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Pinnacle Transportation Systems, Inc. v. Welch

February 15, 2007

PINNACLE TRANSPORTATION SYSTEMS, INC., PLAINTIFF,
v.
EARNEST L. WELCH, ROBIN N. KITCHENS, SHAWNA M. BANEY,: AMBER L. HERN, MICHAEL ERDLEY, AND GALAXY TRANSPORTATION, INC., DEFENDANTS



The opinion of the court was delivered by: Judge Muir

Complaint filed 10/04/2006

ORDER

THE BACKGROUND OF THIS ORDER IS AS FOLLOWS: On October 25, 2006, Plaintiff Pinnacle Transportation Systems, Inc. (hereinafter "Pinnacle Transportation"), filed an amended eight-count complaint against Defendants Earnest L. Welch, Robin N. Kitchens, Shawna M. Baney, Amber L. Hern, Michael Erdley, and Galaxy Transportation, Inc. (hereinafter "Galaxy Transportation"). Our jurisdiction in this case is based on the diversity of the parties' citizenship. While the Defendants are Pennsylvania citizens, Pinnacle Transportation is a Nevada corporation.

All of the claims in this action stem from various business relationships among the parties. In essence, Pinnacle Transportation alleges that the Defendants have unlawfully used information obtained from Pinnacle Transportation to start their own business (Galaxy Transportation) which competes directly with Pinnacle Transportation. Pinnacle Transportation asserts the following specific claims in its amended complaint: 1) Defendants Welch, Kitchens, Baney, and Hern breached their employment contracts with Pinnacle Transportation by, inter alia, soliciting its customers, competing against it, and divulging certain confidential information; 2) all of the Defendants tortiously interfered with Pinnacle Transportation's contractual relations; 3) all of the Defendants tortiously interfered with Pinnacle Transportation's business and prospective contractual relations; 4) all of the Defendants misappropriated Pinnacle Transportation's trade secrets; 5) all of the Defendants converted Pinnacle transportation's confidential business information; 6) all of the Defendants competed unfairly against Pinnacle Transportation; 7) Defendants Welch, Kitchens, Baney, and Hern breached the common law duty of loyalty owed to Pinnacle Transportation; and 8) all of the Defendants unlawfully conspired against Pinnacle Transportation.

On December 27, 2006, Defendant Erdley filed a motion to dismiss all of the claims against him. A brief in support of that motion was filed on January 8, 2007. Pinnacle Transportation filed its opposition brief on January 26, 2007. The time allowed for Erdley to file a reply brief expired on February 12, 2007, and to this date no such brief has been filed.

Erdley's motion to dismiss the claims against him is ripe for disposition.

In determining whether a plaintiff has stated a claim upon which relief may be granted, a court must accept the veracity of the plaintiff's allegations. Scheuer v. Rhodes, 416 U.S. 232, 236 (1974). Furthermore, "the complaint should not be dismissed for failure to state a claim unless it appears beyond doubt that the plaintiff can prove no set of facts in support of his claim which would entitle him to relief." Conley v. Gibson, 355 U.S. 41, 45-6 (1957); District Council 47 v. Bradley, 795 F.2d 310 (3d Cir. 1986). However, the court is "not required to accept legal conclusions either alleged or inferred from the pleaded facts." Kost v. Kozakiewicz, 1 F.3d 176, 183 (3d Cir. 1993)(quoting Mescall v. Burrus, 603 F.2d 1266, 1269 (7th Cir. 1979)).

The Court of Appeals for the Third Circuit has further declared that

[a] plaintiff generally need not explicitly allege the existence of every element in a cause of action if fair notice of the transaction is given and the complaint sets forth the material points necessary to sustain recovery. ... Simply put, the complaint will withstand a Fed.R.Civ.P. 12(b)(6) attack if the material facts as alleged, in addition to inferences drawn from those allegations, provide a basis for recovery.

Menkowitz v. Pottstown Memorial Medical Center, 154 F.3d 113, 124-125 (3d Cir. 1998). We will apply those concepts to Erdley's motion to dismiss the claims against him.

Counts 1 and 7 in Pinnacle Transportation's complaint do not contain any claims against Erdley. In count 2 Pinnacle Transportation alleges that all of the Defendants tortiously interfered with Pinnacle Transportation's contractual relations. The elements of such a claim are (1) the existence of a contractual ... relation between the complainant and a third party; (2) purposeful action on the part of the defendant, specifically intended to harm the existing relation; (3) the absence of privilege or justification on the part of the defendant; and (4) the occasioning of actual legal damage as a result of the defendant's conduct.

Reading Radio, Inc. v. Fink, 833 A.2d 199, 211 (Pa. Super. 2003). The contracts at issue in this count are the employment contracts between Pinnacle Transportation and its former employees which contain the covenants not to compete at issue in this case.

Erdley argues that the claim against him in count 2 should be dismissed because "[t]here is no allegation to support that he took any steps to induce the remaining individual defendants to breach or not perform their alleged contractual obligations." (Brief in Support of Motion to Dismiss, p. 6)

Pinnacle Transportation alleges that "Erdley created and/or began working for Galaxy, in direct competition with Pinnacle," and that "as of August 7, 2006, Erdley was acting as the President of Galaxy." (Complaint, pp. 9-10, ΒΆ30) In other portions of its complaint Pinnacle Transportation alleges that the other individual Defendants, all of whom were former employees of Pinnacle Transportation, joined Erdley in creating and operating Galaxy Transportation. Paragraph 70 of the complaint contains the allegation that "all Defendants intentionally induced one or more of Welch, Kitchens, Baney and/or Hern to breach ...


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