author: BRADLEY, J.,

text:
    Paden v. Shanks

      C.P. of Delaware County,
    no. 97-4318.

      Thomas Bruno II, for plaintiffs.

      Hugh J. Gillespie, for defendant.
    June 29, 2001
   BRADLEY, J.,

Plaintiff Kortni Paden appeals from the entry of judgment in favor of defendant Lawrence C. Shanks after a jury trial.

This is an action for personal injuries arising out of a motor vehicle collision which occurred on April 3,1995 at the intersection of 22nd and Chestnut Streets in the City of Chester. At that time, the vehicle that Kortni Paden was driving, was struck on the driver’s side by defendant’s vehicle. After the accident, Mrs. Paden drove to the emergency room at Crozer-Chester Medical Center. Although she had no bruises or bleeding, she complained of neck and back pain and had x-rays taken. The x-rays did not reveal a problem, and she was instructed to follow up with her family doctor if necessary.

Plaintiff never followed up with her family doctor. Instead, she began physical therapy treatments with Dr. William Murphy for complaints of pain in her left shoulder, low back and neck. At Dr. Murphy’s recommendation, Mrs. Paden underwent a cervical and lumbar MRI. (Plaintiffs’ exhibit P-1, Dr. William Murphy’s deposition, 10-26-2000, pp. 26, 30.) The MRI of the lower back revealed herniated discs at L4-5 and L5-S1. Id. at 33. Dr. Murphy opined that the herniated discs were caused by the accident. Id.

Dr. Murphy referred Mrs. Paden to a neurosurgeon, Dr. Hagop DerKrilcorian, for her continuing complaints of pain. Id. at 34. Dr. DerKrikorian concluded that the diagnosis of herniated discs at L4-5 and L5-S1 was correct, but there was no significant evidence of lumbar pinched nerve or radiculopathy. Id. at 35. Dr. Der-Krikorian recommended she continue conservative treatment and not have surgery. Id.

Plaintiff treated with Dr. Murphy into 1996. She returned in February 1997, at which time she had a repeat MRI of the lumbar spine. Although that MRI was read as normal, Dr. Murphy testified that he believed the disc herniations were still present. Id. at 44-46. He gave Mrs. Paden an exercise program and explained that she would have to learn to live with her condition. Id. at 46-47. Mrs. Paden saw Dr. Murphy twice more, once in 1999 and once in 2000, still complaining of chronic pain in the shoulder, neck and low back area.

Dr. William D. Emper performed the independent medical examination on plaintiff. At his videotape trial deposition, on direct examination, Dr. Emper testified to his opinion:

“[I]t was my impression that Mrs. Paden sustained a cervical sprain/strain, a lumbar sprain/strain, and a contusion of the left shoulder as a result of the motor vehicle accident. That’s my opinion to within a reasonable degree of medical certainty based on her history of telling me that she had pain in her low back and assuming that she had soft tissue injury as a result of the accident. There were no objective signs to that effect. There no— were no signs to my examination or no objective signs of disc herniation, and the repeat MRI confirmed that there was no evidence of a disc herniation in the lumbar spine.” (Defendant’s exhibit, D-l, deposition of William D. Emper, 11-13-2000, pp. 15-16.)

A one-day jury trial was held in this matter on November 15, 2000. Defendant stipulated to negligence. No evidence was submitted regarding damage to plaintiff’s vehicle. The jury concluded that defendant’s negligence was not a substantial factor in bringing about plaintiff’s injuries. Post-trial motions seeking a new trial were filed by the plaintiffs and denied. Judgment was entered in favor of defendant. This appeal followed.

Plaintiffs assert that the verdict cannot stand because it is contrary to law, the evidence and the weight of the credible evidence. Plaintiffs believe all the medical evidence confirms that the motor vehicle accident caused by the admitted negligence of defendant caused Mrs. Paden to sustain injuries; thus, it was legally impermissible for the jury to disregard the experts presented by both parties who concluded that plaintiff suffered injuries as a result of the accident.

Plaintiffs are correct that a long line of Pennsylvania cases holds that a new trial is warranted whenever the jury finds the defendant’s negligence was not a substantial factor in bringing about plaintiff’s injuries when both plaintiffs’ and defendant’s experts agree plaintiff suffered an injury as the result of the accident. See Hixson v. Barlow, 723 A.2d 716 (Pa. Super. 1999), approved on these grounds, disapproved on different grounds, Mano v. Madden, 738 A.2d 493 (Pa. Super. 1999) (en banc); Craft v. Hetherly, 700 A.2d 520 (Pa. Super. 1997); and Rozanc v. Urbany, 444 Pa. Super. 645, 664 A.2d 619 (1995). This case is markedly different from that line of cases. Here, defense expert, Dr. Emper, did not concede that Mrs. Paden suffered an injury as a result of the accident. He qualified his opinion as being based on plaintiff’s history. (Defendant’s exhibit D-1, deposition of William D. Emper, 11-13-2000, pp. 15-16). Dr. Emper stated further there were no objective signs of injury and there were no objective signs of disc herniation. Id. Dr. Emper’s testimony provided a reasonable basis for the jury to conclude that plaintiff’s alleged injuries were not caused by the negligence of defendant. Accord Holland v. Zelnick, 329 Pa. Super. 469, 478 A.2d 885 (1984); Gigliotti v. Machuca, 409 Pa. Super. 50, 58, 597 A.2d 655, 659 (1991). Accordingly, plaintiffs’ post-trial motions were denied.

Plaintiffs also contend that the court erred by refusing plaintiffs’ counsel’s request for a cautionary instruction after closing arguments. Such error, plaintiffs allege, resulted in a verdict contrary to law.

In his closing argument, plaintiffs’ counsel made reference to photographs of the vehicle, taken by plaintiff’s husband after the accident, which were not admitted into evidence. (N.T. 11/13/2000, p. 4.) Plaintiffs’ counsel appeared confused, originally indicating the pictures were admitted into evidence, then realizing they weren’t, and finally questioning their significance in any event. In response, defense counsel in his closing statement mentioned that although these photographs existed, neither the photographs nor the husband’s testimony regarding the photographs was introduced at trial. (N.T. 11/13/2000, p. 17.) Plaintiffs characterized defense counsel’s comment “You didn’t hear from the husband,” as impermissibly asking the jury to draw an adverse inference from Mr. Paden’s failure to testify.

“The decision whether to tell the jury an unfavorable inference may be drawn from the failure of a party to produce some circumstance, witness, or document is also one which lies within the sound discretion of the trial court and which will not be reversed absent manifest abuse.... The general rule is that [wjhere evidence which would properly be part of a case is within the control of the party in whose interest it would naturally be to produce it, and without satisfactory explanation he fails to do so, the jury may draw an inference that it would be unfavorable.” Clark v. Philadelphia College of Osteopathic Medicine, 693 A.2d 202, 204 (Pa. Super. 1997). (citations omitted)

In the instant case, it was proper to refuse a cautionary instruction. It is axiomatic that plaintiffs have the burden of proof and persuasion in this action. All defense counsel indicated in his closing argument was that plaintiffs failed to introduce photographs of plaintiff’s vehicle that were taken by plaintiff’s husband. At no time did defense counsel suggest that plaintiff’s husband was not called because his testimony would have contradicted his wife’s testimony. Moreover, this issue of the photographs not being produced at trial was initially brought to the jury’s attention by plaintiffs’ counsel’s closing argument. (N.T. 11/13/2000, p. 4.) Plaintiffs can scarcely be heard to complain about defense counsel’s brief comment and the court’s denial of a request for a cautionary instruction when her own counsel raised the issue of the missing photographs and their significance in front of the jury.

Accordingly, it was for all the above reasons that plaintiffs’ motions for post-trial relief were denied and judgment was entered in favor of defendant.


source: Caselaw Access Project

author: HANCHER, J.,

license: Public Domain

text:
    Weichey v. Doerr

      C.P. of Butler County,
    no. 97-10915.

      Eric D. Levin, for plaintiff.

      Thomas W. King, for defendant Doerr.

      Dai Rosenblum, pro se.
    January 31, 2001
   HANCHER, J.,

And now, before this court is defendant’s motion for summary judgment. For the reasons set forth below, defendant’s motion is denied.

I. FACTUAL BACKGROUND

Plaintiff Scarlett Weichey filed this action against Attorneys Doerr and Rosenblum alleging that her underinsured motorist claim was denied due to their negligence. Plaintiff argues her underinsurance benefits were lost because her underlying cláims against the tortfeasors were settled without first obtaining consent to settle and waiver of subrogation from her own motorist insurance carrier.

On or about May 2,1990, plaintiff and Attorney Doerr entered into a contingent fee agreement whereby Doerr agreed to represent plaintiff in connection with a civil suit arising out of injuries plaintiff sustained in an automobile accident on or about April 28, 1990. Attorney Doerr undertook to represent plaintiff by means of negotiation with the tort-feasors, Cathy and Joseph Yusko (Nationwide Insurance Co.) and George Weiland (Aetna Casualty and Surety).

The Yusko action was interpleaded and on April 10, 1992, an order of court was issued approving settlement and distribution of the Nationwide Insurance Company policy limits. However, Attorney Doerr did not obtain consent to settle and waiver of subrogation from plaintiff’s underinsured carrier, State Farm Insurance Company. Nor did Attorney Doerr obtain consent to settle and waiver of subrogation from State Farm before settlement of said claim against George Weiland (Aetna Casualty and Surety).

On August 21, 1992, the plaintiff entered into a substitution agreement with Dai Rosenblum. On August 25, 1992, Attorney Rosenblum negotiated a second settlement agreement with the tort-feasors’ insurance carriers. Attorney Rosenblum also failed to obtain consent to settle or waiver from plaintiff’s underinsured carrier. Attorney Rosenblum then initiated an action for plaintiff’s underinsured benefits, which resulted in an underinsured arbitration panel finding in favor of State Farm, plaintiff’s insurance carrier specifically due to the failure to obtain written consent to settle with the third party tort-feasors, as her policy required. This decision was affirmed in the courts.

Before us at this time is Attorney Doerr’s motion for summary judgment. The focus of the summary judgment is related to plaintiff’s claim that her underinsurance benefits were “irreversibly lost” as a result of the negligence of the defendant, Attorney Doerr. Attorney Doerr claims that there are no genuine issues of material fact and that the alleged failure to obtain this consent would not affect plaintiff’s ability to recover for underinsured motorist coverage due to the recent decision in a 1999 Pennsylvania Superior Court case.

H. STANDARD OF REVIEW

Our standard of review in summary judgment cases is based upon Pa.R.C.P. no. 1035(b). Summary judgment is only proper where there are no genuine issues of material fact and the moving party is entitled to judgment as a matter of law.

A motion for summary judgment may properly be granted when the pleadings depositions, answers to interrogatories, and admissions on file, together with affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to judgment as a matter of law. Godlewski v. Pars Manufacturing Company, 408 Pa. Super. 425, 597 A.2d 106 (1991). Summary judgment may be entered only in cases that are clear and free from doubt. Weiss v. Keystone Mack Sales Inc., 310 Pa. Super. 425, 430, 456 A.2d 1009, 1011 (1983).

Additionally, the record must be examined in the light most favorable to the non-moving party, accepting as true all well-pleaded facts in its pleadings and giving that party the benefit of all reasonable inferences drawn therefrom. Hower v. Whitmak Associates, 371 Pa. Super. 443, 445, 538 A.2d 524, 525 (1988). Moreover in summary judgment proceedings, the court’s function is not to determine the facts, but only to determine if a material issue of fact exists. French v. United Parcel Service, 377 Pa. Super. 366, 372, 547 A.2d 411, 414 (1988).

III. MERITS OF DEFENDANT’S ARGUMENT

Defendant, Attorney Doerr argues that any negligence committed, which is specifically denied, in failing to obtain the consent of State Farm Mutual Insurance Company in settling plaintiff’s claims for damages with Nationwide and Aetna would not rise to a cause of action of negligence against the defendant, Attorney Doerr.

Attorney Doerr cites the case of Nationwide Mutual Insurance Company v. Lehman, 743 A.2d 933 (Pa. Super. 1999), which states that prejudice to the underinsured motorist carrier is necessary to its denial of coverage after the insured settles for the limits of the available liability insurance and in contravention of the consent to settle clause. Accordingly, Attorney Doerr claims that the alleged failure to obtain this consent would not affect plaintiff’s ability to recover for underinsured motorist coverage from State Farm Mutual Insurance Company as State Farm did not demonstrate that its interest had been prejudiced and, therefore, State Farm cannot deny coverage to plaintiff.

In order for this court to discern if the Lehman case law applies to the instant case we must determine if the case is on point. After review, this court finds that the facts of the Lehman case are not parallel with the facts of the instant case therefore not controlling law. In Lehman, the insured had placed his insurance carrier on notice that the underinsured motorist coverage was at issue and had requested that “Nationwide pull [Lehmans’] records.” Lehman at 935. Lehmans’ attorney faxed a letter to Nationwide’s adjuster requesting consent to settle and Nationwide notified the Lehmans’ attorney that it could not consent to a settlement agreement until it received and reviewed its file. Id.

After review of the instant case, and, in comparison to Lehman, this court finds the facts are dissimilar for two reasons. First, in the instant case, plaintiff’s insurance carrier (State Farm) was never put on notice of the underinsured motorist claim and was never asked to consent to settle or waive subrogation. Further, State Farm was never aware of the existing claims and for similar reasons was released of its liability in the first case of Weichey v. State Farm. Although this court recognizes the rule of law in Lehman that states that the insurance carrier must show its interests were prejudiced before it denies the underinsured motorist coverage to plaintiff, this only applies when the insurance carrier is aware of a claim and/or possible settlement. In the instant case, State Farm had no knowledge of the claim and of a request of consent to settle or waiver of subrogation and therefore this court cannot apply Lehman to the case at hand as binding law. Further, the issue of prejudice will not be taken into consideration for it is not necessary because this court concluded the suggested case law is not on point.

Secondly, this court finds the principle of law discussed above in Lehman has been applied inappropriately to the facts of this case. After close review of Lehman, it is the court’s determination that this principle of law is restricted to its application, in that, it should be applied only in cases where the parties are insurer and insured. This court believes that it is improper to apply the principle of law discussed in Lehman (whereby the facts include a contractual provision in an insurance policy regarding the consent to settle clause and an insurer and insured) to a collateral professional malpractice cause of action between attorney and client. Simply, the facts are different.

In addition, it is the court’s understanding the Superior Court of Pennsylvania has upheld this court in the earlier case of Weichey v. State Farm, Pa. Super, no. 932 Pittsburgh 1997, denying Weichey her right to a underinsured motorist claim due to her failure of notice and consent thereby barring her action.

In conclusion, there are genuine issues of material fact that need to be determined, and defendant is not entitled to judgment as a matter of law, therefore, the defendant’s motion for summary judgment is denied.

In addition, since this court decided that Lehman is not controlling in this case, we have no need to address the issue of retroactive application of such case law.

Accordingly we submit the following:

ORDER

And now, January 31, 2001, it is hereby ordered, adjudged and decreed, defendant’s motion for summary judgment is denied.


author: BAER, J.,

text:
    Northside Bank v. American Casualty Co. of Reading

      C.P. of Allegheny County,
    no. GD 97-19482.

      Richard J. Thomas and Jeffrey T Morris, for plaintiff.

      Kevin Kavanagh, for defendant.
    January 10, 2001
   BAER, J.,

Plaintiff Northside Bank sued defendant American Casualty Company of Reading, PA (CNA) contending that CNA breached a “Community financial institution bond” (insurance policy) that insured Bank against, inter alia, losses from fraudulent electronic fund transfers and from computer crimes. CNA moved for summary judgment. Bank filed a response in which it argued that there was a genuine issue of material fact concerning interpretation of the words “modified or altered” within the insurance policy, and that therefore CNA’s motion for summary judgment should be denied. In the alternative, Bank filed its own motion for summary judgment and requested that we grant it summary judgment. We concluded that there was no genuine issue of material fact, and that CNA was entitled to summary judgment as a matter of law. Bank has appealed, and we file this opinion in accordance with the mandate of Pa.R.A.P 1925(a).

We are mindful that in considering a motion for summary judgment, we must view the facts in a light most favorable to the non-prevailing party. Hamilton Bank v. Insurance Co. of North America, 384 Pa. Super. 11, 557 A.2d 747 (1989). With that standard fully in mind, the facts are as follows. On October 12, 1994, Bank opened an account incident to a merchant services agreement with a company known as Dakco PC Product Division Inc. Dakco then proceeded to accept orders for merchandise, and take payment by debit and credit cards. Dakco electronically transmitted the debit and credit card authorizations to Bank, and, upon receipt, Bank transferred money into Dakco’s account. Eventually, it was disovered that Dakco never delivered the purchased merchandise to its customers, and they exercised their rights under federal law to rescind their obligation to pay for the unshipped merchandise. See, 15 U.S.C. §1666; FTC v. Overseas Unlimited Agency Inc., 873 F.2d 1233 (9th Cir. 1989). When these customers refused to pay, their creditors, in turn, refused to pay, or charged back the amounts paid to Bank. When Bank went to charge back Dakco, it found Dakco’s accounts depleted. Bank sustained a loss of about $300,000.

Bank hopes to recoup these funds through insurance proceeds claiming coverage under section 13 of endorsement G-21032A and section 14 of endorsement G-21033A to the insurance policy.

Sections 13 and 14 provide as follows:

“(13) Electronic Funds Transfers
“Loss resulting directly from the insured having in good faith and in the usual course of business transferred, paid or delivered any funds or property, or established any credit or given any value on the faith of, or assumed any liability or otherwise acted upon, any fraudulent electronic instruction or advice transmitted to the insured through an electronic funds transfer system.
“(14) Computer Crime
“(A) Computer systems fraud
“Loss resulting from the insured having in good faith and in the usual course of business transferred, paid or delivered any funds or property, established any credit, debited any account or given any value or assumed any liability as the direct result of any fraudulent electronic instruction or advice transmitted to or from the insured through
“(1) the insured’s computer system;
“(2) any shared network or facility for any automated teller machine or point-of-sale terminal in which the insured participates; or
“(3) a corporate customer cash management system.” (emphasis added)

The term “fraudulent electronic instruction or advice” is defined for purposes of both sections 13 and 14 as follows:

“(a) an electronic instruction or advice purporting to have been sent by another financial institution or automated clearing house or by a customer of the insured, and which instruction or advice is intended to deceive and is not in fact sent by said financial institution or automated clearing house or by said customer; or
“(b) an electronic instruction or advice which is modified or altered with intent to deceive after being sent by another financial institution or automated clearing house or by a customer of the insured.”

We accept for purposes of summary judgment, that Bank in good faith and in the usual course of business paid monies to Dakco upon receipt of electronic instructions transmitted through an electronic fund transfer system, and sustained losses. Thus, if any legally successful argument could be made that the transfers were of fraudulent electronic instructions, we would not have entered summary judgment.

As set forth above, the definition of a fraudulent electronic instruction has two subparts. Bank concedes that subpart (a) dealing with a case where someone other than a customer poses as the customer to defraud a bank is not applicable herein. Instead, Bank relies on subsection (b) which defines a fraudulent electronic instruction as one which is modified or altered after being sent by a customer with intent to deceive.

Bank argues that the words “modified or altered” are ambiguous, and, therefore, CNA’s motion for summary judgment should be denied. CNA argues that the policy is clear and unambiguous, and that, therefore, we should grant its motion. It is well settled that the issues of whether contractual language is ambiguous, and if not, whether a claim falls within a policy’s coverage are questions of law which may be decided by a court deciding a motion for summary judgment. Dominick v. Statesman Insurance Co., 692 A.2d 188 (Pa. Super. 1997). Our Supreme Court has summarized the applicable principles in Madison Construction Co. v. Harleysville Mutual Insurance Co., 557 Pa. 595, 606, 735 A.2d 100, 106 (1999):

“The task of interpreting [an insurance] contract is generally performed by a court rather than by a jury. The goal of that task is, of course, to ascertain the intent of the parties as manifested by the language of the written instrument. Where a provision of a policy is ambiguous, the policy provision is to be construed in favor of the insured and against the insurer, the drafter of the agreement. Where, however, the language of the contract is clear and unambiguous, a court is required to give effect to that language.. ..
“Contractual language is ambiguous ‘if it is reasonably susceptible of different constructions and capable of being understood in more than one sense.’ ... This is not a question to be resolved in a vacuum. Rather, contractual terms are ambiguous if they are subject to more than one reasonable interpretation when applied to a particular set of facts. . . . We will not, however, distort the meaning of the language or resort to a strained contrivance in order to find an ambiguity.” (citations omitted)

In an understandable attempt to avoid a $300,000 loss, Bank seeks to place a square peg in a round hole. It argues that Dakco’s submission to Bank of the electronic instructions and subsequent failure to ship the merchandise should be viewed as a modification or alteration of the electronic instruction with the intent to deceive. This construction is so strained and at odds with the obvious intent of the insurance policy that to accept it would be to distort the meaning of the policy beyond all recognition. The simple truth is that the words “modified” and “altered” mean exactly what they say, and the electronic instructions submitted to Bank in this case were never modified or altered. These instructions directed that Bank pay a sum certain to Dakco when they left Dakco’s control, and were unmodified and unaltered when they reached Bank; Bank read them, and, in fact, paid them in accordance with their unmodified and unaltered language. As counsel for CNA points out, it is the fact that Dakco never “altered or modified” the instructions by canceling them or directing that they not be paid that forms the heart of Bank’s complaint.

A review of the insurance policy in toto, and the electronic fund transfer and computer crimes coverage in particular, establishes that the purpose of the coverage was to protect the Bank from someone breaking into the electronic fund transfer system and pretending to be an authorized representative or altering the electronic instructions to divert monies from the rightful recipient. That is simply not what happened in this case. Dakco was a customer of Bank. It submitted an electronic instruction which was never modified or altered, and, in fact, was honored. While Bank certainly has an action against Dakco, it cannot succeed in this case against CNA on the theory that the electronic instructions were somehow modified or altered after being sent by Dakco, when they simply were not.

      . The named defendant, American Casualty Company of Reading, PA, is evidently a CNA company. All involved in this case have referred to the defendant as “CNA,” and we will do likewise.

      . For sake of simplicity, we will refer to “electronic instructions or advice” collectively as “electronic instructions.”


author: SHEPPARD JR., J.,

text:
    Olympic Paper Co. v. Dubin Paper Co.

      Anthony Beldecos, for plaintiff.

      Louis Hackman, for defendants.
    December 29, 2000
   SHEPPARD JR., J.,

Plaintiff-petitioner, Olympic Paper Company, seeks to partially enforce a restrictive covenant against its former employee, defendant-respondent Brian Reddy, and Reddy’s new employer, defendant-respondent Dubin Paper Company. In its petition for a preliminary injunction, Olympic seeks to enjoin Reddy and Dubin from soliciting any Olympic customers within a 150-mile radius for a period of one year. In addition, Olympic requests that defendants be ordered to return all price lists, client folders, orders, notes and other confidential materials removed from Olympic on the ground that this information merits protection as a trade secret and/or confidential information.

This court grants the petition, in part, and enjoins Reddy, Dubin, and those acting in concert with them, for a period of six months, from soliciting, contacting or otherwise engaging in business relations with the 14 businesses with which Reddy established and/or maintained relationships while employed as a sales representative at Olympic. Further, this court orders Reddy to return to Olympic any of Olympic’s files and/or property currently in his possession.

The court submits the following findings of fact, discussion and conclusions of law in support of its contemporaneous order.

FINDINGS OF FACT

I. The Parties

(1) Olympic engages in the business of selling disposable paper products primarily for restaurant and food service clientele. (N.T. 7, 10.)

(2) Olympic is currently located at 7500 State Road, Philadelphia, PA and transacts business in a geographic radius of 100 miles, including locations in Delaware, Maryland and northern New Jersey. (N.T. 7-8, 77.)

(3) Olympic’s sales for last year were $8.75 million and it obtains its customers primarily through solicitation and from referrals from other satisfied customers. (N.T. 11.)

(4) Olympic currently has five full-time sales persons, but it had employed approximately eight salespersons including Brian Reddy prior to terminating Reddy and others. (N.T. 15-16, 60-61.)

(5) Dubin is a direct competitor of Olympic in the paper business, which business is highly competitive and price and quality sensitive. (N.T. 14-15.)

(6) Reddy had been employed by Olympic since 1995, first, in the capacity of a truck driver, then a customer service representative, then purchasing agent, and then as a sales representative from April 2000 until he was terminated on or about September 15, 2000. (N.T. 18-21.)

(7) Approximately three weeks following his termination from Olympic, Reddy began working as a sales representative for Dubin. (N.T. 111-13.)

II. The Employment Agreement

(8) In the fall of 1999, Reddy had expressed the desire to become a sales representative, which would provide an opportunity to increase his income depending on how much business he would generate, since sales representatives are paid 60 percent straight commission and they generally make more money by bringing in more business. (N.T. 21-23.)

(9) On or about November 1,1999, Reddy received a letter from Olympic’s management which provided details on the compensation package involved in a sales representative position. Both Reddy and Olympic’s management executed this letter. (N.T. 25-26; and attachment to exhibit P-1.)

(10) In April 2000, Reddy unofficially began his position as a sales representative of Olympic when he attended four separate sales “blitzes” at the New Jersey shore. (N.T. 90, 94-95.)

(11) In connection with this change in his job assignment, Reddy was informed that he would have to sign a noncompete agreement in order to work as a sales representative for Olympic. There is no evidence that Reddy would be fired if he did not sign the noncompete agreement. (N.T. 48-49, 90.)

(12) Shortly after he began work as a sales representative on May 5, 2000, Reddy signed an employment agreement, which was also signed by Stephen Hottinger, who was then the director of sales and marketing for Olympic. (N.T. 26, 90-91; exhibit P-1.)

(13) The agreement contained clauses relating to confidential information and including a restrictive covenant, which states in pertinent part:

“(4) Property Of Employer . . .
“(a) All past, present and future customers of [Olympic] which are not heretofore defined as [Reddy’s] property, price books, catalogues, customer lists and records, samples, and all other data relative to [Reddy’s] relationship with its customers, suppliers and competitors are the property of the employer. All printed material hereunder are subject to recall at any time by [Olympic], and upon such recall will be surrendered by [Reddy]. Upon termination, all such material will be surrendered by [Reddy] forthwith, without any further notice.
“(5) Covenant Not To Compete: [Reddy] hereby covenants that he . . . presently is not, and that during the term of this agreement and for the next one year following the termination of the employment[,] this agreement, or any extension thereof:
“(a) That [Reddy] will not become involved either directly or indirectly, whether as owner, partner, director, officer, agent, representative or employee of a business entity, or any enterprise which is engaged in substantially the same business as [Olympic] and solicit business from [Olympic’s] customers who have locations within [Olympic’s] trading area;
“(b) [Reddy] will not reveal or in any manner divulge [Olympic’s] trade secrets as defined hereinabove;
“(c) [Reddy] will not engage in any business activity which is in contravention of the foregoing covenants, whether as an owner, director, officer, agent, representative or employee of such competing business entity within a radius of 150 miles of [Olympic’s] place of business at 7500 State Road, Philadelphia, Pennsylvania ... (Exhibit P-1, at 3.)

(14) The agreement also provided that Reddy received a “sign-on bonus” of $100 paid by Olympic, as consideration for the recitals in the agreement and for becoming a sales representative. (Id. at 1.)

(15) Reddy claims that he never received this $100 bonus or any additional consideration for signing the agreement. (Def. mem. of law, at 7-8.) Louis Balias, salesman and part owner of Olympic, testified that Reddy may not have literally received this money, but he did receive an equivalent benefit because Olympic had forgiven a debt owed to it by Reddy. (N.T. 44-45; 102-103.) In addition, Reddy’s income had potential to increase and did increase after he became a sales representative. (Id. at 106-108.)

(16) The terms of the agreement were non-negotiable. (N.T. 49.)

III. Reddy’s Position As Olympic’s Sales Representative

(17)As a sales representative, Reddy received a price list, a sales book and a customer history list which included the identity of the customer, what the customer paid and what the customer bought. (N.T. 26-27, 73-74.)

(18) Prior to being assigned a sales territory, Reddy was introduced to various customers by Louis Balias or others in order to become familiar with these customers. (N.T. 12, 38.)

(19) Reddy was first assigned 11 accounts as his initial sales territory. These accounts had been Louis Balias’ accounts. (N.T. 37, 73-74, 144-46.)

(20) These first 11 accounts are: Wunderbar, Classic Sub/Pizza, Mount Airy Best, Mystic Pizza, Oak Lane Pizza, Alladin Pizza, Stenton Pizza, Giovanni Pizza, Penrose Diner, Teddy’s Pizza Express, and Dwight’s BBQ. (Exhibit P-2 (nos. l-ll).)

(21) Two other accounts, Pizza Station and Victoria’s, were later assigned to Reddy when another salesman left. (N.T. 144; exhibit P-2 (nos. 12-13).)

(22) Reddy also opened an account at Randazzo’s when he was a sales representative at Olympic. (N.T. 145-46; exhibit P-2 (no. 26).)

(23) Testimonial evidence demonstrates that the success of any Olympic sales representative depended upon his or her personal relationship with customers and the level of familiarity and comfort between the salesperson and the customer. (N.T. 12-13.)

(24) Olympic claims that, although Reddy had talent to be a good sales representative, he was terminated for poor performance by not bringing in new business, by not visiting his customers and by not collecting money owed to Olympic. (N.T. 40-42, 96, 110.) Olympic had also purportedly contemplated firing Reddy when he was a purchasing agent. (Id. at 58-59.)

(25) Reddy was terminated on September 15, 2000, but there is no evidence, other than testimonial evidence, that he was fired for poor performance. (N.T. 65-66.)

IV. Reddy’s Actions Following His Termination

(25) Olympic claims that Reddy did not return Olympic’s price list after he was terminated. (N.T. 95.) However, it remains unclear whether Reddy took any confidential documents with him when he left Olympic’s employ.

(26) Approximately three weeks following his termination from Olympic, Reddy began working as a full-time salesperson at Dubin. (N.T. 111-13.)

(27) While at Dubin, Reddy has contacted or attempted to contact at least 20 of Olympic’s customers. (N.T. 137-38.)

(28) There is no evidence that Reddy had spread any disparaging rumors regarding Olympic after it fired him. Rather, rumors regarding Olympic’s financial trouble had started when Reddy was still employed by Olympic. There is no evidence that Reddy initiated these rumors. (N.T. 63-65.)

(29) There is no evidence that Olympic’s sales decreased after Reddy was terminated. Rather, profits appear to be rising because Olympic has been cutting costs. (N.T. 61-62.)

(30) Olympic’s sales force has been reduced since Reddy was terminated. There is no evidence that Olympic is contemplating hiring any new sales persons in the future. (N.T. 60-62.)

DISCUSSION

This court now holds that Olympic has demonstrated that Reddy has breached the restrictive covenant by actively soliciting those Olympic customers whom Reddy had maintained on Olympic’s behalf. However, the restrictive covenant is overbroad as written and will be modified to limit its geographic scope and duration in order to protect only Olympic’s legitimate business interests.

Thus, this court now enjoins Reddy and those acting in concert with him from soliciting or otherwise contacting any of the fourteen customers that Reddy, as a sales representative, had maintained on Olympic’s behalf for a period of six months.

I. This Court May Enforce the Restrictive Covenant Through a Preliminary Injunction to the Extent Necessary To Protect Customer Relationships That Reddy Established or Maintained for Olympic

A. Standard of Review for Enforcing Restrictive Covenants

This court must first determine whether the non-compete agreement, as a post-employment restrictive covenant, is enforceable. A restrictive covenant may only be enforced at equity if: (1) it is ancillary to an employment relationship between the parties to the covenant, (2) it is reasonably limited in duration and geographic scope, and (3) it is necessary to protect a legitimate business interest of the employer without imposing an undue hardship on the employee. John G. Bryant Co. Inc. v. Sling Testing & Repair Inc., 471 Pa. 1, 9-10, 369 A.2d 1164, 1168 (1977); Boldt Machinery & Tools Inc. v. Wallace, 469 Pa. 504, 511, 366 A.2d 902, 906 (1976); Sidco Paper Co. v. Aaron, 465 Pa. 586, 591, 351 A.2d 250, 252 (1976); All-Pak Inc. v. Johnston, 694 A.2d 347, 350 (Pa. Super. 1997); Thermo-Guard. Inc. v. Cochran, 408 Pa. Super. 54, 64, 596 A.2d 188, 193 (1991). If the restrictive covenant meets this three-part test for reasonableness, it is prima facie enforceable at equity. John G. Bryant, 471 Pa. at 8, 369 A.2d at 1167 (citing Bettinger v. Carl Berke Associates Inc., 455 Pa. 100, 103, 314 A.2d 296, 298 (1974)). The employee bears the burden of establishing the unreasonableness of the covenant and demonstrating how it is unenforceable. Id. at 12, 368 A.2d at 169. In addition, the court must consider all the facts and circumstances on a case-by-case basis. Insulation Corp. of America v. Brobston, 446 Pa. Super. 520, 530, 667 A.2d 729, 733-34 (1995).

B. The Restrictive Covenant of the Employment Agreement Is Ancillary to the Employment Relationship and Is Supported by Adequate Consideration

To be ancillary to the employment relationship, a covenant must be supported by adequate consideration, which can be in the form of a corresponding benefit or a beneficial change in employment status. Id. at 529, 667 A.2d at 733. In Brobston, the court concluded that the restrictive covenant was supported by adequate consideration in the form of the employee’s annual raise and change in employment status from “at-will” to a written year-to-year term. Id. Restrictive covenants are ancillary to the taking of regular employment and supported by valid consideration, as long as they are “not an afterthought to impose additional restrictions on the unsuspecting employee.” See Beneficial Finance Co. of Lebanon v. Becker, 422 Pa. 531, 536, 222 A.2d 873, 876 (1966) (holding that restrictive covenant was ancillary to the taking of employment when all of the employees were required to sign such contracts and contract was prepared the day defendant-employee started his employment, despite that defendant signed the contract two days after starting work and plaintiff did not accept the contract until nine days later).

The circumstances presented here demonstrate that the restrictive covenant does not constitute an impermissible “afterthought,” and was supported by consideration since Reddy was required to sign the employment agreement in order to become a sales representative. The agreement explicitly provided that Reddy received $100 as a “sign-on bonus” when he signed it. (Exhibit P-1, at 1.) Even if Reddy had not literally received this money, testimonial evidence demonstrates that Reddy received an equivalent benefit because Olympic forgave part of Reddy’s debt owed to it. (N.T. 44-45.) Moreover, the record demonstrates that sales representatives had the potential to increase their income if they generated more business. Therefore, the agreement’s restrictive covenant was ancillary to Reddy’s change in his job position. As such, it meets the first part of the reasonableness test.

C. The Covenant Will Be Reasonable in Duration and Geographic Scope Once the Court Modifies It to the Extent Necessary To Protect Olympic’s Legitimate Interests

The reasonableness of the duration and geographic aspects of a restrictive covenant must be determined in light of the nature of the employer’s interest sought to be protected. Boldt Machinery & Tools, 469 Pa. at 513, 366 A.2d at 907. Where the restrictive covenant is sought to protect customer relationships, the duration is considered reasonable “if it is no longer than necessary for the employer to put a new man on the job and for the new employee to have a reasonable opportunity to demonstrate his effectiveness to the customers.” Id. (quoting Blake, Employee Covenants Not To Compete, 73 Harv.L.Rev. 625, 677-78 (1960)). See also, Robert Clifton Associates Inc. v. O’Connor, 338 Pa. Super. 246, 255, 487 A.2d 947, 952 (1985). (citations omitted) Generally, a new employee needs less time to demonstrate his effectiveness in industries involving frequent client contact and more time in industries involving infrequent contact. Boldt Machinery & Tools, 469 Pa. at 513, 366 A.2d at 907 (quoting Blake’s article). Further, when the employment relationship is complex, a longer period may be called for to demonstrate effectiveness versus when the relationship is relatively simple. Id. In addition, “[cjourts seldom criticize restraints of six months or a year on the grounds of duration as such, and even longer restraints are often enforced.” Id. See Bettinger v. Carl Berke Associates Inc., 455 Pa. 100, 103-104, 314 A.2d 296, 298 (1974) (holding that one-year restrictive covenant in contract of former employee of temporary employment agency was reasonable); Robert Clifton Associates, 339 Pa. Super, at 255, 487 A.2d at 952 (same).

In addition, Pennsylvania courts of equity, when enforcing restrictive covenants, may limit the geographic scope to the extent which is reasonably necessary for the protection of the employer. Sidco Paper Co., 465 Pa. at 595, 351 A.2d at 254; Thermo-Guard, 408 Pa. Super, at 65-66 n.9, 596 A.2d at 194 n.9; Quaker City Engine Rebuilders Inc. v. Toscano, 369 Pa. Super. 573, 584-85, 535 A.2d 1083, 1089 (1987) (stating “an otherwise valid restrictive covenant which is geographically overbroad is ‘divisible and enforceable [once it has been limited by the court] to reasonable geographical limits.’ ”).

Moreover, recently, this court in Robert Half of PA Inc. v. Feight, 48 D.&C.4th 129 (Phila. Cty. 2000) (Herron, J.), limited its enforcement of the restrictive covenants to those 16 law firms of which Feight, the defendant-employee, had personally established the good will with her former employer, RHI, despite that Feight had dealt with 260 clients at RHI but had not established a relationship on RHI’s behalf with the 744 remaining firms. Id. at 151-52, 161-62. This court concluded that “[t]his modification will achieve a proper balance between protecting RHI’s interests and not imposing an undue hardship on Feight.” Id. at 162.

Here, on its face, the restrictive covenant imposes a one-year restriction following termination of employment and limits the geographic scope to within 150 miles of Olympic’s place of business at 7500 State Road, Philadelphia, PA. (Exhibit A, at 3.) On its face, the covenant seems broader than necessary to protect Olympic’s legitimate interests. Further, Olympic, in its modified request for injunctive relief, seeks only to enjoin Reddy and those acting in concert with him from soliciting 29 customers of Olympic for a period of one year following his termination from Olympic. (See proposed order attached to pet’r. post-hearing mem. of law.) Therefore, it appears that even Olympic concedes that its original request was too broad. In addition, Reddy was only in his job as a sales representative for a period of approximately five months. It is not reasonable that the covenant should be enforced for a period of time inordinately longer than the time during which Reddy was working as sales representative.

Therefore, this court will enjoin Reddy and those working in concert with him from soliciting customers for a period of only six months from the date of his termination, and defendants will only be enjoined from soliciting only those customers with whom Reddy had personally established good will on Olympic’s behalf. Thus, the restrictive covenant, as modified, meets the second part of the reasonableness test.

D. Olympic Has Shown a Legitimate Business Interest in Protecting its Customer Relationships Maintained by Reddy but Has Failed To Show that its Price Lists Deserve Trade Secret Protection or Protection As Confidential Information

The primary issue which remains is whether the restrictive covenant is necessary to protect Olympic’s legitimate business interests. Pennsylvania courts have determined that trade secrets of an employer, customer good will and specialized training and skills gained from the employer do constitute legitimate interests that are protectible through a general restrictive covenant. Thermo-Guard, 408 Pa. Super. at 65, 596 A.2d at 193-94. See also, Sidco Paper Co., 465 Pa. at 590-94; Morgan’s Home Equip. Corp. v. Martucci, 390 Pa. 618, 631-32, 136 A.2d 838, 846 (1957). Olympic, primarily, is seeking to protect its customer good will and preserving its established business relationships. (Pet’r. mem. of law, at 1-2.) Olympic is also trying to implicate an interest in protecting its “trade secrets,” by compelling the return of any “confidential” documents which may include documents relating its sales methods, customer lists and other information. (See id. at 2.)

The Pennsylvania Supreme Court has repeatedly upheld the employer’s right to protect, by noncompetition and nonsolicitation agreements, an interest in customer good will acquired through the efforts of the employee. See e.g., John G. Bryant Co., 471 Pa. at 8-10, 369 A.2d at 1168; Sidco Paper Co., 465 Pa. at 590-92, 351 A.2d at 252-53; Morgan’s Home Equip. Corp., 390 Pa. at 631-32, 136 A.2d at 846. Moreover, in Feight, the Honorable John W. Herron recognized the importance of protecting the employer’s business relationships that were established by the employee, especially where the employer’s sole or major contact with its customers is through that employee. Id. at 150-51. In that case, this court emphasized that the employer’s right to protection is especially applicable to the employee placement field which is highly competitive and requires frequent contact with customers to maintain the strength of the relationships. Id. at 150. This court thus enjoined, for one year, the former employee-defendant from soliciting, contacting or otherwise engaging in business relations with the 16 law firms that she had the most significant contact while at her former employment and which were in a 50-mile radius of the plaintiff. Id. at 151-52.

Here, Olympic originally sought very broad relief. In its modified request, Olympic seeks to enjoin defendants from soliciting 29 of its customers for a period of one year. (Pet’r. proposed order attached to pet’r. post-hearing mem. of law.) While it is clear under Pennsylvania law that protecting customer good will is a legitimate business interest, the record here demonstrates that Reddy established and/or maintained relations with only 14 customers of Olympic. This number reflects the 11 accounts assigned as Reddy’s original sales territory, the two accounts added to his sales territory and the other account he generated as a sales representative. Any other accounts which Reddy may or may not have obtained himself did not derive from his position as a sales representative of Olympic. Rather, he generated them in his previous positions at Olympic, or these accounts were generated by others. The relevant time period and effect of the restrictive covenant comes into play only after Reddy became a sales representative. It is clear that Olympic has a legitimate business interest in protecting those customer relationships nurtured by Reddy on Olympic’s behalf.

The court reaches this conclusion despite defendants’ argument that Reddy cannot be construed as a threat to these interests because he was purportedly fired for “poor performance.” As support, defendants rely upon All-Pak Inc. v. Johnston, 694 A.2d 347 (Pa. Super. 1997) and Insulation Corp. of America v. Brobston, 446 Pa. Super. 520, 667 A.2d 729 (1995). In All-Pak, the trial court had found that because the employee was terminated unilaterally, the employer’s right to a preliminary injunction was unclear in light of the recent decision in Brobston. 694 A.2d at 352. In that case, the appellate court affirmed the lower court’s denial of a preliminary injunction to enforce a restrictive covenant. Id. However, the All-Pak decision turned mostly on the fact that the employment contract did not contain an assignment clause and policy considerations against allowing a successor employer to enforce a restrictive covenant. The court did not hold that the firing of an employee bars the employer’s right to injunctive relief. Id. The All-Pak court, citing Brobston, stated the following:

“We held that the fact that the employee was terminated, rather than quit voluntarily, was an important factor when considering the enforceability of a restrictive covenant. On the facts in that case, we determined that it was inequitable for the employer to obtain an injunction against the employee. . . . We emphasized, however, that the reasonableness of enforcing such a restriction is determined on a case by case basis. Thus, the mere termination of an employee would not serve to bar the employer’s right to injunctive relief. Where, for instance, an employee intentionally engaged in conduct that caused his termination,... the employer’s right to injunctive relief would survive. However, where an employer terminated an employee for reasons beyond the employee’s control, the rule announced in Brobston may bar injunctive relief. . . .” Id. at 352. (footnotes omitted)

Here the record does not clearly demonstrate exactly why Reddy was terminated. The only evidence that Reddy was terminated because of his poor performance (i.e., his alleged failure to collect money owed to Olympic, his alleged failure to visit customers and his alleged failure to generate new business) was testimonial in nature. (N.T. 40-42, 96, 110.) Even assuming, arguendo, that Reddy was terminated because of his performance, Reddy could have intentionally engaged in this conduct in order to cause his termination and avoid the restrictive convenant. Here, it does not appear that Olympic discarded its rights to protect its customer good will when it terminated Reddy. Rather, the circumstances of this case do weigh in favor of striking a balance between protecting Olympic’s customer good will without imposing an undue hardship on Reddy.

However, Olympic has not demonstrated that the information it seeks to protect, mainly its prices and customer lists, is particular or unique to its business and deserves protection as a trade secret or as confidential information. In Feight, this court distinguished the need to protect business relations with its legal clients and candidates from protecting the confidentiality of the identities of those clients and candidates and held that the latter were not “trade secrets.” Id. at 152-53. It stated that “[tjhough confidential customer data may be entitled to protection as a trade secret, ‘customer lists [are] at the very periphery’ of trade secret law.” Id. at 153 (citing Renee Beauty Salons v. Blose-Venable 438 Pa. Super. 601, 604, 652 A.2d 1345, 1347 (1995)). See also, Carl A. Colteryahn Dairy v. Schnieder Dairy, 415 Pa. 276, 283, 203 A.2d 469, 473 (1964) (stating that “[ejquity will not protect mere names and addresses easily ascertainable by observation or reference to directories”); Fidelity Fund Inc. v. DiSanto, 347 Pa. Super. 112, 120, 500 A.2d 431, 436 (1985).

Determining whether an employer’s customer lists are entitled to protection as trade secrets depends on whether they are “the particular secrets of the complaining employer, not general secrets of the trade in which he is engaged.” Bettinger, 455 Pa. at 105-106, 314 A.2d at 299. Recently, our Superior Court recognized that customer lists and other data compilations gathered by an employer through a material investment of time and expense may qualify as trade secrets and/or confidential information protectible through injunctive relief. A.M. Skier Agency Inc. v. Gold, 747 A.2d 936, 939-40 (Pa. Super. 2000). See also, Spring Steels Inc. v. Molloy, 400 Pa. 354, 358-60, 162 A.2d 370, 372-73 (1960) (determining that a former employee may use nonconfidential customer lists gained through general sources although he may not use confidential information peculiar to his employer’s business and acquired therefrom); Harsco Corp. v. Klein, 395 Pa. Super. 212, 218, 576 A.2d 1118, 1121 (1990) (stating that the identities of the employer’s customers were not confidential where those identities “would be generally known to all firms in the same business as” the employer). In addition, the plaintiff-employer bears the burden of demonstrating that the information sought for protection is a trade secret and that the employee misappropriated the information in violation of the contract or the confidential relationship. Feight, 48 D.&C.4th at 153-54 (citing Fidelity Fund Inc., 347 Pa. Super. at 121, 500 A.2d at 436).

Olympic did not demonstrate that it invested time, effort or resources to cultivate its customer list. Nor did Olympic show why and how its prices constitute a trade secret. (See N.T. 30-34.) Rather, this information can be obtained by asking its customers how much they pay for pizza boxes and other paper products, and then, a competitor like Dubin, will seek to beat those prices. (See id.) Further, customer service representatives and purchasing agents, who were not under any restrictive covenant, had access to this same information because they had access to the computers. (N.T. 19-21, 54-56, 76-77.) Though Olympic did show that its business was highly competitive and sensitive to prices, this court cannot now conclude that its price lists or customer lists merit protection as a trade secret or as confidential information. Nonetheless, the employment agreement does require the employee to return all of Olympic’s property upon termination of the employment. (Exhibit P-1, at 3.) Pursuant to this agreement, Olympic does retain a proprietary interest in its price books, customer lists and other records. Id. Therefore, in the interests of reaching an equitable result, Reddy and/or those working in concert with him must return any price books, customer lists or other records which rightfully belong to Olympic, so long as Reddy currently has these items in his possession.

II. Olympic Is Entitled to a Preliminary Injunction Enforcing the Restrictive Covenant As Modified

Having resolved that the restrictive covenant meets the three-part test for reasonableness and is prima facie enforceable, this court must still determine whether Olympic is entitled to a preliminary injunction to enforce the covenant. This determination usually turns on the potential for irreparable harm, absent an injunction. Harsco Corp., 395 Pa. Super. at 220, 576 A.2d at 1122 (affirming order denying preliminary injunction where restrictive covenant could not be enforced by a preliminary injunction where plaintiff failed to show likelihood of immediate and irreparable harm).

A preliminary injunction is regarded as “an extraordinary remedy and may only be granted if the plaintiff has established a clear right to the relief sought.” Soja v. Factoryville Sportmen’s Club, 361 Pa. Super. 473, 477, 522 A.2d 1129, 1131 (1987). The purpose of a preliminary injunction is to preserve the status quo as it exists or previously existed before the acts complained of, thus preventing irreparable injury or gross injustice. Maritrans GP Inc. v. Pepper, Hamilton & Scheetz, 529 Pa. 241, 259, 602 A.2d 1277, 1286 (1992). Further, the moving party must establish the following requisite elements: (1) that relief is necessary to thwart immediate and irreparable harm which could not be remedied by damages; (2) that greater injury will result by refusing the injunction than by granting it; (3) that the injunction will restore the parties to the status quo as it existed immediately before the alleged wrongful conduct; (4) that the injunction is reasonably suited to abate such activity; and (5) that the plaintiff’s right to relief is clear. School District of Wilkinsburg v. Wilkinsburg Education Association, 542 Pa. 335, 338 n.2, 667 A.2d 5, 6 n.2 (1995); Valley Forge Historical Society v. Washington Memorial Chapel, 493 Pa. 491, 500, 426 A.2d 1123, 1128 (1981); New Castle Orthopedic Associates v. Burns, 481 Pa. 460, 464, 392 A.2d 1383, 1385 (1978).

These requisite elements “are cumulative, and if one element is lacking, relief may not be granted.” Norristown Municipal Waste Authority v. West Norriton Township Municipal Authority, 705 A.2d 509, 512 (Pa. Commw. 1998).

Here, Olympic has demonstrated that Reddy violated the restrictive covenant by knowingly soliciting Olympic’s customers in violation of the agreement. (N.T. 137-38.) Such proof establishes the requisite element of irreparable harm. As noted by the Pennsylvania Supreme Court,“[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., 471 Pa. at 7, 369 A.2d at 1167. See also, Rollins Protective Services Co. v. Shaffer, 383 Pa. Super. 598, 602, 557 A.2d 413, 415 (1989) (stating that “ ‘unwarranted interference with customer relationships’ would constitute a threat of irreparable harm”).

Moreover, the balance of harms waives in favor of granting the injunction since its denial could permit Reddy and Dubin to exploit and undermine certain of Olympic’s customer relationships. On the other hand, granting the injunction, as modified, would most likely not prevent Reddy or Dubin from making a living since there appear to be many other companies in Philadelphia, Pennsylvania and the surrounding areas whom they can solicit for the paper business other than those companies whose accounts Reddy had handled on Olympic’s behalf. Further, a preliminary injunction where Reddy and Dubin would be prohibited from contacting those companies would restore the status quo that existed before Reddy had contacted them after his employment had ended with Olympic. It seems clear that Olympic should prevail on the merits since Reddy’s actions on Dubin’s behalf appear to violate the restrictive convenant which is prima facie enforceable in equity, once modified by the court.

CONCLUSIONS OF LAW

(1) The restrictive covenant was ancillary to Reddy’s change in employment status to a sales representative at Olympic and was supported by adequate consideration.

(2) Enforcement of the modified restrictive covenant is necessary to protect the good will that Reddy established with the 14 customers on Olympic’s behalf.

(3) The modified restrictive covenant is reasonable in duration and geographic scope.

(4) If Reddy, and those working in concert with him at Dubin continue to solicit Olympic’s customers with whom he established relationships on Olympic’s behalf Olympic will suffer immediate and irreparable harm that cannot be compensated by monetary damages.

(5) A greater injury will occur from denying the preliminary injunction than from partially granting the injunction.

(6) An injunction will restore the parties to the status quo as it existed before Reddy’s wrongful conduct.

(7) Reddy’s solicitation of Olympic’s customers is an actionable wrong and an injunction prohibiting Reddy and Dubin from dealing with the 14 customers is reasonably suited to abate that wrong.

(8) Olympic’s right to relief is clear.

(9) Olympic’s price list and customer lists do not constitute trade secrets and do not deserve protection as confidential information, but Olympic’s proprietary interest in these items should be respected. Therefore, Reddy and/or Dubin should return to Olympic those items if any exist in their possession.

(10) These conclusions require that the court partially grant Olympic’s petition for preliminary injunction. The court’s order prohibits Reddy, Dubin, and those acting in concert with them, from soliciting, contacting or otherwise engaging in business relations with the specifically-named 14 customers until six months after the effective date of Reddy’s termination from Olympic on September 15, 2000.

On the basis of the record, the court will enter a contemporaneous order granting in part, and denying in part, the petition for preliminary injunction. The court will condition the order on Olympic’s filing a bond or depositing legal tender with the prothonotary in the amount of $25,000 within five days of the date of this order. Pa.R.C.P. 1531(b).

ORDER

And now, December 29, 2000, upon consideration of the petition of plaintiff, Olympic Paper Company, for a preliminary injunction, the response of defendants, Brian Reddy and Dubin Paper Company, the respective memoranda and all other matters of record, and after a hearing, it is hereby ordered that the preliminary injunction is granted in part, and denied in part, on the condition that Olympic file a bond or deposit legal tender with the prothonotary in the amount of $25,000 in accordance with Pa.R.C.P. 1531(b) within five days of the date of this order.

In accordance with the findings of fact, discussion and conclusions of law filed contemporaneously in support of this order, Reddy, Dubin, and those acting in concert with them, are enjoined from soliciting, contacting or otherwise engaging in business relations, for six months from Reddy’s termination from Olympic Paper Company on September 15, 2000 with the following customers: Wunderbar, Classic Sub/Pizza, Mount Airy Best, Mystic Pizza, Oak Lane Pizza, Alladin Pizza, Stenton Pizza, Giovanni Pizza, Penrose Diner, Teddy’s Pizza Express, Dwight’s BBQ, Pizza Station, Victoria’s, Area Foods and Randazzo’s.

It is further ordered that Reddy return to Olympic any documents or materials belonging to Olympic presently in Reddy’s possession.

      . Olympic does not seek to prevent Reddy from working at Dubin or in the paper business generally, but it merely seeks to prevent Reddy from soliciting Olympic’s business. (N.T. 16-17.) Following the preliminary injunction hearing, Olympic modified its original request for injunctive relief and now seeks to preliminarily enjoin Reddy and those acting in concert with him from directly or indirectly soliciting business from 29 customers of Olympic until September 15,2001, and to return to Olympic any price lists or company documents based on the restrictive covenant in the employment agreement between Reddy and Olympic. See proposed order, attached to pet’r. post hearing mem. of law.

      . All references to Notes of Testimony are to the November 30,2000 preliminary injunction hearing in courtroom 513, City Hall.

      . As a customer service representative, Reddy’s duties involved answering the telephone, taking orders and processing customer complaints. He also had access to the computer. Further, as purchasing agent Reddy’s duties involved maintaining inventory, reviewing pricing, making computer entries and processing orders. Both customer service people and purchasing agents had access to the computer where price lists and customer names were kept, but neither position required signing a noncompete agreement, unlike the sales representatives. (N.T. 19-21,54-56,76-77.)

      . Exhibits referred to are those exhibits presented during the hearing on November 30,2000.

      . Reddy had also made some sales in his previous positions when he took orders over the telephone. (N.T. 47-48.)

      . The agreement defines “trade secrets” as including the “sales methods, customer lists, and other data relative to [Olympic’s] relationships with its customers, suppliers and competitors____” (Exhibit P-1, at 1.)

      . Exhibit P-2 purports to represent the 30 Olympic customers with whom Reddy had some contact on behalf of Dubin. (N.T. 69-70, 81.) However, Olympic admits that Carambola (no. 27 on the list) belongs to Reddy because it is his brother-in-law. (Id. at 81-83.) As testified by Louis Balias, Reddy had not obtained any of the 30 customers on his own, except for Carambola. (Id. at 37-38.)

      . Reddy also testified that he opened two other accounts, Sea Grille and Land Mark Wholesale, when he was a customer service representative. (N.T. 144-45.) This court, however, is concerned only with those accounts which Reddy had established or maintained in his role as sales representative and not from his previous positions, since the restrictive covenant only came into effect once Reddy became a sales representative. For this same reason, this court is not concerned with the Area Foods’s account (no. 14 on the list) since Area Foods was a “pick-up customer” who would come to Olympic’s location and salesman would not have to actively visit it. (N.T. 86-87.)

      . For example, Ibrahim Elzayar of Manhattan Pizza testified that he would give his business to Reddy, whether at Olympic or at Dubin, because he felt more comfortable with Reddy, even though he had been an Olympic customer before Reddy was an employee of Olympic. (N.T. 113-14,118-19.) This court will not now interfere with Mr. Elzayar’s freedom to choose to whom he wants to send his business. His testimony does, however, demonstrate the need to develop a comfort level with one’s customers.

      . Specifically, Reddy admitted to speaking with the following customers: Wunderbar, Stenton Pizza, Victoria’s, Rising Sun, Sea Grille, Juliano’s, Mr. Pizza, Tananno’s, Mario’s Market, Mario’s Catering, Manhattan Pizza, Shef’s Pizza, Randazzo’s, Carambola, Gatto Pizza, Land Mark Wholesale and Country Pizza (respectively nos. 1,7,13,16,17, 18,19,21-30 of exhibit P-2; N.T. 137.) Reddy also admitted to attempting to speak with other customers. Id.

      . In Brobston, 446 Pa. Super, at 532, 667 A.2d at 735, the court denied the employer’s preliminary injunction where the employer had sought to enforce a two-year restrictive covenant because the employer had fired the employee for failure to perform in a manner which promoted the employer’s legitimate business interest. The court stated that “it is unreasonable as a matter of law to permit the employer to retain unfettered control over that which it has effectively discarded as worthless to its legitimate business interests.” Id.

      . This competition for better prices provides another reason for restricting defendants from soliciting certain customers of Olympic and undermining the good will established by Reddy on Olympic’s behalf.

      . At the preliminary injunction hearing, the parties stipulated that Reddy’s termination date was September 15,2000. (N.T. 65-66.)


author:
WATKINS, Member,
     Per curiam:

text:
    In re Anonymous No. 158 D.B. 2000
    Disciplinary Board Docket no. 158 D.B. 2000.
    January 4, 2002
   To the Honorable Chief Justice and Justices of the Supreme Court of Pennsylvania:

WATKINS, 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 December 14, 2000, a petition for discipline was filed by petitioner, Office of Disciplinary Counsel, against [ ], respondent in these proceedings. The petition charged respondent with violations of Pennsylvania Rules of Professional Conduct 1.3,1.15(a), 1.15(b), and 8.4(c). Respondent filed an answer on January 22,2001, and admitted all allegations raised in the petition, including the admission that he violated those specific Rules of Professional Conduct.

A disciplinary hearing was held on April 5, 2001, before Hearing Committee [ ] comprised of Chair [ ], Esquire, Member [ ], Esquire, and Alternate Member [ ], Esquire. Following briefing by the parties, the Hearing Committee filed a report on July 24, 2001, in which it recommended that respondent be suspended for a period of three months.

No briefs on exceptions were filed by the parties.

This matter was adjudicated by the Disciplinary Board at the meeting of September 11, 2001.

II. FINDINGS OF FACT

The board makes the following findings of fact based upon petitioner’s exhibits and the testimonial evidence of respondent:

(1) Petitioner, whose principal office is located at Suite 3710, One Oxford Centre, Pittsburgh, Pennsylvania 15219, is invested, under Rules 207 of the Pennsylvania Rules of Disciplinary Enforcement, with the power and the 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 that rule.

(2) Respondent was bom in 1927 and was admitted to the practice of law in the Commonwealth of Pennsylvania in 1957. Respondent has been a sole practitioner with a focus in real estate work. (N.T. 11.)

(3) Over the years as an attorney, respondent was a former board of directors’ member of the [ ] Bar Association, an assistant city solicitor for the City of [ ], and is presently an assistant solicitor with [ ] County and the [ ] program. (N.T. 12.)

(4) During the years of 1995 and 1996, respondent was an approved attorney with the [A] Insurance Company which permitted him to conduct business with [A] Attorneys.

[B] SETTLEMENT

(5) In 1995, respondent represented [ ] and [ ] [B] in a closing involving property at [ ]. On October 12, 1995, respondent acted as the settlement agent for the [B]/[C] closing.

(6) As a result of the closing, respondent received from the [B] a sum of $1,178.50, $379 of which represented title insurance premiums and should have been forwarded to [A] after the closing. The proceeds from the closing were deposited into a bank account used for general business purposes, which also contained personal funds re-suiting in a commingling of funds. Respondent did not forward the check for $379 to [A]. (N.T. 17-18.)

(7)Respondent failed to promptly disburse funds he received at the closing. Respondent converted title insurance premiums together with the fee he would have otherwise earned had he paid the title insurance premium to his own use.

[D] SETTLEMENT

(8) Respondent represented [ ] and [ J [D] in December of 1995 in reference, to a refinancing of property located at [ ].

(9) When the real estate closing took place, a check in the amount of $189,300 was deposited by respondent on behalf of the [D] into an account which was used by respondent for general business purposes and which contained his personal funds, constituting a commingling of funds. Of this amount, $812.50 represented title insurance premiums and should have been forwarded to [A] after the closing.

(10) Respondent failed to properly disburse funds he received at the closing, as a result of which he did not earn a legal fee for obtaining the title insurance. Respondent converted title insurance premiums together with the fee he would have otherwise earned had he paid the title insurance premium to his own use.

[E] SETTLEMENT

(11)Respondent, in the summer of 1996, represented [ ] and [ ] [E] in relation to a purchase of property at [ ]. On July 24, 1996, the closing was held, as a result of which a check from the [E] in the amount of $7,004.76 was issued representing the cash due at settlement.

(12) The amount of $575 of that sum was collected by respondent for title insurance.

(13) Respondent deposited proceeds from the [E] closing into an account used for general purposes which also contained personal funds, constituting a commingling of funds.

(14) Respondent failed to remit payment to [A] in the amount of $159.75 after the closing.

(15) Respondent used a substantial portion of the [E] funds by converting the title insurance premiums together with the fees he would have otherwise earned had he paid the title insurance premiums to his own use.

(16) As a result of these three real estate transactions, respondent owed [A] approximately $1,350. (N.T. 18.)

(17) [A] filed a lawsuit against respondent in October of 1997. Respondent allowed default judgment to be entered against him in the amount of $3,250.

(18) During 1995 and 1996, respondent carried malpractice insurance. (N.T. 19-20.)

(19) As an agent of [A], respondent was bonded, which provided separate insurance to cover any mistakes. (N.T. 20.)

(20) All three closings were properly closed otherwise. (N.T. 21.)

(21) The [B] never complained that they were not represented properly, and they received a proper binder at the closing. (N.T. 14-15.)

(22) The [D] never complained that their closing was not conducted properly or in a professional manner or that they did not receive a title policy. (N.T. 15-16.)

(23) The [E] never complained that they were not properly represented or that there was not proper title insurance on the property. (N.T. 16-17.)

(24) On November 19,1999, respondent satisfied the judgment entered against him by [A]. (N.T. 19.)

(25) Respondent no longer practices real estate and he is currently winding down his private practice. (N.T. 29.)

(26) With respect to the three transactions with [A] Attorneys, respondent knew that what he was doing was wrong and it was an intentional decision on his part to not pay what he was otherwise obligated to pay. (N.T. 33.)

MITIGATING CIRCUMSTANCES

(27) The respondent has never been the subject of a disciplinary action other than the current matter. (N.T. 27.)

(28) The respondent made restitution in 1999. (N.T. 19.)

(29) The respondent testified that in 1995 and 1996 his diabetic condition which he has had for 15 to 20 years was no longer under control and he was now becoming insulin dependent. The overall effect on his health was that he was becoming lethargic, depressed, forgetful and it affected his vision. (N.T. 23-25.)

(30) Respondent did not present any expert testimony demonstrating a causal connection between the respondent’s diabetic condition and the underlying misconduct.

(31) Respondent’s wife had two hip operations between 1995 and 1997, which caused him to take care of her and neglect his practice, creating a lack of cash flow. (N.T. 26-27.)

(32) Respondent testified that he realized what he did was wrong. Respondent did not turn over the title insurance premiums because he personally needed the money. (N.T. 29, 40.)

(33) In 1999, a civil action was initiated against respondent by [F] Insurance Company, his malpractice carrier. The basis of the lawsuit was the failure of respondent to pay the $2,500 deductible. Judgment has been entered and respondent is making payments. (N.T. 37-38, 45.)

(34) In 1999, [G] Company also brought a suit against respondent and payments are currently being made on that judgment. (N.T. 38-39, 45.)

(35) Respondent has a fine reputation in general in [ ] County. (N.T. 51.)

(36) Respondent has been practicing law for 44 years.

(37) Respondent presented favorable character witnesses.

(38) Respondent had financial difficulties during the years in question.

m. CONCLUSIONS OF LAW

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

(1) RPC 1.3 — A lawyer shall act with reasonable diligence and promptness in representing a client.

(2) RPC 1.15(a) — A lawyer shall hold property of clients or third persons that is in a lawyer’s possession in connection with a representation separate from the lawyer’s own property.

(3) RPC 1.15(b) — Upon receiving funds or other property in which a client or third person has an interest, a lawyer shall promptly notify the client or third person.

(4) RPC 8.4(c) — It is professional misconduct for a lawyer to engage in conduct involving dishonesty, fraud, deceit or misrepresentation.

IV. DISCUSSION

This is the case of a respondent who is 74 years old and has been practicing law since 1957 as a sole practitioner handling civil cases and real estate work. Respondent has no prior discipline and enjoys a very good reputation in [ ] County. The evidence of record demonstrates that during the years 1995 and 1996, respondent was the approved attorney for [A] Insurance Co. In that capacity, between the fall of 1995 and the summer of 1996, respondent handled three residential real estate transactions wherein he collected title insurance premiums and commissions totaling approximately $3,700, which funds he commingled with his own in his general account and subsequently converted to his own use and purposes without sending in the insurance premiums or additional documentation necessary to [A] to issue the owner and lender title insurance policies. Respondent did properly handle all other aspects of those transactions. None of the three clients made complaints against respondent and respondent made [A] whole by paying the judgment against him.

Respondent admitted that his conduct was in violation of the Rules of Professional Conduct, and he candidly admitted at the hearing that he intentionally failed to send [A] the premiums due them, even though he knew it was wrong, “because he needed the money.” (N.T. 33, 40.) Respondent testified to his personal circumstances at the time of the misconduct. Respondent suffers from diabetes and his health was not good. His wife had two hip operations between 1995 and 1997, she was bedridden, and he had to care for her and take her to therapy. This caused him to be out of the office 50-75 percent of the time, a substantial amount for a sole practitioner, which caused cash flow problems. While these circumstances might well explain respondent’s need for money, they do not in any way justify or excuse his misappropriation of client and third-party funds. An attorney’s personal financial difficulties in no way mitigates the seriousness of his misconduct involving client funds. Office of Disciplinary Counsel v. Knepp, 497 Pa. 396, 441 A.2d 1197 (1982).

Misappropriation of client or third party funds is a serious offense. Office of Disciplinary Counsel v. Monsour, 549 Pa. 482, 701 A.2d 556 (1997). However, every case is entitled to be evaluated individually with attention given to all aggravating and mitigating circumstances. Office of Disciplinary Counsel v. Lucarini, 504 Pa. 271, 472 A.2d 186 (1983). The board believes that respondent’s full cooperation with the Office of Disciplinary Counsel, his 44 years of unblemished practice of law in the Commonwealth, and the high regard in which he is held by fellow lawyers deserve consideration.

Case law suggests that some length of suspension is appropriate. Clearly less than a suspension would not adequately address the intentional and dishonest nature of respondent’s acts. See In re Anonymous No. 6 D.B. 86, 2 D.&C.4th 67 (1987) (attorney received a three-month suspension for having removed $14,000 from his firm’s escrow account); Office of Disciplinary Counsel v. Kochel, 515 Pa. 449, 529 A.2d 1075 (1987) (attorney received a three-month suspension after he misappropriated $11,000 from client escrow accounts on 23 occasions); In re Anonymous No. 49 D.B. 1998, No. 668 Disciplinary Docket no. 3 (Pa. May 8, 2001) (attorney received a one year and one day suspension after he converted six checks belonging to his law firm totaling $31,500); In re Anonymous No. 50 D.B. 87, 3 D.&C.4th 627 (1989) (two year suspension for a lawyer who converted a check in the amount of $15,000 but who did not accept responsibility and instead argued he had no duty to keep the funds segregated).

The board is cognizant that respondent plans to wind down his practice, does not do real estate work anymore and has approximately 10-15 active clients. A suspension of three months, as recommended by the hearing committee, appropriately addresses respondent’s misconduct while accounting for the unique facts of this matter.

V. RECOMMENDATION

The Disciplinary Board of the Supreme Court of Pennsylvania recommends that the respondent, [ ], be suspended from the practice of law in the Commonwealth of Pennsylvania for a period of three months.

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

Board Member Cunningham dissented and would recommend a one-year suspension.

Board Members Halpem and Stewart did not participate in the September 11, 2001 adjudication.

ORDER

Per curiam:

And now, March ll, 2002, upon consideration of the report and recommendations of the Disciplinary Board dated January 4, 2002, it is hereby ordered that [respondent] be and he is suspended from the Bar of this Commonwealth for a period of three months 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.