Court Opinion

ID: 9399901
Source: CourtListenerOpinion
Date Created: 2023-06-06 17:09:58.544553+00
Date Added: 2024-06-11T17:19:40.802791
License: Public Domain

J-A28037-22

NON-PRECEDENTIAL DECISION - SEE SUPERIOR COURT O.P. 65.37

    PATRICK WOLFINGTON, TIMOTHY                :   IN THE SUPERIOR COURT OF
    EARLE AND JOHN GRABOWSKI                   :        PENNSYLVANIA
                                               :
                       Appellants              :
                                               :
                                               :
                v.                             :
                                               :
                                               :   No. 1564 EDA 2022
    THADDEUS BARTKOWSKI, III,                  :
    CATALYST OUTDOOR ADVERTISING,              :
    LLC AND CATALYST EXPERIENTIAL,             :
    LLC                                        :

                  Appeal from the Order Entered April 6, 2022
                In the Court of Common Pleas of Chester County
                     Civil Division at No(s): 2021-05143-CT

BEFORE: PANELLA, P.J., LAZARUS, J., and SULLIVAN, J.

MEMORANDUM BY SULLIVAN, J.:                                FILED JUNE 6, 2023

       Patrick Wolfington (“Wolfington”), Timothy Earle (“Earle”), and John

Grabowski (“Grabowski”) (collectively, “Appellants”) appeal from the order

granting a preliminary injunction in favor of Thaddeus Bartkowski, III

(“Bartkowski”), Catalyst Outdoor Advertising, LLC, and Catalyst Experiential,

LLC (collectively, “Appellees”).1 We affirm in part, vacate in part, and remand

for a correction to the order.

       The trial court set forth the factual background of this appeal as follows:

              [Appellants] were employees and members of Catalyst
       [Outdoor Advertising, LLC and Catalyst Experiential, LLC
       (collectively, “Catalyst”), of which Bartkowski is the majority

____________________________________________

1See Pa.R.A.P. 311(a)(4) (permitting an interlocutory appeal as of right from
an order granting an injunction).
J-A28037-22

       owner.2] All were parties to the operating agreement as amended
       for Catalyst. In addition, [Earle and Grabowski] had employment
       agreements. [Both the operating agreement and employment
       contracts contained restrictive covenants.3] Catalyst’s business
       consisted of various activities [relating to] digital billboards. At
       one point, Catalyst sold advertising for digital billboards it owned.
       In addition, and importantly for this litigation, Catalyst’s strategy
       entailed finding locations where digital billboards would create
       high revenue (and were often not permitted by right) and seeking
       to acquire an interest in the real estate via lease, easement, or
       purchase, and obtaining municipal approvals and developing the
       sites. Catalyst erects monopole billboards, monument billboards
       (billboards with stone, brick or other surroundings to improve the
       aesthetics), and experiential billboards (attached to public
       developments such as dog parks). Catalyst ultimately sells its
       interest in both the land and the revenue stream from the
       billboards receiving upfront money as well as a tailing payment
       (or deduction) depending on performance of the billboard in the
       two (2) years post-sale.

              At times through the history of Catalyst, members and
       officers were asked to defer salary during periods of low cash
       reserves or financial difficulty to be repaid after stabilization of
       [Catalyst]. All [Appellants] testified that there was no specific
       timeline to be repaid but that the understanding [among] the
       parties was that repayment would occur when [Catalyst] achieved
       a financially sound or stable condition. COVID-19 was one such
       time when the decision was made to defer salary for members and
       officers following a sale of assets being canceled by a prospective
       purchaser due to the pandemic.           That sale was ultimately
____________________________________________

2 Wolfington was one of Catalyst’s founders and an executive vice president
of real estate; Earle was an executive vice president of investments and
became an owner/member in 2020; Grabowski was catalyst’s chief financial
officer and became an owner/member in 2017.

3 As detailed below, Appellants were all signatories to a second amendment
to a third amended and restated limited liability company agreement (“the
amended operating agreement”).        The amended operating agreement
included a non-compete provision. Earle’s and Grabowski’s employment
agreements contained restrictive covenants not to compete and limiting their
uses of confidential information. See Employment Agreements, 5/18/15, at
§ 8, 10.

                                           -2-
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        renegotiated and consummated at a lower price. [In late 2020,
        Appellants’ salaries were deferred.] In May of 2021, [Appellants’]
        unhappiness with Bartkowski reached its breaking point when
        [they] discovered that Bartkowski had withdrawn money during
        their period of salary deferral. [Appellants] and Bartkowski had a
        meeting, however, no agreement was reached . . .. Other areas
        of disagreement remained as well and [Appellants] left [Catalyst]
        and [Appellees] locked [Appellants] out of [Catalyst’s] server and
        email.

Order and Memorandum, 4/6/22, at 3-4 (footnotes omitted). According to

Appellees, Grabowski downloaded confidential information from Catalyst’s

server and Appellants abruptly left Catalyst, leaving Catalyst’s operations in

disarray. According to Appellants, Appellees constructively terminated and

squeezed them out after they confronted Bartkowski about his personal uses

of Catalyst’s funds and he refused their demands for payments and other

conditions on Catalyst’s financial and business operations. There is no dispute

that by May 2021, Appellants no longer worked at Catalyst. The parties began

negotiations to terminate Appellants’ stakes in Catalyst but were unable to

come to an agreement.

        In July 2021, Appellants sued Appellees for breaches of contract,

violations of the Pennsylvania Wage Payment and Collection law, 4 and

breaches of fiduciary duty, alleging that Bartkowski had mismanaged Catalyst

and that Catalyst owed them a total of $1.3 million, which included $555,288

____________________________________________

4   See 43 P.S. §§ 260.1-260.13.

                                           -3-
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in deferred salaries or wages and profit distributions.5 Appellees answered

and raised counterclaims for breaches of fiduciary duties, conversion, fraud,

and breach of contract. Appellees alleged that Appellants had acted against

Catalyst’s interests during their employment and that their abrupt departure

caused additional harms to Catalyst. Appellees also sought injunctive relief to

restrain Appellants from competing against Catalyst.

       After their departure from Catalyst, Appellants took steps to create their

own company. In their first attempt, they attempted to form a company, MMD

Development (“MMD”). Appellants used Catalyst’s “deal deck” or “pitch deck,”

which included materials they took from Catalyst in their pitches for MMD,

including Catalyst’s business models, examples of completed projects,

photographs, and financial analyses of deals, when seeking investors and

members.      See Order and Memorandum, 4/6/22, at 3-4; see also N.T.,

3/14/22, at 189-90.        Additionally, they approached a business contact of

Catalyst to fund or participate in MMD, but that company never formed. See

N.T., 3/14/22, at 189-90. Appellants, however, later formed Wolfgate Devco,

LLC (“Wolfgate”), to develop real estate by (1) identifying properties zoned

for billboards, (2) obtaining permits, and (3) either selling the permits or

developing the site and selling or leasing the billboards. Wolfgate obtained

leases or other interest in seven properties in southeastern Pennsylvania.
____________________________________________

5 Appellants also filed an emergency petition for the appointment of a
custodian of Catalyst based on Bartkowski’s alleged mismanagement of
Catalyst. The Honorable Mark L. Tunnell denied the petition following a
hearing. See Order, 9/23/21.

                                           -4-
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       Upon learning of Appellants’ new business ventures, Appellees filed

petitions for preliminary injunctive relief.6     The Honorable Bret M. Binder

conducted hearings at which Bartkowski, Joe Weinlick (“Weinlick”), Catalyst’s

new Chief Operating Officer, and Appellants testified. On April 6, 2022, the

trial court granted Catalyst a preliminary injunction and, in relevant part,

prohibited Appellants from competing against Catalyst in “the Greater

Philadelphia Area . . . and New Jersey in leasing, developing, buying, selling,

or otherwise participating in real estate transactions and/or development for

the purposes of use by a digital billboard[.]” See Order and Memorandum,

4/6/22, at 1. The trial court also required Appellants to “destroy any duplicate

copies” of digital or physical property of Catalyst. See id. Appellants timely

appealed and complied with the trial court’s order to submit a Pa.R.A.P.

1925(b) statement.        The trial court adopted its order and memorandum

granting the preliminary injunction as its Rule 1925(a) opinion.

       Appellants raise the following issues for our review:

       1. Did the trial court err by failing to strictly construe the pertinent
          restrictive covenants and in interpreting them expansively so
          as to conclude that [Appellants] violated their terms
          notwithstanding the evidence that [Appellants] are not
          engaged in the outdoor advertising business and/or in the out
          of home media industry?

____________________________________________

6 As discovery in the underlying action progressed, Appellees filed three
different petitions for preliminary injunctive relief: one on October 19, 2021,
a supplemental petition on December 14, 2021, and a third on February 25,
2022.

                                           -5-
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       2. Did the trial court err by granting injunctive relief that is not
          narrowly tailored, but instead, imposes restrictions in excess of
          those set forth in the subject agreements?

       3. Did the trial court err in concluding [Appellees] proved the
          existence of immediate and irreparable harm where
          [Appellees] were unable to identify any actual harm and could
          only speculate about possible future harm that cannot occur, if
          at all, until after the expiration of the term of the restrictive
          covenants and all of which can be fully compensated in
          monetary damages?

       4. Did the trial court abuse its discretion and commit an error of
          law by failing to conclude that [Appellees] have unclean hands
          in failing to pay [Appellants] in excess of $1.3 million in salary
          and profit distributions, in squeezing [Appellants] out of
          [Catalyst], and by concluding that [s]ection 9(d) of the
          [a]mended [o]perating [a]greement precludes [Appellants]
          from asserting unclean hands as a defense?

       5. Did the trial court err in ordering mandatory preliminary
          injunctive relief requiring the destruction of property during the
          pendency of the action?

Appellants’ Brief at 3-5.7

       This Court reviews an order granting preliminary injunctive relief for an

abuse of discretion. See Synthes USA Sales, LLC v. Harrison, 83 A.3d 242,

248-49 (Pa. Super. 2013).          Our review is “highly deferential.”   Id. at 248

(internal citations and quotation omitted). An appellate court must examine

____________________________________________

7 We note that Appellees’ responsive brief relies almost entirely on a discussion
and application of Delaware law, without offering a detailed analysis of
whether Delaware law should apply to the issuance of a preliminary injunction,
aside from indicating that the amended operating agreement contained a
choice of Delaware law provision. See Appellees’ Brief at 19. We add that
Appellees did not mention Delaware standards for issuing a preliminary
injunction in any of their three petitions for preliminary injunctive relief, and
that they did not do so until part way through the hearings. The trial court
did not apply Delaware law, and we decline to so in this appeal.

                                           -6-
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the record to determine if there were any apparently reasonable grounds for

the action of the court below. See id. at 248-49. This Court will not inquire

into the merits of the underlying controversy. See id. at 249. We will only

disturb the trial court’s decision if it is plain that no grounds existed to support

the order or that the trial court relied upon a rule of law that was palpably

erroneous or misapplied. See id.

      It is well settled that “[a] preliminary injunction’s purpose is to preserve

the status quo and to prevent imminent and irreparable harm that might occur

before the merits of a case can be heard and determined.”             Ambrogi v.

Reber, 932 A.2d 969, 976 (Pa. Super. 2007). A preliminary injunction is an

“extraordinary remedy,” and the party seeking the injunction bears a heavy

burden of establishing:

      1) that the injunction is necessary to prevent immediate and
      irreparable harm that cannot be adequately compensated by
      damages; 2) that greater injury would result from refusing an
      injunction than from granting it, and, concomitantly, that issuance
      of an injunction will not substantially harm other interested parties
      in the proceedings; 3) that a preliminary injunction will properly
      restore the parties to their status as it existed immediately prior
      to the alleged wrongful conduct; 4) that the activity it seeks to
      restrain is actionable, that its right to relief is clear, and that the
      wrong is manifest, or, in other words, must show that it is likely
      to prevail on the merits; 5) that the injunction it seeks is
      reasonably suited to abate the offending activity; and, 6) that a
      preliminary injunction will not adversely affect the public interest.

Allied Envtl. Serv., Inc. v. Roth, 222 A.3d 422, 426 (Pa. Super. 2019)

(internal citation omitted).

                                       -7-
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       Appellants, in their first issue, argue that the trial court erred in

construing and applying the restrictive covenants, which, as stated in the

amended operating agreement, provided:

             No Member shall directly or indirectly engage in any outdoor
       advertising business of the type in which [Catalyst] historically
       engaged (the development of traditional sign structures and the
       sale and marketing of advertising thereon) in the Philadelphia
       Standard Metropolitan Statistical Area other than through
       [Catalyst] . . . so long as such Person is a Member of the Company
       and for a period of one (1) year after such Person ceases to be a
       Member of [Catalyst]. . . .

Amended Operating Agreement, 1/1/20, § 9(a).

       Additionally,    Earle’s    and    Grabowski’s   employment   agreements

contained the following non-compete provision:

             Because of [Catalyst’s] legitimate business interest and the
       good and valuable consideration offered to the Employee, during
       the term of Employee’s employment and for the period of two (2)
       years following the voluntary or involuntary termination of the
       Employee’s employment with the Employer, the Employee agrees
       and covenants not to engage in Prohibited Activity within the out
       of home media industry.

              For purposes of this non-compete clause, “Prohibited
       Activity” is activity in which the Employee contributes his
       knowledge, directly or indirectly, in whole or in part, as an
       employee, employer, owner, operator, manager, advisor,
       consultant, agent, partner, director, stockholder, officer,
       volunteer, intern or any other similar capacity to an entity
       engaged in the same or similar business as the Employer and in
       the same geographic region in which Employee preformed
       services for the Employer.[8] Prohibited Activity also includes
____________________________________________

8 As noted by the trial court, Grabowski’s employment agreement did not
contain the “in the same geographic region” phrase.     See Order and
Memorandum, 4/6/22, at 6 & n.6; see also Grabowski’s Employment
(Footnote Continued Next Page)

                                           -8-
J-A28037-22

       activity that may require or inevitably require disclosure of trade
       secrets, proprietary information or Confidential Information.

See e.g., Earle’s Employment Agreement, 5/18/15, § 10(b).

       Pennsylvania law disfavors restrictive covenants as restraints on trade

that undercut an individual’s abilities to earn a living. See Rullex Co., LLC

v. Tel-Stream, Inc., 232 A.3d 620, 624 (Pa. 2020). Our courts, however,

recognize that “in the modern business environment, such covenants can be

important business tools which prevent individuals from learning employers’

trade secrets, befriending their customers and then moving into competition

with” a former employer.           Id. (internal citation, quotation, and bracket

omitted). “To be enforceable, a restrictive covenant must be incident to an

employment relationship between the parties and supported by consideration;

also, its restrictions must be reasonably necessary for the protection of the

employer’s legitimate interests and reasonably limited in duration and

geographic extent.” Id. at 624-25 (internal citations omitted). “In essence,

the court must examine and balance the employer’s legitimate business

interest, the individual’s right to work, the public’s right to unrestrained

competition, and the right to contract in determining whether to enforce a

restrictive covenant.” WMI Group., Inc. v. Fox, 109 A.3d 740, 749 (Pa.

Super. 2015) (internal citation omitted).

____________________________________________

Agreement, 5/8/15, at § 10(b). Appellants do not argue that this difference
between Earle’s and Grabowski’s employment agreements bears any
relevance to the disposition of this appeal.

                                           -9-
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       A court will not assume that a contract’s language was chosen

carelessly, nor will a court assume that the parties were ignorant of the

meaning of the language they employed. See id. “When a writing is clear

and unequivocal, its meaning must be determined by its contents alone. It is

not the function of this Court to re-write it, or to give it a construction in

conflict with the accepted and plain meaning of the language used.” See id.

(internal citation omitted).

       Appellants argue that the amended operating agreement did not prohibit

their activities in real estate development. See Appellants’ Brief at 29-30.

The amended operating agreement, they note, did not expressly preclude

activities related to real estate development, and they claim that the trial court

essentially rewrote the provision to enjoin their activities.9 See id. at 35-36.

Moreover, Appellants contend that the trial court erred by ignoring their

evidence that they deliberately chose not to compete with Catalyst in

Catalyst’s known locations or in Catalyst’s specialty in high-cost/high-revenue

projects. See id. at 39-40.

____________________________________________

9 Appellants further suggest Catalyst is no longer in the “outdoor advertising
business.” See id. at 38-39. However, that contention appears to be based
on Appellant’s overly narrow reading of the outdoor advertising business as
limited to the sale of advertising space on Catalyst’s billboards. To the extent
Appellants argue that any prohibition on working in the “out of home media”
industry, as stated in the employment agreements, would apply only to Earle
and Grabowski, who signed the agreements, and not to Wolfington, id. at 31-
32, there is no dispute that Wolfington was an owner/member subject to the
non-compete provision in the amended operating agreement.

                                          - 10 -
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      The trial court found Appellants’ attempts to distinguish their real estate

activities from Catalyst’s outdoor advertising business unavailing. See Order

and Memorandum, 4/6/22, at 7. The trial court determined that “a significant

portion of Catalyst’s business is the identification of potential locations for

digital billboards, the acquisition of interests in the underlying land, and

receiving approvals to construct a digital billboard.” Id. Appellants’ activities,

the trial court concluded, “mirror these exactly.”     Id.   The trial court thus

concluded that Appellees were likely to prevail in their claims against

Appellants. See id.

      Following our review, we discern no error in the trial court’s conclusion.

The amended operating agreement precluded Appellants from competing in

“any outdoor advertising business of the type in which [Catalyst] historically

engaged[,]” including, parenthetically, the “the development of traditional

sign structures and the sale and marketing of advertising thereon.” Amended

Operating Agreement, 1/1/20, § 9(a). Nothing in the plain language of the

amended operating agreement or the record supports Appellants’ argument

that this provision was limited to the actual construction of billboards or the

sales of advertising space on billboards.      Moreover, the record evidence

supports the trial court’s findings that Appellants engaged in precisely the

same activities as Catalyst’s historical development of billboards, including

acquiring interests in real estate and developing the real estate for outdoor

advertising. See Order and Memorandum, 4/6/22, at 7-8; see also N.T.,

                                     - 11 -
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3/14/22, at 8 (indicating Bartkowski’s testimony that “Catalyst is in the

business of developing, securing real estate for the purpose of developing

outdoor advertising assets”). Thus, Appellants’ first issue fails.

      In their second issue, Appellants claim that the trial court did not

narrowly tailor its order. See Appellants’ Brief at 40. They argue that the

trial court should have limited the injunction to areas where their activities

would affect an existing Catalyst billboard, and they posit that a prohibition

on their activities within one mile of an existing Catalyst billboard is more

appropriate. See id. at 41. Appellants also assert that the trial court erred

when it enjoined their activities in all of New Jersey.         See id. at 42

(emphasizing that the trial court enjoined their activities in the entire state

of New Jersey).

      Relatedly, Appellants assert that the trial court unreasonably extended

the duration of the non-compete provisions. See id. Appellants argue that

the trial court’s preliminary injunction could last indefinitely unless and until

the court determined that they had been squeezed out or constructively

terminated as of May 2021. See id. They claim that the trial court should

have set an expiration date should have expired in May 2022, one year from

the date they were squeezed out of Catalyst. See id.

      The trial court did not expressly address Appellants’ claims but

determined that the preliminary injunction reasonably protected the status

quo pending the resolution of the underlying controversies between the

                                     - 12 -
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parties. See Order and Memorandum, 4/6/22, at 3-4. The trial court briefly

mentioned that the one- and two-year restrictions in the amended operating

agreement and the employment agreements were reasonable and that their

geographic scopes were limited.       See id. at 10-11.     The court, however,

determined that the duration of an injunction would have to be determined at

trial. See id. at 11 n.10 (indicating that the parties agreed that Appellants

were still owner/members under the amended operating agreement).

      As to the geographic scope of the preliminary injunction, the amended

operating agreement uses the term “the Philadelphia Standard Metropolitan

Statistical Area” and the hearing evidence established that Catalyst operated

in the marketing area that included Philadelphia, Bucks, Montgomery,

Delaware, and Chester counties in Pennsylvania, and “most municipalities in

South Jersey . . . somewhat in line with Route 195 . . .” N.T., 3/14/22, at 15

(emphasis added). Therefore, we discern no merit to Appellants’ assertion

that they were entitled to narrower zones of non-competition than stated in

the amended operating agreement and supported by the hearing testimony.

However, our review reveals that Appellees, as the petitioning party for

preliminary injunctive relief, offered no specific evidence or argument to

extend the non-compete provisions to the entirety of the State of New Jersey.

Therefore, we agree with Appellants that the prohibition of all of their activities

in all of New Jersey is overbroad, and we vacate that portion of the order and

                                      - 13 -
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direct the trial court to enter a corrected order limiting the geographic scope

of the injunction to southern New Jersey.

      As to the duration of the preliminary injunction, we discern no error or

abuse of discretion in the trial court’s decision not to set an expiration date

for the non-compete provisions. Appellants do not argue the non-compete

provisions were unenforceable due to the lack of specificity in the duration of

the restrictive covenants.   We agree with the trial court that the ultimate

resolution of the duration of the non-compete provision in the amended

operating agreement is a matter for trial on the merits of the parties’

substantive claims and counterclaims. See Summit Towne Centre, Inc. v.

Shoe Show of Rocky Mount, Inc., 828 A.2d 995, 1000 (Pa. 2003) (noting

that in an appeal from the grant or denial of a preliminary injunction, an

appellate court does not inquire into the merits of the controversy, but only

examine the record to determine if there were any apparently reasonable

grounds for the action of the court below). Accordingly, we discern no merit

to Appellants’ claim that the trial court should have issued a preliminary

injunction with an expiration date of May 2022.

      In their third issue, Appellants assert that Appellees failed to prove a

preliminary injunction will prevent immediate and irreparable harm.         See

Appellants’ Brief at 43. In order to meet the burden of showing immediate

and irreparable harm, a party seeking a preliminary injunction “must present

concrete   evidence   demonstrating   actual   proof   of   irreparable   harm.”

                                    - 14 -
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Greenmoor, Inc. v. Burchick Const. Co., Inc., 908 A.2d 310, 314 (Pa.

Super. 2006) (internal citation and quotation omitted). A claim of irreparable

harm cannot be based solely on speculation and hypothesis and must be

shown to be irreversible. See id. Further, the party seeking the preliminary

injunction must show that the need for relief is immediate. See id.

      Appellants argue that any harms their activities pose to Catalyst are

speculative and cannot occur before the expiration of the non-compete

provisions. See Appellants’ Brief at 43. In support, Appellants assert that

they have yet to construct or sell a sign. See id. They add that given the

typical times between obtaining interests in real estate and sales of

advertising space, they will not be able to directly compete for advertisements

with a Catalyst billboard until after the restrictive covenant in the operating

agreement expires.     See id. at 45.      Appellants emphasize that none of

Catalyst’s existing assets actually suffered any losses because of their

activities. See id. at 46. They thus assert that the trial court erred in granting

the preliminary injunction based on the speculative and remote possibility that

Catalyst could lose revenue in the future. See id. at 47.

      The trial court addressed the irreparable harm requirement for issuing

a preliminary injunction and concluded that Catalyst showed that Appellants’

activities would result in a loss of business opportunities.     See Order and

Memorandum, 4/6/22, at 8-9. The trial court noted that Appellants “have

used material, information, photographs and the like obtained from

                                     - 15 -
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[Catalyst]” when seeking to form their own business ventures and identified,

pursued, and contacted municipalities about digital billboard locations in

Catalyst’s geographic region.     Id. at 8.    The trial court further credited

Appellees’ testimony that

      (1) every application for a digital billboard in any municipality
      makes it increasingly more difficult to receive approval for future
      billboards; (2) every billboard placed reduces the value of future
      billboards due to the advertising revenue being less valuable when
      more competition is located nearby; (3) existing sales by
      [Catalyst] of certain assets could be reduced due to
      underperformance during a look-back period for revenues; (4)
      [Catalyst’s] property and trade secrets are being used by
      [Appellants] to further their business, including the use in a pitch
      deck of financial analysis, photos, historical performances of
      [Catalyst], and the like; and (5) damages are too nebulous to
      ascertain and compensate solely with monetary damages.

See id.

      Based on these findings, the trial court concluded that Appellees

suffered irreparable harm due to

      the reduction in receptiveness to [Catalyst] due to [Appellants’]
      activities in a region, the value of [Catalyst’s] materials used by
      [Appellants], . . . [and t]he potential impending loss of business
      or market opportunities due to [Appellants] attempting to receive
      approvals for digital billboards in municipalities within the
      geographic reach of [Catalyst].

See id. at 8-9 (internal citations omitted).

      Following our review, we discern no basis to disturb the trial court’s

findings of fact or conclusions of law. Catalyst presented testimony, which

the trial court accepted, that Appellants’ activities in seeking interests in land

to develop billboards would adversely affect Catalyst’s ability to obtain

                                     - 16 -
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approvals for additional billboards in the same area and would diminish the

profitability of their existing billboards. See N.T., 3/29/22 (A.M.), at 209-10.

Because there were apparently reasonable grounds for the trial court’s

determinations that a preliminary injunction was immediately necessary to

prevent irreparable harm, we have no basis to disturb the trial court’s ruling.10

       In their fourth issue, Appellants claim that the trial court erred in

rejecting their arguments that Catalyst’s failures to pay them their deferred

salaries and Bartkowski’s unclean hands rendered the amended operating

agreement and the employment contracts unenforceable.               Additionally,

Appellants assert that the trial court erred when rejecting their arguments

based on section 9(d) of the amended operating agreement, which states:

“[t]he existence of a claim, charge, or cause of action by any Member against

[Catalyst] shall not constitute a defense to the enforcement by [Catalyst] of

the [non-compete provision].” See id. at 50 (quoting Amended Operating

Agreement, 1/1/20, at 1/1/20, § 9(d)). However, Appellants do not allege

that they received no consideration from these agreements.           Appellants’

allegations concerning the nonpayment of their deferred salaries and

Bartkowski’s improper actions are matters that concern breaches of the

amended operating agreement and the employment agreements or violations

of the law, not the underlying consideration necessary to enforce the
____________________________________________

10To the extent Appellants suggest that the trial court erred in balancing the
harms to Catalyst against their need to make a living, we agree with the trial
court’s statements at the hearing that Appellants were free to develop real
estate for purposes unrelated to billboards.

                                          - 17 -
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provisions of the underlying amended operating agreement.           Therefore, we

decline to review the merits of the pending action between the parties, and

we discern no basis upon which to disturb the trial court’s determination that

the underlying facts satisfied the requirements for the issuance of a

preliminary injunction.   See Summit Towne Centre, 828 A.2d at 1000.

Thus, Appellants’ fourth issue merits no relief.

      In their fifth issue, Appellants claim that the trial court erred in ordering

them to destroy their copies of the Catalyst’s confidential information in their

possession. It is well settled that courts will hold mandatory injunctions, which

require a positive act to preserve the status quo, to a higher standard than

prohibitory injunctions, which require a party to refrain from acting.        See

Constantakis v. Bryan Advisory Servs., LLC, 275 A.3d 998, 1021 (Pa.

Super. 2022). Thus, this Court will more extensively review the underlying

merits of the claims to determine if the party seeking the mandatory injunction

has established a “clear right to relief.” Id. at 1021.

      As to the prohibitions on Appellants’ use of Catalyst’s information, we

note that Earle and Grabowski’s employment agreements defined confidential

information as follows:

      . . . “Confidential Information” includes, but is not limited to, all
      information not generally known to the public, in spoken, printed,
      electronic or any form or medium, relating directly or indirectly
      to: business practices, methods, policies, plans, research, referral
      sources, operations, services, strategies, techniques, agreements,
      contracts, transactions, potential transactions, negotiations,
      pending negotiations, know-how, trade secrets, computer

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       programs . . databases, manuals, records, . . . graphics, drawings,
       . . . product plans, designs, styles, [and] models . . ..

Grabowski’s Employment Agreement, 5/18/15, § 8(a).             The employment

agreements prohibited Grabowski from copying “any documents, records,

files, media, or other resources containing any Confidential Information, or

remove any such documents, records, files, media or other resources from

the premises or control of [Catalyst], except as required in performance of . . .

authorized employment duties . . ..” Id. § 8(c). Grabowski’s obligations as

to confidential information continued “during or after [their] employment until

such    time   as   such   Confidential   Information    has   become        public

knowledge . . ..” Id. § 8(d).

       When departing Catalyst, Grabowski sent himself twenty-eight emails

attaching Catalyst’s files to a personal address, “essentially moving company

information to his private account.” N.T., 3/16/22, at 61. During discovery,

Appellants turned over a hard drive containing 283 gigabytes of information

that included Catalyst’s financial data and information that came from

Catalyst’s files.   See id.; see also N.T., 3/29/22 (A.M.), 154 (indicating

Grabowski’s testimony that he downloaded files from Catalyst’s servers that

were eventually placed on the hard drive). Further, the court heard testimony

that Appellants had used the information obtained from Catalyst when

attempting to form MMD and in other ventures. See Order and Memorandum,

4/6/22, at 3-4; see also N.T., 3/14/22, at 189-90.           The trial court, in

fashioning the preliminary injunction, noted its concern about the information,

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determined that Appellants should return the hard drive containing Catalyst’s

files and destroy copies of the files in their possession, but allowed Appellants’

counsel to retain copies of the information subject to keeping the information

confidential. See N.T., 3/29/22 (P.M.), at 7-8.

      On appeal, Appellants note the stricter standards applicable to

mandatory injunctions than prohibitory injunctions. See Appellants’ Brief at

53-54.   They assert that a prohibitive injunction was sufficient to protect

Appellees’ interests and that the court’s order for them to destroy their copies

of   Catalyst   information     was    improper     because     they    remained

owners/members of Catalyst. See id. at 55.

      The trial court’s order and memorandum did not expressly address the

portion of its order requiring Appellants to destroy any personal copies of the

information they had taken from Catalyst. Nevertheless, our review of the

record, the trial court’s findings, and Appellants’ arguments compel the

conclusion that Grabowski took Catalyst’s information and used it outside of

the scope of his employment with Catalyst as prohibited by the employment

agreement. Thus, Catalyst established a clear right to relief as to the improper

taking of its information. See Constantakis, 275 A.3d at 1021. Moreover,

given the evidence that Appellants had used the information to compete with

Catalyst, we conclude that the trial court had a proper basis to order

Appellants to destroy their copies of Catalyst’s information to maintain the

status quo between the parties.

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J-A28037-22

      In sum, we vacate that portion of the order prohibiting Appellants’

activities in all of New Jersey as overbroad and direct the trial court to enter

a corrected order limiting the geographic scope of the injunction to southern

New Jersey. We otherwise affirm the trial court’s order granting Catalyst a

preliminary injunction.

      Order affirmed in part and vacated in part.        Case remanded with

instructions. Jurisdiction relinquished.

Judgment Entered.

Joseph D. Seletyn, Esq.
Prothonotary

Date: 6/6/2023

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