Court Opinion

ID: 4216569
Source: CourtListenerOpinion
Date Created: 2017-10-31 19:20:03.335362+00
Date Added: 2024-06-11T14:42:08.376334
License: Public Domain

J-A20012-17

NON-PRECEDENTIAL DECISION - SEE SUPERIOR COURT I.O.P. 65.37

CUSTOM BUILDING SYSTEMS, LLC;            :   IN THE SUPERIOR COURT OF
PRACTICAL SOFTWARE SOLUTIONS,            :        PENNSYLVANIA
INC.; PROFESSIONAL BUILDING              :
SYSTEMS, INC., AS ITSELF AND AS A        :
MEMBER OF AMERICAN MODULAR               :
TRANSPORT, LLC; AMERICAN                 :
MODULAR TRANSPORT, LLC                   :
                                         :
                   Appellants            :
                                         :
             v.                          :
                                         :
RONALD H. NIPPLE, INDIVIDUALLY;          :
CONNIE I. NIPPLE, INDIVIDUALLY           :
AND AS AN OWNER OF ICON                  :
REALTY, LLC; KEVIN HICKS,                :
INDIVIDUALLY AND AS PRESIDENT            :
OF ICON LEGACY CUSTOMER                  :
MODULAR HOMES, LLC; ICON                 :
LEGACY CUSTOM MODULAR HOMES,             :
LLC A/K/A LEGACY MODULAR                 :
HOMES, LLC AND LEGACY CUSTOM             :
MODULAR HOMES, LLC; ICON                 :         No. 127 MDA 2017
LEGACY TRANSPORT, LLC

                   Appellees

              Appeal from the Order Entered December 30, 2016
               In the Court of Common Pleas of Snyder County
                     Civil Division at No(s): CV-194-2011

BEFORE: GANTMAN, P.J., PANELLA, J., and FORD ELLIOTT, P.J.E.

MEMORANDUM BY GANTMAN, P.J.:                      FILED OCTOBER 31, 2017

      Appellants, Custom Building Systems, LLC (“CBS”), Practical Software

Solutions, Inc. (“PSS”), Professional Building Systems, Inc. (“PBS”), as itself

and as a member of American Modular Transport, LLC (“AMT”) and AMT,

appeal from the order entered in the Snyder County Court of Common Pleas,
J-A20012-17

which granted summary judgment in favor of Appellees, Ronald H. Nipple,

Connie I. Nipple, and Kevin Hicks, Legacy Custom Modular Homes, LLC

(“Icon”) a/k/a Legacy Modular Homes, LLC and Legacy Custom Modular

Homes, LLC, and Icon Legacy Transport, LLC in this employment contract

action. We affirm.

      The relevant facts and procedural history of this care are as follows.

William French owns several entities in the manufactured-home industry,

including Appellant companies, CBS, PBS, PSS, and AMT.              PBS and CBS

manufacture and sell modular homes. PSS and AMT provide software and

transportation services, respectively, to CBS and PBS. On August 1, 2005,

Appellee     Ronald     Nipple   entered       into   an   employment   agreement

(“Agreement”) to serve as general manager of CBS.                 The Agreement

provided, in relevant part, as follows:

           1. General

                                    *      *      *

           F. As used in this Agreement, the term “Companies” shall
           mean (i) [CBS], (ii) [PBS], ([iii]) Professional Building
           Systems of North Carolina LLC (“PBS-NC”); ([iv]) [AMT].
           ([v]) Professional Structures, Inc. (“PSI”), ([vi]) [PSS],
           ([vii]) all subsidiaries and successors of any of the
           [Companies], and ([viii]) any other companies owned in
           whole or in part by William D. French.

                                    *      *      *

           3. Non-Solicitation Covenants

                                    *      *      *

                                        -2-
J-A20012-17

          C. During the term of this Agreement, and for a period of
          three years from the date of termination of this
          Agreement, the Employee shall not, directly or indirectly,
          sell, or attempt to sell, any modular structure to any
          builder, or other person or entity, to whom any of the
          Companies sold modular structures at any time during the
          twelve months prior to the Employee’s cessation of
          employment hereunder.

(See Ronald Nipple Employment Agreement with CBS; Appellees’ Statement

of Undisputed Facts, Exhibit E at 1-3; R.R. at 417a-419a).                     CBS

subsequently terminated Mr. Nipple’s employment on April 20, 2007.

       In early 2008, Appellee Icon formed as a modular home manufacturing

company.1      Icon Legacy Transport, LLC (“Icon Transport”), which hauls

Icon’s modular homes, also formed.               Mr. Nipple’s wife, Appellee Connie

Nipple, invested in Icon and served as Icon’s secretary until 2011.            Mr.

Nipple’s son-in-law, Appellee Kevin Hicks, has been president of Icon since

its formation.     Between the date of Icon’s formation and April 2010, Mr.

Nipple was not an Icon employee, but he had an office at Icon, maintained

regular working hours at Icon, and occasionally sat in on company meetings.

Between its formation and April 2010, Icon submitted bids and sold modular

homes to several of Appellants’ customers.

       On April 19, 2011, Appellants and Mr. French filed a writ of summons

against Appellees.       Appellants and Mr. French filed a complaint against

____________________________________________

1The name of Icon changed several times since its formation. Icon’s former
names included Legacy Custom Modular Homes, LLC.

                                           -3-
J-A20012-17

Appellees on August 19, 2011, for breach of contract, unjust enrichment,

and breach of fiduciary duty.         On September 1, 2011, Appellants and Mr.

French filed a first amended complaint.             Appellees filed on September 19,

2011, preliminary objections to the first amended complaint, which the court

sustained in part and overruled in part on November 28, 2011.                        On

December 19, 2011, Appellants and Mr. French filed a second amended

complaint, to which Appellees filed preliminary objections on January 5,

2012.

        Appellants and Mr. French filed a third amended complaint on January

23, 2012, raising multiple counts of breach of contract, breach of the duty of

loyalty and fiduciary duty, misappropriation of trade secret and proprietary

information,     unfair    competition,        tortious   interference   with   existing

contractual and business relationships, tortious interference with prospective

contractual and business relationships, and civil conspiracy. That same day,

Appellants filed a motion to discontinue the claims of Mr. French and remove

Mr. French from the caption, which the court granted on January 24, 2012.2

Appellees filed preliminary objections to the third amended complaint, which

the court sustained in part and overruled in part on September 14, 2012,

striking all unfair competition claims against Appellees.           Appellees filed an

____________________________________________

2 As a result of the January 24, 2012 order, Mr. French was no longer a
party to the trial court proceedings in this matter. Mr. French is not a party
to this appeal.

                                           -4-
J-A20012-17

answer and new matter to the third amended complaint on November 5,

2012.

        By stipulation on July 15, 2016, Appellants discontinued their claims

asserting breach of duty of loyalty and fiduciary duty and misappropriation

of trade secrets and proprietary information. That same day, Appellees filed

a motion for summary judgment on the remaining claims, which the court

granted on December 30, 2016. Appellants filed a timely notice of appeal on

January 17, 2017. On January 19, 2017, the court ordered Appellants to file

a concise statement errors complained of on appeal per Pa.R.A.P. 1925(b);

Appellants timely complied on February 6, 2017.

        Appellants raise the following issues for our review:

           IS THERE A GENUINE ISSUE OF MATERIAL FACT AS TO
           WHETHER [APPELLEE] RONALD NIPPLE INDIRECTLY SOLD
           MODULAR HOMES TO CUSTOMERS OF [CBS] AND [PBS] IN
           VIOLATION OF HIS RESTRICTIVE COVENANT, WHERE THE
           RECORD SHOWS THAT [ICON] SOLD MODULAR HOMES TO
           28 OF THE RESTRICTED CUSTOMERS DURING THE YEARS
           OF [APPELLEE] RONALD NIPPLE’S RESTRICTED PERIOD,
           AND WHERE THE RECORD SHOWS THAT RONALD NIPPLE
           WAS THE KEY PERSON IN FORMING, FINANCING, AND
           OPERATING ICON AND HAD DE FACTO CONTROL OF THE
           COMPANY?

           DID THE TRIAL COURT ABUSE ITS DISCRETION WHERE IT
           MADE A FINDING OF FACT THAT ENFORCEMENT OF THE
           “INDIRECT” SALES RESTRICTION WOULD PROHIBIT
           [APPELLEE] RONALD NIPPLE FROM CONTINUING HIS
           CAREER IN “ANY CAPACITY,” WHERE THERE IS NO
           EVIDENCE   OF   RECORD    TO   SUPPORT   SUCH   A
           CONCLUSION, AND WHERE THE RESTRICTIVE COVENANT
           APPLIED ONLY TO SELECT CUSTOMERS OF [APPELLANTS]?

           DID THE TRIAL COURT ABUSE ITS DISCRETION IN

                                       -5-
J-A20012-17

         DISMISSING THE CLAIM FOR TORTIOUS INTERFERENCE
         WITH PROSPECTIVE CONTRACTUAL RELATIONSHIPS
         WHERE THERE IS A GENUINE ISSUE OF MATERIAL FACT
         REGARDING     WHETHER    THE   PRIOR   CUSTOMER
         RELATIONSHIPS BETWEEN [CBS], [PBS], AND THEIR 28
         CUSTOMERS DEMONSTRATE THAT THERE WAS A
         REASONABLE LIKELIHOOD THAT THESE CUSTOMERS
         WOULD HAVE PLACED THEIR ORDERS WITH [CBS] OR
         [PBS], ESPECIALLY IF [ICON] WAS RESTRICTED FROM
         SELLING TO THESE CUSTOMERS?

         DID THE TRIAL COURT ERR IN FINDING THAT
         [APPELLEES] DID NOT COMMIT CIVIL CONSPIRACY EVEN
         THOUGH    THE   RECORD   ESTABLISHES   THAT  ALL
         [APPELLEES] WERE AWARE OF RONALD NIPPLE’S
         RESTRICTIVE COVENANT, HELPED CONCEAL HIS INITIAL
         INVOLVEMENT WITH [ICON], AND HIRED SALESMEN WITH
         CUSTOMER ACCOUNTS FROM CBS AND PBS IN ORDER TO
         SELL MODULAR HOMES TO THE VERY CUSTOMERS TO
         WHOM RONALD NIPPLE WAS PROHIBITED FROM SELLING?

         DID THE COURT ERR IN FINDING THAT [CBS] AND [PBS]
         DID NOT DEMONSTRATE PROBABLE, INFERENTIAL, OR
         DIRECT PROOF OF THEIR LOSS WHERE THEY PRODUCED
         PRECISE CALCULATIONS OF REVENUE, LABOR, MATERIAL,
         AND OTHER COSTS, AND PROJECTED PROFIT FOR THE
         SALE OF MODULAR HOMES?

(Appellants’ Brief at 3-5).

      In reviewing a trial court’s grant of summary judgment,

         [W]e apply the same standard as the trial court, reviewing
         all the evidence of record to determine whether there
         exists a genuine issue of material fact. We view the record
         in the light most favorable to the non-moving party, and
         all doubts as to the existence of a genuine issue of
         material fact must be resolved against the moving party.
         Only where there is no genuine issue as to any material
         fact and it is clear that the moving party is entitled to a
         judgment as a matter of law will summary judgment be
         entered. All doubts as to the existence of a genuine issue
         of a material fact must be resolved against the moving
         party.

                                    -6-
J-A20012-17

        Motions for summary judgment necessarily and directly
        implicate the plaintiff’s proof of the elements of [a] cause
        of action.   Summary judgment is proper if, after the
        completion of discovery relevant to the motion, including
        the production of expert reports, an adverse party who will
        bear the burden of proof at trial has failed to produce
        evidence of facts essential to the cause of action or
        defense which in a jury trial would require the issues to be
        submitted to a jury. In other words, whenever there is no
        genuine issue of any material fact as to a necessary
        element of the cause of action or defense, which could be
        established by additional discovery or expert report and
        the moving party is entitled to judgment as a matter of
        law, summary judgment is appropriate. Thus, a record
        that supports summary judgment either (1) shows the
        material facts are undisputed or (2) contains insufficient
        evidence of facts to make out a prima facie cause of action
        or defense.

        Upon appellate review, we are not bound by the trial
        court’s conclusions of law, but may reach our own
        conclusions.

Chenot v. A.P. Green Services, Inc., 895 A.2d 55, 61 (Pa.Super. 2006)

(internal citations and quotation marks omitted).

     Significantly:

        A plaintiff cannot survive summary judgment when mere
        speculation would be required for the jury to find in
        plaintiff’s favor. A jury is not permitted to find that it was
        a defendant’s [actions] that caused the plaintiff’s injury
        based solely upon speculation and conjecture; there must
        be evidence upon which logically its conclusion must be
        based. In fact, the trial court has a duty to prevent
        questions from going to the jury which would require it to
        reach a verdict based on conjecture, surmise, guess or
        speculation. Additionally, a party is not entitled to an
        inference of fact that amounts merely to a guess or
        conjecture.

Krishack v. Milton Hershey School, 145 A.3d 762, 766 (Pa.Super. 2016)

                                    -7-
J-A20012-17

(internal citation omitted).

      “To support a claim for breach of contract, a plaintiff must allege: (1)

the existence of a contract, including its essential terms; (2) a breach of a

duty imposed by the contract; and (3) resultant damage.”           Pittsburgh

Construction Company v. Griffith, 834 A.2d 572, 580 (Pa.Super. 2003),

appeal denied, 578 Pa. 701, 852 A.2d 313 (2004).

      Contract construction and interpretation is a question of law for the

court to decide.   Profit Wize Marketing v. Wiest, 812 A.2d 1270, 1274

(Pa.Super. 2002); J.W.S. Delavau, Inc. v. Eastern America Transport &

Warehousing, Inc., 810 A.2d 672, 681 (Pa.Super. 2002), appeal denied,

573 Pa. 704, 827 A.2d 430 (2003) (reiterating: “The proper interpretation of

a contract is a question of law to be determined by the court in the first

instance”). In construing a contract, the intent of the parties is the primary

consideration. Tuscarora Wayne Mut. Ins. Co. v. Kadlubosky, 889 A.2d

557, 560 (Pa.Super. 2005).

         When interpreting agreements containing clear and
         unambiguous terms, we need only examine the writing
         itself to give effect to the parties’ intent. The language of
         a contract is unambiguous if we can determine its meaning
         without any guide other than a knowledge of the simple
         facts on which, from the nature of the language in general,
         its meaning depends. When terms in a contract are not
         defined, we must construe the words in accordance with
         their natural, plain, and ordinary meaning. As the parties
         have the right to make their own contract, we will not
         modify the plain meaning of the words under the guise of
         interpretation or give the language a construction in
         conflict with the accepted meaning of the language used.
         On the contrary, the terms of a contract are ambiguous if

                                     -8-
J-A20012-17

         the terms are reasonably or fairly susceptible of different
         constructions and are capable of being understood in more
         than one sense. Additionally, we will determine that the
         language is ambiguous if the language is obscure in
         meaning through indefiniteness of expression or has a
         double meaning.

Profit Wize Marketing, supra at 1274-75 (internal citations and quotation

marks omitted).

         Where there is any doubt or ambiguity as to the meaning
         of the covenants in a contract or the terms of a grant, they
         should receive a reasonable construction, and one that will
         accord with the intention of the parties; and, in order to
         ascertain their intention, the court must look at the
         circumstances under which the grant was made. It is the
         intention of the parties which is the ultimate guide, and, in
         order to ascertain that intention, the court may take into
         consideration the surrounding circumstances, the situation
         of the parties, the objects they apparently have in view,
         and the nature of the subject-matter of the agreement.

Giant Food Stores, LLC v. THF Silver Spring Development, L.P., 959

A.2d 438, 448 (Pa.Super. 2008), appeal denied, 601 Pa. 697, 972 A.2d 522

(2009) (internal citations and quotation marks omitted).       In either event,

“the court will adopt an interpretation which under all circumstances ascribes

the most reasonable, probable, and natural conduct of the parties, bearing in

mind the objects manifestly to be accomplished.” E.R. Linde Const. Corp.

v. Goodwin, 68 A.3d 346, 349 (Pa.Super. 2013).

      “To maintain a cause of action in breach of contract, a plaintiff must

establish: (1) the existence of a contract, including its essential terms; (2) a

breach of a duty imposed by the contract; and (3) resulting damages.”

Lackner v. Glosser, 892 A.2d 21, 30 (Pa.Super. 2006) (citing Gorski v.

                                     -9-
J-A20012-17

Smith, 812 A.2d 683, 692 (Pa.Super. 2002), appeal denied, 579 Pa. 692,

856 A.2d 834 (2004)).       The elements of interference with prospective

contractual relations are as follows:

         (1)   a prospective contractual relationship;

         (2) the purpose or intent to harm the plaintiff by
         preventing the relation from occurring;

         (3) the absence of privilege or justification on the part of
         the defendant; and

         (4) the occasioning of actual damage resulting from the
         defendant’s conduct.

Phillips v. Selig, 959 A.2d 420, 428 (Pa.Super. 2008), appeal denied, 600

Pa. 764, 967 A.2d 960 (2009). The plaintiff bears the burden of pleading

and proving each element.      International Diamond Importers, Ltd. v.

Singularity Clark, L.P., 40 A.3d 1261, 1275 (Pa.Super. 2012). To sustain

the cause of action, the plaintiff must show a “reasonable probability or

likelihood” that contractual relations will follow. Phillips, supra at 428. In

determining “reasonable probability or likelihood,” Pennsylvania courts apply

an objective standard and consistently required more evidence than the

mere existence of a current business relationship between the parties. Id.

      To state a claim for civil conspiracy, “a complaint must allege: (1) a

combination of two or more persons acting with a common purpose to do an

unlawful act or to do a lawful act by unlawful means or for an unlawful

purpose; (2) an overt act done in pursuance of the common purpose; and

(3) actual legal damage.” Goldstein v. Phillip Morris, Inc., 854 A.2d 585,

                                        - 10 -
J-A20012-17

590 (Pa.Super. 2004).     Civil conspiracy requires proof by full, clear and

satisfactory evidence. Phillips, supra at 437. “The mere fact that two or

more persons, each with the right to do a thing, happen to do that thing at

the same time is not by itself an actionable conspiracy.” Id. Additionally,

“absent a civil cause of action for a particular act, there can be no cause of

action for civil conspiracy to commit that act.” McKeeman v. Corestates

Bank, N.A., 751 A.2d 655, 660 (Pa.Super. 2000).

      After a thorough review of the record, the briefs of the parties, the

applicable law, and well-reasoned opinions of the Honorable Michael T.

Hudock, we conclude Appellants’ issues on appeal merit no relief. The trial

court opinions comprehensively discuss and properly dispose of the

questions presented. (See Trial Court Opinion, filed January 31, 2017, at 1

unpaginated; Trial Court Opinion, filed December 30, 2016, at 6-13)

(finding: (1-2) although Icon made sales to prohibited customers during

restricted covenant period, no facts of record indicate Mr. Nipple was

involved in sales to any of CBS’ customers; record does not support finding

that Mr. Nipple made sales directly or indirectly to any customers, much less

customers prohibited by non-solicitation provision in Agreement; that Mr.

Nipple had office at Icon and Mrs. Nipple and Mr. Hicks worked at Icon do

not show Mr. Nipple was involved in sales to prohibited customers; record

shows Mr. Nipple merely provided general advice to individuals at Icon;

Appellants offered no evidence to show Mr. Nipple’s involvement at Icon

                                    - 11 -
J-A20012-17

exceeded   advisory   role;   non-solicitation   provision   does   not   prohibit

employees of Icon nor Icon itself from contracting with CBS customers; to

apply terms of non-solicitation provision per Appellants’ interpretation would

effectively prohibit Appellee from continuing his career in modular home

industry in any capacity; under Appellants’ view, employer in modular home

industry that hired Mr. Nipple in any capacity would be unable to sell to

prohibited customers during the restricted covenant period; Agreement,

however, does not prohibit Mr. Nipple from competing with PBS and CBS;

(3) Appellants’ relationships with customers do not rise to level of

prospective contractual relationship; providing customers quotes in normal

course of business does not lead to reasonable likelihood or probability of

enforceable contractual relationship; although Appellants provide customers

with price quote for project, customers are free to seek out multiple quotes

and choose any quote; merely providing quote does not create prospective

contract; also, record does not indicate Appellees intended to harm

Appellants; (4) record does not demonstrate Appellees conducted unlawful

act or acted with unlawful purpose; non-solicitation provision does not bar

Mr. Nipple from competing in same field as Appellants; Agreement does not

require Appellees to disclose to Appellants Mr. Nipple’s lawful involvement

with Icon; non-solicitation provision merely prohibits Mr. Nipple from

engaging in sales, directly or indirectly, to customers of Appellants;

Appellants have not offered facts of record to support claim that Mr. Nipple

                                     - 12 -
J-A20012-17

violated terms of non-solicitation provision; (5) Appellants are not entitled

to damages for lost sales because Appellants’ claims for breach of contract,

conspiracy, and tortious interference are without merit; further, Appellants

failed to demonstrate probable, inferential, or direct proof of their loss

attributable to Appellees).   The record supports the trial court’s rationale.

Accordingly, we affirm on the basis of the trial court’s opinions.

      Order affirmed.

Judgment Entered.

Joseph D. Seletyn, Esq.
Prothonotary

Date: 10/31/2017

                                     - 13 -
Circulated 10/05/2017 03:58 PM
Circulated 10/05/2017 03:58 PM