The opinion of the court was delivered by: Chief Judge Kane
Before the Court are motions to stay (Doc. No. 5) and to stay discovery pending mediation and/or arbitration (Doc. No. 14) filed by Defendants Tranace (Tracy) Taylor ("Ms. Taylor") and Tango Productions ("Tango") (collectively "Defendants"). The motions are fully briefed and are ripe for disposition. For the reasons that follow, Defendants' motions will be denied.
The instant dispute focuses on Defendants' role in a business arrangement that went awry between Braun Media Solutions, Inc., ("BMS") and Ms. Taylor's husband and his wholly owned corporation. BMS is a Minnesota corporation that, among other things, assists clients in implementing marketing and distribution programs involving digital media. Ms. Taylor is a Pennsylvania resident who is an officer of and who holds an ownership interest in Tango, a corporation engaged in the business of filming, producing, editing, and mastering videos in both digital and analog media. Ms. Taylor's husband, Todd Taylor ("Mr. Taylor"), is the sole owner and officer of Taylor'd Solutions, Inc., ("TSI"), a Pennsylvania corporation through which Mr. Taylor engaged in the business of filming, producing, editing, and mastering videos in both digital and analog media. Both Tango and TSI operate out of the Taylor residence.
In March 2003, BMS, Mr. Taylor, and TSI entered into an arrangement whereby BMS would purchase the assets of TSI, directly and indirectly assume equipment leases entered into by TSI, and employ Mr. Taylor as BMS's Director of Video Services (these contracts will be collectively referred to as the "March 2003 agreements"). Pursuant to the March 2003 agreements, Mr. Taylor was hired and paid by BMS for his work, and BMS began making payments on the leases for equipment located at TSI's former studio. BMS additionally built a new production studio for Mr. Taylor at the Taylor residence, enhanced and upgraded the existing equipment there, and purchased new equipment and new music and video licenses to be stored and/or used by Mr. Taylor in the studios at the Taylor residence. These assumed leases, equipment enhancements and upgrades, newly purchased equipment, and music and video licenses will be collectively referred to as the "BMS assets."
At the time BMS, Mr. Taylor, and TSI entered into the March 2003 agreements, Mr. Taylor and BMS had been working together on a major account, A Beca Academy, Inc., d/b/a Pensacola Christian College ("PCC"). According to BMS, under their employment agreement, Mr. Taylor was the primary contact with PCC and was commissioned on sales to PCC. In the spring of each year through 2005, BMS provided services in connection with a PCC program, the PCC Curriculum Update, which generated large revenues and significant gross margin income to BMS. BMS expected to receive the PCC Curriculum Update for 2006, and it had sent Mr. Taylor to meet with PCC at PCC's headquarters to begin planning the program and to firm up commitments for the 2006 work. Instead of receiving the expected orders for the 2006 PCC Curriculum Update, BMS received a request from Mr. Taylor that he be allowed to handle the update on his own or through his wife's company, while still being employed by BMS. This request was denied, and Mr. Taylor resigned from BMS.
After Mr. Taylor's resignation, BMS learned that, "acting on the advice of and with the assistance, encouragement and support of Ms. Taylor and Tango," Mr. Taylor did the following:
(1) solicited and placed the 2006 PCC Curriculum Update business with himself or companies with which Mr. Taylor and his wife were affiliated while he was still employed by BMS; (2) "breached his employment agreement with BMS by soliciting, contracting and retaining certain BMS vendors, referral sources and/or strategic allies to help himself -- or companies such as Tango . . . -- secure and fulfill the 2006 PCC Curriculum Update business;" (3) produced videos while employed with BMS and otherwise directly competed for business with BMS in violation of the March 2003 agreements; and (4) refused to return the BMS assets to BMS.
BMS asserts that during the relevant time period, Defendants were aware of the business relationship between BMS and PCC, BMS's contemplation of and substantial investment in the acquisition of the 2006 PCC Curriculum Update business, and the provisions of the March 2003 agreements between BMS, Mr. Taylor, and TSI. BMS further asserts that Defendants intentionally, wrongfully, and maliciously encouraged Mr. Taylor's breach of his employment agreement with BMS and engaged in unfair competition. Finally, BMS asserts that Defendants have converted the BMS assets and have been unjustly enriched by the unauthorized possession and/or use of these assets at the expense of BMS.
BMS filed a civil action in the District Court of Minnesota against Mr. Taylor and TSI for common-law unfair competition, conversion, and breach of contract based on the above-mentioned events. (Doc. No. 1-3.) By stipulation of the parties, the matter was remanded for arbitration before the American Arbitration Association. (Doc. No. 5-3.) Mediation is scheduled for December 12, 2006, (Doc. No. 16, at 1), and arbitration is scheduled for hearing in April 2007 (Doc. No. 19, at 8).
BMS filed the instant civil action against Defendants Ms. Taylor and Tango in the Court of Common Pleas of York County, Pennsylvania, on September 6, 2006, asserting claims of interference with actual or prospective contractual relations, unfair competition, conversion, and unjust enrichment. On October 11, 2006, Defendants removed the action to the Middle District of Pennsylvania, invoking the Court's diversity jurisdiction.
In the motions now before the Court, Defendants urge that the instant suit between Ms. Taylor and Tango should be stayed pending the mediation and arbitration of the Minnesota lawsuit between BMS and Mr. Taylor and TSI. Defendants assert that the underlying facts of the two cases are the same and that, "[s]hould that forum determine Braun has no cause against Todd Taylor or his company, no further action need be taken in this case." (Doc. No. 14, at 9.) According to Defendants, granting a stay or a stay of discovery would ...