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BELL FUEL CORPORATION v. ANTHONY CATTOLICO (06/10/88)

filed: June 10, 1988.

BELL FUEL CORPORATION
v.
ANTHONY CATTOLICO, JR., APPELLEE



Appeal from the Order entered on July 31, 1987, In the Court of Common Pleas of Philadelphia County, Civil Division, at No. 2232 July Term 1987.

COUNSEL

Barry M. Klayman, Philadelphia, for appellant.

Joseph A. Venuti, Jr., Philadelphia, for appellee.

Beck, Kelly and Johnson, JJ.

Author: Beck

[ 375 Pa. Super. Page 241]

This is an appeal from an order of the trial court denying appellant Bell Fuel Corporation's request for a preliminary injunction against its former employee, appellee Anthony Cattolico, Jr.*fn1 Bell sought a preliminary injunction to restrain Cattolico from soliciting Bell's customers, using or disclosing Bell's confidential business information and retaining Bell's confidential business records in alleged violation of the law of unfair competition and the terms of Cattolico's employment agreement with Bell. In pertinent part, the employment agreement provides as follows:

Employee covenants and agrees that Employee will not, during the term of his employment or thereafter, for any reason or purpose whatsoever, use for Employee's personal benefit, or disclose, communicate or divulge to, or use for the benefit, direct or indirect, of any person, firm, association or company other than the Company, any information as to business methods, business policies, procedures, techniques, research or development projects or results thereof, trade secrets, knowledge and processes used or developed by the Company, any addresses of customers of the Company, data on or relating to past, present or prospective customers of the Company or any other confidential information relating to or dealing with the business operations or activities of the Company,

[ 375 Pa. Super. Page 242]

    made Employee or learned or acquired by Employee while in the employ of the Company. Employee acknowledges that such confidential information is the sole and exclusive property of the Company and maintenance of the confidentiality thereof is essential to the Company's ability to conduct its business.

Employee covenants and agrees that Employee will not, during the term of Employee's employment or thereafter, contact or solicit customers of the Company except on behalf of the Company or solicit employees to leave the Company.

[Upon termination of employment, employee will] [d]eliver to the Company any and all records, contracts, lists of names or other customer data and any other papers which have come into Employee's possession by reason of Employee's employment with Company or which Employee holds for the Company, irrespective of whether or not any of said items were prepared by Employee, and Employee shall not retain memoranda or copies of any of said items.*fn2

The procedural history of this matter can be briefly stated as follows. On July 17, 1987, Bell contemporaneously filed a Complaint in Equity and a Petition for Special and Preliminary Injunction alleging breach of the restrictive covenant and seeking enforcement thereof as well as damages. The Petition was supported by an affidavit of William A. Selvagn, Sales Manager of Bell and Cattolico's supervisor. On that date, Judge Diaz issued a Rule to

[ 375 Pa. Super. Page 243]

Show Cause why the preliminary injunction should not issue, returnable on July 21, 1987. Actually, the so-called hearing on the preliminary injunction was not conducted until July 28, 1987, before a different judge.

At the hearing, counsel for appellee handed to the court and opposing counsel appellee's Response to the Petition for Special and Preliminary Injunction, accompanied by an affidavit of appellee. The trial court then elicited from counsel opening remarks and soon reached the conclusion that the court might be able to resolve the preliminary injunction matter on either "summary judgment or demurrer" since counsel for appellee raised several arguments in support of entry of judgment for appellee as a matter of law. Therefore, the trial court decided that although it would allow the testimony to begin and to continue until shortly before the end of that hearing day, the court would then hear argument on the issues that might entitle Cattolico to denial of the injunction as a matter of law. The court did not make clear exactly what procedural posture it would then consider the matter to be in. The court merely stated that it considered the arguments loosely to be either in support of a demurrer or a motion for summary judgment. The court committed itself to rendering decision on those issues by the following day. The court specifically stated that in so deciding, it would limit its consideration to only the Petition and Response and supporting affidavits and memoranda of law. It would not consider any testimony elicited at the hearing.

The court then allowed Bell to call its first witness, Cattolico, who was called as on cross. After the examination of Cattolico was complete, the court heard oral argument on what it then called appellee's "motion for summary judgment" and terminated the hearing pending decision on the motion. The next day, the court rendered its written decision granting what it called "summary judgment" to appellee and denying appellant's Petition for Preliminary Injunction. The court found as a fact that:

[ 375 Pa. Super. Page 2441]

. Cattolico was employed by Bell on September 17, 1981 and, ancillary to that employment, entered into a covenant not to compete and/or divulge which " inter alia prohibited him from contacting or soliciting customers" of Bell except on behalf of Bell either during or after his employment, and which contained no territorial or time limitations.

2. Cattolico voluntarily terminated his employment with Bell on June 16, 1987, went to work for a competitor of Bell and contacted customers of Bell to solicit their business for his new employer.

The court made the following conclusions of law:

1. The covenant not to compete, which fails to specify time or territorial limits, is void as unreasonable in that it imposes an unconscionable restraint on appellee's ability to pursue his occupation.

2. The covenant may not be modified because it is unreasonable on its face.

3. Appellee did not divulge any trade secrets of Bell's.

4. Appellant is not entitled to an injunction because it has failed to demonstrate a right to relief which is clear and free from doubt.

A trial court has broad discretion in granting or denying a preliminary injunction. We will reverse such a decision only if the trial court abused its discretion or committed a palpable legal error. Merrill Lynch, Pierce, Fenner & Smith v. Moose, 365 Pa. Super. 40, 47, 528 A.2d 1351, 1355 (1987) (citing, inter alia, Unionville -- Chadds Ford School District v. Rotteveel, 87 Pa. Commw. 334, 336-7, 487 A.2d 109, 111 (1985)). We must uphold the trial court's decision if it can be sustained on "any apparently reasonable ground." Id.; John G. Bryant Co., Inc. v. Sling Testing and Repair, Inc., 471 Pa. 1, 369 A.2d 1164 (1977); Sidco Paper Co. v. Aaron, 465 Pa. 586, 351 A.2d 250 (1976); Air Products and Chemicals, Inc. v. Johnson, 296 Pa. Super. 405, 442 A.2d 1114 (1982); Boyd v. Cooper, 269 Pa. Super. 594, 410 A.2d 860 (1979).

[ 375 Pa. Super. Page 245]

The trial court must not grant a preliminary injunction unless the petitioning party has satisfied the following rigorous standard:

[F]irst, that is is necessary to prevent immediate and irreparable harm which could not be compensated by damages; second, that greater injury would result by refusing it than by granting it; and third, that it properly restores the parties to their status as it existed immediately prior to the alleged wrongful conduct . . . . Even more essential, however, is the determination that the activity sought to be restrained is actionable, and that the injunction issued is reasonably suited to abate such activity. And unless the plaintiff's right is clear and the wrong is manifest, a preliminary injunction will not generally be awarded . . . .

City of Philadelphia v. District Council 33, 112 Pa. Commw. 90, 535 A.2d 231, 236 (1987) (quoting New Castle Orthopedic Associates v. Burns, 481 Pa. 460, 464, 392 A.2d 1383, 1385 (1978)); Albee Homes, Inc. v. Caddie Homes, Inc., 417 Pa. 177, 181, 207 A.2d 768, 770 (1965).

Appellant first argues that the proper determination of this appeal depends in part on a clear understanding of the procedural posture of the case. We agree that the procedural aspect of this case is significant. Appellant contends that in fact, the trial court granted appellee a demurrer, not summary judgment, to appellant's Petition for Preliminary Injunction, and that our review must, therefore, be governed by the standards applicable to review of a demurrer. Accepting this argument, we would take every well-pleaded fact in appellant's petition as true, accept all reasonable inferences therefrom, but draw our own ...


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