The opinion of the court was delivered by: Judge Caputo
Presently before the Court are Defendants Tandem Industries, Gyp's Market, James Lawson, and Thomas Mulhearn's Motion for Summary Judgment (Doc. 45) and Plaintiff Colgate-Palmolive's Motion for Summary Judgment (Doc. 50). For the reasons discussed in detail below, Defendants Tandem Industries, Gyp's Market, James Lawson, and Thomas Mulhearn's motion will be denied, and Plaintiff Colgate-Palmolive's motion will be denied in part and granted in part.
The Court has jurisdiction over this matter pursuant to 28 U.S.C. § 1332.
Plaintiff Colgate-Palmolive Company ("Colgate") is a Delaware Corporation with a principal place of business in New York, New York. (Defs.' SOF, Doc. 46 ¶ 1; Pl.'s Reply to Defs.' SOF, Doc 79 ¶ 1.) Colgate is a leading consumer products company, designing and manufacturing products in the areas of oral care, personal care, home care, and pet nutrition. (Defs.' SOF ¶ 3; Pl.'s Reply to Defs.' SOF ¶ 3.) Defendant Tandem Industries is a business operating in Freeland, Pennsylvania, registered to Defendants James Lawson and Thomas Mulhearn. (Defs.' SOF ¶ 2; Pl.'s Reply to Defs.' SOF ¶ 2.) Tandem Industries operates a store in Freeland, Pennsylvania named Gyp's Market. (Id.)
Defendant Richard Flower was employed by Colgate from 1976 to August 2006, last serving in the position of Account Business Manager ("ABM"). (Defs.' SOF ¶ 4; Pl.'s Reply to Defs.' SOF ¶ 4.) As a Colgate employee, Defendant Flower received a copy and was aware of a Code of Conduct (the "Code") that directed employees to "avoid any activity or association which conflicts with or appears to conflict with [employees'] exercise of judgment in the Company's best interest." (Pl.'s SOF, Doc. 66 ¶¶ 2-4.) The Code further instructed Colgate employees to maintain accurate company records, and permitted Colgate employees to use company assets only for lawful, proper and authorized practices. (Id. ¶¶ 5-6.)
Starting in 1996, Defendant Flower began supplying Defendants Tandem Industries, Gyp's Market, Thomas Mulhearn, and James Lawson (the "Tandem Defendants") with Colgate product. (Pl.'s SOF ¶ 20; Defs.' Reply to Pl.'s SOF ¶ 20.) Under the Defendants' arrangement, Flower shipped and personally delivered Colgate merchandise to the Tandem Defendants. (Id.) In many instances, the product delivered to the Tandem Defendants had been returned to Colgate from other retailers. (Pl.'s Reply to Defs.' SOF ¶ 39.) The Tandem Defendants examined and sorted this product, kept what they could sell and threw away what they could not. (Pl.'s SOF ¶ 20; Defs.' Reply to Pl.'s SOF ¶ 20; Defs.' SOF ¶ 40; ; Pl.'s Reply to Defs.' SOF ¶ 40.) This practice continued for ten (10) years, until 2006. (Pl.'s SOF ¶ 23; Defs.' Reply to Pl.'s SOF ¶ 23.)
During this period, Defendant Flower made payments to Defendants Tandem Industries through the Total Account Management ("TAM") System and predecessor system.
(Defs.' SOF ¶¶ 4, 46; Pl.'s Reply to Defs.' SOF ¶¶ 4, 46; Pl.'s SOF ¶ 22; Defs.' Reply to Pl.'s SOF ¶ 22.) These payments were made by Colgate-issued checks and totaled approximately six hundred seventy-four thousand, seventy dollars and fifty-five cents ($674,070.55) for the ten (10) year period from 1996 to 2006. (Pl.'s SOF ¶ 23; Defs.' Reply to Pl.'s SOF ¶ 23.) The Tandem Defendants had received free product and checks from other manufacturers, but Defendant Mulhearn testified that he could not remember any other deal with a company where the company provided free products for sale, while also providing regular check payments. (Pl.'s SOF ¶ 26; Defs.' Reply to Pl.'s SOF ¶ 26.) Defendant James Lawson also testified that he could not recall any deal with any suppler that was as good as the Tandem Defendants' deal with Colgate, and further testified that ninety-nine percent (99%) of the checks the Tandem Defendants received from manufacturers were from Colgate. (Id.) The Tandem Defendants had no expectation that they would receive any checks from Colgate when they purchased or received Colgate product from any source other than the free product Defendant Flower provided to them. (Pl.'s SOF ¶ 27; Defs.' Reply to Pl.'s SOF ¶ 27.)
In addition to the free Colgate product Defendant Flower provided to the Tandem Defendants, he also sold them Colgate product at Colgate list prices (the same price Colgate would have sold it for). (Pl.'s SOF ¶ 34; Defs.' Reply to Pl.'s SOF ¶ 34.) Defendant Flower specifically asked the Tandem Defendants to pay him directly for these sales, rather than paying Colgate. (Id.) On occasion, Defendant Flower requested that his payment be made in cash and the Tandem Defendants honored these requests. (Pl.'s SOF ¶ 35; Defs.' Reply to Pl.'s SOF ¶ 35.) Defendant Lawson testified that it was not uncommon to personally pay brokers who sold the Tandem Defendants samples or "car stock". (Id.) In total, Defendant Flower received approximately twenty-five thousand dollars ($25,000.00) from these sales. (Pl.'s SOF ¶ 36; Defs.' Reply to Pl.'s SOF ¶ 36.)
In August 2006, Defendant Flower retired from Colgate pursuant to a Voluntary Early Retirement Program and received severance pay and enhanced pension benefits. In his severance agreement, he agreed and promised that he did not violate Colgate's Code of Conduct during his employment. (Pl.'s SOF ¶¶ 36, 37; Defs.' Reply to Pl.'s SOF ¶¶ 36, 37.) After the Tandem Defendants were notified of Defendant Flower's retirement, they did not contact Colgate or Defendant Flower to see if they would continue receiving free products and payments from Colgate. (Pl.'s SOF ¶ 41; Defs.' Reply to Pl.'s SOF ¶ 27.) Following Defendant Flower's retirement, the Tandem Defendants have received no payments or free product from Colgate. (Pl.'s SOF ¶ 42; Defs.' Reply to Pl.'s SOF ¶ 42.)
Following his retirement, Defendant Flower met with representatives from Colgate to discuss the payments made to the Tandem Defendants. (Pl.'s SOF ¶ 43; Defs.' Reply to Pl.'s SOF ¶ 43.) In a letter to the Tandem Defendants dated August 20, 2007, Colgate stated that it had no record of ever doing business with Defendants Gyp's Market or Tandem Industries and requested the Tandem Defendants' explanation for the payments they had received from Colgate. (Pl.'s SOF ¶ 44; Defs.' Reply to Pl.'s SOF ¶ 44.) In a letter dated August 31, 2007 The Tandem Defendants' counsel responded that, when dealing with Defendant Flower, the Tandem Defendants had no reason to believe that they were dealing with anyone except Colgate through its authorized representative or agent, and that the details of the Tandem Defendants' dealings with Defendant Flower should be reflected in Colgate's business records. (Pl.'s SOF ¶ 45; Defs.' Reply to Pl.'s SOF ¶ 45.)
On September 19, 2007, Colgate filed it's Complaint (Doc. 1), initiating this action and bringing state law claims against Defendant Flower for fraud (Count I) and breach of fiduciary duty (Count II); against the Tandem Defendants for aiding and abetting Flower's breach of fiduciary duty (Count III), unjust enrichment (Count IV), and conversion (Count V); and against all Defendants for civil conspiracy (Count VI). On October 8, 2007, the Tandem Defendants filed a Motion to Dismiss and a Motion to Sever (Doc 3), and on October 10, 2007 Defendant Flower submitted his Answer and Affirmative Defenses (Doc. 8). On November 27, 2007, the Court entered an Order (Doc. 13) granting the Tandem Defendant's Motion to Dismiss with respect to the Count III claim for "aiding and abetting a breach of fiduciary duty," but denying the motion with respect to all other counts applicable to the Tandem Defendants (Counts IV, V, and VI). The Tandem Defendants filed their Answer and Affirmative Defenses (Doc. 14) on December 7, 2007, and on June 13, 2008 the case was assigned to the "standard" case management track (Doc. 22). On May 30, 2008, Plaintiff filed an Amended Complaint (Doc. 19) including the previously-dismissed "aiding and abetting a breach of fiduciary duty" claim from the original Complaint. On June 30, 2008 the Court approved a Stipulation (Doc. 29) between the parties that Count III of the Amended Complaint was identical to Count III of Plaintiff's original Complaint, which had already been dismissed by the Court's November 27, 2007 Order.
Following the close of discovery, on November 24, 2008, the Tandem Defendants filed their Motion for Summary Judgment (Doc. 45) currently before the Court. The Tandem Defendants also provided a Brief in Support (Doc. 48), along with a Statement of Facts (Doc. 45) as required by Middle District of Pennsylvania Local Rule 56.1. On December 23, 2008, Colgate filed a Brief in Opposition (Doc. 78) and an Answer to Defendants' Statement of Facts (Doc. 79) and, on January 16, 2009, the Tandem Defendants filed their Reply Brief (Doc. 91). As the Tandem Defendants' Motion for Summary Judgment has been thoroughly briefed, it is currently ripe for disposition.
Similarly, on November 24, 2008, Plaintiff Colgate-Palmolive filed its Motion for Summary Judgment (Doc. 50) that is currently before the Court, along with a Brief in Support (Doc. 65) and a Statement of Facts (Doc. 66). On December 23, 2008, the Tandem Defendants filed their Answer to Plaintiff's Statement of Facts (Doc. 72) and a Brief in Opposition (Doc. 84) to Plaintiff's motion. Defendant Flower also filed an Affidavit (Doc. 83) and Brief in Opposition (Doc. 84) on December 23, 2008, and filed an additional set of Exhibits (Doc. 30) on December 30, 2008. Plaintiff filed its Reply Brief on January 16, 2009. Thus, Plaintiff's Motion for Summary Judgment has been thoroughly briefed and is now ripe for disposition.
Summary judgment is appropriate if "the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law." FED. R. CIV. P. 56(c). A fact is material if proof of its existence or nonexistence might affect the outcome of the suit under the applicable substantive law. See Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986).
Where there is no material fact in dispute, the moving party need only establish that it is entitled to judgment as a matter of law. Where, however, there is a disputed issue of material fact, summary judgment is appropriate only if the factual dispute is not a genuine one. See id. at 248. An issue of material fact is genuine if "a reasonable jury could return a verdict for the nonmoving party." Id.
Where there is a material fact in dispute, the moving party has the initial burden of proving that: (1) there is no genuine issue of material fact; and (2) the moving party is entitled to judgment as a matter of law. See CHARLES ALAN WRIGHT & ARTHURR. MILLER, FEDERAL PRACTICE AND PROCEDURE: CIVIL 2D § 2727 (2d ed. 1983). The moving party may present its own evidence or, where the nonmoving party has the burden of proof, simply point out to the Court that "the nonmoving party has failed to make a sufficient showing of an essential element of her case." Celotex Corp. v. Catrett, 477 U.S. 317, 323 (1986).
All doubts as to the existence of a genuine issue of material fact must be resolved against the moving party, and the entire record must be examined in the light most favorable to the nonmoving party. See White v. Westinghouse Elec. Co., 862 F.2d 56, 59 (3d Cir. 1988). Once the moving party has satisfied its initial burden, the burden shifts to the nonmoving party to either present affirmative evidence supporting its version of the material facts or to refute the moving party's contention that the facts entitle it to judgment as a matter of law. See Anderson, 477 U.S. at 256-57.
The Court need not accept mere conclusory allegations, whether they are made in the complaint or a sworn statement. Lujan v. Nat'l Wildlife Fed'n, 497 U.S. 871, 888 (1990). In deciding a motion for summary judgment, "the judge's function is not himself to weigh the evidence and determine the truth of the matter but to determine whether there is a genuine issue for trial." Anderson, 477 U.S. at 249.
I. Tandem Defendants' Motion for Summary Judgment
A. Statute of Limitations
The Tandem Defendants argue that Plaintiff's claims for unjust enrichment, conversion, and conspiracy were not brought within the applicable limitations periods for each cause of action. (Defs.' Motion ...