject of Pa.R.C.R 4010. That rule defines an “examiner” as “a licensed physician... or licensed psychologist.” We note that a psychiatrist is, by definition, a licensed “physician.” Rule 4010 would appear to apply to child custody cases by its own terms, since the rule excludes the right to counsel at such exams and the right to an audio or stenographic record of the exam from application in child custody cases. Pa.R.C.R 4010(a)(4)(h), and (a)(5)(h).

We conclude that an expert, whether hired by a particular party or appointed by the court in custody litigation, is an expert subject to Rule 4010, and, as such, materials including a “detailed written report of the examiner setting out the examiner’s findings, including results of all tests made, diagnosis and conclusions” are discoverable by a party as provided in that rule. This conclusion is reached regardless of the status of the expert as a witness at trial.

Attorney Work Product

As we noted before, the concept of attorney work product may also bar discovery of expert material. The attorney work product doctrine actually provides broader protection in cases of this sort than the attorney-client privilege. “It promotes the adversary system by enabling attorneys to prepare cases without fear that their work product will be used against their clients.” (citations omitted) Commonwealth v. Noll, 443 Pa. Super. 602, 608, 662 A.2d 1123, 1126 (1995) (prohibiting the Commonwealth from using an expert hired by the attorney for the defendant):

“As attorneys must often rely on the assistance of investigators and other agents in the compilation of materials necessary for trial, the doctrine protects materials prepared by agents for the attorney, as well as those prepared by the attorney himself.” Id. (citations omitted)

Thus, the Superior Court held that, in a criminal case arising from an auto accident, the work product doctrine barred the Commonwealth’s use of an expert hired by the defense. However, as we observed before, an expert in custody litigation is in a different position than one hired in an auto accident case. The case at bar is therefore distinguishable from the situation in which the expert was hired in Noll. See the discussion generally in Thomas v. Germantown Hospital and Medical Center, 16 D.&C.4th 247 (Philadelphia Cty. 1992).

Psychiatrist-Patient Privilege

The only other reason such material might be protected from discovery would be the psychiatrist-patient privilege, 42 Pa.C.S. §5944. The applicability of this privilege was extensively discussed by the Honorable Penny L. Blackwell in her opinion in Durakovich v. Psychological Associates of Pennsylvania P.C., 2002 SU 051 84-01 (2003). That case arose as a claim of professional malpractice resulting from the father hiring an expert to do a custody evaluation and to “potentially serve as an expert witness.” A request was made by the father for the expert to also do an evaluation of the mother. The expert did so, then released the results of the evaluation of the mother to mother’s counsel, without the father’s consent.

In granting the defendants’ preliminary objections to the cause of action, Judge Blackwell opined that neither the father, who hired the expert, nor the mother, was the “client” of the psychologist, and, therefore, neither the statutory privilege, nor the State Board of Psychology Code of Ethics (49 Pa. Code §41.61) prohibit the disclosure of mother’s report to the attorney for mother:

“In Adoption of Embick, 351 Pa. Super. 491, 506 A.2d 455 (1986), the Superior Court recognized that the purpose of the psychologist-patient privilege is ‘to encourage people to seek professional help for their mental or emotional problems, and that [such] purpose is best accomplished when people in need of psycho-therapeutic treatment know that what they tell their therapist during treatment will not be disclosed to anyone.’ ...

“The court noted that the parents ‘were not seeking treatment, or counseling, or advice for any mental or emotional problems,’ but that, instead, the parents went to see the psychologist because they were asked to do so by the agency and for the limited purpose of examination. ...” Durakovich, id., at 8, 9. (citations omitted) Similarly, in the present case, Father was not seeking out the expert for treatment. The expert was sought specifically for the purpose of litigation, which, for litigation purposes, places the expert in the category of those governed by the requirements of discovery under Rule 4010.

CONCLUSION

We hold that all of the facts known and opinions held by Father’s expert may be discovered by Mother pursuant to Pa.R.C.P. 4010. An order will be entered in conformance with this opinion.

ORDER PERMITTING DISCOVERY

And now, February 3, 2005, upon consideration of the request for relief filed by plaintiff, the request is granted. Discovery of detailed written reports, all finding results of all tests made, diagnoses and conclusions of Dr. Shienvold is hereby permitted. The parties shall expeditiously comply with this order so as to not delay trial.

Copies of this opinion and order shall be sent to counsel for the parties.


author: SHEERER, Member,

text:
    Office of Disciplinary Counsel v. Bowen

      Disciplinary Board Docket no. 10 D.B. 2003, 28 D.B. 2003.
    July 29, 2004
   To the Honorable Chief Justice and Justices of the Supreme Court of Pennsylvania:

SHEERER, Member,

Pursuant to Rule 208(d)(2)(iii) of the Pennsylvania Rules of Disciplinary Enforcement, the Disciplinary Board of the Supreme Court of Pennsylvania herewith submits its findings and recommendations to your honorable court with respect to the above-captioned petition for discipline.

I. HISTORY OF PROCEEDINGS

On January 31, 2003, Office of Disciplinary Counsel filed a petition for discipline against Michael G. Bowen, respondent. The petition charged respondent with violating Rules of Professional Conduct 1.1, 1.3, 1.4(a), 1.4(b), 1.15(b), and 1.16(d) in connection with his representation of five separate clients. Respondent did not file an answer to the petition. On March 26, 2003, petitioner filed an additional one-charge petition for discipline charging respondent with violating Rules of Professional Conduct 1.1, 1.3, 1.4(a) and 1.4(b) in connection with his representation of one client. Respondent did not file an answer. On April 7,2003, petitioner filed a motion to consolidate the two matters for hearing. On June 3, 2003, the Disciplinary Board granted the motion and consolidated the matters for hearing.

A disciplinary hearing took place on August 26,2003, before Hearing Committee 2.05 comprised of Chair Thomas G Jackson, Esquire, and Members Michael S. Dinney, Esquire and Mary G McLaughlin Davis, Esquire. Respondent appeared pro se. Immediately preceding the hearing, petitioner and respondent entered a joint stipulation of fact. Petitioner presented the testimony of eight witnesses as well as supporting exhibits. Respondent testified on his own behalf.

The Hearing Committee filed a report on February 27, 2004, finding that respondent violated the Rules of Professional Conduct and recommending a suspension of one year and one day with a practice monitor after reinstatement.

No briefs were filed by the parties.

The Disciplinary Board adjudicated this matter at the meeting of May 18, 2004.

II. FINDINGS OF FACT

The board makes the following findings of fact:

(1) Petitioner, whose principal office is situated at Suite 1400, 200 North Third Street, Harrisburg, Pennsylvania 17101, is invested, pursuant to Rule 207 of the Pennsylvania Rules of Disciplinary Enforcement, with the power and duty to investigate all matters involving alleged misconduct of an attorney admitted to practice law in the Commonwealth of Pennsylvania and to prosecute all disciplinary proceedings brought in accordance with the various provisions of the aforesaid rules.

(2) Respondent, Michael G. Bowen, was bom in 1949 and was admitted to practice law in Pennsylvania in 1990. He maintains his law office at Suite 7, 62 West Swamp Road, Doylestown, PA 18901.

(3) Respondent is subject to the jurisdiction of the Disciplinary Board of the Supreme Court of Pennsylvania.

(4) Respondent has a prior history of discipline consisting of a private reprimand administered in 2000. Respondent was retained to file an offer of compromise with the IRS and was paid an advance fee. Respondent neglected the matter for two years, after which time the client terminated his services.

Charge I — Mazakas Matter

(5) In October 2001, respondent met with David Mazakas and agreed to prepare and file a Chapter 13 bankruptcy petition for him.

(6) At the meeting in October 2001, respondent provided, and Mr. Mazakas signed, a retainer agreement whereby Mr. Mazakas agreed to pay $ 1,3 00 in legal fees plus the court filing fee of $ 185 and a courier fee of $75, for a total of $ 1,560.

(7) On or about December 10,2001, Mr. Mazakas gave respondent a check in the amount of $1,000 as partial payment for respondent’s fee.

(8) On or about January 27,2002, respondent met with Mr. Mazakas and reviewed a Chapter 13 plan.

(9) On or about January 27,2002, respondent accepted the balance of the fee owed to him by Mr. Mazakas in the amount of $560.

(10) During the month of February 2002, respondent spoke to Mr. Mazakas several times over the telephone concerning bill collectors calling.

(11) During respondent’s telephone conversations with Mr. Mazakas in February 2002, respondent told Mr. Mazakas that the collection people could not call him and to give any credit collection callers respondent’s number.

(12) Thereafter, some collection people called respondent’s office and left messages for respondent to return their calls.

(13) Stalling at the end of February 2002 and into March 2002, Mr. Mazakas called respondent’s office and left messages for respondent to return his calls concerning the status of his case.

(14) Respondent failed to return Mr. Mazakas’ calls.

(15) At the time of the hearing, respondent had not filed a Chapter 13 bankruptcy petition.

(16) Mr. Mazakas left several messages on respondent’s home answering machine offering to negotiate a refund of the fee paid.

(17) Respondent did not respond to the messages.

(18) To obtain a return of the fee paid to respondent, Mr. Mazakas filed a civil action against respondent in March 2003 and obtained a judgment before a district justice.

(19) Shortly thereafter, respondent appealed the judgment awarded to Mr. Mazakas.

(20) The civil action filed by Mr. Mazakas was stayed because respondent filed for bankruptcy on behalf of himself.

Charge II — Taras Matter

(21) In December 2000, Linda Taras telephoned respondent and requested advice concerning a recent IRS audit determination that she and her husband, Rodney Taras, owed $315,000 to the IRS. She also asked about valuation of assets, including the characterization and valuation of her and her husband’s horse raising and racing business.

(22) On or about December 14,2000, Mrs. Taras faxed to respondent certain documents that she had received from the IRS and other documents that respondent requested.

(23) Following this fax, respondent spoke to Mrs. Taras by telephone and offered advice on how to complete certain IRS forms, including an offer in compromise form and a “Request for a collection due process hearing.”

(24) On February 14, 2001, Mr. and Mrs. Taras met with respondent at his office to discuss the IRS matter and sign a retainer agreement and power of attorney form.

(25) Mr. and Mrs. Taras paid respondent $1,500 as a retainer to handle their case.

(26) Respondent informed the Tarases that he would contact Revenue Officer Madelon Lankford on their behalf.

(27) On February 28, 2001, respondent called Ms. Lankford and arranged a meeting with her on March 7, 2001.

(28) Respondent met with Ms. Lankford on March 7, 2001. Ms. Lankford requested appraisals and the most recent tax return, as well as corrected information on financial statements. Respondent told her he would contact her by March 16, 2001.

(29) Respondent left a voicemail message on Ms. Lankford’s telephone on March 20,2001, stating that he was waiting to receive information from his clients and would respond to her in the next few days. He thereafter had no further contact with Ms. Lankford.

(30) In April 2001, respondent spoke to Mrs. Taras on several occasions regarding the 2000 income tax return. He did not tell his clients that there was a 30-day deadline for providing information to Ms. Lankford.

(31) During a conversation with Mrs. Taras in April 2001, respondent told her “sometimes it takes a very long time until things get going and that, you know, it could be a while until things progress on it....” (NT 48, 49.)

(32) On June 7,2001, respondent received a letter from Appeals Officer Bibb acknowledging that the Taras’ appeal had been referred to him and that he would be contacting respondent to schedule a conference.

(33) Respondent did not inform his clients of the letter from Officer Bibb.

(34) Respondent did not take any action regarding the letter.

(35) In July 2001, Mrs. Taras prepared the 2000 tax return for her and her husband and forwarded a copy to respondent along with two appraisals that he requested for Ms. Lankford.

(36) After receiving the tax return and appraisals, respondent did not advise his clients that Ms. Lankford had already told respondent that there would be no offer in compromise.

(37) Between July 2001 and January 2002, respondent failed to take action to further his clients’ matter.

(38) In January 2002, Appeals Officer Bibb sent respondent a letter indicating that a conference regarding the Tarases’ appeal was scheduled for February 21,2002, at the IRS office in Philadelphia.

(39) Respondent did not notify his clients of the conference date and failed to appear at the hearing.

(40) By letter of February 25, 2002, Officer Bibb advised the Tarases that they had failed to appear for the due process hearing as scheduled and that there was a March 18,2002 deadline for them to contact Officer Bibb to schedule a hearing.

(41) After receiving the letter, Mrs. Taras tried to contact respondent to find out what was happening.

(42) Respondent did not respond to any of the messages.

(43) By notice dated March 29,2002, the IRS advised Mr. and Mrs. Taras that the imposition of a federal tax lien on their property was appropriate since Mr. and Mrs. Taras had not responded to the IRS’ attempts to contact them or offer any collection alternatives or otherwise dispute the lien.

(44) Between April 1, 2002 and April 4, 2002, Mrs. Taras attempted to reach respondent by telephone to discuss the notice, but respondent failed to return the calls.

(45) Mrs. Taras also faxed respondent and he did not respond to the faxes.

(46) By certified letter of May 18,2002, Mr. and Mrs. Taras demanded that respondent immediately return the $1,500 retainer fee and that respondent return all copies of documents, including the original appraisal they had sent to respondent.

(47) Respondent failed to respond to the certified letter.

(48) Respondent failed to refund any unearned fees.

(49) As of the hearing, Mr. and Mrs. Taras’ tax case is still open before the IRS and they have incurred additional interest and penalties since retaining respondent.

Charge III — Capp Matter

(50) On July 11, 2000, respondent met with Annette Capp and agreed to file a bankruptcy petition on her behalf.

(51) Ms. Capp signed a retainer agreement. Between July 11,2000 and October 2,2000, Ms. Capp paid $ 1,685 to file a Chapter 13 bankruptcy petition.

(52) In October 2000, respondent told Ms. Capp he would contact her when a court date had been set by the bankruptcy court.

(53) Between October 2000 and May 2002, Ms. Capp telephoned respondent’s office and left messages on numerous occasions.

(54) Between October 2000 and May 2002, Ms. Capp received several notices from creditors and collection agencies, which Ms. Capp forwarded to respondent.

(55) By certified letter of May 6, 2002, Ms. Capp requested respondent advise her of the status of her case.

(56) As of the date of the hearing, respondent had not filed a bankruptcy petition on behalf of Ms. Capp.

(57) Respondent did not refund any unearned fees.

Charge IV — Rodger Matter

(5 8) On February 13,2001, respondent met with John Rodger and entered into a retainer agreement whereby he agreed to represent Mr. Rodger in connection with a matter pending before the IRS.

(59) Mr. Rodger paid respondent $1,500 in advance of representation.

(60) By letter of May 2, 2001, respondent forwarded IRS Offer in Compromise form 433 Ato Mr. Rodger for him to complete and sign, which Mr. Rodger did.

(61) In July 2001, an IRS employee told Mr. Rodger that respondent had not filed an offer in compromise.

(62) Between May 3, 2001 and December 5, 2001, Mr. Rodger called respondent’s office on numerous occasions and left many messages concerning the status of his case.

(63) Respondent did not return these calls.

(64) On December 5, 2001, Mr. Rodger sent respondent a letter requesting information on the status of his case before the IRS.

(65) Respondent failed to respond and did not refund any unearned fees.

Charge V — Armstrong Matter

(66) On March 13,2002, Peter Armstrong of Specialty Haulers Inc., met with respondent and requested that he represent Specialty Haulers in a matter pending before the Pennsylvania Department of Revenue.

(67) Respondent accepted a retainer of $1,500.

(68) Between March 13, 2002 and August 19, 2002, Mr. Armstrong left several messages on respondent’s answering machine and faxed several letters to his office requesting respondent contact him.

(69) Respondent did not communicate in any fashion with Mr. Armstrong after March 13, 2002.

(70) By certified letter of August 19, 2002, Mr. Armstrong terminated respondent’s services and requested a refund of $1,500.

(71) The letter was returned as unclaimed.

(72) By certified letter of October 10, 2002, Mr. Armstrong sent the same letter to respondent. This letter was not returned.

(73) Respondent never responded to the certified letter, nor did he refund any unearned fees.

Charge VI — Leonhard Matter

(74) In November 2001, Frank and Patricia Leonhard requested that respondent represent them in a Chapter 13 bankruptcy.

(75) Respondent agreed to represent them for $1,500, which the Leonhards paid.

(76) On November 7, 2001, Mr. Leonhard met with respondent and gave him some paperwork and documents respondent had requested in order to file the bankruptcy petition.

(77) On or about November 7,2001, respondent filed a Chapter 13 bankruptcy petition on behalf of his clients.

(78) Shortly thereafter, the court advised that there were missing documents, including a disclosure of attorney compensation, a Chapter 13 plan, a matrix, all schedules, a statement of financial affairs, and summary of schedules.

(79) The court informed respondent that the case would be dismissed if the missing documents were not filed within 15 days.

(80) On November 29,2001, respondent requested an extension of time to file the missing documents.

(81) The court granted respondent an extension to December 7, 2001.

(82) On December 18, 2001, the court entered an order dismissing the bankruptcy petition.

(83) Respondent did not notify his clients of the dismissal of their petition.

(84) Respondent failed to notify his clients that a sheriff’s sale of their property had been scheduled.

(85) After Mrs. Leonhard learned of the sheriff’s sale, she contacted respondent and left messages.

(86) Respondent did not return the calls.

(87) Mrs. Leonhard asked her employer, Brendan J. Malley, Esquire, to contact respondent.

(88) Mr. Malley spoke to respondent, who advised him that the bankruptcy had been dismissed. Mr. Malley asked that respondent forward the Leonhard’s file to them.

(89) Respondent did not forward the file to his clients.

(90) Mrs. Leonhard hired another attorney, who contacted respondent regarding the matter.

(91) Respondent did not respond to any letters from the Leonhard’s new counsel.

(92) Respondent has maintained a solo practice in the area of bankruptcy and credit law since becoming a member of the Pennsylvania Bar.

(93) At present, respondent has no employees and works by himself.

(94) Respondent has not implemented any new office procedures since January 2003 involving calendaring of client matters, communicating with clients, or record keeping.

(95) The only new office procedures made by respondent in response to the disciplinary proceedings are creation of a memo in each file reflecting activity in the file and the use of a date stamp on incoming mail.

III. CONCLUSIONS OF LAW

By his conduct as set forth above, respondent violated the following Rules of Professional Conduct:

(1)R.P.C. 1.1 — A lawyer shall provide competent representation to a client.

(2) R.P.C. 1.3 — A lawyer shall act with reasonable diligence and promptness in representing a client.

(3) R.P.C. 1.4(a) — A lawyer shall keep a client informed about the status of a matter and promptly comply with reasonable requests for information.

(4) R.P.C. 1.4(b) — A lawyer shall explain a matter to the extent necessary to permit the client to make informed decisions regarding the representation.

(5) R.P.C. 1.15(b) — A lawyer shall promptly deliver to the client or third person any funds or other property that the client or third person is entitled to receive and upon request shall promptly render a full accounting regarding such property.

(6) R.P.C. 1.16(d) — Upon termination of representation, a lawyer shall take steps to the extent reasonably practicable to protect a client’s interests, such as surrendering property to which the client is entitled and refunding advance payments of fee that have not been earned.

IV. DISCUSSION

This matter is before the Disciplinary Board on consolidated petitions for discipline filed against respondent by Office of Disciplinaiy Counsel. As petitioner, Office of Disciplinary Counsel bears the burden of proof by a preponderance of the evidence that is clear and convincing that respondent engaged in professional misconduct. Office of Disciplinary Counsel v. Keller, 509 Pa. 573, 506 A.2d 872 (1986). Review of the record demonstrates that petitioner met its burden.

Respondent engaged in a pattern of neglect, failure to communicate and failure to account in six client matters. Each client paid respondent the full fee demanded and in each matter respondent did not complete the representation. Respondent further did not account for his services and failed to refund any portion of the fee that was not earned despite specific requests from his clients that he do so.

Respondent admits that in each matter he did demand and accept his full fee and that he did not complete the representation, he did not give any client an accounting of services rendered, he did not refund any portion of the unearned fee and did not return any client files. He does not believe that he neglected his clients’ matters, but for the Annette Capp case. He also contends he did not fail to communicate with his clients.

The evidence shows that respondent did violate Rule of Professional Conduct 1.3 by failing to represent all six of the complaining clients with reasonable diligence and promptness. He failed to file a bankruptcy petition in the Mazakas matter and failed to file an offer in compromise in the Taras and Rodger matters, as well as appear for a hearing in the Taras matter. In the Armstrong matter, respondent took no action after accepting payment. Although he did file a bankruptcy petition in the Leonhard matter, he did not file the necessary supporting documents and, as a consequence, the petition was dismissed. Respondent’s management of his cases represents the very definition of neglect.

Respondent maintains that he did communicate, albeit orally, with his clients, and informed them of the strategy of their cases. The testimony of the complaining witnesses refutes this statement. Mr. Mazakas and Ms. Capp made numerous calls and wrote letters that remained unanswered. Mrs. Haras presented copies of telephone bills and letters and faxes that she sent, the majority unanswered. Mr. Rodger and Mrs. Leonhard testified similarly. Mr. Armstrong sent two certified letters, one of which Was returned as unclaimed and the other never received a response. None of these clients believed that they were kept apprised of the status of their matters, and all were frustrated by their inability to contact respondent. All of these witnesses were found to be credible. All of these witnesses, unknown to each other, testified to a similar pattern of failure to communicate from respondent. The cumulative nature of this evidence persuades the board that respondent did engage in a violation of R.P.C. 1.4.

Respondent’s misconduct is aggravated by his history of prior discipline, his failure to take responsibility and show remorse, and his failure to address the problems of his law office management. Respondent has been practicing law in Pennsylvania since 1990 with an emphasis on bankruptcy and creditor law. Yet, the misconduct engaged in comprises the simple mistakes and inattention to detail that might be expected from a newly admitted practitioner. These mistakes appear in part to be a result of respondent’s poor office management. At the time of the misconduct, respondent practiced by himself with no support staff, and, more importantly, he had no office procedures to assist him in timely filing documents and returning telephone calls and letters.

There is no question that serial neglect, failure to communicate, failure to refund fees and return client files warrants suspension. There are several cases involving similar misconduct that have resulted in suspensions ranging from one year and one day to two years. In re Anonymous No. 72 D.B. 1999, 658 Disciplinary Docket no. 3 (Pa. April 2, 2001), In re Anonymous No. 142 D.B. 1999, 667 Disciplinary Docket no. 3 (Pa. May 8, 2001). Although respondent requests a discipline less than suspension, he already has had the opportunity to benefit from private discipline but did not change his conduct after receiving a private reprimand in 2000.

Based on the totality of the record, the board recommends that respondent be suspended for one year and one day.

V. RECOMMENDATION

The Disciplinary Board of the Supreme Court of Pennsylvania recommends that the respondent, Michael G. Bowen, be suspended from the practice of law for a period of one year and one day.

It is further recommended that the expenses incurred in the investigation and prosecution of this matter are to be paid by the respondent.

Board Vice-Chair Rudnitsky did not participate in the May 18, 2004 adjudication.

ORDER

And now, October 22, 2004, upon consideration of the report and recommendations of the Disciplinary Board dated July 29, 2004, the petition for review and response thereto, it is hereby ordered that Michael G. Bowen be and he is suspended from the bar of this Commonwealth for a period of one year and one day, and he shall comply with all the provisions of Rule 217, Pa. R.D.E. It is further ordered that respondent shall pay costs to the Disciplinary Board pursuant to Rule 208(g), Pa.R.D.E.