Patriot Energy Group, Inc. v. Kiley

32 Mass. L. Rptr. 169
CourtMassachusetts Superior Court
DecidedFebruary 26, 2014
DocketSUCV201304177BLS1
StatusPublished

This text of 32 Mass. L. Rptr. 169 (Patriot Energy Group, Inc. v. Kiley) is published on Counsel Stack Legal Research, covering Massachusetts Superior Court primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Patriot Energy Group, Inc. v. Kiley, 32 Mass. L. Rptr. 169 (Mass. Ct. App. 2014).

Opinion

Kaplan, Mitchell H., J.

This case is before the court on plaintiff Patriot Energy Group, Inc.’s motion for a preliminary injunction enforcing a “Confidentiality, Non-Competition, Non-Solicitation” agreement (Agreement) that the individual defendants, Brian Kiley and Robert Meehan, signed at or about the time that they commenced work for Patriot. Kiley and Meehan are now both employees of the corporate defendants, Metromedia Energy, Inc., Metromedia Power, Inc., and Energy Express, Inc., who will generally be referred to as Metromedia. For the reasons that follow, Patriot’s motion for a preliminaiy injunction is DENIED.

PROCEDURAL BACKGROUND

Patriot filed this action on November 26, 2013 and obtained an order of notice on their motion for preliminary injunctive relief returnable on December 5, 2013. The defendants moved for a continuance of the hearing date, and it was continued to December 10, 2013, but pursuant to an order that, among other things, prohibited Kiley and Meehan from having contact with any customer that either had dealt with while they were employed by Patriot that was not already a customer of Metromedia. The parties continued the hearing date two additional times, and the motion for preliminary relief was initially heard on January 6, 2014. At the conclusion of that hearing, the court continued the matter to February 5, 2014 to allow the parties to take discovery and expand their submissions in support of and opposition to the motion and to have an opportunity, if they wished, to present testimony or cross examine affiants. The restriction on contact with the individual defendants’ Patriot customers was continued, but with the understanding that this continuance was not to be construed as a finding of likelihood of success on the merits or irreparable injury to any party. At the parties’ request, that hearing was continued to February 12, 2014. On that date, neither party elected to present witnesses, and the case was submitted on the parties’ expanded and somewhat voluminous record and oral argument. The facts that follow are drawn from that record. For the most part, the facts are not substantially in dispute, but rather, the dispute focuses on the inferences and legal conclusions to be drawn from those facts.

FACTS

Patriot is a closely held Massachusetts corporation owned by two individuals, Louis Frate and David Reinfeld. It is an energy broker with an office located [170]*170in Burlington, Massachusetts. Its business model is to have its clients execute a document which it titles: Appointment of Agent. Under this agency agreement, Patriot’s customer appoints Patriot as its agent -with broad authority to negotiate and enter into contracts on the customer’s behalf with energy suppliers. Almost all of Patriot’s business involves placing customers into contracts with electricity suppliers, but it also occasionally executes contracts on behalf of its clients with natural gas suppliers. Patriot earns its income by adding a commission or fee to the rate at which the energy supplier contracted to provide energy to the customer.

Frate and Reinfeld are also the only two members of Mint Energy, LLC, which operates out of the same suite of offices as Patriot. Mint is an electricity supplier, and some of the energy contracts that Patriot, as agent, executed on behalf of its clients were with Mint. The record contains no evidence that Patriot disclosed the common ownership of Mint and Patriot to all of its customers.

Meehan was first employed by Patriot in August 2010 as an inside sales representative; Kiley was first similarly employed in September 2010.2 Each signed an essentially identical Agreement at the outset of his employment which, in general terms, prohibited him from (a) disclosing confidential information (broadly defined), and, (b) for a period of one year after termination, working for any company that competes directly or indirectly with Patriot or soliciting any Patriot customer or prospective customer.3 Prior to joining Patriot, Meehan was a real estate title examiner; his CV suggests that at an earlier time, he worked in recruiting and placing temporary employees and selling industrial carpeting. Riley previously was employed in sales of such products as casters and wheels, computer components, cable and wireless infrastructure and, most recently, mattresses. Neither had any prior experience in the energy industry or selling energy contracts, and there is no evidence in the record that Patriot provided them with any significant training regarding the energy industry. They were each paid a base salary, starting at $26,000 annually and increasing to $35,000, plus commissions on each energy contract that they sold as long as that contract remained in place, but subject to reduction if they failed to meet their sales quota in any month. For example, if either was at 75% of his quota for a month, he would receive 75% of the commissions he otherwise would be due.

As inside sales representatives, their primary job was to make cold calls to prospective customers. They were required to be at work from 9:00 AM to 5:30 PM and required to be on the telephone from 9:00 AM to 11:00 AM and then from 1:00 PM to 4:00 PM each day. The balance of the day was for e-mailing and administrative work. Patriot provided them with some lists of prospective customers that were published by state utility departments and available to any licensed energy broker, and they developed their own leads from Google or publicly available databases. Patriot did not provide them with any proprietary or confidential lists of prospective clients. If their prospecting struck gold, their role was to inquire about the customer’s energy needs and get them to sign the agency agreement.

A Patriot processing department then provided quotes for potential energy contracts with energy suppliers, usually three for each prospective customer. These contracts could be fixed rates for periods of one or more years, or monthly contracts at variable rates. The quotes would be at a price per unit of energy and did not break out the commission or margin built into those rates that would be paid to Patriot.

The sales representative would communicate the quotes to the customer, but would not necessarily know the profit margin that the processing department had built into the rates and would have no authority to vary the quotes. The sales representative generally was the only person to speak to the customer, but had no contact with the energy supplier. At times, if the customer was large enough to warrant it, Patriot would assign a relationship manager to the customer who might call on the customer directly.

Meehan and Kiley, as inside sales representatives, communicated with customers only by telephone or e-mail and never left Patriot’s offices. Their communications with the customer generally ended once a contract was executed, until the contract was close to expiration and it was time to attempt to have the customer sign a new contract. With customers on variable monthly contracts, this contact might be more frequent than with customers on long-term contracts. The record is not clear as to the percentage of Meehan’s or Kiley’s customers that were on long-term contracts as opposed to monthly contracts, but the few commission reports (described below) in the record suggest that the vast majority of their customers were on year-long contracts.

Each month, Meehan and Kiley had a so-called “commission report” sent to their homes.

Free access — add to your briefcase to read the full text and ask questions with AI

Related

Whitinsville Plaza, Inc. v. Kotseas
390 N.E.2d 243 (Massachusetts Supreme Judicial Court, 1979)
F. A. Bartlett Tree Expert Co. v. Barrington
233 N.E.2d 756 (Massachusetts Supreme Judicial Court, 1968)
Marine Contractors Co. Inc. v. Hurley
310 N.E.2d 915 (Massachusetts Supreme Judicial Court, 1974)
Alexander & Alexander. Inc. v. Danahy
488 N.E.2d 22 (Massachusetts Appeals Court, 1986)
Amerada Hess Corp. v. Garabedian
617 N.E.2d 630 (Massachusetts Supreme Judicial Court, 1993)
New England Canteen Service, Inc. v. Ashley
363 N.E.2d 526 (Massachusetts Supreme Judicial Court, 1977)
Packaging Industries Group, Inc. v. Cheney
405 N.E.2d 106 (Massachusetts Supreme Judicial Court, 1980)
Richmond Brothers v. Westinghouse Broadcasting Co.
256 N.E.2d 304 (Massachusetts Supreme Judicial Court, 1970)
Planned Parenthood League of Massachusetts, Inc. v. Operation Rescue
550 N.E.2d 1361 (Massachusetts Supreme Judicial Court, 1990)
USM Corp. v. Marson Fastener Corp.
393 N.E.2d 895 (Massachusetts Supreme Judicial Court, 1979)
GTE Products Corp. v. Stewart
610 N.E.2d 892 (Massachusetts Supreme Judicial Court, 1993)
Jet Spray Cooler, Inc. v. Crampton
282 N.E.2d 921 (Massachusetts Supreme Judicial Court, 1972)
All Stainless, Inc. v. Colby
308 N.E.2d 481 (Massachusetts Supreme Judicial Court, 1974)
Student No. 9 v. Board of Education
440 Mass. 752 (Massachusetts Supreme Judicial Court, 2004)
Boulanger v. Dunkin' Donuts Inc.
815 N.E.2d 572 (Massachusetts Supreme Judicial Court, 2004)
North American Expositions Co. v. Corcoran
452 Mass. 852 (Massachusetts Supreme Judicial Court, 2009)
Bank of New England, N.A. v. Mortgage Corp. of New England
567 N.E.2d 961 (Massachusetts Appeals Court, 1991)
Cypress Group, Inc. v. Stride & Associates, Inc.
17 Mass. L. Rptr. 436 (Massachusetts Superior Court, 2004)
Lycos, Inc. v. Jackson
18 Mass. L. Rptr. 256 (Massachusetts Superior Court, 2004)
Grace Hunt IT Solutions, LLC v. SIS Software, LLC
29 Mass. L. Rptr. 460 (Massachusetts Superior Court, 2012)

Cite This Page — Counsel Stack

Bluebook (online)
32 Mass. L. Rptr. 169, Counsel Stack Legal Research, https://law.counselstack.com/opinion/patriot-energy-group-inc-v-kiley-masssuperct-2014.