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CINEMAGIC, INC.,
a Pennsylvania Corporation
. Plaintiffs
vs.
John Crawford
757 Erford Rd.
Camp Hill, PA 17011,
and
Dolphin NewMedia, Inc.
5221 Simpson Ferry Rd.
Mechanicsburg, PA 17055
and
Ms. Jan T. McKnight
505 Beech Ave.
Hershey, PA 17033
and
Mr. Clifford A. Sobel
T/DBA The Phoenix Group, Inc. and
Oatrageous Muffin Co., Inc.
24 Woodbine Ave., Suite #3
Northport, NY 11768
Defendant
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) IN THE COURT OF COMMON PLEAS OF
) CUMBERLAND COUNTY
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CNIL ACTION: EQUITY
DOCKET NO:
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NOTICE
You have been sued in Court. If you wish to defend against the claims set forth in
the following pages, you must take certain action within twenty (20) days after this
Complaint and Notice are served by entering a written appearance personally or by
an attorney and filing in writing with the Court your defenses or objections to the
. claims set forth against you. You are warned that if you fail to do so, the case may
proceed without you and a judgment may be entered against you by the Court
without further notice for any money claimed in the Complaint or for any other
claim or relief requested by the plaintiff(s). You may lose money or property or
other rights important to you
YOU SHOULD TAKE TillS PAPER TO YOUR LAWYER AT ONCE. IF YOU
DO NOT HAVE A LAWYER OR CANNOT AFFORD ON , GO TO OR
TELEPHONE THE OFFICE SET FORTH BELOW TO FIND OUT WHERE YOU
CAN GET LEGAL HELP.
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COURT ADMINISTRATOR
4TH FLOOR
CUMBERLAND COUNTY COURTHOUSE
CARliSLE, PA 17013
PHONE: (717) 240-6200
Pa. Lawyer Referral Service
P.O. Box 1086
Harrisburg,PA 17108
PA Residents Telephone
1-800-692-7375
Out-of-State Residents
1-717-238-6715
Cumberland County Bar Association
2 Liberty Avenue
Carlisle, PA 17013
Telephone: (717) 249-3166
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CINEMAGIC, INC.,
a Pennsylvania Corporation
Plaintiffs
vs.
John Crawford
757 Erford Rd.
Camp Hill, PA 17011,
and
Dolphin New Media, Inc.
5221 Simpson Ferry Rd.
Mechanicsburg, PA 17055
and
Ms. Jan T. McKnight
505 Beech Ave.
Hershey, PA 17033
and
Mr. Clifford A. Sobel
T/DBA The Phoenix Group, Inc. and
Oatrageous Muffin Co., Inc.
24 Woodbine Ave., Suite #3
Northport, NY 11768
Defendants
) IN THE COURT OF COMMON PLEAS OF
) CUMBERLAND COUNTY
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CNIL ACTION: EQUITY
DOCKET NO:
DI -(,LOI ~Lu~ 'T~
COMPLAINT
AND NOW, this /~ of {JtJ/" ,2001, comes Plaintiff, Cinemagic Inc., by .
their attorney Robert W. Waeger, Esq., state their Complaint against Defendants, as
follows:
1.
The Parties
Plaintiff, Cinemagic Inc. ("Cinemagic") is a domestic business corporation
organized under the laws of the Commonwealth of Pennsylvania, maintaining a principal office
at 930 Century Dr., Suite 101, Mechanicsburg, Cumberland County, Pennsylvania.
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2. Defendant, John Crawford ("Crawford") is an adult individual maintaining a
residence at 757 Erford Rd., Camp Hill, Cumberland County, Pennsylvania and is owner of
Dolphin New Media, Inc. a Pennsylvania corporation, maintaining a principal office at 5221
Simpson Ferry Rd., Mechanicsburg, Pennsylvania" 17055.
3. Defendant, Jan T. McKnight ("McKnight") is and adult individual maintaining a
residence at 505 Beech Ave., Hershey, Pennsylvania, 17033.
4. Defendant, Clifford A. Sobel, T/DBA The Phoenix Group, Inc. both maintaining
an office at 24 Woodbine Ave., Suite 3 Northport, NY 11768.
5.
Jurisdiction and Venue
This action arises under the laws of the Commonwealth of Pennsylvania and is
within the subject matter jurisdiction of this court.
6. The Court has personal jurisdiction over defendant's Crawford and McKnight
pursuant to 42 PA Cons. Stat. Ann. (l5301(a)(l).
7.
Venue in this Court is proper because the claims asserted arose in Cumberland
County, Pennsylvania, and/or certain occurrences out of which the claims arose took place in
Cumberland County, Pennsylvania.
8. At all relevant times Cinemagic has been engaged in the business of selling and
servicing computers, peripherals, software and related equipment, as well as programming and
the designing of interactive multimedia programs.
9. A significant portion of Cinemagic's total business relates to the selling and
servicing of computers, peripherals, software and the programming and/or designing of programs
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and interactive multimedia for sDecialized customers. Cinemagic's technical applications are
highly specialized in multimedia and motion design.
10. In order to maintain its growing leadership and expertise in its specialized
industry, Cinemagic, has, over a substantial period of years, expended substantial amounts of
time, money and resources in the continuing development of technology in all aspects of their
specialized business.
11. Cinemagic has obtained and can only !llaintain its present position in the
marketplace and competitive advantage by preserving the confidentiality of the technology and
information covering its process, product variables, product specifications, and development data
as well as customer lists, customer information; marketing information, sales, pricing, cost and
profitability information, as well as its programming methodologies and programming design
specialty. All of said information constitutes trade secrets and/or confidential information.
12. Cinemagic takes substantial measures to maintain the confidential and trade
secrets nature of its technology in order to protect the business of Cinemagic from discovery by
its competitors. The methods utilized by Cinemagic in this regard include employee agreements,
independent contractor agreements and other security measures, including verbal contracts and
agreements from its employees.
Defendant Crawford and McKnil!ht
13. Defendant Crawford was employed by Cinemagic between October of 1996 and
March of 2000. Defendant McKnight was employed by Cinemagic between April of 1999 and
June of 2001.
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14. Crawford was promoted to the position of Multimedia Director, and McKnight
was a Sales/Marketing professional wherein they were privy to "secret" and privileged
information regarding Cinemagic operations, strategy, pricing, sales contracts, specialty
programming methods, customer lists, and partnership.
15. Crawford and McKnight became familiar with the proprietary process and
technology which are applicable to the specialized computer business of Cinemagic.
16. Crawford and McKnight became familiar with Cinemagic's computer systems,
technology information, production of multimedia, motion design and internet programs
specifically within its business relationship with a company known as Oatrageous Muffin Co.
(OMe) DBA The Phoenix Group and an individual known as Cliff Sobel.
17. As part of their employment by Cinemagic, Crawford and McKnight received
propriety and confidential information, especially sensitive customer lists, on-going projects and
other business relationship information.
Defendants Crawford and McKnil!ht Duties to Plaintiff
18. While employed by Cinemagic, Crawford and McKnight occupied positions of
trust and confidence. By virtue of the existence of this relationship they had a duty not to use or
disclose confidential information especially when it is utilized to compete against Cinemagic.
19. Crawford and McKnight executed a limited non-compete agreement and/or
confidentially agreement with Cinemagic early in their relationship..
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20. Crawford and McKnight were also aware through many employee meetings, etc,
that all Cinemagic customer information must be kept secure, and corporately Cinemagic
enforced restrictions to keep said information confidential.
21. On March 27, 2000 Crawford terminated his employment without advance notice.
He gave reasons "that he was frustrated with the nature of the multimedia business and did not
want to continue in this line of work."
22. As early as April 12, 2000 Cinemagic received a call from Erik Elugren of the
University of Virginia, advising Cinemagic that Crawford called him to solicit multimedia work.
23. At about this same time, April 2000, Cliff Sobel of the Phoenix Group advised
Cinemagic that Crawford solicited him for multimedia work.
24. Both clients described in averments #22 and #23 are clients of Cinemagic, and
Crawford's solicitation of them violates his non-compete agreement, as well as tortiously
interferes with Cinemagic's contractual relationship with said clients.
25. Cinemagic, through its counsel's letter dated April 24, 2000 specifically warned
Crawford of his efforts to compete and solicit Cinemagic's customers. Crawford advised no such
activity was taking place.
26. Since April 2000, Cinemagic is aware, that Crawford continues to solicit business
in violation of his non-competition agreement and in fact has performed computer and/or
multimedia projects for Mr. Cliff Sobel and his business's. Cinemagic has obtained irrefutable
documentation of these violations from the Internet as well as from Cliff Sobel.
27. Cinemagic is also aware of other projects for MTV network, Discovery Channel
worked on by Crawford.
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28.
Crawford is also collecting Pennsylvania. Unemployment Compensation benefits
while "working" in direct competition against Cinemagic.
29. In Crawford's employment by others, or as an independent contractor, he will
inevitably draw upon and utilize the expertise, knowledge, customer needs, and customer lists he
acquired during his employment by Cinemagic, with respect to trade secrets, proprietary and
confidential information described herein.
30. While employed by Cinemagic, McKnight occupied positions of trust and
confidence. By virtue of the existence of this relationship McKnight has a duty not to use or
disclose confidential information especially when it is utilized by himself to compete against
Cinemagic.
31. McKnight executed a limited non-compete agreement and/or confidentially
agreement with Cinemagic early in her relationship with said agreement being executed on or
about April of 1999..
32. Crawford was also aware through many employee meetings, etc, that all
Cinemagic customer information must be kept secure, and corporately Cinemagic enforced
restrictions to keep said information confidential.
33.
McKnight was also aware through many employee meetings, etc, that all
Cinemagic customer information must be kept secure, and corporately Cinemagic enforced
restrictions to keep said information confidential.
34. On or about June of 2001, McKnight terminated her employment.
35. Cinemagic, through its counsel's letter dated June 14, 2001 specifically warned
McKnight of her efforts to compete and solicit Cinemagic's customers.
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36. Since June of 2001, Cinemagic is aware, that McKnight continues to solicit
business in violation of his non-competition agreement and in fact has performed computer
and/or multimedia projects for Mr. Cliff Sobel and his business's. Cinemagic has obtained
irrefutable documentation of these violations from the Internet as well as from Cliff Sobel.
37.
McKnight has applied for Pennsylvania unemployment compensation benefits
while "working" in direct competition against Cinemagic.
38.
In McKnight's employment by others, or as an independent contractor ,she will
inevitable draw upon and utilize the expertise, knowledge, customer needs, and customer lists
she acquired during his employment by Cinemagic, with respect to trade secrets, proprietary and
confidential information described herein.
Defendant Sobel (The Phoenix Group, Inc.)
39. Defendant Cliff Sobel and/or his corporation The Phoenix Group, Inc., are in a
business relationship with Cinemagic either by himself, or through his corporation the
Oatrageous Muffin Co., Inc. T/DBA The Phoenix Group, Inc. Said relationship has existed since
1997.
40. Over a period of January 1997 through present, the plaintiff and defendant Sobel
entered into agreements whereby Sobel agrees to buy and plaintiff agrees to sell programming,
computer equipment, services for interactive training, DVD preparation, designing of programs
and interactive multimedia, for specialized customers.
41. Said items and services were delivered to, accepted, and utilized by defendant
Sobel, and a resulting benefit has inured to Sobel.
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42. Sobel, in turn, has used the relationship of trust and confidence it had with
Cinemagic to its benefit, by directly competing for Cinemagic's customers, by soliciting
Cinemagic's employees and former employees, to assist in the tortious interference with
Cinemagic's contractual relationship with its clients. Cinemagic has been advised by an existing
customer, that Sobel has solicited said customer and "He called me to solicit business in the area
of interactive multimedia." And "that Jan McKnight and John Crawford are employed by his
company."
43. In Sobel's employment of Crawford and McKnight, or as using them as
independent contractors, or in collusion with them, he will inevitably draw upon and utilize the
expertise, knowledge, customer needs, and customer lists acquired during Crawford and
McKnight's employment by Cinemagic, with respect to trade secrets, proprietary and
confidential information in direct violation of non-compete agreements.
Irreparable Harm to Cinemal!ic
44. Defendants are in direct competition of Cinemagic.
45. The confidential information which defendants possess as described herein will
assist him or his subsequent employer in the development of products which compete directly
with Cinemagic.
46. Said actions by defendants already completed, and any in the future will cause
immediate and irreparable harm to Cinemagic.
47. The damages to Cinemagic are not yet susceptible to accurate measurement and
are by this nature, irreparable.
48. Cinemagic has no adequate remedy at law.
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Count I
49. The averments of Paragraphs 1-43 herein are incorporated by reference.
50. Crawford and McKnight are subject to a written expressed contractual provision
prohibiting their competition against Cinemagic; and Crawford and McKnight are subject to a
verbal contractual agreement as an employee of Cinemagic not to compete.
51. Crawford and McKnight's conduct is willful, intentional and un-privileged and
causes irreparable harm as well as potential money damages to Cinemagic.
52. As a result of Crawford and McKnight's actions, Cinemagic is entitled to
injunctive relief prohibiting Crawford from competing with the business of Cinemagic for a
period of one year and compensatory damages in an amount yet to be determined.
Count II
Breach of Dutv
53. The averments of Paragraphs 1-47 herein are incorporated by reference..
54. Defendants actions are willful, intentional and unprivileged and have caused and
are causing irreparable harm as well as potential monetary damages to Plaintiff.
55. As a result defendants aforesaid action, Plaintiff is entitled to injunctive relief
prohibiting defendants from competing with the business of Plaintiff for a period of one (1) year
and compensatory damages in an amount yet to be determined.
Count III
Tortious Interference with Business RelationshiDs
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56. The averments of Paragraphs 1-50 hereinabove are incorporated herein by
reference thereto as if fully set forth.
57. The aforesaid actions by defendants constitute tortious interference in the business
and contractual relationships between Plaintiff and Plaintiff present customers.
58. As a result of defendants aforesaid actions, Plaintiff is entitled to injunctive relief
prohibiting defendants from further solicitation of Plaintiff customers or employees in violation
of defendants contractual and other duties to Plaintiff, and Plaintiff is further entitled to
compensatory damages in an amount yet to be determined, for punitive damages, attorneys' fees,
costs and such other legal or equitable relief to which Plaintiff may be entitled.
Count TV
Unfair ComDetition
59. The averments of Paragraphs 1-53 are incorporated herein by reference thereto as
if fully set forth.
60.
By engaging in the aforesaid conduct, defendants have engaged in unfair
competition with Plaintiff.
61.
The actions of Defendant have been willful, intentional and unprivileged and have
caused and are continuing to cause irreparable harm as well as potential monetary damages to
Plaintiff in an amount yet to be determined.
WHEREFORE, Plaintiff respectfully requests:
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(1) A special/preliminary injunction, followed by a permanent injunction against
Defendant and all other persons or entities actions in concert with either of them or on behalf of
either of them:
(a) Enjoining defendants for one (1) year from the date of any ORDER this
Court may grant from employment by or consulting with any client of Plaintiff in any capacity,
direct or indirect; and
(b) Enjoining defendants from in any way disclosing or otherwise providing to
any third person directly or indirectly, any trade secret, proprietary or confidential information or
data relating to any multimedia process, process or process or product variable, product
specification, research or development data, supplier, customer, bid or marketing information,
sales, pricing, cost or profitability information or business plan or strategy; and
(c) Enjoining defendants from any breach of his limited Non-Competition
Agreement, his Intellectual Property Agreement, or his Confidentiality Agreement with Plaintiff.
(d) Enjoining defendants from soliciting clients or other employees of
Cinemagic who are subject to non-competition agreements or for the purpose of unfairly
competing with Cinemagic.
(e) Enjoining defendants from any interference in Cinemagic's contractual
relationship with Cinemagic's current customers.
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(2) A judgement in favor of Plaintiff and against all defendants for all direct,
consequential, incidental and special damages arising out of defendant's aforesaid wrongful
conduct, including punitive damages, attorneys' fees and costs.
Respectfully submitted,
ROBERT W. W AEGER, ESQUIRE
A
Robert W. Waeger,
204 State Street
Harrisburg, P A
(717) 783-3770 e
Attorney for Plaintiff
Cinemagic, Inc.
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VERIFICATION
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CINEMAGIC, INC. hereby verify th~t the facts set forth in the foregoing Complaint are true and
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correct to the best of my knowledge, information and belief.
I understand that false statements herein are made subject to the penalties of 18 Pa.C.S. ~4904,
relating to unsworn falsification to authorities.
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\.-9
N
..,J