IN THE UNITED STATES DISTRICT COURT

FOR THE EASTERN DISTRICT OF PENNSYLVANIA

CENTRIX HR, LLC : CIVIL ACTION 

v. :

ON-SITE STAFF MANAGEMENT, INC. : NO. 04-5660

d/b/a/ CENTRIX STAFFING, et al.

MEMORANDUM AND ORDER

THOMAS J. RUETER June 3, 2008

Chief United States Magistrate Judge 

Presently before the court are: (1) “Plaintiff’s Motion for Reconsideration, and/or

for a New Trial or to Correct, Amend or to Supplement the Courts’ [sic] March 25, 2008 Order

and/or to Make Additional or Supplemental Findings of Fact Pursuant to Fed. R. Civ. P. 52, 59 &

60” (“Pl.’s Motion”) and Memorandum of Law in Support thereof (“Pl.’s Mem. of Law”) (Doc.

No. 53); (2) Defendants’ Motion for Relief Pursuant to Federal Rules of Civil Procedure 52, 59

& 60 (“Defs.’ Motion”) (Doc. No. 54); (3) Defendants’ Brief in Opposition to Plaintiff’s Motion

for Post Trial Relief (“Defs.’ Br. in Opp.”) (Doc. No. 55); (4) Plaintiff’s Response to Defendants’

Motion for Relief Pursuant to Federal Rules of Civil Procedure 52, 59 & 60 (“Pl.’s Resp.”) (Doc.

No. 56); (5) Plaintiff’s Reply Memorandum of Law in Support of its Post Trial Motion (“Pl.’s

Reply”) (Doc. No. 59); (6) Defendants’ Reply Memorandum of Law in Support of their Motion

for Post Trial Relief (“Defs.’ Reply”) (Doc. No. 60); and (7) Plaintiff’s Surreply (“Pl.’s

Surreply”) (Doc. No. 63).

The court conducted a bench trial in the above-captioned case from October 22 to

October 24, 2007. The court filed its Memorandum of Decision and Judgment Order (“MOD”)

Case 2:04-cv-05660-TJR Document 64 Filed 06/03/08 Page 1 of 25
The parties to this case are: (1) plaintiff Centrix HR, LLC (“plaintiff” or “HR”); 1

(2) defendant On-Site Management, Inc. (“On-Site”); (3) defendant Centrix HR Logistics, Inc.

(“Logistics”); and (4) defendant William Black (“Black”) (On-Site, Logistics and Black 

collectively shall be referred to herein as the “defendants”). The court will dispense with a

further recitation of the facts of this case and the background of the litigation. Those matters are

set forth in detail in the court’s March 25, 2008 MOD. 

2

on March 25, 2008 (Doc. No. 52). See Centrix HR, LLC v. On-Site Management, Inc., et al.,

2008 WL 783558 (E.D. Pa. Mar. 25, 2008). The post trial motions followed. For the reasons set

forth below, plaintiff’s motion is denied and defendants’ motion is granted in part and denied in

part.

1

I. STANDARD OF REVIEW

“The purpose of a motion for reconsideration is to correct manifest errors of law

or fact or to present newly discovered evidence.” Harsco Corp. v. Zlotnicki, 779 F.2d 906, 909

(3d Cir. 1985). Reconsideration is proper where the moving party establishes one of three

grounds: (1) an intervening change in the controlling law; (2) the availability of new evidence

that previously was unavailable; or (3) the need to correct a clear error of law or fact or to prevent

manifest injustice. Stilwell Value Partners I, L.P. v. Prudential Mut. Holding Co., 2008 WL

2156719, at *1 (E.D. Pa. May 21, 2008) (citing Max’s Seafood Café ex rel. Lou-Ann, Inc. v.

Quinteros, 176 F.3d 669, 677 (3d Cir. 1999)). Motions for reconsideration may not be used to

argue new issues or facts that were not presented to the court in the matter previously decided. 

Id. (citing Johnson v. Diamond State Port Corp., 50 Fed. Appx. 554, 560 (3d Cir. 2002)).

Case 2:04-cv-05660-TJR Document 64 Filed 06/03/08 Page 2 of 25
The court will address defendants’ motion first since disposition of one of 2

defendants’ claims impacts some of plaintiff’s claims.

On March 15, 2002, plaintiff, the Licensor, and defendant Logistics, the Licensee, 3

entered into a Licensing Agreement. (MOD Findings of Fact ¶ 5 (citing Ex. P-2).) The court

concluded that defendant Logistics properly terminated the Licensing Agreement. (MOD

Conclusions of Law ¶ 4.) The court further concluded that defendants had violated the noncompete provision and awarded plaintiff nominal damages. (MOD Conclusions of Law ¶ 5.)

3

II. DEFENDANTS’ MOTION2

1. Non-Compete Provision of the Licensing Agreement

Defendants first seek reconsideration of this court’s conclusion that defendants

breached the non-compete provision of the Licensing Agreement. Defendants argue that because

the court found that Logistics properly terminated the Licensing Agreement due to plaintiff’s

violations of the terms thereof, defendants were relieved of their obligations under the noncompete provision of the Agreement. (Defs.’ Motion at 1-4.) Defendants cite to the general rule 3

in Pennsylvania that “a party who has materially breached a contract may not complain if the

other party refuses to perform his obligations under the contract.” Ott v. Buehler Lumber Co.,

541 A.2d 1143, 1145 (Pa. Super. Ct. 1998). 

In the MOD, the court concluded as follows:

that defendant Logistics properly terminated the Licensing Agreement because

plaintiff breached the Licensing Agreement by: (1) failing to provide a proper

accounting of Logistics’ client invoices and collections; (2) failing to pay payrollrelated taxes on a timely basis; (3) failing to remit payments when due to

Logistics; (4) failing to provide timely accounting records; and (5) disbursing

monies collected pursuant to the Licensing Agreement to unauthorized entities,

such as EMG. The court also finds that defendant Logistics gave proper notice to

plaintiff of the termination under the terms of the Licensing Agreement. 

Defendant Logistics gave plaintiff a right to cure the defaults in accordance with

the terms of the Agreement. See Ex. P-2 ¶ 20.

MOD, 2008 WL 783558, at *15. 

Case 2:04-cv-05660-TJR Document 64 Filed 06/03/08 Page 3 of 25
4

The plain language of the non-compete provision in the Licensing Agreement

undermines defendants’ claim that they were no longer required to honor the requirements of that

provision upon termination of the agreement. The non-compete provision provides as follows:

Licensee Non-Competition and Confidentiality. Neither the Licensee

nor any persons controlling, controlled by or under common control with Licensee

may, without the Licensor’s prior written consent:

A. Have any interest, direct or indirect, in the ownership or operation

of any business similar to that of Licensor’s business, within the licensed area or

within 100 miles thereof, for a period of three years after expiration or

termination of this Agreement, and may not operate such a business anywhere

within the territory or within 100 miles thereof during the term of this Agreement. 

Specifically excluded is any business in which Licensee is presently

engaged that provides services under a different concept primarily or exclusively

to customers who Licensor has rejected or refuses to accept due to Workers’

Compensation code or failure to meet credit standards, and/or exclusively uses

employees that do not meet Licensor’s hiring standards. Any such business must

operate under an entirely separate and dissimilar name, from a separate facility in

a location at least two (2) miles from the nearest Licensee office, with unrelated

telephone numbers and different staff employees. 

For a period of three years after the termination or expiration hereof,

Licensee shall not, either as an employee, officer, agent or independent contractor,

call on or solicit clients for whom Licensor provides payroll administration

services.

(Ex. P-2 ¶ 23 (emphasis added).) Under Pennsylvania law, the intent of the parties to a written

contract is contained in the writing itself. Bohler-Uddehlorm America, Inc. v. Elwood Group,

Inc., 247 F.3d 79, 92 (3d Cir. 2001). “In determining the intent of the parties to a written

agreement, the court looks to what they have clearly expressed, for the law does not assume that

the language of the contract was chosen carelessly.” Profit Wize Marketing v. Wiest, 812 A.2d

1270, 1274 (Pa. Super. Ct. 2002).

Case 2:04-cv-05660-TJR Document 64 Filed 06/03/08 Page 4 of 25
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In the instant case, the plain language of the Licensing Agreement reveals that the

parties intended the non-compete provision to remain in effect should either party terminate the

Agreement. The parties specifically stated that the non-compete provision of the Licensing

Agreement would be effective upon either expiration or termination of the Agreement. 

Accordingly, defendants are liable for the breach of the non-compete provision of the Licensing

Agreement, even though defendant Logistics was justified in terminating the Agreement because

of plaintiff’s breaches thereof. The court also notes that defendants enjoyed the benefits of the

Licensing Agreement for almost two years of the three year term of the agreement. It is not

surprising for the parties to agree that defendants not compete with plaintiff after several years of

enjoying the benefits of the Licensing Agreement, even though the agreement was terminated

prematurely.

Generally, a corporate officer cannot be liable for a breach of contract by his

corporation, unless he is himself a party to the contract. Viso v. Werner, 369 A.2d 1185 (Pa.

1977). However, if the contract showed an intent to bind individually the corporate officer, he

may be liable even though he only signed as a corporate representative. Id. at 1188. See also

Welsh v. Alarm Security Group, Inc., 95 Fed. Appx. 399 (3d Cir. 2004) (same); Inoff v. Craftex,

2007 WL 4355385 (E.D. Pa. 2007) (same); Loeffler v. McShane, 539 A.2d 876 (Pa. Super. Ct.

1988) (same). The non-compete provision of the Licensing Agreement provided not only that

Logistics would not compete with plaintiff after termination of the Agreement, but also any

person controlling Logistics would not compete. It is undisputed that Black controlled Logistics

at the time Logistics entered into the Licensing Agreement. Black signed the Licensing

Agreement as President of Logistics. The language of the non-compete provision evinces an

Case 2:04-cv-05660-TJR Document 64 Filed 06/03/08 Page 5 of 25
On March 15, 2002, defendants Black and Logistics entered into a Guaranty 4

Agreement for the benefit of plaintiff and Blaise S. Mazzoni, owner of plaintiff at all times

relevant hereto. (MOD Findings of Fact ¶ 6.) 

6

intent on the part of Mr. Black to be personally bound by the provision since he was the sole

owner of Logistics, the Licensee, when he signed the Licensing Agreement. See Licensing

Agreement ¶ 23 (non-compete provision binds the Licensee and “any person controlling,

controlled by or under common control with Licensee”). The court concluded that Black,

through his company On-Site, is operating a business in violation of the non-compete provision. 

Therefore, the judgment order entered against defendants for one dollar ($1.00) for breach of the

non-compete provision should not be altered by the court. Defendants’ first argument is without

merit.

2. Mr. Black’s Personal Liability Under the Guaranty Agreement 

Defendants ask for reconsideration of the court’s finding that defendant Black is

personally liable pursuant to the Guaranty Agreement to repay loans from plaintiff to defendant

Logistics. (Ex. P-3.) Defendants contend that this court misconstrued the intent and application 4

of the Guaranty Agreement as it relates to the personal liability of Mr. Black. (Defs.’ Motion at

4-6.) With respect to the repayment of loans from plaintiff to Logistics, the court concluded as

follows:

It is clear that Mr. Black and Logistics agreed in writing to repay any loans

made between HR and Logistics. In a Notice of Termination dated December 1,

2003, terminating the Licensing Agreement, Logistics agreed to the following:

In connection with the termination of the Licensing Agreement, and in accordance

with its obligations thereunder, Centrix HR Logistics, Inc., will pay all monies

loaned by Centrix HR, LLC to Centrix HR Logistics, Inc. in equal monthly

installment over a period of twenty-four (24) months, subject to a final accounting

of such monies due and confirmation of the same by all parties.

Case 2:04-cv-05660-TJR Document 64 Filed 06/03/08 Page 6 of 25
Contrary to plaintiff’s assertion, the court did not find Black personally liable for 5

the loans plaintiff made to Logistics pursuant to the Notice of Termination or the Letter of

Understanding. Those documents provide a basis for finding Logistics liable to plaintiff for the

loans.

7

(Ex. P-16; N.T., 10/24/07 at 130.) Furthermore, in the [Letter of Understanding],

executed by the parties in October, 2003, Logistics, through Mr. Black, agreed to

repayment of outstanding loans from HR “to pay any operating losses incurred by

Centrix Logistics in lieu of tax obligations.” (Ex. P-10.) Thus, this court

concludes that defendants Logistics and Black, individually pursuant to the

Guaranty Agreement, (Ex. P-3), are liable to plaintiff for loans made to Logistics

pursuant to the Licensing Agreement. 

(MOD, 2008 WL 738558, at *12.) While the court found Logistics liable for the loans it

received from plaintiff under the Notice of Termination and the Letter of Understanding, the

court found Black personally liable to plaintiff for the loans made by plaintiff to Logistics

pursuant to the Guaranty Agreement. 

5

The Guaranty Agreement provides in pertinent part as follows: 

D. As a material inducement to the Company (Centrix HR, LLC) to enter into

the [Master Factoring] Agreement and the Licensing Agreement, which is

incorporated herein by reference, Guarantor (collectively, Logistics and Black),

subject to certain limitations set forth hereafter, agrees to irrevocably and

unconditionally guaranty all of the Company’s obligations pursuant to and/or

arising out of and pursuant to [sic] the Licensing Agreement. 

1. Guaranteed Obligations. All obligations of Guarantor set forth in this

Section 2 [sic] are collectively called the “Obligations”. 

a. Guaranty. Guarantor guarantees the performance and payment of

all of the obligations of the Company under the Licensing Agreement, which is

incorporated herein by reference, (the “Obligations”). . . . 

(Guaranty Agreement ¶¶ D, 1 (emphasis added).)

Upon further review, the court finds that the plain and unambiguous terms of the

Guaranty Agreement provide that Black guaranteed obligations of plaintiff pursuant to or arising

Case 2:04-cv-05660-TJR Document 64 Filed 06/03/08 Page 7 of 25
In their Answer, defendants denied this allegation stating that the document 6

speaks for itself. (Doc. No. 12.)

8

out of the Licensing Agreement, not obligations of Logistics to plaintiff. Accordingly, the court

will amend its conclusions of law and conclude that Black is not personally liable for loans made

to Logistics by plaintiff.

The court rejects plaintiff’s argument that defendants’ interpretation of the plain

language of the Guaranty Agreement leads to the self-serving result that Logistics and Black

guaranteed only obligations of plaintiff to Logistics, as the only two parties to the Licensing

Agreement. (Pl.’s Resp. at 15-18.) Clearly, plaintiff in the operation of its business incurred

expenses and could owe obligations to third parties which would be covered by the Guaranty

Agreement, subject to any and all limitations set forth in the Agreement. 

Plaintiff urges that defendants waived the argument that Mr. Black did not agree

to repay plaintiff’s loans to Logistics under the Guaranty Agreement because defendants did not

raise it earlier. Plaintiff’s argument must fail as contrary to the facts in this case. Plaintiff is

correct that it argued from the beginning of these proceedings that Black and Logistics were

liable under the Guaranty Agreement for repayment of plaintiff’s loans to Logistics. In the

Complaint, plaintiff asserted that: “On even date therewith the Defendant Black and Defendant

Logistics also entered into a Guaranty whereby they, among other things, guaranteed the

performance and payment of Defendant Logistics’ obligations under the Licensing Agreement.” 

(Complaint ¶ 9.) At the trial, plaintiff argued that defendant Black was liable for repayment of 6

plaintiff’s loans to Logistics under the Guaranty Agreement. In its Proposed Findings of Fact

and Conclusions of Law, plaintiff argued that “Black and Logistics also signed a Guaranty

Case 2:04-cv-05660-TJR Document 64 Filed 06/03/08 Page 8 of 25
Plaintiff contends that defendant Black acknowledged that he agreed to repay the 7

loans to Logistics. See Pl.’s Resp. to Defs.’ Post Trial Brief at 2-3 (citing Defs.’ Post Trial Brief

at 13 and Exs. P-10, P-16). In defendants Post Trial Brief, defense counsel stated as follows:

“Mr. Black acknowledges that he agreed to repay loans to Logistics if Mr. Mazzoni could

demonstrate such a claim. Mr. Mazzoni never provided such documentation.” (Defs.’ Post Trial

Brief at 13.) No evidence in the record supports counsel’s statement that Mr. Black personally

agreed to repay loans from plaintiff to Logistics. Mr. Black did not so testify. The plain

language of the Guaranty Agreement provides otherwise. Moreover, it is unclear what time

frame defense counsel was referring to in the Post Trial Brief or what set of conditions was or

had to be in place as consideration for such a promise by Mr. Black. Exhibits P-10 and P-16 do

not support plaintiff’s argument that Mr. Black personally agreed to repay loans from plaintiff to

Logistics. Exhibit P-10, the LOU, is between plaintiff and Logistics and signed by Mr. Black as

President of Logistics. Exhibit P-16 is the Notice of Termination to plaintiff from Logistics and

9

whereby Black, among other things, personally guaranteed both the ‘performance’ of and

‘payment’ of all of Logistic’s obligations under the Licensing Agreement.” (Pl.’s Proposed

Findings of Fact and Conclusions of Law ¶ 26.) 

While defendants did not argue the language of the Guaranty Agreement as clearly

at trial as they do now, review of the record reveals that defendants have consistently argued that

the language of the Guaranty Agreement speaks for itself. See N.T., 10/22/07 at 41 (defense

counsel stated during opening argument, “The guarantee did go along with [the] licensing

agreement and you’ll see language in there that says that my client would guarantee costs and

expenses that arose from the operation of the licensing agreement. You know, at the end of the

day, that’s really the phrase that this case is about.”); Defs.’ Proposed Findings of Fact and

Conclusions of Law ¶ 29 (“The Guaranty Agreement . . . provided that Logistics and Mr. Black

would guarantee [plaintiff’s] obligations ‘pursuant to and/or arising out of . . . the Licensing

Agreement.”); Defs.’ Post Trial Brief at 1 (In the Guaranty Agreement, Logistics and Mr. Black

“agreed to guarantee the obligations of HR, which ‘arose out of’ or were ‘pursuant to’ the terms

of the Licensing Agreement.”); Defs.’ Post Trial Brief at 12, 14-15 (same). The plain language 7

Case 2:04-cv-05660-TJR Document 64 Filed 06/03/08 Page 9 of 25
also signed by Mr. Black as President of Logistics. In neither of these documents did Mr. Black

accept personal liability to repay plaintiff’s loans to Logistics. 

10

of the Guaranty Agreement supports defendants’ position that Mr. Black did not personally

guarantee the repayment of plaintiff’s loans to Logistics. 

The court admits that initially it was under the impression that the parties agreed

that Black accepted personal liability to pay obligations of Logistics under the Guaranty

Agreement. The court now realizes that defendants did not. Some of the confusion stems from

the trial where the distinction between Mr. Black and his company, Logistics, both defendants in

this matter, blurred. Mr. Black was the President of Logistics. During the trial, counsel often

referred to Mr. Black personally when meaning to refer to Logistics. See, e.g., N.T., 10/23/70 at

266 (during Black’s direct testimony, counsel referred to “you,” but corrected himself to reflect

that he meant Logistics); N.T., 10/24/07 at 57 (defense counsel clarified during Black’s direct

testimony, “Yours meaning Logistics, right?”); id. at 66 (discussing the LOU, Black refers to

himself repaying alleged loans to plaintiff when, without dispute, the document is between

plaintiff and Logistics). Regardless, the language of the Guaranty Agreement is clear. Mr. Black

did not agree to be personally liable as a guarantor for repayment of plaintiff’s loans to Logistics. 

For the above reasons, defendants’ Motion is granted in part and the court will amend its

Findings of Fact and Conclusions of Law to conclude that Mr. Black is not personally liable for

repayment of plaintiff’s loans to Logistics. 

Case 2:04-cv-05660-TJR Document 64 Filed 06/03/08 Page 10 of 25
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III. PLAINTIFF’S MOTION

1. Logistics’ Damages

Plaintiff argues that Logistics’ only counterclaim properly pled was for unpaid

commissions under the Licensing Agreement. Plaintiff asserts that at trial, however, defendants

abandoned this counterclaim and replaced it with a new theory seeking repayment of an alleged

loan of receivables from Logistics to plaintiff used by plaintiff as seed money for the business. 

(Pl.’s Mem. of Law at 2-3.) Since the court rejected the counterclaim seeking the repayment of

the loan of receivables, and defendants allegedly abandoned their original counterclaim, plaintiff

urges that defendants should have recovered no damages in this litigation. Plaintiff further

argues that the court erred in awarding Logistics damages in the amount of $1,603,673.00. 

Plaintiff contends that Logistics never requested damages in this amount but, rather, sought

damages in the amount of $505,965.00. (Pl.’s Mem. of Law at 4-5.) 

First, the court rejected defendants’ late added counterclaim regarding the loan of

receivables as untimely presented and as meritless. See MOD, 2008 WL 783558, at *21. 

Second, defendants clearly pled a counterclaim alleging that plaintiff failed to pay to Logistics all

sums due and owing under the Licensing Agreement. See Answer with Counterclaims ¶¶ 5-26

(Doc. No. 12.) Plaintiff contends that defense counsel, Mr. Gerber, abandoned this counterclaim

when he admitted in his opening argument that “all commissions due [under the Licensing

Agreement] were paid ‘as per the agreement.’” (Pl.’s Mem. of Law at 4 (citing N.T., 10/22/07 at

39).) Plaintiff mischaracterizes the statements of Mr. Gerber. Review of the Notes of Testimony

reveals a different argument by Mr. Gerber. Discussing the business of plaintiff and plaintiff’s

interaction with defendants under the Licensing Agreement, the following colloquy took place:

Case 2:04-cv-05660-TJR Document 64 Filed 06/03/08 Page 11 of 25
12

THE COURT: Were they [defendants] paid money by Mr. Mazzoni’s company for

that?

MR. GERBER: Yes. Yes.

THE COURT: Okay. Then, were they paid commissions as . . . as the –

MR. GERBER: As per the agreement.

. . .

THE COURT: So the counterclaim is only limited to this initial capital

investment, I’ll call it –

MR. GERBER: Essentially. 

. . .

MR. GERBER: It’s . . . a little complicated on its face, but I submit that once we go

through the testimony, Your Honor is going to see a much different

version of what’s going on here. We have an integrated contract

that we’re going to submit, Your Honor.

(N.T., 10/22/07 at 39-40.) Defense counsel did not admit that all commissions had been paid

pursuant to the Licensing Agreement. Mr. Gerber stated that commissions were to be paid

pursuant to the Licensing Agreement. Mr. Gerber did not state that the counterclaim was limited

to the loan of receivables, but urged the court to wait for the evidence, which Mr. Gerber stated

included an integrated contract – the Licensing Agreement. Defendants presented evidence at

trial of the amount of commissions due Logistics from plaintiff under the Licensing Agreement. 

See, e.g., N.T, 10/24/07 at 293.

After hearing the evidence, the court concluded as follows: 

Defendant, Logistics, has asserted a Counterclaim against plaintiff for fees owed

to it pursuant to the Licensing Agreement. See Answer with Counterclaims ¶¶ 8-

25.

Plaintiff’s books of original entry record a net due to Logistics for fees of

$1,603,673, as of August 31, 2003, the last date for which financial statements

were prepared. (Ex. D-50 (Report of C. Lunden) at 4 and Ex. B; N.T., 10/23/07 at

176; Ex. D-69.) Thus, in the absence of any offset, judgment should be entered in

favor of defendant, Logistics, and against plaintiff, HR, in the amount of

$1,603,673 which plaintiff’s own records show is owed to Logistics.

(MOD, 2008 WL 783558, at *20.) 

Case 2:04-cv-05660-TJR Document 64 Filed 06/03/08 Page 12 of 25
The court appears to have misstated “$1.6 million” and “1.3.” 8

13

This court is aware that defendants stated the amount of their damages as

$505,965.00 in their Proposed Findings of Fact and Conclusions of Law. See Defs.’ Proposed

Findings of Fact and Conclusions of Law ¶¶ 4, 5. However, defendants’ submission to the court

is not evidence.

As also pointed out by defendants in their Findings of Fact and Conclusions of

Law, defendants’ expert, Mr. Lunden, calculated the amount owed Logistics by plaintiff as $1.6

million. (Defs.’ Findings of Fact and Conclusions of Law ¶ 169.) Christopher Nawn, CPA,

plaintiff’s expert witness, did not dispute that figure. Id. During his testimony, Mr. Lunden

explained that plaintiff’s books of original entry and the books and records of Logistics both

show an amount due from plaintiff to Logistics of $1.6 million. See N.T., 10/24/07 at 193. Mr.

Lunden later testified that the amount due Logistics from plaintiff was $505,965.00, but qualified

that answer by stating that he arrived at that figure if “you take everything into account and if you

accept the arguments in the counterclaim and if you find liability.” Id. at 194. It is unclear what

had to be taken “into account” to arrive at the $505,965.00 figure. It is unclear which

counterclaim Mr. Lunden referenced, the rejected receivables counterclaim or the originally pled

counterclaim for amounts due Logistics under the Licensing Agreement. 

The court later asked defense counsel whether the amounts owed to Logistics by

plaintiff should be offset by the $505,000. Id. at 278. Defense counsel replied as follows: “You

offset it by a million six, which is what - - in Exhibit B it actually shows you the net, the net

amount due to defendant.” Id. at 278, 290. The court confirmed by stating: “All right. So you

are saying, if you took the seven thirty-six, you are saying it should be offset by the 1.3?” Id. at 8

Case 2:04-cv-05660-TJR Document 64 Filed 06/03/08 Page 13 of 25
Plaintiff argues that the court erred when it relied upon Exhibit B to the expert 9

report of Mr. Lunden (Ex. D-50), defendants’ expert, as opposed to Exhibit A. (Pl.’s Mem. of

Law at 11-12, 11 n. 1.) Plaintiff urges that Exhibit A is the analysis of operating results while

Exhibit B was only a “factor” in favor of Mr. Lunden’s argument that Logistics was not the cause

of plaintiff’s inability to pay its taxes. Id. at 11 n.1. The court has reviewed Exhibit D-50. 

Exhibit A to Exhibit D-50 is titled “Adjusted Income Statements,” and Exhibit B is titled “Net

Amount Due to Defendant.” 

In the MOD, the court concluded that plaintiff owes Logistics $737,673.70. The 10

correct amount is $737,673.64 ($1,603,673.00 – $865,999.36). Plaintiff has not objected to this

six cents discrepancy. Since this is not a material amount, the court will not amend the Judgment

Order.

Transit Aide is a company owned by defendant Black. 11

14

278. Defense counsel replied, “Yes.” Id. See also Defs.’ Supplemental Post Trial Brief at 3 9

(offset amount equals $1.6 million, the amount due Logistics from HR).

This court properly exercised its function as fact finder and considered the weight

of the evidence presented, which included plaintiff’s own books of original entry, and testimony

of the parties’ expert witnesses. The court also engaged in lengthy colloquies with counsel

regarding the issue of damages. After conducting a thorough analysis, this court concluded that,

after appropriate offset, plaintiff owes to Logistics the amount of $737,673.70 . The record 10

clearly supports this court’s conclusions regarding damages. Plaintiff’s disagreement with this

court’s conclusion is insufficient to warrant granting of plaintiff’s Motion. 

2. Loans to Transit Aide

Plaintiff contends that the court erred when it limited the recovery for loans from

plaintiff to Transit Aide, Inc. (“Transit Aide”). (Pl.’s Mem. of Law at 16.) This court 11

concluded as follows: 

The court finds Mr. Mazzoni’s testimony credible that numerous loans were made

from HR directly to Transit Aide and that Mr. Black, on behalf of Logistics,

Case 2:04-cv-05660-TJR Document 64 Filed 06/03/08 Page 14 of 25
15

agreed to repay the loans. By clear, precise and convincing evidence, plaintiff has

shown that Logistics agreed to repay these loans because it needed Transit Aide in

operation because it transported employees of Logistics to clients during work

hours. (N.T., 10/22/07 at 97-98, 210.) 

(MOD, 2008 WL 783558, at *12.) The amount of the loans from plaintiff to Transit Aide totaled

$142,897.81. Id. at 20. 

Plaintiff urges that the court erred when it did not include loans that allegedly

went to Transit Aide that first passed through Employers Management Group, Inc. (“EMG”), a

company owned by Black’s former business partner, Robert Brown. (Pl.’s Mem. of Law at 16.) 

The court addressed this issue in detail in the MOD. See MOD, 2008 WL 783558, at *14. The

court found, and there is no dispute, that effective April 1, 2001, Black relinquished his

ownership interest in EMG to Brown who thereafter retained full ownership of EMG. (MOD,

2008 WL 783558, at *3.) The testimony at the trial revealed that approximately $2,455,822 was

transferred from plaintiff to EMG. Id. at *7-*8. In rejecting plaintiff’s claim for reimbursement

for these amounts, the court concluded as follows:

After careful consideration of the evidence, this court concludes that neither Mr.

Black nor Logistics are liable for the loans made by HR to EMG. Plaintiff has

failed to prove by a preponderance of the evidence, let alone by clear precise and

convincing evidence, that Mr. Black ever knew of these loans to EMG at the time

they were made or subsequently agreed to repay the loans.

The letters sent by Mr. Mazzoni to Mr. Black discussed above did not reference

any loans to EMG. While Mr. Mazzoni did reference loans made to Transit Aide

and Logistics, he was silent as to any agreement by Mr. Black to pay loans to

EMG. . . . This court finds it incredible that Mr. Black would agree orally to repay

loans incurred by EMG, a company owned exclusively by Mr. Brown at the time

of the alleged loans. . . .

In his testimony, Mr. Mazzoni explained that HR made loans to EMG as part of

its effort to assist Transit Aide, because EMG was responsible for funding the

payroll of Transit Aide employees. (N.T., 10/22/07 at 75, 85.) EMG would pay

Case 2:04-cv-05660-TJR Document 64 Filed 06/03/08 Page 15 of 25
16

Transit Aide’s payroll each week, and EMG would bill Transit Aide for the

amounts of the payroll. Transit Aide was to pay the invoice to EMG. (N.T.,

10/23/07 at 120-21.) . . . Mr. Black credibly testified that Transit Aide paid most,

if not all, of these invoices. (N.T., 10/24/07 at 158-62.) Plaintiff did not

introduce any billing records of EMG, or unpaid invoices and dunning letters

EMG sent to Transit Aide, to support Mr. Mazzoni’s assertion that the monies

transferred from HR to EMG went directly to pay Transit Aide’s payroll, and that

Transit Aide did not repay the monies. See N.T., 10/23/07 at 207-09. HR’s

accounting records show transfers to EMG, but do not describe the reasons for the

transfer. (Exs. P-31, P-32.) Plaintiff has not eliminated the possibility that the

loans from HR to EMG were used for other purposes, for example, to pay another

client’s payroll. EMG had many clients, only one of whom was Transit Aide. 

(N.T., 10/23/07 at 118-19, 276.) Even if the loans from HR to EMG were used to

pay Transit Aide’s payroll, this court cannot impose on Logistics or Mr. Black the

obligation to repay HR for these loans absent credible evidence proving that they

agreed or promised to repay HR for loans to EMG. 

(MOD, 2008 WL 783558, at *14 (footnote omitted).)

In the instant Motion, plaintiff rehashes the same arguments raised at trial

regarding the loans from HR to EMG. The court addressed the evidence presented at trial. See

MOD, 2008 WL 783558, at *14 and *14 n.2. The court discussed plaintiff’s claim of unjust

enrichment. Id. at *14 n.3. The court considered the various letters Mr. Mazzoni sent to Mr.

Black concerning Transit Aide. Id. at *12-*13. Plaintiff argues that the testimony of its expert,

Christopher Nawn, proves that the monies lent by plaintiff to EMG were used for Transit Aide. 

(Pl.’s Mem. of Law at 17.) However, Mr. Nawn’s testimony was not as persuasive as plaintiff

paints. On cross-examination, Mr. Nawn testified as follows: 

Q. Do you know - - you don’t know why monies in that amount would be

transferred to EMG, do you?

A. No. I was not employed by either Mr. Black or Mr. Mazzoni. 

Q. So, all you see in these bank statements over a thirty-two month period is

that amount of money going to EMG?

A. I see transfers going to EMG bank accounts consistent with payroll dates,

consistent with the disbursement dates so, you know, it’s money sent over

there to - -

Case 2:04-cv-05660-TJR Document 64 Filed 06/03/08 Page 16 of 25
Plaintiff mischaracterizes the evidence when it states that Mr. Nawn “reviewed 12

EMG’s bank statements and, from those statements, he verified ‘to the penny’, the subsequent

transfer of those same amounts to Transit Aide.” (Pl.’s Mem. of Law at 17.) Mr. Nawn testified

as follows: 

For example, if you look at the EMG loan balance there of 2.5 million dollars we

just didn’t take it for granted that it went up by six hundred and eighty-five

thousand dollars. We went and grabbed the bank statements from Mr. Mazzoni’s

companies, and the bank statements for Mr. Black’s company, EMG, and verified

the numbers to the penny.

(N.T., 10/23/07 at 188.) In this testimony, Mr. Nawn did not state that he traced the monies

loaned to EMG to Transit Aide “to the penny.” Mr. Nawn testified that by looking at EMG bank

statements and the bank statements of Mr. Mazzoni’s companies, he was able to trace the monies

going from “Mr. Mazzoni’s companies” into EMG “to the penny.” 

17

Q. Right. But you don’t know why?

A. That’s correct.

(N.T., 10/23/07 at 204.) Discussing the loans to EMG, Mr. Nawn testified on direct examination

that monies lent to EMG was “cash that went out to defendants’ companies or related entities,”

not only to Transit Aide. Id. at 178. Mr. Nawn also testified that the transfers “coincided with

payroll dates so . . . it passed the smell test in terms of where was the money going and why it

was going out.” Id. at 192. Passing the “smell test” is hardly persuasive evidence. 

12

Defendants’ expert, Mr. Lunden, testified as follows regarding the transfers of

monies from plaintiff to EMG and Mr. Nawn’s expert report:

[Mr. Nawn] is looking at the total transfers over a thirty two month period,

transfers to EMG and saying that they belong as an offset, and in my opinion that

would only be appropriate if one of the Black entities got the benefit of those

transfers.

I saw a document in the production that indicated that EMG was a hundred

percent owned by Mr. Brown, so I don’t think it is appropriate to attribute all of

the transfers to EMG as benefitting Mr. Black.

Case 2:04-cv-05660-TJR Document 64 Filed 06/03/08 Page 17 of 25
18

(N.T., 10/24/07 at 197.) The record supports this court’s conclusion that defendants are not

liable for repayment of loans plaintiff made to EMG. Plaintiff’s request that the court reconsider

defendants’ duty to repay loans from plaintiff to EMG is denied.

3. Equitable Offset, Recoupment, and Harm to Third Party Creditors

Plaintiff’s third and fourth arguments are as follows: 

Assuming, Arguendo, that Logistics’ [sic] was Entitled to an Award of any

Amount on its Counterclaims, the Court Overlooked the Record When It Allowed

Black and Onsite to have the any of [sic] Benefit of an Equitable Offset or

Recoupment for any Damages Awarded Under Logistics’ Counterclaims Because

They Neither Pled nor Presented any Counterclaims

Assuming, Arguendo, that Black and On-Site were Entitled to Equitable

Recoupment on Account of a Counterclaim that they neither Pled nor Presented,

Equitable Recoupment should still not be Applied Because it Unjustly Harms the

Rights of Third Party Creditors

(Pl.’s Mem. of Law at 20, 22.) Plaintiff contends that assuming Logistics is entitled to damages

on account of its counterclaims, Black and On-Site should not be able to use those damages to

offset any of their joint and several liability because they did not present any counterclaims on

behalf of themselves. Id. at 20. Plaintiff further argues that if Black and On-Site are otherwise

entitled to equitable recoupment, it should nonetheless be denied because application of equitable

recoupment unjustly harms the rights of third party creditors, namely, the Internal Revenue

Service, the Commonwealth of Pennsylvania and plaintiff’s counsel. Id. at 23-25. 

These claims will be denied. This court has amended its Conclusions of Law to

conclude that defendant Black did not guarantee repayment of plaintiff’s loans to Logistics under

the Guaranty Agreement. Since Black is not liable as guarantor for repayment of Logistics’

obligations to plaintiff, the doctrines of setoff and equitable recoupment do not apply as to Black. 

Case 2:04-cv-05660-TJR Document 64 Filed 06/03/08 Page 18 of 25
19

The court concluded in the MOD that On-Site, as the successor corporation to Logistics, was

liable to plaintiff for the amounts plaintiff loaned to Logistics. (MOD, 2008 WL 783558, at *20

and *20 nn.6 and 7.) On-Site, as successor to Logistics, is obligated to pay only that amount

owed by its predecessor, Logistics. Logistics is entitled to offset the money it owes plaintiff

against the money owed to Logistics by plaintiff. See id. On-Site is liable only for the net

amount, if any, after application of offset. 

It is ironic that plaintiff argues that defendants should be denied offset because the

unpaid taxing authorities are unjustly harmed parties. The taxing authorities were harmed due to

plaintiff’s own actions. Defendants should not be deprived of their right to offset because of

plaintiff’s actions. The authority cited by plaintiff does not require otherwise. Further, plaintiff

contends that its attorneys may have a charging lien on a fund created by the lawsuit. No fund

was created by the lawsuit; defendants owe nothing to plaintiff other than one dollar for violation

of the non-compete provision of the Licensing Agreement. Plaintiff’s claims are denied.

4. Plaintiff’s Request for an Accounting

Next, plaintiff contends that the court erred when it denied Count II of its

Complaint requesting an accounting. (Pl.’s Mem. of Law at 26-29.) In Count I of the Complaint,

plaintiff alleged a claim of “Intentional Interference with Contractual Relations.” (Complaint

Count I.) In Count II of its Complaint, plaintiff incorporated paragraphs one through forty-four

of the Complaint and requested an accounting. (Complaint Count II.) In Count II, plaintiff

alleges as follows: 

Solely as a result of the conduct of the Defendants as set forth above, Plaintiff is

entitled to an accounting to it for all sums received by Defendants and to have

remitted to it all such sums received without reduction, and to have Defendants

Case 2:04-cv-05660-TJR Document 64 Filed 06/03/08 Page 19 of 25
20

cease and desist from their tortious interference with Plaintiff’s contractual

relations.

(Complaint ¶ 46 (emphasis added).) Plaintiff’s request for an accounting related solely to

plaintiff’s claim in Count I of the Complaint alleging intentional interference with contractual

relations. Id. The court denied Count I of the Complaint and the related request for an

accounting concluding as follows:

In Count II of the Complaint, plaintiff requests an accounting for all sums

received by defendants as a result of their tortious interference with plaintiff’s

contractual relations. (Complaint ¶ 46.) Since plaintiff has failed to prove that

defendants tortiously interfered with plaintiff’s contractual relations, this court

will not order an accounting.

Furthermore, “[a]n accounting request is not a substitute for plaintiffs’ obligation

to establish their damages through discovery.” Arrowroot Natural Pharmacy v.

Stand. Homeopathic Co., 1998 WL 57512 (E.D. Pa. Feb. 10, 1998). “An

accounting should not be used to aide [sic] a party who otherwise failed to satisfy

his burden of proof on the damages issue.” Genica, Inc. v. Holophane Div. of

Manville Corp., 652 F. Supp. 616, 619-20 (E.D. Pa. 1987). See also United States

v. Kithcart, 134 F.3d 529, 536 (3d Cir. 1988) (McKee, J., dissenting in part and

concurring in part) (“I do not think it is asking too much to expect attorneys to

attempt to meet their burdens of proof when issues are first litigated.”). Plaintiff

had the opportunity through discovery to establish any damages caused by

defendants’ alleged interference with contractual relations. Plaintiff evidently

failed to conduct discovery to establish its damages resulting from defendants’

interference with contractual relations, and offered no such evidence at trial. 

Accordingly, an accounting will not be ordered by this court. 

(MOD, 2008 WL 783558, at *17.) 

Plaintiff did not request an accounting with respect to any other count of the

Complaint. To the extent that plaintiff’s incorporation of Count II into the later Counts of the

Complaint is sufficient to transform plaintiff’s specific request for an accounting with respect to

Count I into a general request for an accounting for all Counts of the Complaint, or most

particularly for plaintiff’s claim that defendants breached the non-compete provision in the

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21

Licensing Agreement, the court denies plaintiff’s request for reconsideration. The same analysis

quoted above would apply. Attached as Exhibit A to plaintiff’s Motion, is a Declaration of

Blaise Mazzoni dated April 1, 2008, in which he declares: “[T]he Plaintiff specifically asked

Defendants during discovery, and again in connection with trial, to produce the documents

necessary to prepare such calculations. The Defendants refused to comply.” (Pl.’s Mem. of Law

Ex. A.) Attached to the Declaration are plaintiff’s first set of document requests dated January

31, 2006 and plaintiff’s notice to produce for the trial dated October 19, 2007. The record is

devoid of any action taken by plaintiff after January 31, 2006 but before the trial to obtain the

documents defendants allegedly refused to provide. The court reviewed the docket in this case

and plaintiff did not file a motion to compel, or take any other action to obtain discovery needed

to establish its damage claim. See Fed. R. Civ. P. 37. Mr. Mazzoni’s post trial Declaration is too

little, too late.

Plaintiff’s request for an accounting must be denied since plaintiff had an

adequate remedy at law – a claim for damages. Arrowroot Natural Pharmacy v. Stand.

Homeopathic Co., 1998 WL 57512, at *12 (E.D. Pa. Feb. 10, 1998). See also Am. Air Filter Co.,

Inc. v. McNichol, 527 F.2d 1297, 1300 (3d Cir. 1975) (“An accounting is an essentially equitable

remedy. . ..”); Pennsylvania Ship Supply, Inc. v. Fleming Int’l, Ltd., 113 F. Supp. 2d 760, 764

(E.D. Pa. Sept. 11, 2000) (“An accounting is an equitable remedy which is available only when

there is no adequate remedy at law.”). Where a party had the opportunity to establish their

damage claim through discovery, a request for an accounting is not appropriate. Pennsylvania

Ship Supply, 113 F. Supp. 2d at 764. “An accounting request is not a substitute for plaintiffs’ 

obligation to establish their damages through discovery.” Arrowroot, 1998 WL 57512, at * 12. 

Case 2:04-cv-05660-TJR Document 64 Filed 06/03/08 Page 21 of 25
22

Here, plaintiff had an adequate remedy at law and cannot resort to the equitable remedy of an

accounting. Plaintiff’s motion for reconsideration on its request for an accounting is denied.

5. Use of “Centrix” Name

Plaintiff contends that the court erred when it concluded that defendants had the

right to use the “Centrix” name. (Pl.’s Mem. of Law at 29-32.) Plaintiff urges that defendants

failed to satisfy all of the requirements of paragraph 18 of the Licensing Agreement and,

therefore, cannot use the “Centrix” name and brand. The court concluded as follows:

The Licensing Agreement provided that upon the termination of the agreement,

the name “Centrix HR” and logo would transfer to Logistics for consideration of

one dollar. (Ex. P-2 ¶ 18.) This court has held that Logistics properly terminated

the Licensing Agreement. . . . Thus, upon the termination, Logistics had the right

to use the name HR and logo. Therefore, defendants did not engage in unfair

competition.

(MOD, 2008 WL 783558, at *19.) 

Paragraph 18 of the Licensing Agreement is subtitled “Term” and provides a

number of requirements and conditions governing the Licensing Agreement. Paragraph 18

provides as follows:

Term. The Initial Term of this Agreement shall begin on the effective date

specified above and shall continue for a period of at least one (1) year and/or until

terminated by either party as permitted by the Agreement upon prior written

notice. Upon the death or the incapacitating disability of Blaise Mazzoni . . .,

Licensee shall assume the responsibility of Licensor to fulfill its obligations

hereunder until the end of the Term of this Agreement at no fee. At the end of the

Term or upon termination of this Agreement, Licensor hereby sells assigns and

transfers the Name unto Licensee in consideration for $1.00. At the end of the

Term of this Agreement . . ., Licensee agrees to enter into an Administrative

Services Agreement with Licensor upon terms and conditions consistent with the

services provided to the Licensee under this agreement, and at the same fee and

reimbursed expense structure for a term of at least an additional one year. . . .

Case 2:04-cv-05660-TJR Document 64 Filed 06/03/08 Page 22 of 25
Plaintiff specifically argued that Black’s use of the Centrix name is improper 13

under the Licensing Agreement. However, since Logistics is the Licensee under the Licensing

Agreement, the defendant allegedly misusing the name is Logistics.

23

(Licensing Agreement ¶ 18.) Plaintiff argues that because Logistics did not enter into an 13

Administrative Services Agreement with plaintiff, Logistics did not fulfill the requirements for

the use of the Centrix name. 

Paragraph 18 of the Licensing Agreement permits Logistics to use the Centrix

name upon the end of the term or upon termination of the agreement in consideration of $1.00. 

The execution of the Administrative Services Agreement is a separate and independent

requirement under paragraph 18. The plain language of the Licensing Agreement does not make

execution of the Administrative Services Agreement a condition precedent to Logistics’ use of

the Centrix name. If plaintiff desired to bring a claim against Logistics for breach of this separate

requirement, it could have done so. Plaintiff did not. Plaintiff’s request that the court reconsider

its conclusion that Logistics has the right to use the HR name is denied.

6. Attorney’s Fees Under the Guaranty Agreement

Plaintiff contends that the court overlooked plaintiff’s claim for attorney’s fees

under the Guaranty Agreement. (Pl.’s Mem. of Law at 32.) Plaintiff argues that it is entitled to

attorney’s fees for successfully enforcing the Guaranty Agreement against Black as guarantor of

Logistic’s obligations. Paragraph twenty-four of the Guaranty Agreement provides as follows:

Attorney’s Fees. Guarantor will pay all of the Company’s reasonable costs,

charges, and expenses, including court costs and attorneys’ fees, incurred in

enforcing Guarantor’s obligations under this Guaranty.

(Ex. P-3 ¶ 24.) This request is now moot. The court has amended its Conclusions of Law to

conclude that Black is not liable under the Guaranty Agreement for repayment of plaintiff’s loans

Case 2:04-cv-05660-TJR Document 64 Filed 06/03/08 Page 23 of 25
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to Logistics. Plaintiff has not enforced the obligations of either of the Guarantors under the

Guaranty Agreement. Hence, plaintiff cannot seek attorney’s fees under the Guaranty

Agreement. Plaintiff’s request for attorney’s fees under the Guaranty Agreement is denied. 

IV. CONCLUSION

For the reasons stated above and in the MOD, the court finds that defendant

Logistics is liable to plaintiff for loans in the amount of $856,999.36. This amount shall be

offset by amounts HR owes to Logistics – $1,603,673. On-Site, as the successor corporation, is

merely a continuation of Logistics and is therefore liable for its debts. Black is not liable under

the Guaranty Agreement for Logistics’ obligations to plaintiff. However, Black remains liable

for damages in the amount of $1.00 for breach of the non-compete provision of the Licensing

Agreement.

 The court’s Conclusions of Law in the MOD are revised as follows: 

1. The first sentence of paragraph one is amended to read as follows: “It is

clear that Logistics agreed in writing to repay any loans between HR and Logistics.” 

2. The last sentence of paragraph one is amended to read as follows: “Thus,

this court concludes that defendant Logistics is liable to plaintiff for loans made to Logistics

pursuant to the Licensing Agreement.” 

3. Reference to defendant Black being liable as guarantor is deleted from

Section III.

Case 2:04-cv-05660-TJR Document 64 Filed 06/03/08 Page 24 of 25
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The court need not amend the Judgment Order since the rulings herein do not

materially affect the Judgment Order entered by the court on March 25, 2008. An appropriate

order follows.

BY THE COURT:

/s/ Thomas J. Rueter 

THOMAS J. RUETER

Chief United States Magistrate Judge 

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