Winner Logistics Inc. v. Labor & Logistics Inc.

23 Pa. D. & C.5th 463
CourtPennsylvania Court of Common Pleas, Philadelphia County
DecidedMarch 29, 2011
DocketNo. 2164
StatusPublished

This text of 23 Pa. D. & C.5th 463 (Winner Logistics Inc. v. Labor & Logistics Inc.) is published on Counsel Stack Legal Research, covering Pennsylvania Court of Common Pleas, Philadelphia County primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Winner Logistics Inc. v. Labor & Logistics Inc., 23 Pa. D. & C.5th 463 (Pa. Super. Ct. 2011).

Opinion

BERNSTEIN, J.,

This is an action [465]*465for wrongful use of civil proceedings1 filed by plaintiff Winner Logistics, Inc. (hereinafter “plaintiff’ or “Winner Logistics”) against attorneys Joseph A. Bubba and Nancy Conrad and their firm Fitzpatrick, Lentz & Bubba, P.C. (hereinafter “attorney defendants”). The attorney defendants represented Labor & Logistics Management, Inc. and its president, Curtis Ball,2 in an action against their former employee David Wallover and his new employer Winner Logistics for misappropriation of trade secrets and breach of a restrictive covenant. Winner Logistics is a competing company formed by Wallover after he left Labor & Logistics Management Inc.

Labor & Logistics Management, Inc. is in the driver leasing business, providing commercial truck drivers to shippers on a temporary or ad hoc basis. In September 2000, Labor & Logistics Management, Inc. hired Wallover as a driver lease manager with access to Labor & Logistics customer, prospective customer and driver lists. When Wallover was hired, he was not asked to and did not sign any restrictive covenant when he started to work. In July 2002, Ball recognized that he did not have a signed employment agreement with Wallover and directed Wallover’s supervisor to have him sign one. Wallover refused and he was fired.

Thereafter, Wallover started his own business which competed with Labor & Logistics Management, Inc. Ball and Labor Logistics retained Joseph Bubba and Nancy Conrad and their law firm Fitzpatrick, Lentz & Bubba, P.C. (hereinafter “attorney defendants”) to represent [466]*466them in an action for misappropriation of trade secrets and breach of restrictive covenant against Wallover and Winner Logistics, which was filed in Bucks County.

On December 2, 2002, the attorney defendants filed a complaint in the Court of Common Pleas of Bucks County and a motion for emergency injunctive relief on behalf of Ball and Labor Logistics. The complaint alleged claims for breach of contract, tortious interference with contractual relations and prospective relations, misappropriation of trade secrets, breach of fiduciary duty and unfair trade practices.

On December 13,2004, a non jury trial was held before the honorable John J. Rufe. Judge Rufe found no restrictive covenant existed because Wallover “never executed a written contract of employment with plaintiff LLM and never agreed orally not to compete with LLM in the event of his termination of employment with LLM.”3 He also held that “Wallover is not prohibited by written or oral contract from engaging in business in direct competition with” LLM, “documents wholly or substantially copied or duplicated from [LLMj’s forms and documents do not constitute trade secrets subject to employee confidentiality, as the same were easily obtainable in the open market or could be easily created.”

Despite the foregoing rulings, on January 24, 2005, Judge Rufe enjoined Winner Logistics and Wallover from contacting LLM’s former customers. Winner Logistics and Wallover appealed the ruling. The Superior Court stayed [467]*467enforcement of the injunction and subsequently reversed the trial court’s ruling. The Superior Court said, “our established precedent is clear that the type of information contained in LLM’s customer lists does not qualify as trade secrets.” The Superior Court explained that “an employee is free to take with him, when he leaves an employer, such information about the customers of the employer as he remembers.”4 Because Wallover only contacted customers he remembered from his time at LLM, the Superior Court found that Wallover did not misappropriate any customer list when he left LLM. An “employee, upon terminating his employment relationship with his employer, is entitled to take with him ‘the experience, knowledge, memory, and skill, which he gained while there employed...’”5 When leaving one company for another, an employee is not required to have a partial lobotomy to remove all information relevant to his former position. The Superior Court explained that “Wallover was free to solicit business from those customers for two reasons: first the customers’ identities were not trade secrets; and, second, even if they were, the former employee cannot be enjoined from using trade secrets retained solely in his memory.” The Superior Court found that LLM was not entitled to an injunction and reversed the Bucks County trial court’s decision granting an injunction. The Pennsylvania Supreme Court denied certiorari.

Winner Logistics, winner of the underlying suit, instituted this action for wrongful use of civil proceedings against LLM, defendant Ball, and defendant attorneys. On [468]*468May 15,2008, summary judgment was granted in favor of Winner Logistics and against defendants Labor Logistics and Ball. Defendant Ball affirmatively insisted that he did not rely on the advice of counsel when determining whether the underlying action could be initiated or continued. Ball’s sole claim to probable cause was based on his individual and uninformed reasonable belief that the claim may be valid. The court found that a client’s ignorant hopeful intuition based upon a decision not to ask retained counsel whether a valid lawsuit could be brought under the existing or developing law is not acceptable. Since they affirmatively refused to ask counsel, defendants Labor Logistics and Ball must have acted “primarily for a purpose other than that of securing the proper discovery, joinder of parties or adjudication of the claim in which the proceedings are based” when they proceeded in the underlying action.

Winner Logistics also moved for summary judgment against the attorney defendants. On October 8, 2008, the court denied the motion finding that genuine issues of material fact existed as to what attorney defendants knew before initiating, procuring and continuing the legal action.

From October 14, 2009 to November 5, 2009, the case was tried before a jury against the attorney defendants. During deliberations the jury made a specific request to view a copy of the trial court’s decision in the underlying action. The court, after discussion with counsel, supplied thejury with the trial judge’s opinion as well as the Superior Court opinion overruling it and the Superior Court’s order staying the trial court’s order pending its own resolution of the legal issues.

[469]*469Among the questions decided by the jury were the following:

Question No. 1:
Do you find that the attorney defendants initiated, or continued the underlying lawsuit for a purpose other than that of securing the proper discovery, joinder of parties or adjudication of the claims on which the proceedings were based?
Question No. 2:
Were the attorney defendants, as attorneys in the underlying lawsuit, grossly negligent in initiating, or continuing the underlying lawsuit?
Question No. 3:
Did the defendant attorneys reasonably believe in the existence of the facts upon which the claim was based and either:
a) reasonably believe that under those facts the claim may be valid under the existing law properly applied to those facts
or;

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Bluebook (online)
23 Pa. D. & C.5th 463, Counsel Stack Legal Research, https://law.counselstack.com/opinion/winner-logistics-inc-v-labor-logistics-inc-pactcomplphilad-2011.