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Armstrong Telecommunications, Inc. v. CHR Solutions, Inc.

United States District Court, W.D. Pennsylvania

August 7, 2019

CHR SOLUTIONS, INC. Defendant/Third Party Plaintiff,


          Marilyn J. Horan United States District Judge.

         In this commercial dispute, Plaintiff Armstrong Telecommunications, Inc. ("Armstrong") alleges that Defendant CHR Solutions, Inc. ("CHR") breached a contract between the parties. CHR, in turn, counterclaims that Armstrong breached the contract and alleges that any perceived problems with CHR's performance of the contract was due to Armstrong's own conduct. In addition, CHR alleges that its former employee, Third-Party Defendant Virginia Gardea ("Gardea"), unlawfully conspired with Third-Party Defendant Vantage Point Solutions, Inc. ("Vantage Point"), and Armstrong, in a scheme to usurp CHR's contract from Armstrong. Presently before the Court is the Third-Party Defendants' Motion to Dismiss CHR's Second Amended Third-Party Claims. ECF No. 92. For the reasons that follow, the Third-Party's motion to dismiss will be granted in part, and denied in part.

         I. BACKGROUND

         A. Procedural History

         Armstrong filed a Complaint against CHR on June 15, 2018, alleging various claims arising out of a contract between the parties. ECF No. 1. CHR Answered the Complaint, filed Counterclaims against Armstrong, and filed Third-Party Claims against Gardea and Vantage Point. ECF No. 26. On December 20, 2018, the Court granted the Third-Party Defendants' Motion to Dismiss the Third-Party Claims, without prejudice. ECF No. 65. CHR filed its Amended Third-Party Claims against Ms. Gardea and Vantage Point on January 25, 2019. ECF No. 69. On April 24, 2019, the Court issued a Memorandum Opinion and Order, granting the Third-Party Defendants' Motion to Dismiss CHR's Amended Third-Party Claims, without prejudice. ECF No. 84. On May 24, 2019, CHR filed its Answer to the Complaint, Counterclaims against Armstrong, and Second Amended Third-Party Claims against Gardea and Vantage Point. ECF No. 86. In response, Armstrong answered the Counterclaims, and the Third-Party Defendants filed the instant Motion to Dismiss. ECF Nos. 96 & 92.

         B. Factual Background

         Bearing in mind that the instant Motion to Dismiss does not directly concern the claims and counterclaims between Armstrong and CHR, the relevant factual background necessary for resolution of the present motion is as follows. Armstrong and CHR entered into a Master Services Agreement, dated May 30, 2017 ("MSA"), by which CHR agreed to provide certain specialized engineering services in furtherance of Armstrong's contract to provide broadband services to rural markets in New York. ECF No. 1 at ¶¶ 10-11, 18. Prior to entering into the MSA, CHR presented Armstrong with a proposal titled, "Outside Plant Engineering Services, Statement of Work, Summary Format (SOW# 2506)," (hereinafter "Statement of Work"). Id. at ¶ 16; ECF No. 5-1, at 13-25; ECF No. 86, at p. 16, ¶ 8. During the negotiations for the MSA, Gardea was employed by CHR, and she was CHR's primary contact person with Armstrong. ECF No. 86, at p. 16, ¶¶ 6-7; p. 19 ¶ 28. She was also the author of the Statement of Work and the MSA. Id. The MSA incorporated the parties' two-page Work Order, which in turn incorporated the Statement of Work. ECF No. 1, at ¶ 18; ECF No. 86, at p. 16, ¶ 8. The MSA, the Work Order, and the Statement of Work, in combination, constitute the parties' contract. Id.; see also MSA, § 22.

         Armstrong's Allegations against CHR

         Armstrong alleges that, due to CHR's mistakes, deficiencies, and delays in its performance of the Master Services Agreement, in January of 2018, Armstrong placed CHR on notice of its intent to terminate their agreement. ECF No. 1, at ¶¶ 30, 66. Armstrong alleges that CHR failed to cure its deficiencies; and therefore, Armstrong hired Vantage Point to audit, correct, and complete the services that CHR had originally contracted to perform. Id. ¶¶ 67-68.

         In response, CHR alleges that Armstrong failed to fulfill its' contractual obligation to consistently provide CHR with "qualified personnel, reliable information, sound engineering, and prompt, reliable decisions." ECF No. 86, at p. 17, ¶¶ 11-12. CHR further alleges that Armstrong failed to timely identify essential hub site locations and transport routes, delayed providing essential design criteria, and changed the design criteria and procedures, while also insisting that CHR substantially revise and redesign the project, without providing sufficient time. Id. at p. 17, ¶¶ 15-17. As a result of the above failures by Armstrong, and Armstrong's additional actions and omissions, the project encountered significant delays. Id. at p. 18-19, ¶¶ 19-25.

         CHR's Third-Party Allegations

         When Gardea was hired by CHR in August, 2015, she executed a Confidentiality, Non-Disclosure, and Non-Solicitation Agreement ("August 2015 Agreement"). Id. at p. 27, ¶ 27; Confidentiality, Non-Disclosure, and Non-Solicitation Agreement, Aug. 15, 2017, attached to Ex. 4, at ECF No. 86-4, at pp. 2-9. CHR alleges that, while the project with Armstrong was being implemented, Gardea interviewed and accepted employment with Vantage Point, without CHR's knowledge. Id. at p. 19, ¶¶ 25, 29. Vantage Point is a direct competitor of CHR. Id. at p. 19, ¶ 30. Gardea resigned from CHR on September 12, 2017. Id. On the day she resigned, Gardea signed a one-page, four-paragraph, "Employee Confidentiality Agreement ("September 2017 Agreement")", which reiterated her obligations, primarily related to confidential and propriety information, and trade secrets, under the August 2015 Agreement. ECF No. 86, at p. 19, ¶ 31; Employee Confidentiality Agreement, Sept. 12, 2017, attached to Ex. 4, at ECF No. 86-4, at p. 10.

         One week after Gardea resigned, CHR's Chief Executive Officer notified Vantage Point of Gardea's confidentiality obligations that prevented both her, and her new employer, "from using or disclosing CHR confidential information and soliciting CHR's clients." ECF No. 86, at p. 20, ¶ 33. Vantage Point's CEO and Gardea allegedly indicated to CHR that they were unaware of any confidentiality agreement. Id. at p. 20, ¶ 34. Therefore, CHR forwarded copies of both the August 2015 and September 2017 documents to Vantage Point's CEO and Gardea. Letter from A. Pasrija to L. Thompson, Sept. 28, 2017, ECF No. 86-4. CHR alleges that Vantage Point's CEO assured CHR that Gardea would not be working on projects in the Eastern United States, and specifically, that she would not be working on the Armstrong project. ECF No. 86, at p. 20, ¶ 35. CHR relied on these assurances in choosing not to seek formal injunctive relief against Vantage Point and Gardea. Id. CHR further alleges that, contrary to said assurances, "Gardea was actively informed and participated in the solicitation of Armstrong on this very project." Id.

         CHR alleges that Armstrong gave decision-making authority to Shawn Beqaj ("Beqaj"), Armstrong's Vice President of Regulatory Affairs, despite the MSA's provision that Kevin Young was Armstrong's designated representative. Id. at p. 17, ¶ 13. According to CHR, during the initial implementation of the project, Gardea developed a friendship with Beqaj. Id. at p. 19, ¶¶ 25, 29. CHR alleges that Beqaj became critical of CHR's work directly after Gardea resigned from CHR. Id. at p. 19, ¶ 25. CHR alleges that within weeks of Gardea's resignation, Armstrong increased its criticism of CHR's work, and also began to have more unexplained urgent "issues". Id. at p. 20, ¶ 32.

         On November 13, 2017, Gardea sent an email to Beqaj inviting him to attend a Vantage Point webinar, with the bulk of the email touting Vantage Point's reputation and leadership in performing work related to Armstrong's business. Id. at p. 20, ¶ 36; Email from V. Gardea to S. Beqaj, Nov. 13, 2017, ECF No. 86-5. On December 6, 2017, Vantage Point was actively soliciting Armstrong for work in the Eastern United States, as indicated in emails to Beqaj. ECF No. 86-6, at p. 1. On December 12, 2017, Gardea was included in an email from Vantage Point to Armstrong, which also discussed Vantage Point doing work for Armstrong. Id. Additional email communications from December, 2017 through January, 2018, indicate that Vantage Point and Armstrong were getting close to finalizing an agreement for work. Id. at pp. 2, 7.

         In early February, 2018, Gardea and Beqaj were seen communicating during a Vantage Point sponsored industry event in Springfield, Massachusetts. ECF No. 86, at p. 21, ¶ 38[a][1]. CHR alleges that Gardea's presence at this event in the Eastern United States indicates that Vantage Point never intended to honor its prior assurances that Gardea would only be employed in the Western United States. Id. CHR alleges that, as a result of Gardea's interactions with Beqaj, and in concert with the overall plan to have Vantage Point take over CHR's Armstrong project, Beqaj notified CHR on February 23, 2018, that Armstrong added Vantage Point to audit CHR's work on the project. Id. at p. 21, ¶ 37[b]. On February 26, 2018, Beqaj forwarded to Gardea, an email exchange he had with a CHR Vice President, discussing Armstrong's decision to add Vantage Point to the project. Id. at p. 21, ¶ 38[b]; ECF No. 86-7.

         CHR alleges that Armstrong's hiring of Vantage Point to conduct an "audit" was a ruse, with the true goal being to allow Vantage Point to misappropriate CHR's work-product and take over the Armstrong project, all facilitated by Gardea in concert with Beqaj. ECF No. 86, at pp. 22-23, ¶¶ 45, 49. CHR alleges that Vantage Point's audit eventually resulted in the termination of CHR's contract on April 4, 2018, after which Vantage Point took over completion of the Armstrong project. Id. at p. 22, ¶¶ 45-46.

         Third-Party Claims

         CHR asserts claims of Breach of Contract (Count I) and Fraudulent Inducement (Count II), solely against Armstrong. Id. at pp. 23-25, ¶¶ 50-59. In Count III, CHR asserts a Breach of Contract claim against Gardea, alleging that Gardea breached her confidentiality agreement by assisting Vantage Point in replacing CHR on the Armstrong contract. Id. at p. 25, ¶¶ 60-64. CHR asserts two separate claims of Tortious Interreference with a Contract: in Count IV, CHR alleges that Gardea and Vantage Point unlawfully interfered with CHR's contract with Armstrong; and in Count V, CHR alleges that Armstrong and Vantage Point unlawfully interfered with CHR and Gardea5 s confidentiality agreements. Id. at pp. 25-27, ¶¶ 65-76. In Count VI, CHR asserts a claim of Civil Conspiracy against Gardea, Vantage Point, and Armstrong. Id. at pp. 27-28, ...

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