J-S59037- 14

*Retired Senior Judge assigned to the Superior Court. NON-PRECEDENTIAL DECISION – SEE SUPERIOR COURT I.O.P 65.37 BANK FINANCIAL SERVICES GROUP, STEVEN GOLDBERG, STEVEN GOLDBERG SOLE PROPRIETORSHIP, ARNOLD WINICK, AND DAVID PAYNE,

Appellants v. MEYER-CHATFIELD CORP.,

------------------------------------------- MEYER-CHATFIELD CORP.

v. BANK FINANCIAL SERVICES GROUP; STEVEN GOLDBERG AND DAVID PAYNE

Appellants : : : : : : : : : : : : : : : : : : : : IN THE SUPERIOR COURT OF

PENNSYLVANIA

No. 1092 EDA 2014

Appeal from the Order Entered March 17, 2014, in the Court of Common Pleas of Montgomery County, Civil Division, at No(s): 2013-30326 & 2013-29858 BEFORE: SHOGAN, J., LAZARUS, J., and STRASSBURGER, J.* MEMORANDUM BY STRASSBURGER, J.: FILED OCTOBER 07, 2014 Bank Financial Services Group (BFS), Steven Goldberg , Arnold Winick, and David Payne (collectively, “Appellants”) appeal fro m two orders entered by the trial court. First, Appellants appeal from the March 17, 2014 “Interim Order for Special Injunction” entered in favor of Meyer -Chatfield and against Appellants. Appellants also appeal from an order ent ered on March 26, 2014, by which the trial court denied Appellants’ “Mot ion Demanding aJ-S59037- 14

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Hearing under PA.R.Civ.P. 1531(f)(1) and Motion to Dissolve Injunction under Pa.R.Civ.P. 1531(c).” Upon review, we vacate th e order entered on March 17, 2014, and remand to the trial court for ad ditional proceedings. The trial court summarized the facts underlying this case. Meyer-Chatfield is in the business of providing bank- owned life insurance (“BOLI”), which is a highly specialized fi nancial product. BOLI is a single premium life insurance contr act specifically designed for banks to earn tax free income, among other benefits. Since its beginning in 1992, Meyer-Ch atfield has been engaged in the design, marketing, sales and servici ng of BOLI products to the banking community nationwide. Me yerChatfield has developed highly sophisticated programs t o analyze and meet the needs of its existing customers and to identify, cultivate and establish strategic relationship s and contractual and business relationships with new customers. Meyer-Chatfield has expended substantial time, money, and effort to recruit, train and supervise a team of profe ssional marketing and sales consultants to carry out its progra ms. On March 3, 2003, Steven Goldberg executed a sales representative agreement with Meyer- Chatfield (the “Goldberg Contract”). Goldberg became an extremely successful BOLI salesperson, earning in excess of $2 million in commissions in multiple years. [The contract included a non-compete agreement.]

*** The Goldberg Contract was entered into for an initia l (1) year term from March 7, 2003 to March 7, 2004 (the “Te rm”), and was automatically renewed every year thereafter “unless either party notified the other party in writing at least three (3) months prior to the end of the Term or any renewal t hereof that it elects to terminate [the Goldberg Contract], in whi ch event [the Goldberg Contract] shall expire upon the expirat ion of the then current renewal term.”J-S59037- 14

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Arnold Winick became a BOLI sales representative for Meyer-Chatfield in 2002 and teamed up with Goldberg . Although Winick did not have a contract with Meyer-Chatfield, h e, much like Goldberg, was a beneficiary of extensive and ongo ing training from Meyer-Chatfield and became an extremel y successful BOLI salesperson. On August 16, 2013, Goldberg left Meyer-Chatfield a nd went to work for Bank Financial Services Group (“BFS”), which is a direct competitor of Meyer- Chatfield’s. Winick followed Goldberg to BFS, along with numerous other employees, including David Payne, Joseph Byrd and David Schwartz. Trial Court Opinion, 5/30/2014, at 1- 3. On October 2, 2013, Meyer-Chatfield filed a complaint and petition for preliminary injunction against Appellants. On October 7, 2013, BFS, Goldberg, the Steven Goldberg Sole Proprietorship, W inick and Payne filed a complaint for declaratory judgment and a special/prelim inary injunction against Meyer-Chatfield. The two matters were later consolidated. A hearing was held on October 18, 2013. At that hear ing, the trial court permitted counsel to argue why “interim injunctive relief would be appropriate in this case.” N.T. 10/18/2013, at 3. No testimony was taken,

and the trial court took the matter under advisement. The next hearing was held on January 29, 2014. The parties confirmed that they were trying to work through discov ery disputes and had also begun settlement negotiations. Appellants brought their witnesses and were prepared to proceed with the hearing; however, Appellants then argued that Meyer-Chatfield brought a surprise expert witness, forensicJ-S59037- 14

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analyst Louis Cinquanto, and asked for a protective or der with respect to his testimony. The trial court deni ed that request, and due to Cinquanto’s schedule, permitted him to testify first. The trial court summarized that testimony as follows. ... Meyer -Chatfield hired Louis Cinquanto to perform a forensi c computer investigation. Cinquanto, who testified at t he January 29, 2014 hearing in this matter, is a certified comput er forensic examiner and Chief Operations Officer and senior foren sic examiner at Cornerstone Legal Consultants, a litigatio n consulting firm that performs computer preservation, ana lysis, expert testimony, and trial presentation services. Cinq uanto conducted an in-depth investigation of the computer reco rds of Goldberg, Winick, Byrd and Schwartz. Meyer-Chatfiel d alleges that the discovery of this investigation demonstrates th at Goldberg, Winick, Byrd and Schwartz unlawfully accessed , downloaded and copied Meyer- Chatfield’s confidential and proprietary information and data from its computers sho rtly before leaving Meyer-Chatfield to join BFS. Furthe rmore, Cinquanto testified about how the former Meyer-Chatf ield employees used methods to conceal their activities on thei r computers, including finding a program used to erase tem porary files on the computer Goldberg used at Meyer-Chatfiel d. In addition, Cinquanto testified that analysis of Pay ne’ s computer showed that Payne used a “drop box,” which is a service that allows the sending and receiving of data or files by way of the internet. In addition, Payne used a flash drive three (3) times in 2013 to transfer files that had “Meyer

- Chatfield” or “MC” in the file name. Likewise, an analysis of Byrd’s and Schwartz’s computers showed that they both used flash dr ives. In sum, Cinquanto concluded in his testimony that the former Meyer-Chatfield employees engaged in a systema tic pattern of concealment and destruction of data that wou ld have indicated what specific Meyer-Chatfield data [Appellan ts] accessed and sent to outside persons or companies. He added that the action of the former employees could be the “l argest IPJ-S59037- 14

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theft” case that he has seen in all of his years as a computer forensic [analyst]. Trial Court Opinion, 5/30/2014, at 3- 6. Cinquanto did not complete his testimony until the late afternoon, so the trial court scheduled another hearing, which occurre d on February 28, 2014. At that hearing, the trial court permitted ar gument with respect to the grant of interim relief pending the resolution o f the preliminary injunction. Meyer- Chatfield argued that Appellants continued to “pilfer” clients, and to date, 18 clients, representing a “ve ry sizeable portion of Meyer- Chatfield’s business” had been lost. N.T., 2/28/2014, at 4. Counsel further argued that, if Appellants’ conduct continued, Meyer -Chatfield would go out of business. Appellants argued in response to Mey er- Chatfield’s contentions; no testimony was taken; and, the trial cou rt took the matter under advisement and scheduled a two-day hearing. On March 13, 2014, the trial court signed an order, which states the following. AND NOW, this 13 th day of March 2014, it is hereby ORDERED and DECREED as follows: [Appellants] Steven Goldberg and [BFS] and any of t heir respective partners, agents, joint ventures and any per sons or entities acting for or on their behalf including but n ot limited to BFS Northeast, Arnold Winick, David Payne, David Schwa rtz and Joseph Byrd (collectively, [Appellants]) are hereby e njoined and shall immediately cease and desist from: (i) diverting existing BOLI business away from Meyer-Chatfield (ii) soliciting or inducing or attempting to induce any existing bank cl ient ofJ-S59037- 14

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Meyer-Chatfield not to do business with Meyer-Chatfie ld or to cease doing business with Meyer-Chatfield and (iii) cont acting, soliciting or communicating in any way with existing ban k clients of Meyer-Chatfield (including those identified in Ex hibit 2 of the Affidavit of Bennett S. Meyer in support of the Pet ition.) IT IS FURTHER ORDERED AND DECREED that [Appellants ] are temporarily enjoined from servicing its BOLI polic ies in regard to Customers Bank other than the Northwestern M utual BOLI policy sold to Customers Bank by BFS in September 2013. IT IS FURTHER ORDERED AND DECREED that [Appellants ] may provide monthly reports strictly necessary for the ser vicing of existing BOLI policies at the following banks ... This Interim Special Injunction Order shall take effe ct immediately upon the posting of a bond by Meyer-Chat field in the amount of One Thousand Dollars ($1,000.00) and sha ll continue in force until further Order of the Court. Interim Order for Special Injunction, 3/17/2014. On March 19, 2014, Appellants filed a motion to dissol ve the injunction and for a hearing pursuant to Pa.R.C.P. 1531(f)(1). 1 The trial court entered

1 That rule provides that [w]hen a preliminary or special injunction involving freedom of expression is issued, either without notice or after noti ce and hearing, the court shall hold a final hearing within three days after demand by the defendant. A final order shall b e filed in the office of the prothonotary within twenty-four hours a fter the close of the hearing. If the final hearing is not held within the three-day period, or if the final order is not filed within twentyfour hours after the close of the hearing, the injuncti on shall be deemed dissolved. Pa.R.C.P. 1531(f)(1).J-S59037- 14

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an order denying that motion on March 26, 2014. On March 27, 2014, Appellants filed a notice of appeal referencing both orders. 2,3 Before we reach the issues raised on appeal by Appella nts, we consider the trial court’s suggestion that these orders ar e not appealable because it has not yet heard all of the evidence. 4 The trial court observed the following. Hearings in this matter were held on October 18, 2013, January 29, 2014 and February 28, 2014. These preliminary i njunction hearings have not been completed. An appeal cannot be taken from a temporary interim injunction order entered d uring the course of multiple hearings on a petition for prelimin ary injunction. ... Accordingly, this court’s order dated March 13, 2014 is interlocutory, and this appeal should be quashe d. Trial Court Opinion, 5/30/2014, at 6. Although neither party responds specifically to the tri al court’s observation, the statement of jurisdiction presented by Appellants sets forth that this Court has jurisdiction under Pa.R.A.P. 311( a)(4). Appellants’ Brief at 1. That rule provides that a party is entitled t o an interlocutory appeal as of right from

2 We observe that the filing of one appeal from multi ple orders is discouraged generally. See TCPF Ltd. P'ship v. Skatell , 976 A.2d 571, 574 (Pa. Super. 2009).

3 The trial court did not order a concise statement of err ors complained of on appeal pursuant to Pa.R.A.P. 1925 and none was filed.

4 Hearings on this matter have been scheduled and postpon ed on numerous occasions. A review of the trial court docket reveals th at hearings are scheduled currently for the end of October 2014.J-S59037- 14

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[a]n order that grants or denies, modifies or refuses to modify, continues or refuses to continue, or dissolves or refuses to dissolve an injunction unless the order was entered ... af ter a trial but before entry of the final order. Such ord er is immediately appealable, however, if the order enjoi ns conduct previously permitted or mandated or permits or mandat es conduct not previously mandated or permitted, and is e ffective before entry of the final order. Pa.R.A.P. 311(a)(4)(ii). This Court has also explained that [a]n order which grants a request to enjoin certain cond uct, as was done by the trial court in the ... order, is an inte rlocutory matter specifically authorized for appeal as of right b y Rule 311(a)(4). Injunctive relief is considered an extraordi nary equitable remedy and it is to be granted only where the moving party has established that immediate and irreparable harm, which cannot be compensated by damages, will result if the injunction is denied. Furthermore, the party seeking t o enjoin ce rtain conduct must demonstrate that greater injury wou ld result by refusing the injunction than by granting it

. Pennsylvania Orthopaedic Soc. v. Independence Blue C ross , 885 A.2d 542, 547 (Pa. Super. 2005) (internal citations omitt ed). Instantly, the trial court’s “Interim Order for Special Injunction” entered on March 13, 2014 clearly enjoined the conduct of Appellants, and is therefore immediately appealable pursuant to Pa.R.A. P. 311(a)(4). Moreover, the order dated March 26, 2014 which denied Appel lants’ request to dissolve the injunction is also appealable under the same rule. Accordingly, we conclude that we have jurisdiction to re view these orders.

We set forth our well-settled standard of review.J-S59037- 14

- 9 - A trial court has broad discretion to grant or deny a preliminary injunction. Bell Fuel Corp. v. Cattolico , 375 Pa.Super. 238, 244, 544 A.2d 450, 453 (1988), appea l denied, 520 Pa. 612, 554 A.2d 505 (1989). When reviewing a trial court's grant or refusal of a preliminary injunction, a n appellate court does not inquire into the merits of the controver sy, but rather examines only the record to ascertain whether a ny apparently reasonable grounds existed for the action of the court below. Temtex Products, Inc. v. Kramer , 330 Pa.Super. 183, 197, 479 A.2d 500, 507 (1984) ( quoting Singzon v. Commonwealth Dept. of Public Welfare , 496 Pa. 8, 10

– 11, 436 A.2d 125, 126

– 27 (1981)). We may reverse if the trial court's ruling amounted to an abuse of discretion or a misapplication of law. Bell Fuel , 375 Pa.Super. at 244, 544 A.2d at 453.

WPNT Inc. v. Secret Commc'n Inc. , 661 A.2d 409, 410 (Pa. Super. 1995). The procedure applicable to actions for injunctive rel ief is governed by Pa.R.C.P. 1531. That rule provides, in relevant par t, as follows. (a) A court shall issue a preliminary or special injuncti on [ 5] only after written notice and hearing unless it appears to the satisfaction of the court that immediate and irreparab le injury will be sustained before notice can be given or a hear ing held, in which case the court may issue a preliminary or special injunction without a hearing or without notice. In de termining whether a preliminary or special injunction should be g ranted and whether notice or a hearing should be required, the court may act on the basis of the averments of the pleadings o r

5 “Beca use of the many similarities between preliminary and sp ecial injunctions, the two types tend to merge into one and the words are used interchangeably. Although the former equity rules mad e minor distinctions between them, the Pennsylvania Rules of Civil Procedur e treat them exactly alike.” 5 Goodrich Amram 2d § 1531(a):1 (Amram Commen tary). For the sake of consistency, we will refer to the injunction gran ted in this case as a preliminary injunction.J-S59037- 14

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petition and may consider affidavits of parties or thir d persons or any other proof which the court may require.

*** (c) Any party may move at any time to dissolve an inju nction. Pa.R.C.P. 1531(a) and (c) (footnote added). This rule has been interpreted as follows. This court has acknowledged that there is no absolute rig ht to a hearing on a preliminary injunction. Bell Fuel , 375 Pa.Super. at 248, 544 A.2d at 455; Franklin Decorators, Inc. v. Hende – Jon Furniture Showrooms, Inc. , 339 Pa.Super. 449, 489 A.2d 246 (1985). Nevertheless, “our rules and our case law cle arly indicate that a hearing is the preferred procedure. It is the rare preliminary injunction that can correctly be denied wit hout a hearing and no preliminary injunction can be granted and continued without a hearing, whether before or after t he initial grant .” Bell Fuel , 375 Pa.Super. at 249, 544 A.2d at 455 (emphasis added). See also Pubusky v. D.M.F. Inc. , 428 Pa. 461, 239 A.2d 335 (1968).

In Pubusky , supra , the trial court initiated a hearing on the requested preliminary injunction. Interrupting de fendant's cross-examination of plaintiff and preventing defenda nt from presenting any evidence or testimony on his own behalf, the lower court discontinued the hearing and granted plain tiff a preliminary injunction. This state's Supreme Court vacat ed the decree and remanded the case for an evidentiary heari ng after concluding that “[i]t is ... fundamental that all of th e parties are entitled to a hearing before [a preliminary] injunct ion should issue.” Id . at 463, 239 A.2d at 336

– 37. The court in Pubusky further noted that even when circumstances support the issuance of an ex parte injunction, a hearing is not excused, but merely delayed for a limited time. Id . at 463 n. 1, 239 A.2d at 337 n. 1. See also Ogontz Controls Co. v. Pirkle , 329 Pa.Super. 8, 13

– 14, 477 A.2d 876, 879 (1984), appeal after remand , 346 Pa.Super. 253, 499 A.2d 593 (1985) (although the trial court conducted a hearing within five days of iss uing an ex parte injunction, it erred by continuing the preliminary i njunctionJ-S59037- 14

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without allowing the objecting party to present evide nce at the abbreviated hearing)[.]

WPNT Inc. , 661 A.2d at 411.

We frequently have said that a preliminary injunction should not issue at least until the rights of the plaint iff are clearly established. It also is fundamental that all of the parties are entitled to a hearing before such an injunction s hould issue. While the testimony at a hearing for a preliminary i njunction which seeks only to preserve the status of the parties un til the issue is finally determined need not always be as extensi ve as that at a final hearing, the litigants should not be deprived of their right to fully cross-examine all adverse witnesses, nor of the opportunity to present testimony which is relevant to the question of whether or not the injunction should issue. These basic rights were overlooked in this case. Pubusky v. D. M. F. Inc. , 239 A.2d 335, 336-37 (Pa. 1968) (internal quotations and citations omitted). As the trial court points out, the hearing in this mat ter has not been completed. See Trial Court Opinion, 5/30/2014, at 7 (“The hearings a re not complete, and the court has reached no final conclusion on whether to issue the preliminary injunction.”). T hus, the trial court misapplied law by granting a preliminary injunction under these circumsta nces. Moreover, we find the trial court’s attempt to couch it s order as an “interim special injunction” unavailing. The rules do n ot provide any basis for such relief. Accordingly, we vacate the March 17, 2014. Order vacated. Case remanded. Jurisdiction relinqu ished. Judge Lazarus joins the memorandum.J-S59037- 14

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Judge Shogan concurs in the result. Judgment Entered.

Joseph D. Seletyn, Esq. Prothonotary

Date: 10/7/2014