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HomeMy WebLinkAbout08-6484IN THE COURT OF COMMON PLEAS OF CUMBERLAND COUNTY, PENNSYLVANIA SOVEREIGN BENEFITS CONSULTING, INC., Plaintiff V. WILLIAM HILLER, JR., DANIEL SOMMA, and CAPITAL INSURANCE ADVISORS, LLC, Defendants NOTICE TO DEFEND YOU HAVE BEEN SUED IN COURT. If you wish to defend against the claims set forth in the following pages, you must take action within twenty (20) days after this Complaint and Notice are served, by entering a written appearance personally or by 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. You may lose money or property or other rights important to you. YOU SHOULD TAKE THIS PAPER TO YOUR LAWYER AT ONCE. IF YOU DO NOT HAVE A LAWYER, GO TO OR TELEPHONE THE OFFICE SET FORTH BELOW. THIS OFFICE CAN PROVIDE YOU WITH INFORMATION ABOUT HIRING A LAWYER. IF YOU CANNOT AFFORD TO HIRE A LAWYER, THIS OFFICE MAY BE ABLE TO PROVIDE YOU WITH INFORMATION ABOUT AGENCIES THAT MAY OFFER LEGAL SERVICES TO ELIGIBLE PERSONS AT A REDUCED FEE OR NO FEE. Cumberland County Bar Association 32 South Bedford Street Carlisle, PA 17013 Telephone Number (717) 249-3166 SLl 875210v]/008370.01197 AVISO PARA DEFENDER USTED HA SIDO DEMANDADO/A EN LA CORTE. Si usted desea defender conta la demanda puestas en las siguientes paginas, usted tienen que tomar accion dentro veinte (20) dias despues que esta Demanda y Aviso es servido, con entrando por escrito una aparencia personalmente o por un abogado y archivando por escrito con la Corte sus defensas o objectiones a las demandas puestas en esta contra usted por la Corte sin mas aviso por cualquier dinero reclamado en la Demanda o por cualquier otro reclamo o alivio solicitado por Demandante. Usted puede perder dinero o propiedad o otros derechos importante para usted. USTED DEBE LLEVAR ESTE PAPEL A SU ABOGADO ENSEGUIDA. SI USTED NO TIENE UN ABOGADO, VAYA O LLAME POR TELEFONO LA OFFICINA FIJADA AQUI ABAJO. ESTA OFICINA PUEDE PROVEERE CON INFORMACION DE COMO CONSEGUIR UN ABOGADO. SI USTED NO PUEDE PAGARLE A UN ABOGADO, ESTA OFICINA PUEDE PROVEERE INFORMACION ACERCA AGENCIAS QUE PUEDAN OFRECER SERVICIOS LEGAL A PERSONAS ELIGIBLE AQ UN HONORARIO REDUCIDO O GRATIS. Cumberland County Bar Association 32 South Bedford Street Carlisle, PA 17013 Telephone Number (717) 249-3166 SLl 875210v 1 /008370.01197 IN THE COURT OF COMMON PLEAS OF CUMBERLAND COUNTY, PENNSYLVANIA SOVEREIGN BENEFITS CONSULTING, INC., Plaintiff D, ?0 7 Gd?J? I 7G/?w WILLIAM HILLER, JR., DANIEL SOMMA, and CAPITAL INSURANCE ADVISORS, LLC, Defendants COMPLAINT FOR EQUITABLE, INJUNCTIVE AND MONETARY RELIEF AND NOW COMES Plaintiff, Sovereign Benefits Consulting, Inc., by and through its counsel Stevens & Lee, and makes the following complaint in equity against Defendants William Hiller, Jr., Daniel Somma, and Capital Insurance Advisors, LLC, stating in support thereof as follows: 1. Plaintiff is Sovereign Benefits Consulting ("SBC") a Pennsylvania corporation having its principal place of business at 1215 Manor Drive, Mechanicsburg, PA 17055. 2. Defendant William Hiller, Jr. ("Hiller") is an adult individual, with a residence (and, upon information and belief, a business address) of 147 Valley View Drive, Belle Vernon, e County, Pennsylvania 15012. 3. On or about October 27, 2006, Hiller entered into a certain Employee Confidentiality and Non-Solicitation Agreement with Plaintiff, a true and correct copy of which is attached hereto and made a part hereof as Exhibit "A" (the "Hiller Agreement"). 4. On or about September 4, 2007, Hiller resigned from SBC. SLl 875210v1 /008370.01197 5. The following day, SBC's President, Lawrence M. Cooney, directed a letter to Hiller enclosing a copy of the Hiller Agreement and reminding Hiller of his obligations thereunder. A true and correct copy of this letter is attached hereto and made a part hereof as Exhibit "B". 6. Defendant Daniel Somma ("Somma") is an adult individual with a residence (and, upon information and belief, a business address) of 1232 Belmont Drive, South Park, Allegheny County, Pennsylvania 15129. 7. On or about October 27, 2006, Somma entered into a certain Employee Confidentiality and Non-Solicitation Agreement with Plaintiff, a true and correct copy of which is attached hereto and made a part hereof as Exhibit "A" (the "Somma Agreement") 8. On or about September 7, 2007, Somma resigned from SBC. 9. The same day, SBC's President, Lawrence M. Cooney, directed a letter to Somma enclosing a copy of the Somma Agreement and reminding Somma of his obligations thereunder. A true and correct copy of this letter is attached hereto and made a part hereof as Exhibit "D". 10. Among other provisions, the Agreements, at paragraph 6(g) expressly designates the Court of Common Pleas of Cumberland County, Pennsylvania as the forum for dispute resolution relating to the Agreements. 11. The Hiller and Somma Agreements also provide, at Paragraph 2, that Hiller and Somma will have access to proprietary and confidential information, and that they agreed to specific "nondisclosure" provisions which were part of the Agreement. 12. Specifically, Paragraph 2(a) of the Agreement ("Definition and Use of Proprietary Information") provides that: "Employee agrees that he will not disclose any Proprietary Information to any person or entity other than the Employees of 2 S Ll 875210v l /0083 70.01 l 97 Sovereign authorized to receive the same or use the same for any purpose (other than in the performance of his duties as an employee of Sovereign) without the express written approval by an authorized officer of Sovereign, either during or after this employment with Sovereign ..." See Exhibits "A" and "C". 13. In addition to the direct monetary harm they have inflicted, Defendants have taken other serious and unwarranted actions which are deliberately harmful to Plaintiff. Specifically, and most urgently, Defendants are in material violation of a certain covenant not to solicit Plaintiff SBC's customers for a period of two (2) years following the termination of Defendants' employment by SBC. 14. With regard to non-solicitation, the Agreement explicitly provides that: 3. Non-Solicitation of Customers and Employees of SBC. While Employee is employed by Sovereign and for a period of two (2) years after the termination or cessation of such employment for any reasons (whether by SBC or Employee), Employee will not directly or indirectly: (a) either alone or in association with others, solicit, divert, or take away or attempt to solicit, divert or take away, the business or patronage of any account, client or customer, with whom SBC has conducted any business or for whom SBC has performed any services during the period of Employee's employment by SBC. (b) either alone or in association with others, solicit, divert, or take away or attempt to solicit, divert or take away, the business or patronage of any prospective account, client or customer (whether a person, firm, corporation, partnership, association or other entity), pursued by SBC, its subsidiary or affiliate, within a one (1) year period immediately preceding the date of expiration of Employee's employment with SBC, as evidenced by telephonic, written or face-to-face communications with such prospects, or a pending business or similar report. (c) either alone or in association with others (i) solicit, or permit any organizations directly or indirectly 3 S L l 875210v 1 /008370.01197 to solicit, any employee of SBC to leave employ of SBC, (ii) solicit for employment, hire or engage as an independent contractor, or permit any organization directly or indirectly to solicit for employment, hire or engage as an independent contractor, any person who is employed by SBC at any time during the term of Employee's employment with SBC; provided that this clause (iii) shall not apply to any individual whose employment with SBC has been terminated for a period of six months or longer. The periods set forth in this Section 3 shall be extended by the time of any (i) breach by Employee of any terms thereof, or (ii) litigation involving Employee and Sovereign with respect to any of the provisions thereof (whether by Employee seeking relief from the terms thereof or by Sovereign seeking to enforce the terms thereof or otherwise). Agreement (Complaint Exhibit "A" and "C") at ¶ 3. 15. The provisions of Paragraph 3 of the Agreement are reasonably restricted in time and scope to protect legitimate business interests of Plaintiff, and are enforceable as a matter of law. 16. Following the termination of their employment with SBC, Defendants, upon information and belief, created, chartered and advertised a new business, known as "Capital Insurance Advisors, LLC." 17. Through Capital Insurance Advisors, LLC, Defendants Hiller and Somma have contacted, solicited, and taken away business from SBC. 18. By way of example, attached as Exhibit "E" hereto is a "Broker of Record" letter, whereby long-standing SBC client, the Southwest Pennsylvania Health and Human Services Agency, discontinued its business relationship with SBC and, instead, designated Capital Insurance Advisors, LLC as its insurance Broker. 19. The loss of this customer relationship alone will cost SBC approximately one hundred thousand dollars ($100,000.00) per year. 4 S Ll 87 5210v 110083 70.01197 20. Furthermore, attached hereto and made a part hereof as Exhibit "F" is the affidavit of Shawn Farr, the Director of Business Services at The Capital Area Intermediate Unit, an SBC customer, in which affidavit Mr. Farr describes Mr. Somma's attempts to solicit the CAIU's business on behalf of Capital Insurance Advisors, LLC. 21. Defendants' solicitation of SBC's customers within two years of the termination of the parties' Agreement constitutes a clear breach of the provisions of the Agreement, including Paragraph 3. 22. Paragraph 6(f) of the parties' Agreement allows SBC to recover attorney-fees incurred in the event of litigation. 23. Specifically, that Paragraph of the Agreement ("Employee Acknowledgement and Equitable Remedies") states as follows: "Employee agrees that Sovereign ... shall be entitled to ... the payment by Employee of all costs and expenses incurred by Sovereign in enforcing the provisions thereof against Employee, including attorney's fees incurred by Sovereign." COUNTI SPECIFIC PERFORMANCE SBC v. Hiller and Somma 24. Plaintiff incorporates by reference the averments of Paragraphs 1 through 23 as though set forth in full herein. 25. The Agreements marked Exhibits "A" and "C" hereto constitute binding and enforceable contracts in all respects. 26. Plaintiff specifically reminded Defendants of their obligations under the Agreements immediately following their termination. 27. Plaintiff is entitled to specific performance of the various provisions of the parties' Agreement before this court of equity, and lacks a remedy at law for Defendants' breach. SL.i 875210vl/008370.01197 28. Defendants, through the actions recited herein, are in material breach of numerous significant provisions of the parties' Agreement, and Plaintiff is being damaged thereby. WHEREFORE, Plaintiff respectfully requests a Decree ordering specific performance of the respective obligations imposed upon the parties pursuant to the Agreement, including Defendants' obligation to pay Plaintiff's attorney's fees and costs, together with such other and further relief as this Court deems appropriate. Plaintiff further seeks injunctive relief, preliminary and then final, enforcing these same rights. Plaintiff has filed an appropriate motion for injunctive relief contemporaneously herewith. Plaintiff further seeks monetary relief, as quantified through the accounting requested below. COUNT II - ACCOUNTING SBC v. Capital Insurance Advisors, LLC 29. Plaintiff incorporates by reference the averments of Paragraphs 1 through 28 as though set forth in full herein. 30. Plaintiff is entitled to an equitable accounting of any and all proceeds and/or business receipts earned by "Capital Insurance Advisors, LLC" in violation of the Parties' Agreement. WHEREFORE, Plaintiff respectfully requests that Defendants be ordered and directed to produce an accounting, supported by the business' books and records, of all proceeds and/or business receipts earned by "Capital Insurance Advisors, LLC." Plaintiff further respectfully requests that Defendants be ordered to pay such amounts as are revealed in such accounting to Plaintiff as damages, together with attorney's fees and costs, together with such other and further relief as this Court deems appropriate. 6 SLl 875210vl /008370.01197 COUNT III - TORTIOUS INTERFERENCE WITH CONTRACTUAL RELATIONS SBC v. Capital Insurance Advisors. LLC 31. Plaintiff incorporates by reference the averments of Paragraphs 1 through 30 as though set forth in full herein. 32. The principals of Capital Insurance Advisors, LLC are, upon information and belief, Defendants Hiller and Somma. 33. Capital Insurance Advisors, LLC is and was aware of the Agreements by and between Hiller and Somma and SBC attached hereto as Exhibits "A" and "C". 34. Capital Insurance Advisors, LLC is and was aware that Hiller and Somma were soliciting and accepting business from SBC customers. 35. This conduct constitutes a breach of Hiller and Somma's contracts with SBC. 36. There is no privilege or justification for Capital Insurance Advisors, LLC's interference with Hiller and Somma's contracts with SBC. WHEREFORE, Plaintiff respectfully requests judgment in its favor and against Capital Insurance Advisors, LLC, in an amount to be proven at trial, together with such other and further relief as this Court deems appropriate. Date: October 31, 2008 STEVENS & LEE By: Mark D. Bradshaw Attorney I.D. No. 61975 17 North Second Street 16th Floor Harrisburg, PA 17101 (717) 234-1090 mdb@stevenslee.com Attorneys for Sovereign Benefits Consulting, Inc. 7 SLl 875210v1 /008370.01197 VERIFICATION I, LAWRENCE M. COONEY, verify that I am the Sovereign Benefits Consulting in the within action; that the attached Complaint is based upon the facts of which I have personal knowledge or information furnished to me by counsel; that the language of the document is that of counsel and not my own; and that the facts set forth in the foregoing document are true and correct to the best of my knowledge, information and belief. I understand that the statements herein are ihade subject to the penalties of 18 Pa. C.S.A. § 4904 relating to unworn falsification to authorities. Date: ©4 2008 SL1 875210vl/008370.01197 EMPLOYEE CONFIDENTIALITY AND NON-SOLICITATION AGREEMENT This Employee Confidentiality and Non-Solicitation Agreement ("Agreement') is made as of the 27* day of October, 2006 by and between SOVEREIGN BENEFITS CONSULTING, INC., a Pennsylvania corporation, ("SBC) and its area subsidiary and affiliated entities (collectively referred to herein as "Sovereign'), and 11111 p ("Employee'. RECITAL WHEREAS, Sovereign and Employee desire to enter into this Agreement in connection with Employee's employment by Sovereign. NOW, THEREFORE, in consideration of Employee's employment by Sovereign, and for other valuable consideration, the sufficiency and receipt of which is hereby acknowledged, and intending to be legally bound hereby, the parties to this Agreement agree as follows: L Condition of EmuLqW-e-nt. Employee acknowledges that his employment with Sovereign is contingent upon his agreement to sign and adhere to the provisions and restrictions contained in this Agreement. 2. Propr?_ and Confidential Information. (a) Definition and Use of Pro 'etary Infimnation Employee agrees that all information, whether or not in writing, of a private, secret or confidential nature concerning Sovereign's business, business relationships or financial affairs, whether or not constituting a trade secret under applicable law, (collectively, "Proprietary Information') is and shall be the exclusive property of Sovereign. By way of illustration, but not limitation, Proprietary Information may include information with respect to the organization and management of Sovereign; identity of actual or potential customers, customer contracts and contacts, transactions and account requirements, and customer credit and financial data, Sovereign products, services, programs, projects, technical information, financial data (including sales costs, profits, pricing methods),* plans (including business and marketing plans), rates and price data; personnel data; computer programs (including software used pursuant to license agreement) and other information considered confidential by Sovereign or by its customers. Employee acknowledges that he will have access to Proprietary Information in connection with his employment with Sovereign. Employee agrees that he will not disclose any Proprietary Information to any person or entity other than employees of Sovereign authorized to receive the same or use the same for any purpose (other than in the performance of his duties as an employee of Sovereign) without the express written approval by an authorized officer of Sovereign, either during or after his employment with Sovereign, unless and until such Proprietary information has become public knowledge without fault by Employee. (b) Return of Proprietary Information. Employee agrees that all files, documents, letters, memoranda, reports, records, data, computer equipment or devices, computer programs or other written, photographic or other material containing Proprietary Information, including those stored by electronic means, whether created by Employee or others, which shall come into his custody or possession, shall be and are the exclusive property of Sovereign to be used by Employee only in the performance of his duties for Sovereign and shall not be copied or removed from Sovereign premises except in pursuit of Sovereign business. All such materials or copies thereof and all tangible property of Sovereign in the custody or possession of Employee shall be delivered to Sovereign, upon the earlier of (i) a request by Sovereign or (ii) termination of Employee's employment for any reason. (c) Information of Customers and Other Third Parties. Employee agrees that his obligation not to disclose or use information and materials of the types set forth in paragraphs (a) and (b) above, and his obligation to return materials and tangible property, set forth in paragraph (b) above, also extends to such types of information, materials, and tangible property of customers of Sovereign or suppliers to Sovereign or other third parties who may have disclosed or entrusted the same to Sovereign or to Employee. 3. Non-Solicitation of Customers and Employees of SBC. While Employee is employed by Sovereign and for a period of two (2) years after the termination or cessation of such employment for any reasons (whether by SBC or Employee), Employee will not directly or indirectly: (a) either alone or in association with others, solicit, divert, or take away or attempt to solicit, divert or take away, the business or patronage of any account, client or customer, with whom SBC has conducted any business or for whom SBC has performed any services during the period of Employee's employment by SBC. (b) either alone or in association with others, solicit, divert, or take away or attempt to solicit, divert or take away, the business or patronage of any prospective account, client or customer (whether a person, firm, corporation, partnership, association or other entity), pursued by SBC, its subsidiary or affiliate, within a one (1) year period immediately preceding the date of expiration of Employee's employment with SBC, as evidenced by telephonic, written or face-to- face communications with such prospects, or a pending business or similar report. (c) either alone or in association with others (i) solicit, or permit any organizations directly or indirectly to solicit, any employee of SBC to leave employ of SBC, (ii) solicit for employment, hire or engage as an independent contractor, or permit any organization directly or indirectly to solicit for employment, hire or engage as an independent contractor, any person who is employed by SBC at any time during the term of Employee's employment with SBC; provided that this clause (iii) shall not apply to any individual whose employment with SBC has been terminated for a period of six months or longer. The periods set forth in this Section 3 shall be extended by the time of any (i) breach by Employee of any terms thereof, or (ii) litigation involving Employee and Sovereign with respect to any of the provisions thereof (whether by Employee seeking relief from the terms thereof or by Sovereign seeking to enforce the terms thereof or otherwise). 4. Other A=aements. Employee hereby represents that, except as Employee has disclosed in writing to Sovereign, Employee is not bound by the terms of any agreement with any previous employer or other party to refrain from using or disclosing any trade secret or confidential or propriety information in the course of his employment with Sovereign or to refrain firnn competing, directly or indirectly with the business of such previous employer or any other party. Employee fiuther represents that his performance of all the terms of this Agreement and as an employee of Sovereign does not and will not breach any agreement to keep in confidence any proprietary information, knowledge or data acquired by Employee in confidence or in trust prior to his employment with Sovereign and Employee will not disclose to Sovereign or induce Sovereign to use any confidential or proprietary information or material belonging to any previous employer or others. 5. At-Will Eaplovment. EMPLOYEE ACKNOWLEDGES THAT THIS AGREEMENT DOES NOT CONSTITUTE A CONTRACT OF EMPLOYMENT AND DOES NOT IMPLY THAT SOVEREIGN WILL CONTINUE EMPLOYEE'S EMPLOYMENT FOR ANY PERIOD OF TIME. EMPLOYEE ACKNOWLEDGES AND AGREES THAT EMPLOYEE'S EMPLOYMENT WITH SOVEREIGN IS AT-WILL, AND THAT EITHER PARTY MAY TERMINATE THE RELATIONSHIP AT ANY TIME AND FOR ANY REASON. Any agreement contrary to the employment at will relationship must be in writing and signed by Employee and an authorized representative of Sovereign. Employee's obligations under Sections 2 and 3 above shall not be affected by the manner of Employee's separation from employment with Sovereign, including termination upon Sovereign's initiative or any change in Employee's position, title, function or duties with Sovereign. This Agreement, including but not limited to Sovereign's right to injunctive relief, shall survive the termination of Employee's employment and shall remain in full force and effect for the period provided. 6. General Provisions (a) No Conflict. Employee represents that the execution and performance by him of this Agreement does not and will not conflict with or breach the terms of any other agreement by which Employee is bound. (b) Entire Agreement. This Agreement supersedes any prior understandings, representations or agreements, proposed or otherwise, oral or in writing, between Employee and Sovereign, and constitutes the entire understanding between Employee and Sovereign relating to the subject matter of this Agreement. This Agreement may not be modified, changed, or discharged in whole or in part, except by an agreement in writing signed by Employee and an authorized representative of Sovereign. Employee agrees that any change or changes in his duties, salary or compensation after the signing of this Agreement shall not affect the validity or scope of this Agreement. (c) Interpretation and Reformation. If any restriction set forth in Sections 2 and 3 above is found by any court of competent jurisdiction to be unenforceable because it extends for too long a period of time or over too great a range of activities or is overbroad for any reason, it shall be interpreted to extend only over the maximum period of time, range of activities or limited or reduced to whatever extent the court deems reasonable and the restraint may be enforced as to such interpretation or reduction. (d) Sevesbility. It is the desire and intent of the parties herein that the terms, provisions, covenants and remedies contained in this Agreement shall be enforceable to the fullest extent permitted by law. If any such term, provision, covenant or remedy of this Agreement or the application thereof to any person or circumstance shall be construed to be invalid or unenforceable in whole or in part, such tem, ' provision, covenant or remedy shall be conshued in a manner so as to permit its enforceability under the applicable law to the fullest extent permitted by law. In any case, the remaining provisions of this Agreement or the application thereof to any person or circumstance other than those to which have been held invalid or unenforceable shall remain in full force and effect. (e) Waiver. No delay or omission by Sovereign in exercising any right under this Agreement will operate as a waiver of that or any other right. A waiver or consent given by Sovereign on any one occasion is effective only in that instance and will not be construed as a bar to or waiver of any right on any other occasion. (f) Employee AcImowledgement and Equitable Remedies. Employee hereby acknowledges and agrees that the covenants and restrictions in this Agreement are necessary to protect the legitimate business interests of Sovereign, including, without limitation, customer information and goodwill, and considers the restrictions to be reasonable for such purpose. Employee acknowledges that any breach by Employee of the obligations set forth in Sections 2 and 3 above would substantially and materially impair and irreparably harm Sovereign's business and good will; that such impairment and harm would be difficult to measure; and, therefore, total compensation in solely monetary terms would be inadequate. Consequently, in the event of any breach or any threatened breach by Employee of any of the provisions of Sections 2 and 3 above, Employee agrees that Sovereign, in addition to monetary damages or such other remedies which may be available, shall be entitled to specific performance and other equitable relief, including temporary or permanent restraining orders and/or other injunctive relief without the necessity of proving actual damages and/or posting a bond, as well as any equitable accounting of all earnings, profits or other benefits arising from any violation hereof, and to the payment by Employee of all costs and expenses incurred by Sovereign in enforcing the provisions thereof against Employee, including attorneys' fees incurred by Sovereign. The existence of any claims or cause of action by Employee against Sovereign, whether predicated on this Agreement or otherwise, shall not constitute a defense to the enforcement by Sovereign of such obligations. (g) Sucxessors and Assigns. This Agreement shall be binding upon and inure to the benefit of both parties and their respective successors and assigns, including any corporation or entity with which or into which Sovereign may be merged or which may succeed to its assets or business, provided however that the obligations of Employee are personal and shall not be assigned by Employee. (h) Governing Law. Forum and Jurisdiction. This Agreement shall be governed by and interpreted in accordance with the internal, substantive laws of the Commonwealth of Pennsylvania, without regard to its conflicts of law principles. Furthermore, the parties agree that in the event that any proceeding is instituted to resolve any matter arising under or relating to any provision of this Agreement, including, without limitation, any action to interpret or enforce any term of this Agreement, such proceeding shall be commenced in Cumberland County, Pennsylvania (or, if applicable, a federal court located within Pennsylvania having jurisdiction over such county), and Employee and Sovereign each consents to the jurisdiction of such court. 0 . G (i) Pronouns. Whenever the context may require, any pronouns used in this Agreement shall include the corresponding masculine, feminine or neuter forms, and the singular forms of nouns and pronouns shall include the plural, and vice versa. (j) Captions. The captions of the sections of this Agreement are for convenience of reference only and in no way define, limit or affect the scope or substance of any section of this Agreement. EMPLOYEE ACKNOWLEDGES THAT HE HAS CAREFULLY READ THIS AGREEMENT AND UNDERSTANDS AND AGREES TO ALL OF THE PROVISIONS OF THIS AGREEMENT. IN WITNESS WHEREOF, the parties have executed this Agreement on the date first above written. BENEFITS CONSULTING, INC. EMPLOYEE: A111x14c1'- ,qm a 1215 Mann' Drive, Suite 200 Smre* n IIE'i??i9 IJV? Mechanicsburg, FA 17055 phone 1717.79795.8666 .8666 toll free 1866.769.3090 fax 1717.790.0122 September 5, 2007 William Hiller Jr. 147 Valley View Drive Belle Vernon, PA 15012 Re: Post-Employment Commitments to Sovereign Benefits Consulting Dear Bill: You have recently terminated your employment with Sovereign Benefits Consulting ("SBC"), effective September 4, 2007. While we understand you to be a business professional with strong business ethics, it is my duty to remind you of certain ongoing obligations to SBC. While an employee of SBC, you were given access to highly confidential and proprietary information as part of your employment. This Information included, but was not limited to, the names and addresses of SBC customers, SBC pricing and consulting policies relating to its customers, as well as marketing and other confidential information belonging to SBC. Additionally, in connection with your employment with SBC, you executed the Employee Confidentiality and Non-Solicitation Agreement (the "Agreement") for the benefit of SBC on October 27, 2006. A copy of the Agreement is enclosed for your review. Pursuant to the Agreement, you agreed not to solicit customers and employees of SBC for a period of 2 years for any reasbn (directly or indirectly) following the date of your termination. You agreed not to solicit any prospective account, client or customer of SBC for a period of 1 year following the date of your termination. You also agreed not to divulge any SBC trade secrets or confidential information for any direct or indirect reason. When you left SBC, you should not have taken with you, whether in paper, electronic or any other from, any information and materials belonging to SBC, including, without limitation, information pertaining to SBC clients. All such materials remain the property of SBC and should have been left with SBC. To the extent that you retained any such materials, please return to our offices immediately. We expect that you will honor and observe these ongoing commitments you have to SBC. We wish you success in your future endeavors. LawrenceTA. Cooney President Enclosure C'.., EMP OYE CONFIDENTIALITY AND NON-SOLICITATION AGREEMENT This Employee Confidentiality and Non-Solicitation Agreement ("Agreement') is trade as of the 27h day of October, 2006 by and between SOVEREIGN BENEFITS CONSULTING, INC., a Pennsylvania corporation, ("SBC'J and its arent subsidiary and affiliated entities (collectively referred to herein as "Sovereign'), and I WARM, ` ("Employee'). RECITAL WHEREAS, Sovereign and Employee desire to enter into this Agreement in connection with Employee's employment by Sovereign. NOW, THEREFORE, in consideration of Employee's employment by Sovereign, and for other valuable consideration, the sufficiency and receipt of which is hereby acknowledged, and intending to be legally bound hereby, the parties to this Agreement agree as follows: 1. Condition of Emplgymg ent. Employee acknowledges that his employment with Sovereign is contingent upon his agreement to sign and adhere to the provisions and restrictions contained in this Agreement. 2. Proprietary and Confidential Information. (a) Definition and Use of Proprietary Information. Employee agrees that all information, whether or not in writing, of a private, secret or confidential nature concerning Sovereign's business, business relationships or financial affairs, whether or not constituting a trade secret under applicable law, (collectively, "Proprietary Information") is and shall be the exclusive property of Sovereign. By way of illustration, but not limitation, Proprietary Information may include information with respect to the organization and management of Sovereign; identity of actual or potential customers, customer contracts and contacts, transactions and account requirements, and customer credit and financial data; Sovereign products, services, programs, projects, technical information, financial data (including sales costs, profits, pricing methods), plans (including business and marketing plans), rates and price data; personnel data; computer programs (including software used pursuant to license agreement) and other information considered confidential by Sovereign or by its customers. Employee acknowledges that he will have access to Proprietary Information in connection with his employment with Sovereign. Employee agrees that he will not disclose any - Proprietary Information to any person or entity other than employees of Sovereign authorized to receive the same or use the same for any purpose (other than in the performance of his duties as an employee of Sovereign) without the express written approval by an authorized officer of Sovereign, either during or after his employment with Sovereign, unless and until such Proprietary Information has become public knowledge without fault by Employee. (b) Return of Proprietary Information. Employee agrees that all files, documents, letters, memoranda, reports, records, data, computer equipment or devices, computer programs or other written, photographic or other material containing Proprietary Information, including those stored by electronic means, whether created by Employee or others, which shall come into his custody or possession, shall be and are the exclusive property of Sovereign to be used by Employee only in the performance of his duties for Sovereign and shall not be copied or removed from Sovereign premises except in pursuit of Sovereign business. All such materials or copies thereof and all tangible property of Sovereign in the custody or possession of Employee shall be delivered to Sovereign, upon the earlier of (i) a request by Sovereign or (ii) termination of Employee's employment for any reason. (c) Information of Customers and Other Third Parties. Employee agrees that his obligation. not to disclose or use information and materials of the types set forth in paragraphs (a) and. (b) above, and his obligation to return materials and tangible property, set forth in paragraph (b) above, also extends to such types of information, materials, and tangible property of customers of Sovereign or suppliers to Sovereign or other third parties who may have disclosed or entrusted the same to Sovereign or to Employee. 3. Non-Solicitation of Customers and Employees of SBC. While Employee is employed by Sovereign and for a period of two (2) years after the termination or cessation of such employment for any reasons (whether by SBC or Employee), Employee will not directly or indirectly: (a) either alone or in association with others, solicit, divert, or take away or attempt to solicit, divert or take away, the business or patronage of any account, client or customer, with whom SBC has conducted any business or for whom SBC has performed any services during the period of Employee's employment by SBC. (b) either alone or in association with others, solicit, divert, or take away or attempt to solicit, divert or take away, the business or patronage of any prospective account, client or customer (whether a person, firm, corporation, partnership, association or other entity), pursued by SBC, its subsidiary or affiliate, within a one (1) year period immediately preceding the date of expiration of Employee's employment with SBC, as evidenced by telephonic, written or face-to- face communications with such prospects, or a pending business or similar report. (c) either alone or in association with others (i) solicit, or permit any organizations directly or indirectly to solicit, any employee of SBC to leave employ of SBC, (ii) solicit for employment, hire or engage as an independent contractor, or permit any organization directly or indirectly to solicit for employment, hire or engage as an independent contractor, any person who is employed by SBC at any time during the term of Employee's employment with SBC; provided that this clause (iii) shall not apply to any individual whose employment with SBC has been terminated for a period of six months or longer. The periods set forth in this Section 3 shall be extended by the time of any (i) breach by Employee of any terms thereof, or (ii) litigation involving Employee and Sovereign with respect to any of the provisions thereof (whether by Employee seeking relief from the terms thereof or by Sovereignseeking to enforce the terms thereof or otherwise). 4. Other Agreements. Employee hereby represents that, except as Employee has disclosed in writing to Sovereign, Employee is not bound by the terns of any agreement with any previous employer or other party to refrain from using or disclosing any trade secret or confidential or propriety information in the course of his employment with Sovereign or to refrain from competing, directly or indirectly with the business of such previous employer or any other party. Employee further represents that his performance of all the terms of this Agreement and as an employee of Sovereign does not and will not breach any agreement to keep in confidence any proprietary information, knowledge or data acquired by Employee in confidence or in trust prior to his employment with Sovereign and Employee will not disclose to Sovereign or induce Sovereign to use any confidential or proprietary information or material belonging to any previous employer or others. 5. At-Will Employment. EMPLOYEE ACKNOWLEDGES THAT THIS AGREEMENT DOES NOT CONSTITUTE A CONTRACT OF EMPLOYMENT AND DOES NOT IMPLY THAT SOVEREIGN WILL CONTINUE EMPLOYEE'S EMPLOYMENT FOR ANY PERIOD OF TIME. EMPLOYEE ACKNOWLEDGES AND AGREES THAT EMPLOYEE'S EMPLOYMENT WITH SOVEREIGN IS AT-WILL, AND THAT EITHER PARTY MAY TERMINATE THE RELATIONSHIP AT ANY TIME AND FOR ANY REASON. Any agreement contrary to the employment at-will relationship must be in writing and signed by Employee and an authorized representative of Sovereign. Employee's obligations under Sections 2 and 3 above shall not be affected by the manner of Employee's separation from employment with Sovereign, including termination upon Sovereign's initiative or any change in Employee's position, title, function or duties with Sovereign. This Agreement, including but not limited to Sovereign's right to injunctive relief, shall survive the termination of Employee's employment and shall remain in full force and effect for the period provided. 6. General Provisions (a) No Conflict. Employee represents that the execution and performance by him of this Agreement does not and will not conflict with or breach the terms of any other agreement by which Employee is bound. (b) Entire A Went. This Agreement supersedes any prior understandings, representations or agreements, proposed or otherwise, oral or in writing, between Employee and Sovereign, and constitutes the entire understanding between Employee and Sovereign relating to the subject matter of this Agreement. This Agreement may not be modified, changed, or discharged in whole or in part, except by an agreement in writing signed by Employee and an authorized representative of Sovereign. Employee agrees that any change or changes in his duties, salary or compensation after the signing of this Agreement shall not affect the validity or scope of this Agreement. (c) Interpretation and Reformation. If any restriction set forth in Sections 2 and 3 above is found by any court of competent jurisdiction to be unenforceable because it extends for too long a period of time or over too great a range of activities or is overbroad for any reason, it shall be interpreted to extend only over the maximum period of time, range of activities or limited or reduced to whatever extent the court deems reasonable and the restraint may be enforced as to such interpretation or reduction. (d) ev ilit . It is the desire and intent of the parties herein that the terms, provisions, covenants and remedies contained in this Agreement shall be enforceable to the fullest extent permitted by law. If any such term, provision, covenant or remedy of this ''cr Agreement or the application thereof to any person or circumstance shall be construed to be invalid or unenforceable in whole or in part, such tern, provision, covenant or remedy shall be construed in a manner so as to permit its enforceability under the applicable law to the fullest extent permitted by law. In any case, the remaining provisions of this Agreement or the application thereof to any person or circumstance other than those to which have been held invalid or unenforceable shall remain in full force and effect. (e) Waiver. No delay or omission by Sovereign in exercising any right under this Agreement will operate as a waiver of that or any other right. A waiver or consent given by Sovereign on any one occasion is effective only in that instance and will not be construed as a bar to or waiver of any right on any other occasion. (f) Employee Acknowledgement and Equitable Remedies. Employee hereby acknowledges and agrees that the covenants and restrictions in this Agreement are necessary to protect the legitimate business interests of Sovereign, including, without limitation, customer information and goodwill, and considers the restrictions to be reasonable for such purpose, Employee acknowledges that any breach by Employee of the obligations set forth in Sections 2 and 3 above would substantially and materially impair and irreparably harm Sovereign's business and good will; that such impairment and harm would be difficult to measure; and, therefore, total compensation in solely monetary terms would be inadequate. Consequently, in the event of any breach or any 'threatened breach by Employee of any of the provisions of Sections 2 and 3 above, Employee agrees that Sovereign, in addition to monetary damages or such other remedies which may be available, shall be entitled to specific performance and other equitable relief, including temporary or permanent restraining orders and/or other injunctive relief without the necessity of proving actual damages and/or posting a bond, as well as any equitable accounting of all earnings, profits or other benefits arising from any violation hereof, and to the payment by Employee of all costs and expenses incurred by Sovereign in enforcing the provisions thereof against Employee, including attorneys' fees incurred by Sovereign. The existence of any claims or cause of action by Employee against Sovereign, whether predicated on this Agreement or otherwise, shall not constitute a defense to the enforcement by Sovereign of such obligations. (g) Successors and Assi ns. This Agreement shall be binding upon and inure to the benefit of both parties and their respective successors and assigns, including any corporation or entity with which or into which Sovereign may be merged or which may succeed to its assets or business, provided however that the obligations of Employee are personal and shall- not be assigned by Employee. (h) Governing Law. Forum and Jurisdiction. This Agreement shall be governed by and interpreted in accordance with the internal, substantive laws of the Commonwealth of Pennsylvania, without regard to its conflicts of law principles. Furthermore, the parties agree that in the event that any proceeding is instituted to resolve any matter arising under or relating to any provision of this Agreement, including, without limitation, any action to interpret or enforce any term of this Agreement, such proceeding shall be commenced in Cumberland County, Pennsylvania (or, if applicable, a federal court located within Pennsylvania having jurisdiction over such county), and Employee and Sovereign each consents to the jurisdiction of such court. (i) Pronouns. Whenever the context may require, any pronouns used in this Agreement shall include the corresponding masculine, feminine or neuter forms, and the singular forms of nouns and pronouns shall include the plural, and vice versa. 6) Captions. The captions of the sections of this Agreement are for convenience of reference only and in no way define, limit or affect the scope or substance of any section of this Agreement. EMPLOYEE ACKNOWLEDGES THAT HE HAS CAREFULLY READ THIS AGREEMENT AND UNDERSTANDS AND AGREES TO ALL OF THE PROVISIONS OF THIS AGREEMENT. IN WITNESS WHEREOF, the parties have executed this Agreement on the date first above written. SOVEREIGN BENEFITS CONSULTING, INC. By: : ? ? - ce , Presi t Q,?, A ?'1,, Svereimi Benefits Consulti 1215 Martyr Drive, Sulte 200 Mechanicsburg, PA 17055 ng phone i 717.795.8666 toll free i 866.769.3090 Taxi 717.790.0122 September 7, 2007 Daniel Somma 1232 Belmont Drive South Park, PA 15129 Re: Post-Employment Commitments to Sovereign Benefits Consulting Dear Dan: You have recently terminated your employment with Sovereign Benefits Consulting ("SBC"), effective September 7, 2007. While we understand you to be a business professional with strong business ethics, it is my duty to remind you of certain ongoing obligations to SBC. While an employee of SBC, you were given access to highly confidential and proprietary information as part of your employment. This information included, but was not limited to, the names and addresses of SBC customers, SBC pricing and consulting policies relating to its customers, as well as marketing and other confidential information belonging to SBC. Additionally, in connection with your employment with SBC, you executed the Employee Confidentiality and Non-Solicitation Agreement (the "Agreement") for the benefit of SBC on October 27, 2006. A copy of the Agreement is enclosed for your review. Pursuant to the Agreement, you agreed not to solicit customers and employees of SBC for a period of 2 years for any reason (directly or indirectly) following the date of your termination. You agreed not to solicit any prospective account, client or customer of SBC for a period of 1 year following the date of your termination. You also agreed *not to divulge any SBC trade secrets or confidential information for any direct or indirect reason. When you left SBC, you should not have taken with you, whether in paper, electronic or any other from, any information and materials belonging to SBC, including, without limitation, information pertaining to SBC clients. All such materials remain the property of SBC and should have been left with SBC. To the extent that you retained any such materials, please return to our offices immediately. We expect that you will honor and observe these ongoing commitments you have to SBC. We wish you success in your future endeavors. Lawrence M. Cooney President Enclosure E krJr?a Y ,tea.. - YJCIt w . A . .. ia. o.. x#" 4 i x 9 Suite lbw?? pp, 15222 ?? pA Pitts ??on ??t ? ? our october 131'200% . oc? 1 ? 2p°g ?? ? efttS Costing lpp F?.?Np^'Ven? V_ 4 -• k' 3 #R • p4a bAr. ??N',fr . \4 drw f. MM o: 6wsr• fa+l}. 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A'P<Yi J vf{, ilY:y,f ?++ 4yf i.a}'fty YfY A3k f.x.• •• r{¢'i a,}.y 4da?f<Y,JtR{ •f i'i a .'•f}Y ! iAw R Y'n X t rN'} ..4.y+ R k ••'Af+?t+«7rr4.w r.+x +•aAq y a .•f 1a +?"a 1}a}pi z:P+M atit`Y.M1.q. f)+F 5«•q k..tY AYfaFSt.+i :l {k . x1'1'4 !r f }+•.: K l: # r.l's. S }.. F IN THE COURT OF COMMON PLEAS OF CUMBERLAND COUNTY, PENNSYLVANIA SOVEREIGN BENEFITS CONSULTING, INC., Plaintiff V. WILLIAM HILLER, JR., DANIEL SOMMA, and CAPITAL INSURANCE ADVISORS, LLC, . Defendants AFFIDAVIT OF SHAWN FARR The undersigned, having been duly sworn, hereby testifies on the basis of personal knowledge as follows: 1. My name is Shawn Farr, I am an adult individual competent to testify in this matter. 2. I am employed as the Director of Business Services for the Capital Area Intermediate Unit (CAIU). 3. I have been employed by CAN since January 2, 2007. 4. CAN is an educational service agency which has approximately 580 employees serving Cumberland, Dauphin, Perry and Northern York Counties. 5. CAN has been a client of Sovereign Benefits Consulting, Inc. (SBC) and a predecessor firm known as hartz consulting group, llc (hcg) through the South Central Trust, since July, 2004 (before my tenure at CAIU commenced). &. Over that period of time, SBC and hcg have provided various risk management, financial and insurance-related services for the CAIU. CAIU has been satisfied with the services received. 1 SL I 875347v 11008370.01197 7. I became acquainted with Daniel Somma during calendar year 2007. Mr. Somma had been involved in SBC's provision of services to CAIU for several years, and I met him in that capacity. 8. I subsequently learned that he and a business colleague, William Hiller, had left SBC's employment and started their own company - Capital Insurance Advisors, Inc. (CIA). 9. On multiple occasions since he resigned from SBC, Mr. Somma contacted me at my office by telephone and email and on a few occasions met in my office and for lunch. During these contacts, Mr. Somma did discuss the services provided by CIA and the desire to have the CAIU enter into an agreement for services with his firm in the area of Workers' Compensation administration and claims management. 10. It is my understanding that the services that Mr. Somma has suggested are services SBC also offers. 11. Mr. Somma's contacts with me, in my mind, clearly were to solicit business from the CAN. FURTHER SAYETH THE DEPONENT NOT. ?J Shawn Farr Sworn to and subscribed before me this I day of ON. , 2008. Not!Wy Public COMMONWEALTH OF P NOTARIAL SEAL MELISSA M. ZEIDERS, Notary PulAc Chy of Harrisburg. Daun County Cornrnlr o Expires Feb. e24, 2011 2 SL 1875347v1/008370.01197 C? ? `-?c?`-s ?, ?r r?-; ''?~ (1' """ ?_' ? ? ? c' `- ? -? ` `'??^{ Y+' V.,, .i ? 7 ? ? ??T?__ ?, c `C?`'``? .:J N -?.. A IN THE COURT OF COMMON PLEAS OF CUMBERLAND COUNTY, PENNSYLVANIA SOVEREIGN BENEFITS CONSULTING, INC., NO. ©f - b 1lft Plaintiff V. WILLIAM HILLER, JR., DANIEL SOMMA, and CAPITAL INSURANCE ADVISORS, LLC, Defendants PLAINTIFF'S MOTION FOR A PRELIMINARY INJUNCTION AND NOW comes Plaintiff, Sovereign Benefits Consulting, Inc. ("SBC"), by and through its counsel, Stevens & Lee, and makes the following request for preliminary injunction pursuant to the provisions of Pa.R.Civ.P. 1531, stating in support thereof as follows: 1. The parties hereto are also parties to a contemporaneously filed action in equity, the allegations and exhibits of which are incorporated herein by reference. 2. The dispute framed by the underlying complaint is marked by egregious business conduct involving self-dealing and blatant violations of certain Employee Confidentiality and Non-Solicitation Agreements by Defendants William Hiller, Jr. and Daniel Somma, following the termination of their Employment with SBC in September of 2007. See Complaint, Exhibits "A" and "C", (the "Agreements"). 3. In addition to the direct monetary harm they have inflicted, Defendants have taken other serious and unwarranted actions which are deliberately harmful to Plaintiff. Specifically, and most urgently, Defendants are in material violation of a certain covenant not to SLl 875200v1 /008370.01197 solicit Plaintiff SBC's customers for a period of two (2) years following the termination of Defendants' employment by SBC. 4. With regard to non-solicitation, the Agreement explicitly provides that: 3. Non-Solicitation of Customers and Employees of SBC. While Employee is employed by Sovereign and for a period of two (2) years after the termination or cessation of such employment for any reasons (whether by SBC or Employee), Employee will not directly or indirectly: (a) either alone or in association with others, solicit, divert, or take away or attempt to solicit divert or take away, the business or patronage of any account, client or customer, with whom SBC has conducted any business or for whom SBC has performed any services during the period of Employee's employment by SBC. (b) either alone or in association with others, solicit, divert, or take away or attempt to solicit, divert or take away, the business or patronage of any prospective account, client or customer (whether a person, firm, corporation, partnership, association or other entity), pursued by SBC, its subsidiary or affiliate, within a one (1) year period immediately preceding the date of expiration of Employee's employment with SBC, as evidenced by telephonic, written or face-to-face communications with such prospects, or a pending business or similar report. (c) either alone or in association with others (i) solicit, or permit any organizations directly or indirectly to solicit, any employee of SBC to leave employ of SBC, (ii) solicit for employment, hire or engage as an independent contractor, or permit any organization directly or indirectly to solicit for employment, hire or engage as an independent contractor, any person who is employed by SBC at any time during the term of Employee's employment with SBC; provided that this clause (iii) shall not apply to any individual whose employment with SBC has been terminated for a period of six months or longer. The periods set forth in this Section 3 shall be extended by the time of any (i) breach by Employee of any terms thereof, or (ii) litigation involving Employee and Sovereign with respect to any of the provisions thereof 2 SLl 875200v 11008370.01197 (whether by Employee seeking relief from the terms thereof or by Sovereign seeking to enforce the terms thereof or otherwise). Agreements (Complaint Exhibits "A" and "C") at ¶3 (emphasis added). 5. As set forth in the Complaint, in direct contravention of this covenant, Defendants are now operating a business competitive with Plaintiff in the greater Pittsburgh area called "Capital Insurance Advisors, LLC", and are soliciting SBC's clients and "taking away" certain business from SBC. 6. In conjunction with the operation of their new competitive business venture, Defendants are also utilizing, at least in part, confidential information and trade secrets obtained through their affiliation with Plaintiff. 7. There is no adequate legal remedy for the harm which results from Defendants' ongoing breaches of the non-solicitation covenant, and there is no way to calculate the loss of good will and loss of business opportunities represented by this unlawful solicitation of Plaintiffs customers. 8. Indeed, Defendants affirmatively acknowledged the same in the Agreements, which provide in part: (f) Employee Acknowledgement and Equitable Remedies. Employee hereby acknowledges and agrees that the covenants and restrictions in this Agreement are necessary to protect the legitimate business interests of Sovereign, including, without limitation, customer information and goodwill, and considers the restrictions to be reasonable for such purpose. Employee acknowledges that any breach by Employee of the obligations set forth in Sections 2 and 3 above would substantially and materially impair and irreparably harm Sovereign's business and good will; that such impairment and harm would be difficult to measure; and, therefore, total compensation in solely monetary terms would be inadequate. Consequently, in the event of any breach or any threatened breach by Employee of any of the provisions of Sections 2 and 3 above, Employee agrees that S L1 875200v i /008370.01197 Sovereign, in addition to monetary damages or such other remedies which may be available, shall be entitled to specific performance and other equitable relief, including temporary or permanent restraining orders and/or other injunctive relief without the necessity of proving actual damages and/or posting a bond, as well as any equitable accounting of all earnings, profits or other benefits arising from any violation hereof, and to the payment by Employee of all costs and expenses incurred by Sovereign in enforcing the provisions thereof against Employee, including attorneys' fees incurred by Sovereign. The existence of any claims or cause of action by Employee against Sovereign, whether predicated on this Agreement or otherwise, shall not constitute a defense to the enforcement by Sovereign of such obligations. See Complaint, Exhibits "A" and "C" at ¶ 6(f) (emphasis added). 9. Plaintiff s rights under the covenant are manifest, as is the wrongfulness of Defendants' conduct in engaging in competition in blatant derogation of the Agreement. 10. By contrast, there is no harm which would befall Defendants should they be compelled to cease their unlawful competition and honor their contractural obligations. 11. The balance of the equities clearly favors Plaintiff, and the public interest would best be served by eliminating, rather than prolonging, the confusion and breaches of contract caused by Defendants' actions. 12. The requested preliminary injunction would restore the parties to the status quo which existed prior to Defendants' breaches of their Agreements with Plaintiff. 13. The nature of Plaintiff's business renders injunctive relief particularly necessary in order to protect Plaintiff s legitimate business interests, because it has a relatively small number of clients, each of which represent substantial annual revenue. 14. More specifically, an average client of Plaintiff s represents annual revenue of between $75,000.00 and $100,000.00. SLl 875200v 1 /008370.01197 4 A 15. Consequently, Defendants' successful interference with only a few customer relationships will amount to substantial damage. WHEREFORE, Plaintiff respectfully requests that this Court enter an injunction against Defendants, preliminary at first, and then final following trial, enjoining Defendants from their ongoing breaches of the Agreement. A draft Order scheduling a hearing in this matter, together with a draft Order granting the relief requested herein are both attached for the convenience of the Court. Date: October 31, 2008 STEVENS & LEE By: Mark D. Bradshaw Attorney I.D. No. 61975 17 North Second Street 16th Floor Harrisburg, PA 17101 (717) 234-1090 mdb@stevenslee.com Attorneys for Sovereign Benefits Consulting, Inc. SLl 875200v l /008370.01197 IN THE COURT OF COMMON PLEAS OF CUMBERLAND COUNTY, PENNSYLVANIA SOVEREIGN BENEFITS CONSULTING, INC., Plaintiff V. WILLIAM HILLER, JR., DANIEL SOMMA, and CAPITAL INSURANCE ADVISORS, LLC, Defendants CERTIFICATE OF SERVICE I, Mark D. Bradshaw, Esquire, hereby certify that I caused a true and correct copy of the foregoing Motion for Preliminary Injunction to be served upon the following by sheriffs service, together with original process, addressed as follows: Capital Insurance Advisors, LLC and William Hiller, Jr. 147 Valley View Drive Belle Vernon, PA 15012 And also by e-mail, directed to bhiller@capitalinsuranceadvisors.com Capital Insurance Advisors, LLC and Daniel Somma 1232 Belmont Drive South Park, PA 15129 And also by e-mail, directed to dsomma@captialinsuarnceadvisors.com Date: October 31, 2008 -- S L l 87 5200v 1 /0083 70.01197 ? CJ "'-? <''. ? y'°? .N,r SOVEREIGN BENEFITS CONSULTING, INC., Plaintiff V. WILLIAM HILLER, JR., DANIEL SOM1vIA, and CAPITAL INSURANCE ADVISORS, LLC, Defendants IN THE COURT OF COMMON PLEAS OF CUMBERLAND COUNTY, PENNSYLVANIA CIVIL ACTION - LAW NO. 09-6484 CIVIL TERM ORDER OF COURT AND NOW, this 31St day of October, 2008, upon consideration of Plaintiff's Motion for a Preliminary Injunction, a hearing is scheduled for Friday, December 5, 2008, at 11:00 a.m., in Courtroom No. 1, Cumberland County Courthouse, Carlisle, Pennsylvania. Mark D. Bradshaw, Esq. P.O. Box 11670 Harrisburg, PA 17108 Attorney for Plaintiff /Capital Insurance Advisors, LLC 147 Valley View Drive Belle Vernon, PA 15012 Daniel Somma 1232 Belmont Drive South Park, PA 15129 BY THE COURT, L0 :Z Wd C- AON BOOZ kVI 'N`±(,l6d 31A JO ?William Hiller 147 Valley View Drive Belle Vernon, PA 15012 Defendants :rc W t ES n'?aL „p/os ?7 IN THE COURT OF COMMON PLEAS OF CUMBERLAND COUNTY, PENNSYLVANIA SOVEREIGN BENEFITS CONSULTING, INC., Plaintiff, CIVIL ACTION No. 08-6484 vs. WILLIAM HILLER, JR., DANIEL SOMMA, and CAPITAL INSURANCE ADVISORS, LLC, PRAECIPE TO ENTER APPEARANCE Defendants. FILED ON BEHALF OF: Defendants William Hiller, Jr., Daniel Somma, and Capital Insurance Advisors, LLC Albert S. Lee, Esquire PA I.D. No. 64201 Michael Robic, Esquire PA I.D. No. 75578 METZ LEWIS LLC 11 Stanwix Street, 18`h Floor Pittsburgh, Pennsylvania 15222 412-918-1100 IN THE COURT OF COMMON PLEAS OF CUMBERLAND COUNTY, PENNSYLVANIA SOVEREIGN BENEFITS CONSULTING, INC., Plaintiff, CIVIL ACTION No. 08-6484 vs. WILLIAM HILLER, JR., DANIEL SOMMA, and CAPITAL INSURANCE ADVISORS, LLC, Defendants. PRAECIPE TO ENTER APPEARANCE KINDLY enter the appearances of Albert S. Lee, Esquire, Michael Robic, Esquire and the law firm of Metz Lewis LLC in the above-captioned action on behalf of Defendants. Dated: November 10, 2008 6??' Albert S. Lee, Esquire Pa. I.D. No. 64201 Michael Robic, Esquire PA I.D. No. 75578 Attorneys for William Hiller, Jr., Daniel Somma, and Capital Insurance Advisors, LLC METZ LEWIS LLC 11 Stanwix Street, 18th Floor Pittsburgh, PA 15222 Phone: (412) 918-1100 CERTIFICATE OF SERVICE I do hereby certify that a true and correct copy of the foregoing PRAECIPE TO ENTER APPEARANCE was served this 10th day of November, 2008, via United States Mail, First-Class, postage prepaid, on the following counsel of record: Mark D. Bradshaw, Esquire Stevens & Lee 17 North Second Street, 16th Floor Harrisburg, PA 17101 G/ ' Albert S. Lee ??? ` •r C:w ? 1 ?s ' C? A { t,?3 ? , •. SOVEREIGN BENEFITS IN THE COURT OF COMMON PLEAS OF CONSULTING, INC., CUMBERLAND COUNTY PENNSYLVANIA Plaintiff v CIVIL ACTION - LAW WILLIAM HILLER, JR., DANIEL SOMMA, and CAPITAL INSURANCE ADVISORS, LLC, Defendants NO. 08-6484 CIVIL TERM IN RE: MOTION FOR PRELIMINARY INJUNCTION ORDER OF COURT AND NOW, this 5th day of December, 2008, upon consideration of the Plaintiff's motion for a preliminary injunction, and following a hearing, the record is declared closed, and the matter is taken under advisement. Counsel are afforded a period of 7 days from today's date within which to furnish briefs to the Court on the issues which they perceive to exist in this matter. By the Court, J`. Wesley O ? Mark D. Bradshaw, Esquire 17 North Second Street 16th Floor Harrisburg, PA 17101 For Plaintiff / ? Michael P. Robic, II, Esquire 11 Stanwix Street 18th Floor Pittsburgh, PA 15222 For Defendants mae cpP' rnz. t LL Jr., J. 6C * i i WV 6- 330 9DOZ v[-??C-ll3111 SOVEREIGN BENEFITS : IN THE COURT OF COMMON PLEAS OF CONSULTING, INC., : CUMBERLAND COUNTY, PENNSYLVANIA Plaintiff V. : CIVIL ACTION WILLIAM HILLER, JR., DANIEL SOMMA, and CAPITAL INSURANCE ADVISORS, LLC, Defendants : No. 08-6484 CIVIL TERM IN RE: PLAINTIFF'S MOTION FOR PRELIMINARY INJUNCTION BEFORE OLER, J. ORDER OF COURT AND NOW, this 4`h day of February, 2009, upon consideration of Plaintiff s Motion for a Preliminary Injunction, following a hearing held on December 5, 2008, and for the reasons stated in the accompanying opinion, it is ordered and decreed as follows: 1. Defendants are preliminarily enjoined in general from future breaches of the terms of the Employment Agreement and Non-Solicitation Agreement constituting Plaintiff's Exhibits 2 and 3, and in particular from soliciting, diverting or taking away the business or patronage of any prospective account, client or customer with whom Plaintiff conducted any business or for whom Plaintiff performed any services during the period of the individual defendants' employment with Plaintiff, 2. Within 30 days of the date of this order, Defendants shall provide to Plaintiff an accounting of receipts by Defendant Capital Insurance Advisors, LLC, from Plaintiff's former client, Southwestern Pennsylvania Human Services, Inc.; 3. Pursuant to Pennsylvania Rule of Civil Procedure 1531(b), this preliminary injunction is conditioned upon Plaintiffs deposit with the prothonotary of cash, or filing with the prothonotary of a bond with corporate surety acceptable to the court, in the amount of $50,000.00, conditioned that, if the injunction is dissolved because improperly granted or for failure to hold a hearing, Plaintiff shall pay to any person injured all damages sustained by reason of granting the injunction and all legally taxable costs and fees; and 4. Failure to make the deposit or filing referred to in paragraph 3 within 20 days of the date of this order shall result in an automatic dissolution of the preliminary injunction without further order of court. /Mark D. Bradshaw, Esq. STEVENS & LEE 16th Floor 17 North Second Street Harrisburg, PA 17101 Attorney for Plaintiff ? Michael P. Robic, II, Esq. METZ LEWIS LLC 18th Floor 11 Stanwix Street Pittsburgh, PA 15222 Attorney for Defendants 0 Of t U rrl.'7 IL-IL aJ?r?og BY THE COURT, VWesley Oler, r. J. N 3d i 1 .3 Wd ? - 83J 5002 ?I ZLttivr va aHl Jo SOVEREIGN BENEFITS CONSULTING, INC., Plaintiff V. WILLIAM HILLER, JR., DANIEL SOMMA, and CAPITAL INSURANCE ADVISORS, LLC, Defendants IN THE COURT OF COMMON PLEAS OF CUMBERLAND COUNTY, PENNSYLVANIA : CIVIL ACTION : No. 08-6484 CIVIL TERM IN RE: PLAINTIFF'S MOTION FOR PRELIMINARY INJUNCTION BEFORE OLER, J. OPINION and ORDER OF COURT OLER, J., February 4, 2009. In this civil action arising out of an alleged breach of a restrictive covenant incident to employment, a former employer has sued two former employees and their present company for "equitable, injunctive and monetary relief."' For disposition at this time is Plaintiff's Motion for a Preliminary Injunction.2 A hearing was held on the motion on December 5, 2008. For the reasons stated in this opinion, the motion will be granted. STATEMENT OF FACTS Plaintiffs complaint alleges that the individual defendants entered into employee confidentiality and non-solicitation agreements with Plaintiff in October of 2006,3 that they resigned their positions with Plaintiff in September of 2007,4 that they proceeded to form the limited liability company constituting the third ' Plaintiffs Complaint for Equitable, Injunctive and Monetary Relief, filed October 31, 2008 (hereinafter Plaintiff's Complaint). z Plaintiffs Motion for a Preliminary Injunction, filed October 31, 2008 (hereinafter Plaintiffs Motion for a Preliminary Injunction). 3 Plaintiffs Complaint, paras. 3, 7. 4 Plaintiffs Complaint, paras. 4, 8. defendant herein,5 and that through the new entity the individual defendants "contacted, solicited, and [took] away business from [Plaintiff]" in violation of their covenants.6 The complaint consists of a count against the individual defendants seeking specific performance, and counts against the limited liability company defendant seeking an accountings and seeking money damages for tortious interference with contractual relations.9 Defendant has also filed the request for a preliminary injunction sub judice.10 In this motion, Plaintiff accuses the individual defendants of "operating a business competitive with Plaintiff ... and ... soliciting [Plaintiffs] clients and `taking away' certain business from [Plaintiff]"" and of "utilizing, at least in part, confidential information and trade secrets obtained through their affiliation with Plaintiff." 12 The motion maintains that "[t]here is no adequate legal remedy for the harm which results from [their] ongoing breaches of the non-solicitation covenant, and there is no way to calculate the loss of good will and loss of business opportunities represented by this unlawful solicitation of Plaintiff's customers."'3 The evidence at the hearing on Plaintiffs request for a preliminary injunction may be summarized as follows. Witnesses called on behalf of Plaintiff were William R. Hartz, senior vice-president of Plaintiff and Defendant Daniel Somma; witnesses called on behalf of Defendants were the aforesaid William R. Hartz, Defendant Daniel Somma, and Defendant William Hiller, Jr. The evidence s Plaintiff's Complaint, para. 16. 6 Plaintiff's Complaint, para. 17, 21. Plaintiff's Complaint, Count I. 8 Plaintiff's Complaint, Count Il. 9 Plaintiff's Complaint, Count III. 10 Plaintiff's Motion for a Preliminary Injunction. 11 Plaintiff's Motion for a Preliminary Injunction, para. 5. 12 Plaintiff's Motion for a Preliminary Injunction, para. 6. 13 Plaintiff's Motion for a Preliminary Injunction, para. 7. 2 at the hearing, which was not significantly conflicting, may be summarized as follows: Plaintiff Sovereign Benefits Consulting, Inc., is a business corporation that provides consultation services to employers with regard to employee insurance and benefit programs and it brokers agreements between insurers and employers in relation thereto, in return for premium-related commissions payable by the employers. 14 On October 1, 2006, Plaintiff purchased the assets of a similar company, known as the Hartz Consulting Group, LLC.15 In connection with the purchase, Plaintiff offered employment to certain former employees of the Hartz Consulting Group, LLC.16 In particular, letters on behalf of Plaintiff, dated October 24, 2006, were sent to Defendants William 14 N.T. 5-6, Hearing December 5, 2008 (morning session). The senior vice-president of Plaintiff described the business of Plaintiff as follows: We provide consulting and brokerage services on the insurance side specifically dealing with today's health insurance pieces of a couple of our clients. That would involve all the day-to-day services, phone calls from the clients, resolving employee issues, employee enrollments, negotiations with insurance carriers, executive level negotiation workings, planned designed consulting, financial consulting. N.T. [5-6], Hearing, December 5, 2008 (morning session). This witness described the business further in the following exchange: Q Can you give the Court a sense of the customer base that you serve, what is your typical client if there is one? A The typical client in the Pittsburgh office is-well, a larger employer, we have a lot of school districts, manufacturers. Most of them would range from 4 to 500 employees to 2,000 employees located all throughout the state. Q Can you give us a sense of the approximate number of clients that Sovereign Benefits Consulting has? A 140. Q Is this a competitive business in your view? A Yes. N.T. 6, Hearing, December 5, 2008 (morning session). "N.T. 10-11, 15, Hearing, December 5, 2008 (morning session). 16 N.T. 12, Hearing, December 5, 2008 (morning session). 3 Hiller, Jr., and Daniel Somma, offering employment as "consulting account executive[s]" and providing for acceptance of the employment "during orientation." 17 Each letter, in its entirety, read as follows: Dear [name]: I am pleased to confirm an offer of employment to you with Sovereign Benefits Consulting. The terms of employment are as follows: Position & Start Date: A full time Sovereign Benefits Consulting Account Executive III position in the 100 First Ave, Pittsburgh office. You will report directly to William Hartz. Your start date will be Friday, October 27, 2006. Please report to the, Pittsburgh location, located at 100 First Ave, Pittsburgh, PA on Friday, October 27, 2006 at 9:00 AM for orientation. PLEASE BE SURE TO BRING THE REQUESTED FORMS OF IDENTIFICATION (see attached), and a copy of your signed offer letter to orientation. Please retain the original for your records. Compensation/Performance Management Your salary will be $4,038.47 paid bi-weekly. This is an annual salary of $105,000.22 Your salary grade is 10. Sovereign will evaluate team member's performance on a periodic basis. Once a year, each team member will be considered for merit increases. Benefits: Beginning December 1, 2006, you will become eligible for 14 hours of Paid Time Off (PTO) for the calendar year of 2006. Details will be provided at orientation. In addition to your bi-weekly salary, you will be eligible to participate in our Comprehensive Benefits Program. The program includes a Flexible Benefits Plan, (options such as medical, dental, vision, life, etc.), that is effective the first of the month after completion of 30 days of employment. You will receive an enrollment notification within 30 days from your first day of employment. Along with this notification you will be provided with an internet web address to access Sovereign's On- Line Enrollment System, as well as your enrollment deadline. The On-Line Enrollment System will provide you with your enrollment options as well as details on each program available. " N.T. 33-36, Hearing, December 5, 2008 (afternoon session) 4 It is important that you enroll by your deadline. Failure to enroll by the deadline will result in no coverage for you and your eligible dependent(s). Depending on the chosen options, you may be required to contribute to the cost of your benefits through bi-weekly payroll deductions. Information on Sovereign's other benefit programs including but not limited to 401(k) Savings Plan, Employee Stock Ownership Plan (ESOP), and Employee Stock Purchase Plan (ESPP) will be provided to you at orientation. Sovereign reserves the right to change, end, or alter plans and eligibility dates at any time. This offer of employment is made contingent upon successful completion of the following: 1. Your ability to provide proof of your identity and legal rights to work in the United States, as specified by the Immigration and Reform Control Act of 1986. The attached list of documents outlines the proof we can accept as dictated by the U.S. Department of Justice. PLEASE BRING THE REQUIRED FORMS WITH YOU TO ORIENTATION. 2. Completion of reference checks satisfactory to Sovereign Bank. 3. Successful completion of the background checks as well as the pre-employment drug screening which must occur within 48 hours following acceptance of the job offer. 4. Completion of Sovereign Bank employment application. 5. Satisfactory completion of training program(s) with Sovereign standards. This offer letter shall not be construed as an agreement, either expressed or implied, to employ you for any stated term, and shall in no way alter the Bank's policy of employment at-will, pursuant to which both you and the Bank remain free to terminate the employment relationship, with or without cause, at any time, with or without notice. Similarly, nothing in this letter shall be construed as an agreement, either express or implied, to pay you any compensation or grant you any benefits beyond the end of your employment with the Bank. If you need clarification of any items mentioned above, please feel free to call me at 717-771-9469. We look forward to you joining our team. Sincerely, Debra Zeiders Team Member Services Recruitment Representative III Team Member Services Enclosures 5 Please confirm your acceptance by signing the copy of the offer letter and returning it during orientation. Offer accepted as outlined above: [Name] Date 1s The orientation session occurred on Friday, October 27, 2006, commencing at 9:00 a.m. and concluding at 11:00 a.m.19 At the session, Defendants Hiller and Somma submitted their signed acceptances and executed documents relating to matters like health insurance and restrictive covenants. 20 Chronologically, the submission of the acceptances preceded the execution and submission of the restrictive covenants, which occurred toward the end of the session .21 The first working day for Defendants Hiller and Somma with Plaintiff was the following Monday. 22 The document executed by Defendants Hiller and Somma containing restrictive covenants was entitled "Employee Confidentiality and Non-Solicitation Agreement," contained "intending-to-be-legally-bound" language, and read, in part, as follows: 3. Non-Solicitation of Customers and Employees of SBC While Employee is employed by Sovereign and for a period of two (2) years after the termination or cessation of such employment for any reasons (whether by SBC or Employee), Employee will not directly or indirectly: (a) either alone or in association with others, solicit, divert, or take away or attempt to solicit, divert or take away, the business or patronage of any account, client or customer, with whom SBC has conducted any 18 Defendants' Ex. 1, Hearing, December 5, 2008. 19 N.T. 63, Hearing, December 5, 2008 (afternoon session). 20 N.T. 46, Hearing, December 5, 2008 (afternoon session). Such items were also referred to in the hearing as "human resources, payroll and other documents." N.T. [12], Hearing, December 5, 2008 (morning session). 21 N.T. 46, 51, Hearing, December 5, 2008 (afternoon session). 22 N.T. 52, Hearing, December 5, 2008 (afternoon session). 6 business or for whom SBC has performed any services during the period of Employee's employment by SBC. (b) either alone or in association with others, solicit, divert, or take away or attempt to solicit, divert or take away, the business or patronage of any prospective account, client or customer (whether a person, firm, corporation, partnership, association or other entity), pursued by SBC, its subsidiary or affiliate, within a one (1) year period immediately preceding the date of expiration of Employee's employment with SBC, as evidenced by telephonic, written or fact-to-face communications with such prospects, or a pending business or similar report. (c) either alone or in association with others (i) solicit, or permit any organizations directly or indirectly to solicit, any employee of SBC to leave employ of SBC, (ii) solicit for employment, hire or engage as an independent contractor, or permit any organization directly or indirectly to solicit for employment, hire or engage as an independent contractor, any person who is employed by SBC at any time during the term of Employee's employment with SBC; provided that this clause (iii) shall not apply to any individual whose employment with SBC has been terminated for a period of six months or longer. The periods set forth in this Section 3 shall be extended by the time of any (i) breach by Employee of any terms thereof, or (ii) litigation involving Employee and Sovereign with respect to any of the provisions thereof (whether by Employee seeking relief from the terms thereof or by Sovereign seeking to enforce the terms thereof or otherwise)." Each of the Employee Confidentiality and Non-Solicitation Agreements also contained this provision: Employee Acknowledgement and Equitable Remedies. Employee hereby acknowledges and agrees that the covenants and restrictions in this Agreement are necessary to protect the legitimate business interests of Sovereign, including, without limitation, customer information and goodwill, and considers the restrictions to be reasonable for such purpose. Employee acknowledges that any breach by Employee of the obligations set forth in Sections 2 and 3 above would substantially and materially impair and irreparably harm Sovereign's business and good will; that such impairment and harm would be difficult to measure; and, therefore, total compensation in solely monetary terms would be inadequate. Consequently, in the event of any breach or any threatened breach by Employee of any of the provisions of Sections 2 and 3 above, Employee agrees that Sovereign, in addition to monetary damages or such other remedies which may be available, shall be entitled to specific performance and other equitable relief, including temporary or permanent restraining orders and/or other injunctive relief without the necessity of proving actual damages and/or posting a bond, as well as any equitable accounting of all earnings, profits or other benefits arising from any violation hereof, and to the payment by Employee of all costs and expenses incurred by Sovereign 23 Plaintiff's Exs. 2-3, Hearing, December 5, 2008. 7 in enforcing the provision thereof against Employee, including attorneys' fees incurred by Sovereign. The existence of any claims or cause of action by Employee against Sovereign, whether predicated on this Agreement or otherwise, shall not constitute a defense to the enforcement by Sovereign of such obligations. 24 Plaintiff's business generates revenue of approximately 5.2 million dollars per year.25 During the period of the individual defendants' employment with Plaintiff, Plaintiff was the broker-of-record for a company known as Southwestern Pennsylvania Human Services, Inc., the gross income from which per year was $100,000 and the net income from which was $50,000 per year.26 Another client of Plaintiff during this period was the Capital Area Intermediate Unit, an educational service agency with almost 600 employees. 27 A third such client was the Diocese of Pittsburgh.28 On August 21, 2007, Defendants Hiller and Somma resigned their positions with Plaintiff, effective shortly thereafter. 29 By letter dated September 5, 2007, the President of Plaintiff reminded them of their obligations under the Employee Confidentiality and Non-Solicitation Agreement. 30 Defendants Hiller and Somma promptly formed Defendant Capital Insurance Advisors, LLC,31 a business similar to that of Plaintiff.32 The new business aggressively solicited a workers' compensation insurance/claims management account from the Capital Area Intermediate Unit 33 and "discussed 24 Plaintiff's Exs. 2-3, para. 6(f), Hearing, December 5, 2008. 2s N.T. 8, Hearing, December 5, 2008 (afternoon session). 26 N.T. 7, 8, 30, 31, 32, Hearing, December 5, 2008 (afternoon session). 27 Plaintiff's Ex. 10, Hearing, December 5, 2008. 28 N.T. 66, 67, Hearing, December 5, 2008 (afternoon session). 29 Plaintiff's Exs. 4, 6, Hearing, December 5, 2008. 30 Plaintiff's Ex. 7, 8, Hearing, December 5, 2008. " N.T. 21, 22, 23, Hearing, December 5, 2008 (afternoon session). 32 N.T. 12-13, Hearing, December 5, 2008 (afternoon session). 33 Plaintiff's Ex. 10, Hearing, December 5, 2008 8 business transactions" with a representative of the Diocese of Pittsburgh.34 In addition, as of October 13, 2008, Defendants' business had actually taken over the Southwestern Pennsylvania Human Services, Inc., account from Plaintiff.35 With respect to the Capital Area Intermediate Unit, the business director of that organization stated in an affidavit that 7. I became acquainted with Daniel Somma during calendar year 2007. Mr. Somma had been involved in SBC's provision of services to CAIU for several years, and I met him in that capacity. 8. I subsequently learned that he and a business colleague, William Hiller, had left SBC's employment and started their own company- Capital Insurance Advisors, Inc. (CIA). 9. On multiple occasions since he resigned from SBC, Mr. Somma contacted me at my office by telephone and email and on a few occasions met in my office and for lunch. During these contacts, Mr. Somma did discuss the services provided by CIA and the desire to have the CAIU enter into an agreement for services with his firm in the area of Workers' Compensation administration and claims management. 10. It is my understanding that the services that Mr. Somma has suggested are services SBC also offers. 11. Mr. Somma's contacts with me, in my mind, clearly were to solicit business from the CAIU.36 While not denying such contacts with this client of Plaintiff, Defendant Somma noted that the particular type of insurance solicited was not among those that Plaintiff serviced for the Capital Area Intermediate Unit. 37 With respect to the Diocese of Pittsburgh, Defendant Miller was somewhat circumspect in his testimony: Q The Diocese of Pittsburgh [is] a former Sovereign Benefits Consultant client? A Yes, it was. Q And is it your testimony under oath that you have not approached or attempted to secure business with the Diocese of Pittsburgh at any time since leaving Sovereign Benefits Consulting" 34 N.t. 66, 67, Hearing, December 5, 2008 (afternoon session). 31 Plaintiffs Ex. 9, Hearing, December 5, 2008; N.T. 18-19, Hearing December 5, 2008 (morning session). 36 Plaintiffs Ex. 10, Hearing, December 5, 2008. 37 N.T. 56, Hearing, December 5, 2008 (afternoon session). 9 A I have not solicited them. Q Let me ask the question again, and be as specific as I can. Are you testifying under oath that you have not contacted the Diocese of Pittsburgh since leaving Sovereign Benefits Consulting in an attempt to secure business? A No, I've not solicited the Diocese of Pittsburgh. Q Have you been in contact with them? A With who? Q Individuals of the Diocese of Pittsburgh? A Every time I go to church within the Diocese of Pittsburgh, yes. Q Have you discussed any business transactions with Dave Stewart at the Diocese? A Yes. Q Since leaving Sovereign Benefits Consulting? A Yes. Q ... Who initiated ... that discussion with the member of the Diocese? A Dave Stewart. Q He called you? A Yes. Q And ... did he call you asking you about doing business with you? A Yes. Q Did you do any business with him? A No. 38 The circumstances concerning the acquisition of the Southwestern Pennsylvania Human Services, Inc., account by Defendant Capital Insurance Advisors, LLC, were described by Defendant Somma as follows: Q Did you solicit any business from Southwest? A No. Q Did you contact anyone at Southwest and ask them to give you business? A No. " N.T. 66-68, Hearing, December 5, 2008 (afternoon session). 10 Q How did it come to be that someone from Southwest contacted you? A I have a-I developed a personal relationship with the CEO, Jeff Brooks Mascara, and as a result I stayed in touch with him, and he had asked me to take over as his benefits. Q You said you stayed in touch with him. Any of those conversations before he asked you to take over, did you ask him to give you any benefits or any work? A No. Q Did he tell you why he wanted to leave Sovereign Benefits? A He wasn't happy. Q Did he explain to you why he wasn't happy? A Not in any great detail or any detail." DISCUSSION Statement of law. Several principles of law are of importance in the present matter. First, with respect to preliminary injunctions, the Pennsylvania Supreme Court has stated as follows: Three criteria have been established for the granting of a preliminary injunction ... They are: (1) the preliminary injunction must be necessary to prevent immediate and irreparable harm which could not be compensated for by damages; (2) greater injury would result from the denial of the preliminary injunction than from the granting of it; and (3) it would operate to restore the parties to the status quo as it existed prior to the alleged wrongful conduct. In addition to meeting all three criteria, the court must be convinced that [the plaintiff's] right to a preliminary injunction is clear ... and general equity jurisdiction must be warranted. Committee of Seventy v. Albert, 33 Pa. Commw. 44, 49, 381 A.2d 188, 190 (1977). Second, "[c]ourts of equity will enforce restrictive covenants [made by employees]... when they are (1) incident to an employment relationship between the employer and employee; (2) reasonably necessary for the protection of the employer; and (3) reasonably limited in duration and geographic extent.... When restrictive covenants meet this three-prong test, they are prima facie enforceable." The Wood Co., Inc. v. Hickey, 40 Cumberland L.J. 511, 514 (1990) (Hess, J.) (citations omitted). In this regard, the legitimacy of a provision in an employment 39 N.T. 54, Hearing, December 5, 2008 (afternoon session). 11 agreement in the nature of a covenant not to compete has been related by the Pennsylvania Supreme Court as follows: In almost all commercial enterprises contact with customers or clientele is a particularly sensitive aspect of the business. In most businesses as the size of the operation increases, selling and servicing activities must be at least in part decentralized and entrusted to employees whose financial interest in the business is limited to their compensation. The employer's sole or major contact with buyers is through these agents and the sole or major contact with buyers is through these agents and the success or failure of the firm depends in part on their effectiveness. The possibility is present that the customer will regard, or come to regard, the attributes of the employee as more important in his business dealings than any special qualities of the product or service of the employer, especially if the product is not greatly differentiated from others which are available. Thus, some customers may be persuaded, or even be very willing, to abandon the employer should the employee move to a competing organization or leave to set up a business of his own. The employer's point of view is that the company's clientele is an asset of value which has been acquired by virtue of effort and expenditures over a period of time, and which should be protected as a form of property. Certainly, the argument goes, the employee should have no equity in the custom which the business had developed before he was employed. Similarly, under traditional agency concept, any new business or improvement in customer relations attributable to him during his employment is for the sole benefit of the principal. This is what he is being paid to do. When he leaves the company he should no more be permitted to divert to his own benefit the product of his employment than to abscond with the company's cashbox. Sidco Paper Co., v. Aaron, 465 Pa. 586, 593-94, 351 A.2d 250, 253-54 (attribution omitted). Third, such restrictive covenants are enforceable notwithstanding that the employment in question is at-will. See generally, National Staroh & Chemical Corp. v. Snyder, 34 Pa. D & C.2d 533, 536-37, 1964 WL 6397, 3. However, it is also the rule that [w]hen [a] restrictive covenant is added to an existing employment relationship, ... it is only enforceable when the employee who restricts himself or herself receives a corresponding benefit or change in status. An employee's continued employment is not sufficient consideration for a covenant not to compete which the employee sign[s] after the inception of his employment, where the employer makes no promise of continued employment for a definite term. Maintenance Specialties, Inc. v. Gottus, 455 Pa. 327, 333, 314 A.2d 279, 282-83 (1974) (Jones, C.J., concurring). 12 Fourth, an assessment of irreparable harm in the context of breach of a restrictive covenant incident to employment is to be made with an understanding that "[i]t is not the initial breach of [the] covenant which necessarily establishes the existence of irreparable harm but rather the threat of the unbridled continuation of the violation and the resultant incalculable damage to the former employer's business ...." John G. Bryant Co., Inc. v. Sling Testing & Repair, Inc., 471 Pa. 1, 7, 369 A.2d 1164, 1167 (1977). Fifth, the fact that monetary losses to a former employer from a breach of a restrictive covenant may be quantified to some extent by an accounting does not mean that an adequate remedy at law exists for such a breach. As the Pennsylvania Supreme Court has stated: [Such covenants] seek[] to prevent more than just the sales that might result by the prohibited contact but also [they are] designed to prevent a disturbance in the relationship that has been established between [the employer] and [its] accounts through prior dealings. It is the possible consequences of this unwarranted interference with customer relationships that is unascertainable and not capable of being fully compensated by 40 money damages. Application of law. In the present case, the evidence tended to show (a) that the individual defendants executed a restrictive covenant contemporaneously, for practical purposes, with their commencement of employment with Plaintiff, (b) that upon terminating that employment they formed a business similar to that of Plaintiff, and (c) that during the period of the restrictive covenant's term they discussed with one of Plaintiffs clients the acquisition of its business, had aggressively solicited another of Plaintiff's clients, and had actually succeeded in acquiring the account of a third client of Plaintiff. Under these circumstances, and based upon the foregoing principles of law, it appears to the court (a) that the restrictive covenant in question was incident to an employment relationship between Plaintiff and the individual defendants, was reasonably necessary for the ao John G. Bryant Co., Inc. v. Sling Testing & Repair, Inc., 471 Pa. 1, 8, 359 A.2d 1164, 1167 (1977). 13 protection of the employer, and was reasonably limited, (b) that it is highly probable that Defendants will be found at trial to have violated the covenant, (c) that the basic requisites for a preliminary injunction as outlined in Committee of Seventy v. Albert, supra, have been shown, and (d) that Plaintiff's right to a preliminary injunction is clear. Accordingly, the following order will be entered: ORDER OF COURT AND NOW, this 4"' day of February, 2009, upon consideration of Plaintiff's Motion for a Preliminary Injunction, following a hearing held on December 5, 2008, and for the reasons stated in the accompanying opinion, it is ordered and decreed as follows: 1. Defendants are preliminarily enjoined in general from future breaches of the terms of the Employment Agreement and Non-Solicitation Agreement constituting Plaintiffs Exhibits 2 and 3, and in particular from soliciting, diverting or taking away the business or patronage of any prospective account, client or customer with whom Plaintiff conducted any business or for whom Plaintiff performed any services during the period of the individual defendants' employment with Plaintiff; 2. Within 30 days of the date of this order, Defendants shall provide to Plaintiff an accounting of receipts by Defendant Capital Insurance Advisors, LLC, from Plaintiff's former client, Southwestern Pennsylvania Human Services, Inc.; 3. Pursuant to Pennsylvania Rule of Civil Procedure 1531(b), this preliminary injunction is conditioned upon Plaintiffs deposit with the prothonotary of cash, or filing with the prothonotary of a bond with corporate surety acceptable to the court, in the amount of $50,000.00, conditioned that, if the 14 injunction is dissolved because improperly granted or for failure to hold a hearing, Plaintiff shall pay to any person injured all damages sustained by reason of granting the injunction and all legally taxable costs and fees; and 4. Failure to make the deposit or filing referred to in paragraph 3 within 20 days of the date of this order shall result in an automatic dissolution of the preliminary injunction without further order of court. BY THE COURT, s/ J. Wesley Oler, Jr. J. Wesley Oler, Jr., J. Mark D. Bradshaw, Esq. STEVENS & LEE 16th Floor 17 North Second Street Harrisburg, PA 17101 Attorney for Plaintiff Michael P. Robic, II, Esq. METZ LEWIS LLC 18th Floor 11 Stanwix Street Pittsburgh, PA 15222 Attorney for Defendants 15 IN THE COURT OF COMMON PLEAS OF CUMBERLAND COUNTY, PENNSYLVANIA SOVEREIGN BENEFITS CONSULTING, INC. Plaintiff, CIVIL DIVISION No.: 08-6484 V. WILLIAM HILLER, JR., DANIEL SOMMA, and CAPITAL INSURANCE ADVISORS, LLC, NOTICE OF APPEAL Filed on Behalf of Defendants: Defendants. WILLIAM HILLER, JR., DANIEL SOMMA, and CAPITAL INSURANCE ADVISORS, LLC Counsel of Record for These Parties: Michael P. Robic II, Esquire Pa. I.D. No.: 75579 JURY TRIAL DEMANDED METZ LEWIS LLC 11 Stanwix Street 18th Floor Pittsburgh, PA 15222 Phone: (412) 918-1100 Fax: (412) 918-1199 IN THE COURT OF COMMON PLEAS OF CUMBERLAND COUNTY, PENNSYLVANIA SOVEREIGN BENEFITS CONSULTING, INC. Plaintiff, CIVIL DIVISION No.: 08-6484 V. WILLIAM HILLER, JR., DANIEL SOMMA, and CAPITAL INSURANCE ADVISORS, LLC, Defendants. NOTICE OF APPEAL AND NOW, come the Defendants, William Hiller, Jr. ("Hiller"), Daniel Somma ("Somma"), and Capital Insurance Advisors, LLC ("CIA") (collectively "Defendants"), by and through their counsel, and pursuant to the Pennsylvania Rules of Appellate Procedure, hereby file this Appeal to the Superior Court of Pennsylvania from the Opinion and Order of the Court of Common Pleas of Cumberland County, Pennsylvania, entered in this matter on the 4th day of February, 2009, by the Honorable J. Wesley Oler, Jr. This Order has been entered in the docket as evidenced by Exhibit "A", a copy of the docket entry. A Notice of Appeal having been filed in this matter, the official court reporter is hereby requested to produce, certify and file the transcript in this matter in conformity with Rule 1922 of the Pennsylvania Rules of Appellate Procedure. Dated: March 5 , 2009 Respectfully submitted, METZ L IS LL / B Y• Michael P. Robic II, Esquire Pa. I.D. No.: 75579 11 Stanwix Street; 18th Floor Pittsburgh, PA 15222 Phone: (412) 918-1100 Fax: (412) 918-1199 Attorneys for Defendants: William Hiller, Jr., Daniel Somma, and Capital Insurance Advisors, LLC r SOVEREIGN BENEFITS : IN THE COURT OF COMMON PLEAS OF CONSULTING, INC., : CUMBERLAND COUNTY, PENNSYLVANIA Plaintiff V. WILLIAM HILLER, JR., DANIEL SOMMA, and CAPITAL INSURANCE ADVISORS, LLC, Defendants CIVIL ACTION No. 08-6484 CIVIL TERM IN RE: PLAINTIFF'S MOTION FOR PRELIMINARY INJUNCTION BEFORE OLER, J. ORDER OF COURT AND NOW, this 4`h day of February, 2009, upon consideration of Plaintiff's Motion for a Preliminary Injunction, following a hearing held on December 5, 2008, and for the reasons stated in the accompanying opinion, it is ordered and decreed as follows: 1. Defendants are preliminarily enjoined in general from future breaches of the terms of the Employment Agreement and Non-Solicitation Agreement constituting Plaintiff's Exhibits 2 and 3, and in particular from soliciting, diverting or taking away the business or patronage of any prospective account, client or customer with whom Plaintiff conducted any business or for whom Plaintiff performed any services during the period of the individual defendants' employment with Plaintiff; 2. Within 30 days of the date of this order, Defendants shall provide to Plaintiff an accounting of receipts by Defendant Capital Insurance Advisors, LLC, from Plaintiff's former client, Southwestern Pennsylvania Human Services, Inc.; EXHIBIT A 3. Pursuant to Pennsylvania Rule of Civil Procedure 1531(b), this preliminary injunction is conditioned upon Plaintiff's deposit with the prothonotary of cash, or filing with the prothonotary of a bond with corporate surety acceptable to the court, in the amount of $50,000.00, conditioned that, if the injunction is dissolved because improperly granted or for failure to hold a hearing, Plaintiff shall pay to any person injured all damages sustained by reason of granting the injunction and all legally taxable costs and fees; and 4. Failure to make the deposit or filing referred to in paragraph 3 within 20 days of the date of this order shall result in an automatic dissolution of the preliminary injunction without further order of court. Mark D. Bradshaw, Esq. STEVENS & LEE 16th Floor 17 North Second Street Harrisburg, PA 17101 Attorney for Plaintiff Mic el P. Robic, II, Esq. M Z LEWIS LLC th Floor 11 Stanwix Street Pittsburgh, PA 15222 Attorney for Defendants BY THE COURT, I ?i - J: Wesley Oler, r. J. SOVEREIGN BENEFITS : IN THE COURT OF COMMON PLEAS OF CONSULTING, INC., : CUMBERLAND COUNTY, PENNSYLVANIA Plaintiff V. : CIVIL ACTION WILLIAM HILLER, JR., DANIEL SOMMA, and CAPITAL INSURANCE ADVISORS, LLC, Defendants : No. 08-6484 CIVIL TERM IN RE: PLAINTIFF'S MOTION FOR PRELIMINARY INJUNCTION BEFORE OLER, J. OPINION and ORDER OF COURT OLER, J., February 4, 2009. In this civil action arising out of an alleged breach of a restrictive covenant incident to employment, a former employer has sued two former employees and their present company for "equitable, injunctive and monetary relief."' For disposition at this time is Plaintiff's Motion for a Preliminary Injunction.2 A hearing was held on the motion on December 5, 2008. For the reasons stated in this opinion, the motion will be granted. STATEMENT OF FACTS Plaintiffs complaint alleges that the individual defendants entered into employee confidentiality and non-solicitation agreements with Plaintiff in October of 2006,3 that they resigned their positions with Plaintiff in September of 2007,4 that they proceeded to form the limited liability company constituting the third 1 Plaintiff's Complaint for Equitable, Injunctive and Monetary Relief, filed October 31, 2008 (hereinafter Plaintiff's Complaint). z Plaintiff's Motion for a Preliminary Injunction, filed October 31, 2008 (hereinafter Plaintiff's Motion for a Preliminary Injunction). 3 Plaintiff's Complaint, paras. 3, 7. a Plaintiff's Complaint, paras. 4, 8. defendant herein,s and that through the new entity the individual defendants "contacted, solicited, and [took] away business from [Plaintiff)" in violation of their covenants.6 The complaint consists of a count against the individual defendants seeking specific performance, and counts against the limited liability company defendant seeking an accountings and seeking money damages for tortious interference with contractual relations.9 Defendant has also filed the request for a preliminary injunction sub judace. 10 In this motion, Plaintiff accuses the individual defendants of "operating a business competitive with Plaintiff ... and ... soliciting [Plaintiff's] clients and `taking away' certain business from [Plaintiff)"t t and of "utilizing, at least in part, confidential information and trade secrets obtained through their affiliation with Plaintiff. ,12 The motion maintains that "[t]here is no adequate legal remedy for the harm which results from [their] ongoing breaches of the non-solicitation covenant, and there is no way to calculate the loss of good will and loss of business opportunities represented by this unlawful solicitation of Plaintiff's customers."13 The evidence at the hearing on Plaintiff's request for a preliminary injunction may be summarized as follows. Witnesses called on behalf of Plaintiff were William R. Hartz, senior vice-president of Plaintiff and Defendant Daniel Somma; witnesses called on behalf of Defendants were the aforesaid William R. Hartz, Defendant Daniel Somma, and Defendant William Hiller, Jr. The evidence 5 Plaintiff's Complaint, para. 16. 6 Plaintiff's Complaint, para. 17, 21. Plaintiff's Complaint, Count I. e Plaintiffs Complaint, Count II. 9 Plaintiff's Complaint, Count III. 10 Plaintiff's Motion for a Preliminary Injunction. " Plaintiffs Motion for a Preliminary Injunction, para. 5. 'Z Plaintiff's Motion for a Preliminary Injunction, para. 6. 13 Plaintiff's Motion for a Preliminary Injunction, para. 7. 2 at the hearing, which was not significantly conflicting, may be summarized as follows: Plaintiff Sovereign Benefits Consulting, Inc., is a business corporation that provides consultation services to employers with regard to employee insurance and benefit programs and it brokers agreements between insurers and employers in relation thereto, in return for premium-related commissions payable by the employers. 14 On October 1, 2006, Plaintiff purchased the assets of a similar company, known as the Hartz Consulting Group, LLC.15 In connection with the purchase, Plaintiff offered employment to certain former employees of the Hartz Consulting Group, LLC.16 In particular, letters on behalf of Plaintiff, dated October 24, 2006, were sent to Defendants William 14 N.T. 5-6, Hearing December 5, 2008 (morning session). The senior vice-president of Plaintiff described the business of Plaintiff as follows: We provide consulting and brokerage services on the insurance side specifically dealing with today's health insurance pieces of a couple of our clients. That would involve all the day-to-day services, phone calls from the clients, resolving employee issues, employee enrollments, negotiations with insurance carriers, executive level negotiation workings, planned designed consulting, financial consulting. N.T. [5-6], Hearing, December 5, 2008 (morning session). This witness described the business further in the following exchange: Q Can you give the Court a sense of the customer base that you serve, what is your typical client if there is one? A The typical client in the Pittsburgh office is-well, a larger employer, we have a lot of school districts, manufacturers. Most of them would range from 4 to 500 employees to 2,000 employees located all throughout the state. Q Can you give us a sense of the approximate number of clients that Sovereign Benefits Consulting has? A 140. Q Is this a competitive business in your view? A Yes. N.T. 6, Hearing, December 5, 2008 (morning session) "N.T. 10-11, 15, Hearing, December 5, 2008 (morning session). 16 N.T. 12, Hearing, December 5, 2008 (morning session). 3 Hiller, Jr., and Daniel Somma, offering employment as "consulting account executive[s]" and providing for acceptance orientation." 17 Each letter, in its entirety, read as follows: Dear [name]: of the employment "during I am pleased to confirm an offer of employment to you with Sovereign Benefits Consulting. The terms of employment are as follows: Position & Start Date: A full time Sovereign Benefits Consulting Account Executive III position in the 100 First Ave, Pittsburgh office. You will report directly to William Hartz. Your start date will be Friday, October 27, 2006. Please report to the, Pittsburgh location, located at 100 First Ave, Pittsburgh, PA on Friday, October 27, 2006 at 9:00 AM for orientation. PLEASE BE SURE TO BRING THE REQUESTED FORMS OF IDENTIFICATION (see attached), and a copy of your signed offer letter to orientation. Please retain the original for your records. Compensation/Performance Management Your salary will be $4,038.47 paid bi-weekly. This is an annual salary of $105,000.22 Your salary grade is 10. Sovereign will evaluate team member's performance on a periodic basis. Once a year, each team member will be considered for merit increases. Benefits: Beginning December 1, 2006, you will become eligible for 14 hours of Paid Time Off (PTO) for the calendar year of 2006. Details will be provided at orientation. In addition to your bi-weekly salary, you will be eligible to participate in our Comprehensive Benefits Program. The program includes a Flexible Benefits Plan, (options such as medical, dental, vision, life, etc.), that is effective the first of the month after completion of 30 days of employment. You will receive an enrollment notification within 30 days from your first day of employment. Along with this notification you will be provided with an internet web address to access Sovereign's On- Line Enrollment System, as well as your enrollment deadline. The On-Line Enrollment System will provide you with your enrollment options as well as details on each program available. 17 N.T. 33-36, Hearing, December 5, 2008 (afternoon session) 4 It is important that you enroll by your deadline. Failure to enroll by the deadline will result in no coverage for you and your eligible dependent(s). Depending on the chosen options, you may be required to contribute to the cost of your benefits through bi-weekly payroll deductions. Information on Sovereign's other benefit programs including but not limited to 401(k) Savings Plan, Employee Stock Ownership Plan (ESOP), and Employee Stock Purchase Plan (ESPP) will be provided to you at orientation. Sovereign reserves the right to change, end, or alter plans and eligibility dates at any time. This offer of employment is made contingent upon successful completion of the following: 1. Your ability to provide proof of your identity and legal rights to work in the United States, as specified by the Immigration and Reform Control Act of 1986. The attached list of documents outlines the proof we can accept as dictated by the U.S. Department of Justice. PLEASE BRING THE REQUIRED FORMS WITH YOU TO ORIENTATION. 2. Completion of reference checks satisfactory to Sovereign Bank. 3. Successful completion of the background checks as well as the pre-employment drug screening which must occur within 48 hours following acceptance of the job offer. 4. Completion of Sovereign Bank employment application. 5. Satisfactory completion of training program(s) with Sovereign standards. This offer letter shall not be construed as an agreement, either expressed or implied, to employ you for any stated term, and shall in no way alter the Bank's policy of employment at-will, pursuant to which both you and the Bank remain free to terminate the employment relationship, with or without cause, at any time, with or without notice. Similarly, nothing in this letter shall be construed as an agreement, either express or implied, to pay you any compensation or grant you any benefits beyond the end of your employment with the Bank. If you need clarification of any items mentioned above, please feel free to call meat 717-771-9469. We look forward to you joining our team. Sincerely, Debra Zeiders Team Member Services Recruitment Representative III Team Member Services Enclosures 5 Please confirm your acceptance by signing the copy of the offer letter and returning it during orientation. Offer accepted as outlined above: [Name] Date is The orientation session occurred on Friday, October 27, 2006, commencing at 9:00 a.m. and concluding at 11:00 a.m.19 At the session, Defendants Hiller and Somma submitted their signed acceptances and executed documents relating to matters like health insurance and restrictive covenants.20 Chronologically, the submission of the acceptances preceded the execution and submission of the restrictive covenants, which occurred toward the end of the session .21 The first working day for Defendants Hiller and Somma with Plaintiff was the following Monday. 22 The document executed by Defendants Hiller and Somma containing restrictive covenants was entitled "Employee Confidentiality and Non-Solicitation Agreement," contained "intending-to-be-legally-bound" language, and read, in part, as follows: 3. Non-Solicitation of Customers and Emnloyees of SBC While Employee is employed by Sovereign and for a period of two (2) years after the termination or cessation of such employment for any reasons (whether by SBC or Employee), Employee will not directly or indirectly: (a) either alone or in association with others, solicit, divert, or take away or attempt to solicit, divert or take away, the business or patronage of any account, client or customer, with whom SBC has conducted any is Defendants' Ex. 1, Hearing, December 5, 2008. 19 N.T. 63, Hearing, December 5, 2008 (afternoon session). 20 N.T. 46, Hearing, December 5, 2008 (afternoon session). Such items were also referred to in the hearing as "human resources, payroll and other documents." N.T. [12], Hearing, December 5, 2008 (morning session). 21 N.T. 46, 51, Hearing, December 5, 2008 (afternoon session). 22 N.T. 52, Hearing, December 5, 2008 (afternoon session). 6 business or for whom SBC has performed any services during the period of Employee's employment by SBC. (b) either alone or in association with others, solicit, divert, or take away or attempt to solicit, divert or take away, the business or patronage of any prospective account, client or customer (whether a person, firm, corporation, partnership, association or other entity), pursued by SBC, its subsidiary or affiliate, within a one (1) year period immediately preceding the date of expiration of Employee's employment with SBC, as evidenced by telephonic, written or fact-to-face communications with such prospects, or a pending business or similar report. (c) either alone or in association with others (i) solicit, or permit any organizations directly or indirectly to solicit, any employee of SBC to leave employ of SBC, (ii) solicit for employment, hire or engage as an independent contractor, or permit any organization directly or indirectly to solicit for employment, hire or engage as an independent contractor, any person who is employed by SBC at any time during the term of Employee's employment with SBC; provided that this clause (iii) shall not apply to any individual whose employment with SBC has been terminated for a period of six months or longer. The periods set forth in this Section 3 shall be extended by the time of any (i) breach by Employee of any terms thereof, or (ii) litigation involving Employee and Sovereign with respect to any of the provisions thereof (whether by Employee seeking relief from the terms thereof or by Sovereign seeking to enforce the terms thereof or otherwise).23 Each of the Employee Confidentiality and Non-Solicitation Agreements also contained this provision: Employee Acknowledgement and Equitable Remedies. Employee hereby acknowledges and agrees that the covenants and restrictions in this Agreement are necessary to protect the legitimate business interests of Sovereign, including, without limitation, customer information and goodwill, and considers the restrictions to be reasonable for such purpose. Employee acknowledges that any breach by Employee of the obligations set forth in Sections 2 and 3 above would substantially and materially impair and irreparably harm Sovereign's business and good will; that such impairment and harm would be difficult to measure; and, therefore, total compensation in solely monetary terms would be inadequate. Consequently, in the event of any breach or any threatened breach by Employee of any of the provisions of Sections 2 and 3 above, Employee agrees that Sovereign, in addition to monetary damages or such other remedies which may be available, shall be entitled to specific performance and other equitable relief, including temporary or permanent restraining orders and/or other injunctive relief without the necessity of proving actual damages and/or posting a bond, as well as any equitable accounting of all earnings, profits or other benefits arising from any violation hereof, and to the payment by Employee of all costs and expenses incurred by Sovereign " Plaintiff's Exs. 2-3, Hearing, December 5, 2008. 7 in enforcing the provision thereof against Employee, including attorneys' fees incurred by Sovereign. The existence of any claims or cause of action by Employee against Sovereign, whether predicated on this Agreement or otherwise, shall not constitute a defense to the enforcement by Sovereign of such obligations.za Plaintiff's business generates revenue of approximately 5.2 million dollars per year. 25 During the period of the individual defendants' employment with Plaintiff, Plaintiff was the broker-of-record for a company known as Southwestern Pennsylvania Human Services, Inc., the gross income from which per year was $100,000 and the net income from which was $50,000 per year.26 Another client of Plaintiff during this period was the Capital Area Intermediate Unit, an educational service agency with almost 600 employees.27 A third such client was the Diocese of Pittsburgh.28 On August 21, 2007, Defendants Hiller and Somma resigned their positions with Plaintiff, effective shortly thereafter.29 By letter dated September 5, 2007, the President of Plaintiff reminded them of their obligations under the Employee Confidentiality and Non-Solicitation Agreement.30 Defendants Hiller and Somma promptly formed Defendant Capital Insurance Advisors, LLC,31 a business similar to that of Plaintiff 32 The new business aggressively solicited a workers' compensation insurance/claims management account from the Capital Area Intermediate Unit33 and "discussed 24 Plaintiff's Exs. 2-3, para. 6(f), Hearing, December 5, 2008. 25 N.T. 8, Hearing, December 5, 2008 (afternoon session). 26 N.T. 7, 8, 30, 31, 32, Hearing, December 5, 2008 (afternoon session). 27 Plaintiff's Ex. 10, Hearing, December 5, 2008. 28 N.T. 66, 67, Hearing, December 5, 2008 (afternoon session). 29 Plaintiff's Exs. 4, 6, Hearing, December 5, 2008. 30 Plaintiff's Ex. 7, 8, Hearing, December 5, 2008. " N.T. 21, 22, 23, Hearing, December 5, 2008 (afternoon session). 32 N.T. 12-13, Hearing, December 5, 2008 (afternoon session). 33 Plaintiff's Ex. 10, Hearing, December 5, 2008. 8 business transactions" with a representative of the Diocese of Pittsburgh.34 In addition, as of October 13, 2008, Defendants' business had actually taken over the Southwestern Pennsylvania Human Services, Inc., account from Plaintiff.35 With respect to the Capital Area Intermediate Unit, the business director of that organization stated in an affidavit that 7. I became acquainted with Daniel Somma during calendar year 2007. Mr. Somma had been involved in SBC's provision of services to CAIU for several years, and I met him in that capacity. 8. 1 subsequently learned that he and a business colleague, William Hiller, had left SBC's employment and started their own company- Capital Insurance Advisors, Inc. (CIA). 9. On multiple occasions since he resigned from SBC, Mr. Somma contacted me at my office by telephone and email and on a few occasions met in my office and for lunch. During these contacts, Mr. Somma did discuss the services provided by CIA and the desire to have the CAIU enter into an agreement for services with his firm in the area of Workers' Compensation administration and claims management. 10. It is my understanding that the services that Mr. Somma has suggested are services SBC also offers. 11. Mr. Somma's contacts with me, in my mind, clearly were to solicit business from the CAIU.36 While not denying such contacts with this client of Plaintiff, Defendant Somma noted that the particular type of insurance solicited was not among those that Plaintiff serviced for the Capital Area Intermediate Unit.37 With respect to the Diocese of Pittsburgh, Defendant Miller was somewhat circumspect in his testimony: Q The Diocese of Pittsburgh [is] a former Sovereign Benefits Consultant client? A Yes, it was. Q And is it your testimony under oath that you have not approached or attempted to secure business with the Diocese of Pittsburgh at any time since leaving Sovereign Benefits Consulting" 34 N.t. 66, 67, Hearing, December 5, 2008 (afternoon session). 31 Plaintiff's Ex. 9, Hearing, December 5, 2008; N.T. 18-19, Hearing December 5, 2008 (morning session). 36 Plaintiff's Ex. 10, Hearing, December 5, 2008. 37 N.T. 56, Hearing, December 5, 2008 (afternoon session). 9 A I have not solicited them. Q Let me ask the question again, and be as specific as I can. Are you testifying under oath that you have not contacted the Diocese of Pittsburgh since leaving Sovereign Benefits Consulting in an attempt to secure business? A No, I've not solicited the Diocese of Pittsburgh. Q Have you been in contact with them? A With who? Q Individuals of the Diocese of Pittsburgh? A Every time I go to church within the Diocese of Pittsburgh' yes. Q Have you discussed any business transactions with Dave Stewart at the Diocese? A Yes. Q Since leaving Sovereign Benefits Consulting? A Yes. Q ... Who initiated ... that discussion with the member of the Diocese? A Dave Stewart. Q He called you? A Yes. you? Q And ... did he call you asking you about doing business with A Yes. Q Did you do any business with him? A No.38 The circumstances concerning the acquisition of the Southwestern Pennsylvania Human Services, Inc., account by Defendant Capital Insurance Advisors, LLC, were described by Defendant Somma as follows: Q Did you solicit any business from Southwest? A No. Q Did you contact anyone at Southwest and ask them to give you business? A No. 38 N.T. 66-68, Hearing, December 5, 2008 (afternoon session). 10 Q How did it come to be that someone from Southwest contacted you? A I have a-I developed a personal relationship with the CEO, Jeff Brooks Mascara, and as a result I stayed in touch with him, and he had asked me to take over as his benefits. Q You said you stayed in touch with him. Any of those conversations before he asked you to take over, did you ask him to give you any benefits or any work? A No. Q Did he tell you why he wanted to leave Sovereign Benefits? A He wasn't happy. Q Did he explain to you why he wasn't happy? A Not in any great detail or any detai1.39 DISCUSSION Statement of law. Several principles of law are of importance in the present matter. First, with respect to preliminary injunctions, the Pennsylvania Supreme Court has stated as follows: Three criteria have been established for the granting of a preliminary injunction ... They are: (1) the preliminary injunction must be necessary to prevent immediate and irreparable harm which could not be compensated for by damages; (2) greater injury would result from the denial of the preliminary injunction than from the granting of it; and (3) it would operate to restore the parties to the status quo as it existed prior to the alleged wrongful conduct. In addition to meeting all three criteria, the court must be convinced that [the plaintiff's] right to a preliminary injunction is clear ... and general equity jurisdiction must be warranted. Committee of Seventy v. Albert, 33 Pa. Commw. 44, 49, 381 A.2d 188, 190 (1977). Second, "[c]ourts of equity will enforce restrictive covenants [made by employees]... when they are (1) incident to an employment relationship between the employer and employee; (2) reasonably necessary for the protection of the employer; and (3) reasonably limited in duration and geographic extent.... When restrictive covenants meet this three-prong test, they are prima facie enforceable." The Wood Co., Inc. v. Hickey, 40 Cumberland L.J. 511, 514 (1990) (Hess, J.) (citations omitted). In this regard, the legitimacy of a provision in an employment 39 N.T. 54, Hearing, December 5, 2008 (afternoon session). agreement in the nature of a covenant not to compete has been related by the Pennsylvania Supreme Court as follows: In almost all commercial enterprises contact with customers or clientele is a particularly sensitive aspect of the business. In most businesses as the size of the operation increases, selling and servicing activities must be at least in part decentralized and entrusted to employees whose financial interest in the business is limited to their compensation. The employer's sole or major contact with buyers is through these agents and the sole or major contact with buyers is through these agents and the success or failure of the firm depends in part on their effectiveness. The possibility is present that the customer will regard, or come to regard, the attributes of the employee as more important in his business dealings than any special qualities of the product or service of the employer, especially if the product is not greatly differentiated from others which are available. Thus, some customers may be persuaded, or even be very willing, to abandon the employer should the employee move to a competing organization or leave to set up a business of his own. The employer's point of view is that the company's clientele is an asset of value which has been acquired by virtue of effort and expenditures over a period of time, and which should be protected as a form of property. Certainly, the argument goes, the employee should have no equity in the custom which the business had developed before he was employed. Similarly, under traditional agency concept, any new business or improvement in customer relations attributable to him during his employment is for the sole benefit of the principal. This is what he is being paid to do. When he leaves the company he should no more be permitted to divert to his own benefit the product of his employment than to abscond with the company's cashbox. Sidco Paper Co., v. Aaron, 465 Pa. 586, 593-94, 351 A.2d 250, 253-54 (attribution omitted). Third, such restrictive covenants are enforceable notwithstanding that the employment in question is at-will. See generally, National Staroh & Chemical Corp. v. Snyder, 34 Pa. D & C.2d 533, 536-37, 1964 WL 6397, 3. However, it is also the rule that [w]hen [a] restrictive covenant is added to an existing employment relationship, ... it is only enforceable when the employee who restricts himself or herself receives a corresponding benefit or change in status. An employee's continued employment is not sufficient consideration for a covenant not to compete which the employee sign[s] after the inception of his employment, where the employer makes no promise of continued employment for a definite term. Maintenance Specialties, Inc. v. Gottus, 455 Pa. 327, 333, 314 A.2d 279, 282-83 (1974) (Jones, C.J., concurring). 12 Fourth, an assessment of irreparable harm in the context of breach of a restrictive covenant incident to employment is to be made with an understanding that "[i]t is not the initial breach of [the] covenant which necessarily establishes the existence of irreparable harm but rather the threat of the unbridled continuation of the violation and the resultant incalculable damage to the former employer's business ...." John G. Bryant Co., Inc. v. Sling Testing & Repair, Inc., 471 Pa. 1, 7, 369 A.2d 1164, 1167 (1977). Fifth, the fact that monetary losses to a former employer from a breach of a restrictive covenant may be quantified to some extent by an accounting does not mean that an adequate remedy at law exists for such a breach. As the Pennsylvania Supreme Court has stated: [Such covenants] seek[] to prevent more than just the sales that might result by the prohibited contact but also [they are] designed to prevent a disturbance in the relationship that has been established between [the employer] and [its] accounts through prior dealings. It is the possible consequences of this unwarranted interference with customer relationships that is unascertainable and not capable of being fully compensated by money damages.40 Application of law. In the present case, the evidence tended to show (a) that the individual defendants executed a restrictive covenant contemporaneously, for practical purposes, with their commencement of employment with Plaintiff, (b) that upon terminating that employment they formed a business similar to that of Plaintiff, and (c) that during the period of the restrictive covenant's term they discussed with one of Plaintiff's clients the acquisition of its business, had aggressively solicited another of Plaintiff's clients, and had actually succeeded in acquiring the account of a third client of Plaintiff. Under these circumstances, and based upon the foregoing principles of law, it appears to the court (a) that the restrictive covenant in question was incident to an employment relationship between Plaintiff and the individual defendants, was reasonably necessary for the ao John G. Bryant Co., Inc. v. Sling Testing & Repair, Inc., 471 Pa. 1, 8, 359 A.2d 1164, 1167 (1977). 13 . protection of the employer, and was reasonably limited, (b) that it is highly probable that Defendants will be found at trial to have violated the covenant, (c) that the basic requisites for a preliminary injunction as outlined in Committee of Seventy v. Albert, supra, have been shown, and (d) that Plaintiff's right to a preliminary injunction is clear. Accordingly, the following order will be entered: ORDER OF COURT AND NOW, this 4th day of February, 2009, upon consideration of Plaintiffs Motion for a Preliminary Injunction, following a hearing held on December 5, 2008, and for the reasons stated in the accompanying opinion, it is ordered and decreed as follows: 1. Defendants are preliminarily enjoined in general from future breaches of the terms of the Employment Agreement and Non-Solicitation Agreement constituting Plaintiffs Exhibits 2 and 3, and in particular from soliciting, diverting or taking away the business or patronage of any prospective account, client or customer with whom Plaintiff conducted any business or for whom Plaintiff performed any services during the period of the individual defendants' employment with Plaintiff; 2. Within 30 days of the date of this order, Defendants shall provide to Plaintiff an accounting of receipts by Defendant Capital Insurance Advisors, LLC, from Plaintiff's former client, Southwestern Pennsylvania Human Services, Inc.; 3. Pursuant to Pennsylvania Rule of Civil Procedure 1531(b), this preliminary injunction is conditioned upon Plaintiffs deposit with the prothonotary of cash, or filing with the prothonotary of a bond with corporate surety acceptable to the court, in the amount of $50,000.00, conditioned that, if the 14 injunction is dissolved because improperly granted or for failure to hold a hearing, Plaintiff shall pay to any person injured all damages sustained by reason of granting the injunction and all legally taxable costs and fees; and 4. Failure to make the deposit or filing referred to in paragraph 3 within 20 days of the date of this order shall result in an automatic dissolution of the preliminary injunction without further order of court. BY THE COURT, s/ J. Wesley Oler. Jr. J. Wesley Oler, Jr., J. Mark D. Bradshaw, Esq. STEVENS & LEE 16th Floor 17 North Second Street Harrisburg, PA 17101 Attorney for Plaintiff Michael P. Robic, II, Esq. METZ LEWIS LLC 18th Floor 11 Stanwix Street Pittsburgh, PA 15222 Attorney for Defendants 15 CERTIFICATE OF SERVICE I hereby certify that a true and correct copy of the NOTICE OF APPEAL was served via first class U.S. mail, postage prepaid upon the following counsel of record on this 5th day of March, 2009: Mark D. Bradshaw, Esquire STEVENS & LEE 17 North Second Street; 16th Floor Harrisburg, PA 17101 (Attorneys for Plaintiff Michelle Eline Official Court Reporter Cumberland County Courthouse One Courthouse Square Carlisle, PA 17013 By: 114 Michael P. obic II, Esquire Pa. I.D. No.: 75579 4 p 7 A k 4 ?. ups IS; C7t x,. nks c,a 9 gr-7P COMMONWEALTH OF PENNSYLVANIA Karen Reid Bramblett, Esq. Prothonotary Superior Court of Pennsylvania Middle District March 25, 2009 Mr. Curtis R. Long Prothonotary Cumberland County Courthouse 1 Courthouse Square Carlisle, PA 17013 Re: 509 MDA 2009 100 Pine Street. Suite 400 Harrisbur¢. PA 17101 717-772-1294 www. superior. court. state.pa. us -Sovereign-benefits Consulting,-lac. V. William Hiller, Jr., Daniel Somma and Capital Insurance Advisors, LLC, Appellants Dear Mr. Long: Enclosed please find a copy of the docket for the above appeal that was recently filed in the Superior Court. Kindly review the information on this docket and notify this office in writing if you believe any corrections are required. Appellant's counsel is also being sent a Docketing Statement, pursuant to Pa.R.A.P. 3517, for completion and filing. Please note that Superior Court Dockets are available on the Internet at the Web site address printed at the top of this page. Thank you. Very truly yours, Karen Reid Bramblett, Esq. Prothonotary TP Enclosure 10:06 A.M. Appeal Docket Sheet Docket Number: 509 MDA 2009 Superior Court of Pennsylvania Page 1 of 2 March 25, 2009 Sovereign Benefits Consulting, Inc. V. William Hiller, Jr., Daniel Somma and Capital Insurance Advisors, LLC, Appellants Initiating Document: Notice of Appeal Case Status: Active Case Processing Status: March 24, 2009 Journal Number: Case Category: Civil Awaiting Original Record CaseType: Civil Action Law Consolidated Docket Nos.: Related Docket Nos.: SCHEDULED EVENT Next Event Type: Receive Docketing Statement Next Event Due Date: April 8, 2009 Next Event Type: Original Record Received Next Event Due Date: May 5, 2009 COUNSEL INFORMATION Appellant William Hiller Jr., Daniel Somma and Capital Insurance Advisors Pro Se: Appoint Counsel Status: IFP Status: No Appellant Attorney Information: Attorney: Robic II, Michael Paul Bar No.: 75578 Law Firm: Metz Lewis, L.L.C. Address: 11 Stanwix Street 18th Floor Pittsburgh, PA 15222 Phone No.: (412)918-1100 Fax No.: (412)918-1199 Receive Mail: Yes E-Mail Address: Receive E-Mail: No Appellee Sovereign Benefits Consulting, Inc. Pro Se: Appoint Counsel Status: IFP Status: Appellee Attorney Information: Attorney: Bradshaw, Mark David Bar No.: 61975 Law Firm: Stevens & Lee, P.C. Address: 17 N Second St 16th FI Harrisburg, PA 17101 Phone No.: (717)234-1090 Fax No.: (717)234-1099 Receive Mail: Yes E-Mail Address: mdb@stevenslee.com Receive E-Mail: Yes 3125/2009 3023 10:06 A.M. Appeal Docket Sheet Docket Number: 509 MDA 2009 Superior Court of Pennsylvania Paqe 2 of 2 March 25, 2009 9wil FEE INFORMATION Paid Fee Date Fee Name Fee Amt Amount Receipt Number 3/25/09 Notice of Appeal 60.00 60.00 2009SPRMD000270 1 KiAL CUUKT/AGENCY INFORMATION Court Below: Cumberland County Court of Common Pleas County: Cumberland Date of Order Appealed From: February 4, 2009 Date Documents Received: March 24, 2009 Order Type: Order Entered Judge: Oler, Jr., J. Wesley Judge Division: Civil Judicial District: 9 Date Notice of Appeal Filed: March 6, 2009 OTN: Lower Court Docket No.: 08-64184 ORIGINAL RECORD CONTENTS Original Record Item Date of Remand of Record: Filed Date Content/Description BRIEFS DOCKET ENTRIES Filed Date Docket Entry/Document Name Party Type Filed By March 24, 2009 Notice of Appeal Filed Appellant William Hiller Jr., Daniel Somma and Capital Insurance Advisors ""AWIATING PROOF OF SERVICE TO L/C JUDGE"* March 25, 2009 Docketing Statement Exited (Civil) Middle District Filing Office 3/25/2009 3023 C-3 SOVEREIGN BENEFITS CONSULTING, INC., Plaintiff V. WILLIAM HILLER, JR., DANIEL SOMMA, and CAPITAL INSURANCE ADVISORS, LLC, Defendants IN THE COURT OF COMMON PLEAS OF CUMBERLAND COUNTY, PENNSYLVANIA CIVIL ACTION - LAW NO. 08-6484 CIVIL TERM ORDER OF COURT AND NOW, this 27t' day of March, 2009, upon consideration of the Notice of Appeal filed in the above-captioned matter, Appellant is DIRECTED!, pursuant to Pa. R.A.P. 1925(b), to file of record in this Court and to serve upon the undersigned judge a concise Statement of Errors Complained of on Appeal no later than 21 days after entry of this Order. Any issues not properly included in the statement timely filed and served pursuant to this order shall be deemed waived. APPELLANT SHALL fully comply with the Rules of Appellate Procedure regarding the provision of notice of the appeal to the trial court within seven days of the date of this order. ,dark D. Bradshaw, Esq. STEVENS & LEE 16th Floor 17 North Second Street Harrisburg, PA 17101 Attorney for Plaintiff S BY THE COURT, 4 4_7 i/dl_ esley Oler, ., ?? Vfvf 'vt C?i Jv ichael P. Robic, II, Esq. METZ LEWIS LLC 11 Stanwix Street 18'h Floor Pittsburgh, PA 15222 Attorney for Defendants :rc IN THE COURT OF COM[jAON PLEAS OF CUMBERLAND COUNTY, PENNSYLVANIA SOVEREIGN BENEFITS CIVIL DIVISION CONSULTING, INC. No.: 08-6484 Plaintiff, V. CONCISE STATEMENT OF MATTERS COMPLAINED OF ON APPEAL WILLIAM HILLER, JR., D NIEL PURSUANT TO Pa.R.A.P. 1925(b) SOMMA, and CAPITAL SURANCE ADVISORS, LLC, i Defenjdants. Filed on Behalf of Defendants: WILLIAM HILLER, JR., DANIEL SOMMA, and CAPITAL INSURANCE ADVISORS, LLC Counsel of Record for These Parties: Michael P. Robic II, Esquire JURY TRIAL DE DED Pa. I.D. No.: 75579 METZ LEWIS LLC 11 Stanwix Street 18'h Floor Pittsburgh, PA 15222 Phone: (412) 918-1100 Fax: (412) 918-1199 IN THE COURT OF COMMON PLEAS OF CUMBERLAND COUNTY, PENNSYLVANIA SOVEREIGN BENEFITS CONSULTING, INC., CIVIL DIVISION No.: 08-6484 V. WILLIAM HILLER, JR., D+ NIE SOMMA, and CAPITAL INSURANCE ADVISORS,jLLC, CONCISE STATEMENT OF MATTERS COMPLAINED AND NOW, come the Defendants, William Hiller, Jr. ("Hiller"), Daniel Somma ("Somma"), and Capital In?urance Advisors, LLC ("CIA") (collectively "Defendants"), by their attorneys, files this Concise Statement of Matters Complained of on Appeal pursuant to Pa.R.A.P. 1925(b) from the Order of Court dated March 27, 2009. The matters complained of on Appeal by the Petitioners, afire as follows: (a) Did the tri court err in granting an injunction against the Appellants when the disputed testimony before the Court revealed that the Appellants ere already employees of the Appellee when they were forced to a ecute the non-solicitation agreements and were provided with no addition consideration for the same? (b) Assuming rguendo that the non-solicitation agreements in question are enforceable did the trial court err in granting an injunction in light of the lack of a deuce presented that the non-solicitation agreements were breached; at Appellee has no protectable interest at issue; and no solicitation ccurred? (c) Did the trial court err in granting an injunction against Appellant Hiller when no evidence was presented by Appellee that Hiller violated any non-solicitation agreement? Dated: Agri19 , 2009 i Respectfully submitted, METZ LEWIS By: LLC Z4-4 A Michael obic 11, Esquire Pa. I.D. No.: 75579 11 Stanwix Street; 18th Floor Pittsburgh, PA 15222 Phone: (412) 918-1100 Fax: (412) 918-1199 Attorneys for Defendants: William Hiller, Jr., Daniel Somma, and Capital Insurance Advisors, LLC 2 CERTIFICATE OF SERVICE I hereby certify that a true and correct copy of the CONCISE STATEMENT OF MATTERS COMPLAINED OF ON APPEAL PURSUANT TO Pa.R.A.P. 1925(b)was served via first class U.S. mail, postage prepaid upon the following counsel of record on this 9t' day of April, 2009: Mark D. Bradshaw, Esquire STEVENS & LEE 17 North Second Street; 16'' Floor Harrisburg, PA 17101 (Attorneys for Plaintif,}? By: Michael P. Robic II, Esquire Pa. I.D. No.: 75579 F1LED-4-)FRCE OF THE PI RIOT ONOTARY 2409 APR 14 PM I : 0 1 PENNNSYLV IA SHERIFF'S RETURN - OUT OF COUNTY CASE NO: 20C8-06484 P COMMONWEALTH OF PENNSYLVANIA: COUNTY OF CUMBERLAND SOVEREIGN BENEFITS CONSULTING VS HILLER WILLIAM JR ET AL R. Thomas Kline , Sheriff or Deputy Sheriff who being duly sworn according to law, says, that he made a diligent search and and inquiry for the within named DEFENDANT to wit: CAPITAL INSURANCE ADVISORS LLC but was unable to locate Them in his bailiwick. He therefore deputized the sheriff of ALLEGHANY serve the within COMPLAINT & NOTICE County, Pennsylvania, to On May 1st , 2009 , this office was iUct nreceipt of the attached return from ALLEGHANY Sheriff's Costs: Docketing 6.00 Out of County .00 Surcharge 10.00 00 11/03/2008 STEVENS & LEE Sworn and subscribe to before me this day of A. D. So ?. In as -reline Sheriff of Cumberland Coun N ' ' am - t?t? 2" f_t y ., re ? i" -s ; 1 '6 q r' - 1 c a Service unknown, Alleghany County return not received as of this date. On 1/22/09 Cumberland County was advised to wait a couple more days for return to arrive. SHERIFF'S RETURN - OUT OF COUNTY CASE NO: 2008-06484 P COMMONWEALTH OF PENNSYLVANIA: COUNTY OF CUMBERLAND SOVEREIGN BENEFITS CONSULTING VS HILLER WILLIAM JR ET AL R. Thomas Kline , Sheriff or Deputy Sheriff who being duly sworn according to law, says, that he made a diligent search and and inquiry for the within named DEFENDANT to wit: SOMMA DANIEL but was unable to locate Him in his bailiwick. He therefore deputized the sheriff of ALLEGHENY County, Pennsylvania, to serve the within COMPLAINT & NOTICE On May 1st , 2009 , this office wasKxrforeceipt of the attached return from ALLEGHENY -?, Sheriff's Costs: Docketing 6.00 Out of County 9.00 Surcharge 10.00 Alleghany 115.00 11/03/2008 STEVENS & LEE Sworn and subscribe to before me this day of A. D. So R!"Th as Kline She ff of Cumberland County 4 7'-) Y rn 23 _,q .? Service unknown, Alleghany County return not received as of this date. On 1/22/2009 Cumberland County was advised to wait a couple more days for return to arrive. SHERIFF'S RETURN - OUT OF COUNTY CASE NO: 2008-06484 P COMMONWEALTH OF PENNSYLVANIA: COUNTY OF CUMBERLAND SOVEREIGN BENEFITS CONSULTING VS HILLER WILLIAM JR ET AL R. Thomas Kline , Sheriff or Deputy Sheriff who being duly sworn according to law, says, that he made a diligent search and and inquiry for the within named DEFENDANT to wit: HILLER WILLIAM JR but was unable to locate Him in his bailiwick. He therefore deputized the sheriff of FAYETTE County, Pennsylvania, to serve the within COMPLAINT & NOTICE On November 2nd , 2008 , this office was in receipt of the attached return from FAYETTE Sheriff's Costs: So a Docketing 18.00 Out of County 9.00 Surcharge 10.00 R mas Kline Fayette Co. 42.23 She iff of Cumberland County 11/03/2008 STEVENS & LEE Sworn and subscribe to before me this day of A. D. N -zF tx; =r. :?j F c-n 7 n 73 C-J ' rr SHERIFF'S RETURN - OUT OF COUNTY CASE NO: 2008-06484 P COMMONWEALTH OF PENNSYLVANIA: COUNTY OF CUMBERLAND SOVEREIGN BENEFITS CONSULTING VS HILLER WILLIAM JR ET AL R. Thomas Kline , Sheriff or Deputy Sheriff who being duly sworn according to law, says, that he made a diligent search and and inquiry for the within named DEFENDANT to wit: CAPITAL INSURANCE ADVISORS LLC but was unable to locate Them in his bailiwick. He therefore deputized the sheriff of FAYETTE serve the within COMPLAINT & NOTICE County, Pennsylvania, to On May 1st , 2009 , this office was in receipt of the attached return from FAYETTE Sheriff's Costs: So an Docketing 6.00 Out of County .00 Surcharge 10.00 R Tho as Kline Postage 9.48 Sher' f of Cumberland County .00 25.48 11/03/2008 STEVENS & LEE C) Sworn and subscribe to before me rn-n this day of c-n J-7 ?(D i;r Fn C) IN THE COURT OF COMMON PLEAS OF CUMBERLAND COUNTY, PENNSYLVANIA SOVEREIGN BENEFITS CONSULTING, INC, Plaintiff V. WILLIAM HILLER, JR., DANIEL : SOMMA, and CAPITAL INSURANCE ADVISORS, LLC, Defendants CIVIL ACTION - LAW NO. 08 - 6484 CIVIL TERM IN RE: OPINION PURSUANT TO PA. R.A.P. 1925 OLER, J., May 20, 2009. In this civil action arising out of an alleged breach of a restrictive covenant incident to employment, a former employer has sued two former employees and their present company for "equitable, injunctive and monetary relief."' Defendants, William Hiller, Jr., Daniel Somma, and Capital Insurance Advisors, LLC, appeal2 to the Pennsylvania Superior Court from an order which, following a December 5, 2008 hearing, granted Plaintiffs Motion for a Preliminary Injunction.3 The bases for the appeal, as expressed in Defendants' statement of matters complained of on appeal, are as follows: (a) Did the trial court err in granting an injunction against the Appellants when the undisputed testimony before the Court revealed that the Appellants were already employees of the Appellee when they were forced to execute the non-solicitation agreements and were provided with no additional consideration for the same? (b) Assuming arguendo that the non-solicitation agreements in question are enforceable, did the trial court err in granting an injunction in light of the lack of evidence presented that the non-solicitation agreements were breached; that Appellee has no protectable interest at issue; and no solicitation occurred? ' Plaintiff's complaint for Equitable, Injunctive and Monetary Relief, filed October 31, 2008 (hereinafter Plaintiff's Complaint). 2 Defendants' Notice of Appeal, filed March 5, 2009. 3 Order of Court, February 4, 2009. 1 r (c) Did the trial court err in granting an injunction against Appellant Hiller when no evidence was presented by Appellee that Hiller violated any non-solicitation agreement?4 The rationale for the court's order from which the Defendants have appealed was provided in an opinion of even date therewith accompanying the orders This opinion, in the court's view, addresses the substantive issues contained in Defendants' concise statement of matters complained of on appeal. Accordingly, the Prothonotary is directed to transmit the record to the Superior Court for purposes of its consideration of Defendants' appeal. BY THE COURT, ?Mark D. Bradshaw, Esq. STEVENS & LEE 16th Floor 17 North Second Street Harrisburg, PA 17101 Attorney for Plaintiff v ichael P. Robic, II, Esq. METZ LEWIS LLC 11 Stanwix Street 18th Floor Pittsburgh, PA 15222 Attorney for Defendants eo ? Es .n? fV L?c.? P 5 ao?v9 t "V J esley Ol ®r., 4 D efendants' Concise Statement of Matters Complained of on Appeal Pursuant to Pa.R.A.P. 1925(b), filed April 14, 2009. 5 See Opinion and Order of Court, February 4, 2009. 2 0? ?, ( :? 4'd 0? 'k VP. 6002 nilu CATE AND TRANSMITTAL OF RECORDS UNDER TE PR To the Prothonotary of the Apellate Court to which the within matter has been appealed: Superior Court of PA The dersigned, Prothonotary of the Court of Common Pleas of Cumberland County, the sal court being a court of record, do hereby certify that annexed hereto is a true and correc copy of the whole and entire record, including an opinion of the court as required by PA R.A.P. 1925, the original papers and exhibits, if any on file, the transcript of the procee lings, if any, and the docket entries in the following matter: Sovereign Benefits Consulting Inc. VS. William Hiller, Jr., Daniel Somma, and Capital Insurance Advisors, LLC 2008-6484 Civil Term 509 MDA 2009 The do uments comprising the record have been numbered from No.1 to 245 , and attache hereto as Exhibit A is a list of the documents correspondingly numbered and identifi d with reasonable definiteness, including with respect to each document, the number of pages comprising the document. The dat? on which the record has been transmitted to the Appellate Court is 05/21/2009. / ?/' I I I k: =;- D ?/j 1 4.4 Curtis R. Lo ono Regina Lebo Date Signature & Title I Among the Records and Proceedings enrolled in the court of Common Pleas in and for the county of Cumberland in the Commonwealth of Pennsylvania 5 09 MD 2009 to No. 0 -6484 Civil Term, 19 is contained the following: COPY F Appearance DOCKET ENTRY Save eign Benefits Consulting, Inc. vs. Will am Hiller, Jr., Daniel , and Capital Insurance Adv' ors, LLC, **S CERTIFIED COPY OF THE DOCKET ENTRIES** County In T this ealth of Pennsylvania Cumberland ss: MONY WHEREOF, I have hereunto 21st 1, _ Curtis R. Long , Prothonotary of the Court of Common Pleas in and for said County, do hereby certify that the foregoing is a full, true and correct copy of the whole record of the case therein stated, wherein Sovereign Ben _f i t Consulting Inc Plaintiff, and William Hi 11 _r,_ j r. flaniP1 Scnuo, and C=ital Tnauranrp AdviGOrG, .Tr Defendant c , as the same remains of record before the said Court at No. 08-6484 of Civil Term, A. D. 19 . set my hand and affixed the seal of said Court day of!+ hlay ,[J A. D., X2009 Prothonotary 1, tzaar B President Judge of the Ninth Judicial District, composed of the County of Cumberland, do certify that 01rija R- Tong I by whom the annexed record, certificate and attestatio were made and given, and who, in his own proper handwriting, thereunto subscribed his name and affixe the seal of the Court of Common Pleas of said County, was, at the time of so doing, and now is Prothonotary in and for said County of QxnhNPrland in the Commonwealth of Pennsylvania, duly commissioned and qualified to all of whose acts as such full faith and credit are and ought to be given as well in Courts of judicature a"Ise here, and that the said record, certificate and attestation are in due form of law and made by- fie prope fieer ., .? --? 7 Commonwealth of Pennsylvania County of Cumberland ss: 1, Curtis R. Long Prothonotary of the Court of Common Pleas in and for th said County, do certify that the Honorable Edgar B. Bayley by whom t e foregoing attestation was made, and who has thereunto subscribed his name, was, at the time of making hereof, and still is President Judge of the Court of Common Pleas, Orphan' Court and Court of Quarter Sessions of the Peace in and for said County, duty Commissioned and qualified; to all whose acts as such full faith and credit are and ought to be given, as well in Courts of judicature as elsewhere. IN TES IMONY WHEREOF, I have hereunto set my had and affixed the al of said Court this 21, day gf A. D. =2M. Prothonotary v H y . ? O F- LL r rt o a n .C» (D ~ O O "S rt N I l? H n Yz?JI?a uuwc_ iatau %.vulll.y rivt_ii?tivL_aiy v?Li? c rayc i Civil Case Print 2008-06484 SOVEREIGN BENEFITS CONSULTING (vs) HILLER WILLIAM JR ET AL Reference No.:. Filed.. ...... 10/31/2008 Case Ty e.....: COMPLAINT Time.........: 12:52 Judgmen......: 00 Execution Date 0/00/0000 Judge Assigned: OLER J WESLEY JR: Jury Trial.... Disposeg Desc.: Disposed Date. 0/00/0000 ------------ Case Comments ------------- Higher Crt 1.: 509 MDA 2009 Higher Crt 2.: General Index Attorney Info SOVEREIG BENEFITS-CONSULTING PLAINTIFF BRADSHAW MARK D INC 1215 MAN R DRIVE MECHANIC BURG PA 17055 HILLER W LLIAM JR DEFENDANT ROBIC MICHAEL P II 147 VALL Y VIEW DRIVE LEE ALBERT S BELLE VE ON PA 15012 SOMMA D IEL DEFENDANT ROBIC MICHAEL P II 1232 BEL ONT DRIVE LEE ALBERT S SOUTH P K PA 15129 CAPITAL I SURANCE ADVISORS LLC DEFENDANT ROBIC MICHAEL P II 147 VALLE VIEW DRIVE LEE ALBERT S BELLE VE ON PA 15012 1232 BELMONT * Date Entries ********* ********************************************************************** fj 10/31/200 10/31/200 3,;?-33 11/03/200 8S-V7 11/12/200 .gj?,_o 12/09/200 q,0-/,01o 2/04/2009 2/13/2009 J©7-/a& 3/06/2009 `.77-1446 3/10/2009 ??71 3/26/2009 3/27/2009 4/14/2009 f5'(o-X3;4/20/2009 .-:? 3-3 5/01/2009 FIRST ENTRY COMPLAINT - BY MARK D BRADSHAW ATTY FOR PLFF ------------------------------------------------------------------- PLAINTIFF'S MOTION FOR A PRELIMINARY INJUNCTION - BY MARK D BRADSHAW ATTY FOR PLFF ------------------------------------------------------------------- ORDER OF COURT - 10/31/08 IN RE: PLFFS MOT 0 FOR PRELIMINARY INJUNCTION - A HEARING IS SCHEDULED FOR 125 08 AT 11:00 AM IN CR1 CUMBERLAND OUNTY COURTHOUSE - BY J WESLEY U ER JR J - COPIES MAILED 11/308 ------------------------------------------------------------------- PRAECIPE TO ENTER APPEARANCE FOR DEFTS - BY ALBERT S LEE ESQ AND MICHAEL ROBIC ESQ ------------------------------------------------------------------- ORDER OF COURT - 12/5/08 IN RE: MOTION FOR PRELIMINARY OBJECTIONS - THE RECORD IS DECLARED CLOSED AND THE MATTER IS TAKEN UNDER ADVISEMENT - BY J WESLEY OLER JR J - COPIES MAILED 129/08 ------------------------------------------------------------------- ORDER OF COURT - OPINION AND ORDER OF COURT - 2/04/09 - IN RE: PLFF'S MOTION FOR PRELIMINARY INJUNCTION- BY J WESLEY OLER JR J - COPIES MAILED 2/04/09 ------------------------------------------------------------------- BOND FOR $50,000.00 FROM SOVEREIGN BENEFITS CONSULT ------------------------------------------------------------------- NOTICE OF APPEAL TO SUPERIOR COURT - BY MICHAL P ROBIC II ATTY FOR PLFF ------------------------------------------------------------------- PARTIAL TRANSCRIPT OF PROCEEDINGS - BY J WESLEY OLER JR J ------------------------------------------------------------------- SUPERIOR COURT OF PA NOTICE OF APPEAL DOCKETING TO #509 MDA 2009 ------------------------------------------------------------------- OLERRJRFJCOUCOPIES/27/09 I3/2E: NOTICE OF APPEAL - BY J WESLEY MAILED 7/09 ------------------------------------------------------------------- CONCISE STATEMENT OF MATTERS COMPLAINED OF ON APPEAL PURSUANT TO PA RAP 1925(B) - BY MICHAEL P ROBIC II ESQ ------------------------------------------------------------------- TRANSCRIPT OF PROCEEDINGS - BY J WESLEY OLER JR J ------------------------------------------------------------------- SHERIFF'S FILE RETURNED FILED. yµ Wyy?~Civil ?Case?Print vV?_1 - ------ - - 2008-06484 SOVEREIGN BENEFITS CONSULTING (vs) HILLER WILLIAM JR ET AL Reference No... Filed. 10/31/2008 Case Typie..... COMPLAINT Time. 2.52 Judgment..... 00 Execution Date 0/00/0000 Judge As igned: OLER J WESLEY JR Jury Trial.... Disposed?Desc.: Disposed Date 0/00/0000 ----------- Case Comments Higher Crt 1.:. 509 MDA 2009 Case Type: COMPLAINT & NOTICE Ret Type Higher Crt 2.: Litigant.: HILLER WILLIAM JR Out of County Addres : 147 VALLEY VIEW DRIVE Cty/St/Z ?p: BELLE VERNON, PA 15012 County Nm: FA ET E Ret Date.: M02 2008 09:25 AM Costs....: $79.2 Pd By: STEVENS & LEE 11/03/2008 --------------------------- FILED------------------------------------- a,31f 5/01/200 SHERIFF'S-FILE-RETURNED -- Case Type: COMPLAINT & NOTICE Ret Type.: Out of County Litigant.: CAPITAL INSURANCE ADVISORS-LLC Add ess..: 147 VALLEY VIEW DRIVE Cty/rSt/Z BELLE VERNON, PA 15012 County Nm: FA ET E Ret Date.: 05.01/T2009 09:25 AM Costs .... _-$2 .48 Pd By: STEVENS & LEE 11/03/2008 --------- ---------------------- 3 S 5 01/2009 SHERIFF'S FILE RETURNED FILED. Case Type: COMPLAINT & NOTICE Ret Type.: Out of County Litigant.: SOMMA DANIEL Add ess..: 1232 BELMONT DRIVE Cty St/Z : SOUTH PARK, PA 15129 County Nm: ALLEG ENY Ret Costs....: $1440.000 0Pd By:2S.TEVENS & LEE 11/03/2008 ---- -------------------------- ___________ d36..?q2 5/01/2009 SHERIFF'S FILE RETURNED FILED. - -- Case Type: COMPLAINT & NOTICE Ret Type.: Out of County Litigant.: CAPITAL INSURANCE ADVISORS-LLC Add ess..: 1232 BELMONT DRIVE SOUTH PARK, PA 15129 Cty St/PM County : AL EG Ret Date.: 0501 2009 09:26 AM Costs....: $16.00 Pd By: STEVENS & LEE 11/03/2008 -------------------------_ _ _ _ __ ------------------- ,)I/?,,)i/ 5/20/2009 IN RE OPINION PURSUANT TO PA R A P 1925 - BY J WESLEY OLER JR J - COPIES MAILED 5/20/09 ------------------_ _ _ _ --------------------------- 5/21/2009 NOTICE OF DOCKET ENTRIES MAILED TO MARK D BRADSHAW ESQ AND MICHAEL P ROBIC II ESQ -2q - - LAST ENTRY - - - - - - - -. - - - - - - * Escrow Information * Fees & Debits Beq Bal Pmts/Ad' End Bat COMPLAINT 55.00 55.00 .00 TAX ON CM LT .00 SETTLEMEN •50 .50 8.00 8.00 .00 JCP AUTOMATIO FEE 5.00 5.00 BOND 10.00. 10.00 .00 APPEAL HD H CT 50000.00 50000.00 .00 48.00 48.00 .00 ------------------------ --------- 50126.50 50126.50 .00 * En of Case Information In T: tii?l^ and thee; u:. hand Fa. This ..... f...... Prothonutary • CERTIFICATE AND TRANSMITTAL OF RECORDS UNDER PENNSYLVANIA RULE OF APPELLATE PROCEDURE 1931 (C) To the Prothonotary of the Apellate Court to which the within matter has been appealed: Superior Court of PA The undersigned, Prothonotary of the Court of Common Pleas of Cumberland County, the said court being a court of record, do hereby certify that annexed hereto is a true and correct copy of the whole and entire record, including an opinion of the court as required by PA R.A.P. 1925, the original papers and exhibits, if any on file, the transcript of the proceedings, if any, and the docket entries in the following matter: Sovereign Benefits Consulting Inc. VS. William Hiller, Jr., Daniel Somma, and Capital Insurance Advisors, LLC • 2008-6484 Civil Term 509 MDA 2009 The documents comprising the record have been numbered from No.1 to 245 , and attached hereto as Exhibit A is a list of the documents correspondingly numbered and identified with reasonable definiteness, including with respect to each document, the number of pages comprising the document. The date on which the record has been transmitted to the Appellate Court is 05/21/2009 . /" ////,v - - C is R. , 4ho ry Re gina Lebo An additional copy of this certificate is enclosed. Please sign and date copy, thereby acknowledging receipt of this record. Received in Superior Court Date Signature & TiftY 21 2009 • MIDDLE 4 Karen Reid Bramblett, Esq. Prothonotary Milan K. Mrkobrad, Esq. Deputy Prothonotary Pennsylvania Judicial Center P.O. Box 62435 601 Commonwealth Avenue, Suite 1600 Harrisburg, PA 17106-2435 (717) 772-1294 www. supe rior. court. state. pa . us CERTIFICATE OF REMITTAUREMAND OF RECORD TO: Prothonotary RE: Banyan Consulting, LLC v. Hiller Jr., W. et al 509 MDA 2009 Trial Court: Cumberland County Court of Common Pleas Trial Court Docket No: 08-6484 Annexed hereto pursuant to Pennsylvania Rules of Appellate Procedure 2571 and 2572 is the entire record for the above matter. Original Record contents: Item Filed Date Description Part May 22, 2009 1 Remand/Remittal Date: 10/18/2010 ORIGINAL RECIPIENT ONLY -Please acknowledge receipt by signing, dating, and returning the enclosed copy of this certificate to our office. Copy recipients (noted below) need not acknowledge receipt. Respectfully, Milan K. Mrkobrad, Esq. Deputy Prothonotary /wjt ~ ~ ~' Enclosure ,~,~ ~-~ cc: Mark David Bradshaw, Esq. .~ ~ ~ mar= The Honorable J. Wesley Oler Jr., Judge ~A ~ ~~ Michael Paul Robic II, Esq. ,~-~-.~.. ---ate ~~ ~~ ?~ ~ ~~ ~;,c lu ~~ ~ ,~~ ~' ~, ~ J. Ao2o37~10 NON-PRECEDENTIAL DECISION -SEE SUPERIOR COURT I.O.P. 65.37 BANYAN CONSULTING, LLC, SUCCESSOR IN INTEREST TO SOVEREIGN BENEFITS CONSULTING, INC., Appellee v. WILLIAM HILLER, JR., DANIEL SOMMA AND CAPITAL INSURANCE ADVISORS, LLC., Appellants IN THE SUPERIOR COURT OF PENNSYLVANIA ~~ . ~ ~ _d ~ . .~. ,s ~ ~ r-r, n ~,~~°- --f --- ~_:. ~~ w ~, c~ ;~, ~ ~ ~ ~~ ~~ . ".~ = ,J No. 509 MDA 2009 Appeal from the Order entered February 4, 2009 In the Court of Common Pleas of Cumberland County Civil No.: 08-6484 BEFORE: STEVENS, DONOHUE, and FITZGERALD,* JJ. MEMORANDUM: FILED: September 9, 2010 Appellants, William Hiller, Jr., Daniel Somma, and Capital Insurance Advisors, LLC, appeal from the order entered in the Cumberland County Court of Common Pleas, granting the motion for a preliminary injunction filed by Appellee, Banyan Consulting, LLC, successor in interest to Sovereign Benefits Consulting, Inc. We affirm. The trial court summarized the relevant facts as follows: [Appellee]'s complaint allege[d] that the individual [Appellants) entered into employee confidentiality and * Former Justice specially assigned to the Superior Court. J. A02037/10 non-solicitation agreements with [Appellee] in October of 2006, that they resigned their positions with [Appellee] in September of 2007, that they proceeded to form the limited liability company constituting the [Capital Insurance Advisors, LLC] herein, and that through the new entity the individual [Appellants] "contacted, solicited, and [took] away business from [Appellee]" in violation of their covenants. The complaint consists of a count against the individual [Appellants] seeking specific performance, and counts against the limited liability company [Appellant] seeking an accounting and seeking money damages for tortious interference with contractual relations. [Appellee] also filed the request for a preliminary injunction sub judice. In this motion, [Appellee] accuse[d] the individual [Appellants] of "operating a business competitive with [Appellee] and soliciting [Appellee's] clients and `taking away' certain business from [Appellee]" and of "utilizing, at least in part, confidential information and trade secrets obtained through their affiliation with [Appellee]." The motion maintains that "[t]here is no adequate legal remedy for the harm which results from their ongoing breaches of the non-solicitation covenant, and there is no way to calculate the loss of good will and loss of business opportunities represented by this unlawful solicitation of [Appellee's] customers." The evidence at the hearing, which was not significantly conflicting, may be summarized as follows: [Appellee] is a business corporation that provides consultation services to employers with regard to employee insurance and benefit programs and its brokers agreements between insurers and employers in relation thereto, in return for premium-related commissions payable by the employers. On October 1, 2006, [Appellee] purchased the assets of a similar company, known as the Hartz Consulting Group, LLC. In connection with the purchase, [Appellant] offered employment to certain former employees of the Hartz Consulting Group, LLC. In particular, letters on behalf of [Appellee], dated October 24, 2006, were sent to [Appellants] William Hiller, Jr., and Daniel Somma, offering employment as "consulting account executive[s]" and -2- J. A02037/10 providing for acceptance of the employment "during orientation." The orientation session occurred on Friday, October 27, 2006, commencing at 9:00 a.m. and concluding at 11:00 a.m. At the session, [Appellants] Hiller and Somma submitted their signed acceptances and executed documents relating to matters like health insurance and restrictive covenants. Chronologically, the submission of the acceptances preceded the execution and submission of the restrictive covenants, which occurred toward the end of the session. The first working day for [Appellants] Hiller and Somma with [Appellee] was the following Monday. The document executed by [Appellants] Hiller and Somma containing restrictive covenants was entitled "Employee Confidentiality and Non-Solicitation Agreement," contained "intending-to-be-legally-bound" language, and read, in part, as follows: 3. Non-Solicitation of Customers and Employees of SBC While Employee is employed by Sovereign and for a period of two (2) years after the termination or cessation of such employment for any reasons (whether by SBC or Employee), Employee will not directly or indirectly: (a) either alone or in association with others, solicit, divert, or take away or attempt to solicit, divert or take away, the business or patronage or any account, client or customer, with whom SBC has conducted any business or for whom SBC has performed any services during the period of Employee's employment by SBC. Each of the Employee Confidentiality and Non- Solicitation Agreements also contained this provision: Emplovee Acknowledgement and Equitable Remedies. Employee hereby acknowledges and agrees that the covenants and restrictions in this Agreement are necessary to protect the legitimate business interests of -3- J. A02037/10 Sovereign, including, without limitation, customer information and goodwill, and considers the restrictions to be reasonable for such purpose. Employee acknowledges that any breach by Employee of the obligations set forth in Section 2 and 3 above would substantially and materially impair and irreparably harm Sovereign's business and good will; that such impairment and harm would be difficult to measure; and, therefore, total compensation in solely monetary terms would be inadequate. Consequently, in the event of any breach or any threatened breach by Employee of any of the provisions of Sections 2 and 3 above, Employee agrees that Sovereign, in addition to monetary damages or such other remedies which may be available, shall be entitled to specific performance and other equitable relief, including temporary or permanent restraining orders and/or other injunctive relief without the necessity of proving actual earnings, profits or other benefits arising from any violation thereof, and to the payment by Employee of all costs and expenses incurred by Sovereign in enforcing the provision thereof against Employee, including attorneys' fees incurred by Sovereign. The existence of any claims or cause of action by Employee against Sovereign, whether predicated on this Agreement or otherwise, shall not constitute a defense to the enforcement by Sovereign of such obligations. [Appellee]'s business generates revenue of approximately 5.2 million dollars per year. During the period of the individual [Appellants'] employment with [Appellee], [Appellee] was the broker-of-record for a company known as Southwestern Pennsylvania Human Services, Inc., the gross income from which per year was $100,000 and the net income from which was $50,000 per year. Another client of [Appellee] during this period was the Capital Area Intermediate Unit, an educational service agency with almost 600 employees. A third such client was the Diocese of Pittsburgh. On August 21, 2007, [Appellants] Hiller and Somma resigned their positions with [Appellee], effective shortly thereafter. Trial Ct. Op., filed 2/4/09, at 1-11 (footnotes omitted). -4- ]. A02037/10 On February 4, 2009, the trial court granted Appellees' motion for a preliminary injunction, preliminarily enjoining Appellants "in general from future breaches of the terms of the Employment Agreement and Non- Solicitation Agreement." Id, at 14. Appellants were ordered "to provide to (Appellee] an accounting of receipts by [Appellant] Capital Insurance Advisors, LLC, from [Appellee]'s former client, Southwestern Pennsylvania Human Services, Inc." Id. at 14. 'Th[e] preliminary injunction [was] conditioned upon [Appellee]'s deposit with the prothonotary of cash, . .. or bond in the amount of $50,000.00. ,conditioned that, if the injunction is dissolved because improperly granted or for failure to hold a hearing, [Appellee] shall pay to any person injured all damages sustained by reason of granting the injunction and all legally taxable costs and fees." Id. at 14-15. Additionally, the injunction would be dissolved for failure to make the deposit within twenty days of the order. Id, at 15. Appellee filed the bond on February 13, 2009. Appellants timely appealed the February 4, 2009 order. Appellant timely filed a court-ordered Pa.R.A.P. 1925(b) statement. On May 20, 2009, the court filed a responsive opinion incorporating by reference the opinion filed on February 4, 2009. Appellants raise the following issues on appeal: 1. Did the trial court err in granting an injunction against the Appellants when the undisputed testimony before the Court revealed that the Appellants were already employees of the Appellee when they were forced to execute the non-solicitation -5- ]. A02037/10 agreements and were provided with no additional consideration for the same? 2. Assuming arguendo that the non-solicitation agreements in question are enforceable, did the trial court err in granting an injunction in light of the lack of evidence presented that the non-solicitation agreements were breached; that Appellee has no protectable interest at issue; and no solicitation occurred? 3. Did the trial court err in granting an injunction against Appellant Hiller when no evidence was presented by Appellee that Hiller violated any non- solicitation agreement? Appellants' Brief at 4. Our scope of review is plenary. Warehime v. Warehime, 580 Pa. 201, 209 n.7, 860 A.2d 41, 46 n.7 (2004). "[O]ur [standard of] review of a trial court's order granting or denying preliminary injunctive relief is 'highly deferential."' Id. at 209, 860 A.2d at 46 (citations omitted). An appellate court's review of the grant or denial of a preliminary injunction is limited to determining whether there were "any apparently reasonable grounds" for the action of the trial court. We will interfere with the trial court's decisions regarding a preliminary injunction only if there exists no grounds in the record to support the decree, or the rule of law relied upon was palpably erroneous or misapplied. It must be stressed that our review of a decision regarding a preliminary injunction does not reach the merits of the controversy. Instead, all that is reviewed is whether the party seeking the preliminary injunction produced sufficient evidence to show that substantial legal questions must be resolved to determine the rights of the respective parties. A!!-Pak, Inc. v. Johnston, 694 A.2d 347, 350 (Pa. Super. 1997) (citations omitted). -6- ). A02037/10 As a preliminary matter, we address the issue of whether "a restrictive covenant not to compete in an employment contract is [ ]assignable by the former employer to a purchaser of the assets of the employer's business." Hess v. Gebhard & Co. Inc., 570 Pa. 148, 162, 808 A.2d 912, 920 (2002) (citations and quotation marks omitted). "A restrictive covenant not to compete, contained in an employment agreement, is not assignable to the purchasing business entity, in the absence of a specific assignability provision, where the covenant is included in a sale of assets." Id, at 167, 808 A.2d at 922. Here, the employment contract contained a specific assignability provision: (g) Successors and Assigns. This Agreement shall be binding upon and inure to the benefit of both parties and their respective successors and assigns, including any corporation or entity with which or into which Sovereign may be merged or which may succeed to its assets or business, provided however that the obligations of Employee are personal and shall not be assigned by Employee. N.T., 12/5/08 afternoon session, at 16, Pl.'s Ex. 2, 3. Therefore, the restrictive covenant was assigned to Appellee Banyan. See Hess, 570 Pa. at 167, 808 A.2d at 922. First, Appellants argue the trial court erred in granting an injunction against Appellants because they were already employees of Appellee when they executed the non-solicitation agreements. Appellants claim that without additional consideration, the non-solicitation agreement, signed subsequent to the initial employment, is unenforceable. Additionally, -7- J. A02037/10 Appellants argue that Appellee has no legitimate protectable interest. We disagree. In Pennsylvania, restrictive covenants are enforceable if they are incident to an employment relationship between the parties; the restrictions imposed by the covenant are reasonably necessary for the protection of the employer; and the restrictions imposed are reasonably limited in duration and geographic extent. Our law permits equitable enforcement of employee covenants not to compete only so far as reasonably necessary for the protection of the employer. However, restrictive covenants are not favored in Pennsylvania and have been historically viewed as a trade restraint that prevents a former employee from earning a living. Hess, 570 Pa. at 157, 808 A.2d at 917 (citations and quotation marks omitted). ~~[P]ost-employment non-competition covenants are not per se unreasonable or unenforceable." WellSpan Health v. Bay/iss, 869 A.2d 990, 996 (Pa. Super. 2005) (citations omitted). Our courts have consistently held that the taking of employment is sufficient consideration for a restrictive covenant. To be valid the restrictive covenant need not appear in the initial employment contract.... As long as the restrictive covenant is an auxiliary part of the taking of employment and not a later attempt to impose additional restrictions on an unsuspecting employee, a contract of employment containing such a covenant is supported by valid consideration and is therefore enforceable. Modern Laundry & Dry Cleaning Co. v. Farrer, 536 A.2d 409, 411 (Pa. Super. 1988). In the instant case, the non-solicitation agreement was an auxiliary part of the taking of employment. Appellants submitted the signed -8- J. A02037/10 acceptance of employment at the beginning of the orientation session on October 27, 2006. At the end of that two-hour session, Appellants executed and submitted the restrictive covenants. The first working day was not until the following Monday. The trial court found: "In the present case, the evidence tended to show (a) that the individual [Appellants] executed a restrictive covenant contemporaneously, for practical purposes, with their commencement of employment with [Appellee]." Trial Ct. Op., filed 2/4/09, at 13. We agree. Appellants argue that Appellee has no {egitimate protectable interest. At a minimum, for a non-competition or restrictive covenant to be enforceable, it must be reasonably related to the protection of a legitimate business interest. The types of interests that have been recognized in the context of a non-competition covenant include trade secrets or confidential information, unique or extraordinary skills, customer good will, and investments in an employee specialized training program. In contrast, a post- employment covenant that merely seeks to eliminate competition per se to give the employer an economic advantage is generally not enforceable. The presence of a legitimate, protectable interest is a threshold requirement for an enforceable non-competition covenant. The interest protected under the umbrella of goodwill is a business's positive reputation. "[G]oodwill represents a preexisting relationship arising from a continuous course of business which is expected to continue indefinitely." A business's goodwill is considered a protectable interest even when the goodwill has been acquired through the efforts of an employee. We//Span Hea/th, 869 A.2d at 996-97 (some quotation marks and citations omitted). Instantly, Appellee "seeks to protect its customer base and its confidential and proprietary information from its inevitable disclosure by -9- J. A02037/10 and/or utilization by [Appellants] in their new venture." Appellee's Brief Supp. Mot. Prelimin. Inj., 10/31/08, at 7. Appellants accepted the business of Southwestern Pennsylvania Human Services, Inc., Appellee's former client, and admitted to soliciting Capital Area Intermediate Unit, another former client of Appellee. N.T., 12/5/08 afternoon session, at 23, 24, Pl.'s Ex. 9. Appellee has a legitimate protectable interest in protecting its customer base. Additionally, a reasonable basis exists for the trial court's finding that enforcement of the non-solicitation agreement is an appropriate remedy to prevent further disruption of that interest. Trial Ct. Op., filed 2/4/09, at 13-14. We disagree with Appellants' contention that Appellee has no legitimate protectable business interest because Appellee gave Appellant Somma the choice of resignation or termination. Appellant's Brief at 19-20. This Court in A//-Pak, Inc. stated in relevant part: In Insulation Corp. of America v. Brobston, [667 A.2d 729 (Pa. Super. 1995),] an employer sought to enforce a two year restrictive covenant on an employee who had been fired for poor performance. We held that the fact that the employee was terminated, rather than quit voluntarily, was an important factor when considering the enforceability of a restrictive covenant. On the facts in that case, we determined that it was inequitable for the employer to obtain an injunction against the employee. We emphasized, however, that the reasonableness of enforcing such a restriction is determined on a case by case basis. Thus, the mere termination of an employee would not serve to bar the employer's right to injunctive relief. Where, for instance, an employee intentionally engaged in conduct that caused his termination, the employer's right to injunctive relief would survive. -10- ]. A02037/10 However, where an employer terminated an employee for reasons beyond the employee's control, the rule announced in Brobston may bar injunctive relief. AI/-Pak, Inc., 694 A.2d at 352 (footnotes omitted). Instantly, the trial court's refusal to bar the restrictive covenant was reasonable. Because the analysis is fact-specific and the bar applied on a case-by-case basis, it was reasonable for the trial court to refuse merely to bar Appellee's right to injunctive relief on the following bases: (1) Appellants Somma and Hiller were not terminated, but resigned from their positions with Appellee, N.T., 12/5/08 afternoon session, at 6, Pl.'s Ex. 4, 6; (2) William Hartz testified that three to four months prior to Appellants` resignation, their activity was "a little unusual," and ``it appeared... [that] they were doing something together," N.T., 12/5/08 afternoon session, at 12; (3) Appellants organized Capital Insurance Advisors, LLC by October 2007, only six weeks after submitting their resignations to Appellee. N.T., 12/5/08 afternoon session, at 23. We next consider Appellants' second and third issues. Since the second issue encompasses the third issue, we address them together. The restrictive covenant states: "Employee will not directly or indirectly {a) either alone or, in association with others solicit, divert, or take away...." N.T., 12/5/08 morning session, at 11, Pl.'s Ex. 2, 3. Appellants argue that the trial court erred in granting the preliminary injunction because they claim that "none of the Appellants solicited, diverted or took away work -11- J. A02037/10 from [Appellee]." Appellants' Brief at 20. Rather, Southwest contacted Appellant Somma and requested that he pertorm work or services for them. Id. Additionally, Appellants claim that the injunction granted against Appellant Hiller is erroneous because Appellee did not produce any evidence that Hiller solicited business from clients of Appellee. Id. at 21. A plaintiff seeking an injunction must establish that: 1) relief is necessary to prevent immediate and irreparable harm; 2) a greater injury will occur from refusing the injunction than from granting it; 3) the injunction will restore the parties to the status quo; 4) the alleged wrong is manifest and the injunction is reasonably suited to abate it; and 5) the plaintiff's right to relief is clear. A party seeking injunctive relief also must show that granting the request will not adversely affect the public interest. Ambrogi v. Reber, 932 A.2d 969, 976 (Pa. Super. 2007). Atrial court can grant the harsh remedy of preliminary injunctive relief only if all of the "essential prerequisites" are met. Warehime, 580 Pa. at 208-10, 860 A.2d at 46-47. We consider the first element: whether relief is necessary to prevent immediate and irreparable harm. See Ambrogi, 932 A.2d at 976. An injury is regarded as "irreparable" if it will cause damage which can be estimated only by conjecture and not by an accurate pecuniary standard. It is not the initial breach of the covenant which necessarily establishes the existence of irreparable harm but rather the unbridled threat of the continuation of the violation, and incumbent disruption of the employer's customer relationships. The effect of such disruption may manifest itself in a loss of new business not subject to documentation, the quantity and quality of which are inherently unascertainable. Thus, grounds for an injunction are established where the plaintiff's proof of injury, although small in monetary -12- J. A02037/10 terms, foreshadows the disruption of established business relations which would result in incalculable damage should the competition continue in violation of the covenant. West Penn Specia/ty MSO, Inc. v. Nolan, 737 A.2d 295, 299-300 (Pa. Super. 1999) (citations omitted) (emphasis added). In John G. Bryant Co. v. Sling Testing Repair Inc., 471 Pa. 1, 369 A.2d 1164 (1977), our Supreme Court found irreparable harm, although the actual damages were only $427, because the defendant made direct sales to accounts of the plaintiff in violation of the restrictive covenant. Id. at 4, 7, 369 A.2d at 1165, 1167. The Court stated that "[i]t is not the initial breach of a covenant which necessarily establishes the existence of irreparable harm but rather the threat of the unbridled continuation of the violation and the resultant incalculable damage to the former employer's business that constitutes the justification for equitable intervention." Id. at 1164. Like the violations of the restrictive covenant in John G. Bryant Co., Appellants' acceptance of Southwestern Pennsylvania Human Services, Inc, as a client resulted in a $50,000 loss in net income and a disruption of an established business relationship. See N.T., 12/5/08 afternoon session, at 7, 8, 31. Regarding the disruption of an established business relationship, Appellee's Senior Vice President, William Hartz, stated at the hearing in relevant part: The interesting fact is I'm going back to Pittsburgh tonight to a party at my house with all of our employees, and they are going to wonder why I'm late, and I'm going to tell -13- J. A02037/10 them I was in court proceedings, and everyone knows about these proceedings and they're all wondering whether or not the agreements are enforceable or not and whether or not their future employments may hinge on the next employee that leaves and takes business and the Court takes no action. N.T., 12/5/08 afternoon session, at 13. Two years provides significant protection for the investment that Sovereign Benefits has made in any of their employees in terms of time, resources, introduction to clients and relationships. A one year period of time is barely enough to get through one renewal cycle, and presents a much greater risk than 2 years, which puts you on a much fairer playing field. Id, at 15. Additionally, like the appellant's lack of intent to refrain from violating the non-solicitation agreement in Blair Design and Constr. Co., instantly, Appellants did not display an intent to refrain from violating the restrictive covenant because they did not merely accept business from Appellee's former client, they also admittedly solicited Capital Area Intermediate Unit, and have discussed business with the Diocese of Pittsburgh. Id. at 9, 66- 68, Pl.'s Ex. 10. Therefore, we discern no error by the trial court in finding irreparable harm. See Warehime, supra; AI/-Pak, supra. We now consider the second element: whether a greater injury will occur from refusing the injunction than from granting it. Ambrogi, 932 A.2d at 976. "Our law permits equitable enforcement of employee covenants not to compete only so far as reasonably necessary for the protection of the employer." Hess, 570 Pa. at 157, 808 A.2d at 917 (citing -14- J. A02037/10 Sidco Paper Co. v. Aaron, 465 Pa. 586, 594, 351 A.2d 250, 254 (1976)). In Ambrogi, "the trial court [] weighed and balanced the rights of both sets of parties and [] concluded that a carefully crafted injunction [was] the only way to protect Appellees' right to actually collect judgment if they prevail[ed] at trial, while protecting Appellants' right to run the[ir] business and reinvest or otherwise use the proceeds of any property sales." Ambrogi, 932 A.2d at 977-78. Instantly, Appellee requested the preliminary injunction in order to protect their business interests, their customer base. While Appellants have a right to run their business and protect their own business interest, the non-solicitation agreement prevents them from soliciting, diverting, or taking away "the business or patronage of any account, client or customer, with whom SBC has conducted any business[, ]for whom SBC has performed any services during the period of Employee's employment by SBC" and "of any prospective account, client or customer." Trial. Ct. Op., filed 2/4/09, at 6-7. The restrictive covenant does not geographically limit Appellants or unreasonably hinder business growth of Appellants. Furthermore, in the event Appellee loses on the merits, recourse is available to Appellants. As in Ambrogi, the trial court carefully crafted an injunction. The trial court required Appellee to deposit $50,000 with the Prothonotary to be paid out to any person injured as a result of improperly granting the injunction. Trial Ct. Op., filed 2/4/09, at 14-15. Therefore, we -15- ). A02037/10 discern no error by the trial court in finding that greater harm would result from the denial of the preliminary injunction rather than the granting of it. See Warehime, supra; All-Pak, supra. We turn to the third element: whether the injunction will restore the parties to the status quo. Ambrogi, 932 A.2d at 976. "The status quo to be maintained by a preliminary injunction is the last actual, peaceable and lawful noncontested status which preceded the pending controversy." Allegheny Anesthesiology Assocs., Inc. v. Allegheny Gen. Hosp., 826 A.2d 886, 894 (Pa. Super. 2003) (enjoining enforcement of non-compete covenants in order to restore the status quo: the nurses', employed by the appellant, continued affiliation with the appellee). Here, the status quo is the time period prior to Appellants' acceptance of Southwestern as a client or Appellants' solicitation of Appellees former clients. The preliminary injunction prevents Appellants from interfering with the business of Appellee's current, former, or documented prospective clients restoring the status quo. Therefore, we discern no error by the trial court in finding that the injunction restores Appellee to the status quo. See Warehime, supra; All-Pak, supra. We consider the fourth element: whether the alleged wrong is manifest and the injunction is reasonably suited to abate it. Appellants' argument that they did not violate the restrictive covenant because they -16- J. A02037/10 were offering a service which Appellee did not provide is unpersuasive. The non-solicitation agreement states in relevant part: While Employee is employed by Sovereign and for a period of two (2) years after the termination or cessation of such employment for any reason (whether by SBC or Employee), Employee will not directly or indirectly: (a) either alone or in association with others, solicit, divert, or take away or attempt to solicit, divert, or take away, the business or patronage of any account, client or customer, with whom SBC has conducted any business or for whom SBC has performed any services during the period of Employee's employment by SBC. Trial Ct. Op., filed 2/4/09, at 6-7. The trial court found 'that during the period of the restrictive covenant's term they discussed with one of [Appellee]'s clients the acquisition of its business, had aggressively solicited another of [Appellee]'s clients, and had actually succeed in acquiring the account of a third client of [Appellee]." Id. at 13. Appellants' acceptance of Southwestern as a client violated the restrictive covenant because they ultimately diverted or took away business and patronage from Appellee. See N.T., 12/5/08 afternoon session, at 7, 8, 31. Therefore, we discern no error by the trial court in finding that the alleged wrong is manifest and the injunction is reasonably suited to abate it. See Warehime, supra; Al/-Pak, supra. We consider the fifth element: whether Appellee's right to relief is clear. This Court will interfere with the trial court's decisions regarding a preliminary injunction only if there exists no grounds in the record to support the decree, or the rule of law relied upon was palpably erroneous _17_ J. A02037/10 or misapplied. See Warehime, supra; All-Pak, supra. We t:lnd no such grounds instantly. Accordingly, we discern no error by the trial court in finding that Appellee's right to relief is clear. See Warehime, supra; A//- Pak, supra. Lastly, we must consider whether Appellee proved that granting the request will not adversely affect the public interest. In Allegheny Anesthesiology Assocs., Inc., this Court "f[ound] ample support in the record for the chancellor's determination that denial of injunctive relief would have caused immediate and irreparable harm to the [nurses] and the public that could not be compensated by damages," and therefore, enjoined the enforcement of the restrictive covenant. Id, at 893. There was evidence that due to the critical shortage of anesthesia professionals, enforcement of the restrictive covenant would have a serious and detrimental effect on the general public welfare. See id. Unlike the harm to the general public welfare found in Allegheny Anesthesiologist Assocs., Inc., instantly, the trial court found nothing in the record implicating the public welfare. We agree. Therefore, we discern no error by the trial court in finding that granting the request would not adversely affect the public interest. See Warehime, supra; All-Pak, supra. Accordingly, we find the court did not abuse its discretion in granting the preliminary injunction. See Warehime, supra; All-Pak, supra; Hess, supra; Ambrogi, supra. -18- J. A02037/10 Order affirmed. Judgment Entered. Deputy Prothonotary Date: September 9, 2010 -19- IN THE COURT OF COMMON PLEAS OF CUMBERLAND COUNTY, PENNSYLVANIA BANYAN CONSULTING, LLC, as successor in interest to, SOVEREIGN BENEFITS CONSULTING, INC., Plaintiff V. WILLIAM HILLER, JR., DANIEL SOMMA, and CAPITAL INSURANCE ADVISORS, LLC, Defendants Docket No. 08-6484 Civil Term r- i cxl 7Z M C-0 N C? Cr% -4 w c> rv C] x -r1 rn o, -1 ? O -71 °na 2> ORDER RELEASING BOND AND NOW, this ? day of November, 2010, the Court having been informed that the parties have settled this dispute, and taking judicial notice of the substitution of Banyan Consulting, LLC for Plaintiff Sovereign Benefits Consulting, Inc. during the pendency of the appeal in the Superior Court (as reflected in the Superior Court's Order of September 9, 2010); IT IS HEREBY ORDERED that the Prothonotary release the fifty thousand dollars ($50,000) injunction bond posted by Plaintiff on February 13, 2009, together with any interest thereon, by check payable to "Banyan Consulting, LLC," in care of counsel for Plaintiff, Mark D. Bradshaw, Esquire, Stevens & Lee, 17 North Second Street, 16th Floor, Harrisburg, Pennsylvania 17101. The Prothonotary shall then mark this case settled and discontinued with prejudice. BY THE COURT, Judge Oler SLl 1034824vl/008370.01197 , J Distribution List: ffice of the Prothonotary Mar D. Bradshaw, Esq. (Stevens & Lee, P.C., 17 1) ichael P. Robic, Esq. (Metz Lewis, LLC, 11 J S Ll 1034824v 1 /008370.01197 17 N. Second St., 16th Flr., Harrisburg, PA Stanwix Street., 18th Flr., Pittsburgh, PA 15222) 2 .;.• A 3. Pursuant to Pennsylvania Rule of Civil Procedure 1531(b), this preliminary injunction is conditioned upon Plaintiffs deposit with the prothonotary of cash, or filing with the prothonotary of a bond with corporate surety acceptable to the court, in the amount of $50,000.00, conditioned that, if the injunction is dissolved because improperly granted or for failure to hold a hearing, Plaintiff shall pay to any person injured all damages sustained by reason of granting the injunction and all legally taxable costs and fees; and 4. Failure to make the deposit or filing referred to in paragraph 3 within 20 days of the date of this order shall result in an automatic dissolution of the preliminary injunction without further order of court. BY THE COURT, Mark D. Bradshaw, Esq. STEVENS & LEE 16th Floor 17 North Second Street Harrisburg, PA 17101 Attornev for Plaintiff Mic el P. Robic, II, Esq. Xt Z LEWIS LLC h h Floor 11 Stanwix Street Pittsburgh, PA 15222 Attorney for Defendants Pommy q90.00 30 -00 5 p.ao J ., J: esley Oler, ti .l. ,50. ooo. 00 -B o o Q ? 30,60 3016 15t /,000 C) y9. 7 C o o ao0. 4eR y9 ? 0, 00 CgLC).00 ?ov,nc}a ?e I 6- F0100 U17 .:'k cat r?•? t SOVEREIGN BENEFITS : IN THE COURT OF COMMON PLEAS OF CONSULTING, INC., : CUMBERLAND COUNTY, PENNSYLVANIA Plaintiff V. : CIVIL ACTION WILLIAM HILLER, JR., DANIEL SOMMA, and CAPITAL INSURANCE ADVISORS, LLC, Defendants : No. 08-6484 CIVIL TERM IN RE: PLAINTIFF'S MOTION FOR PRELIMINARY INJUNCTION BEFORE OLER, J. ORDER OF COURT AND NOW, this 4" day of February, 2009, upon consideration of Plaintiffs Motion for a Preliminary Injunction, following a hearing held on December 5, 2008, and for the reasons stated in the accompanying opinion, it is ordered and decreed as follows: 1. Defendants are preliminarily enjoined in general from future breaches of the terms of the Employment Agreement and Non-Solicitation Agreement constituting Plaintiffs Exhibits 2 and 3, and in particular from soliciting, diverting or taking away the business or patronage of any prospective account, client or customer with whom Plaintiff conducted any business or for whom Plaintiff performed any services during the period of the individual defendants' employment with Plaintiff; 2. Within 30 days of the date of this order, Defendants shall provide to Plaintiff an accounting of receipts by Defendant Capital Insurance Advisors, LLC, from Plaintiffs former client, Southwestern Pennsylvania Human Services, Inc.; --A- CUMBERLAND COUNTY PROTHONOTARY OFFICE - GENERAL FUND Check Date: 11/19/2010 Case No. Defendant 08-06484 SOVEREIGN BENEFITS CONSULTING * 2005 * Descriptions Amt Released Receipt BOND 49480.00 251437 Check Amount I JARCRRA, TIONIL1558HBI3385603 David D. Buell ORRSTOWN BANK SHIPPENSBURG. PA CUMBERLAND COUNTY PROTHONOTARY OFFICE sa15o3ra3 GENERAL FUND 1 COURTHOUSE SQUARE, SUITE 100 CARLISLE, PA 17013 1 CHECK DATE CHECK NUMBER PAY THIS AMOUNT 11/19/2010 2005 $49,480.00 t Forty Nine Thousand Four-Hundred Eighty And 00/100 Dollars TO THE ORDER OF BANYAN CONSULTING LLC C/O MARK D. BRADSHALL, ESQ. Q 1 N 2ND ST - 16TH FLOOR HARRISBURG, PA 17101 _--- ?.?.-Y • VI I '_ , ?.: r `_"1 a. n „ ? AUTHORIZED SIGNATURE _ 11000 200 5110 1:0 3 L 3 150 361: L08 L L L L 7 LII' 13005311192010 Cumberland County Prothonotary's Office PYS380 Check Register Costs & Fees Tran Receipt Case Trans Check Check Payee Name - Rel Date Desc No No Amount Date No BANYAN CONSULTING LLC BOND 11/19/2010 TRNS ESC IN 251437 08-06484 49,480.00 11/19/2010 2005 Total Amount Released Page: 1 Check Amount 49,480.00 ** 49,480.00 -----------------------------------End of Listing --------------------------------------------------------------------- RECEIPT FOR TRANSFER Cumberland County Prothonotary's Office Receipt Date 11/19/2010 Carlisle, Pa 17013 Receipt Time 12:39:43 Receipt No. 251437 SOVEREIGN BENEFITS CONSULTING 1215 MANOR DRIVE MECHANICSBURG, PA 17055 Case Number 2008-06484 Remarks PAY OUT PER 0 OF C 11-15-2010 ---------------------- Distribution Of Adjustment --------------------------- Transaction Payee This Adj BOND PROTHONOTARY ESCROW 520.00- POUNDAGE CUMBERLAND CO GENERAL FUND 520.00 BOND PROTHONOTARY ESCROW 49,480.00- BOND BANYAN CONSULTING LLC 49,480.00