# REVZIP, LLC v. MCDONNELL

> District Court, W.D. Pennsylvania · May 4, 2023

URL: https://www.frixlaw.com/law-library/cases/10418984

## Case

- **Court:** District Court, W.D. Pennsylvania
- **Decided:** May 4, 2023
- **Opinion:** 100trialcourt
- **Cited by:** 0 later opinions in the Frix Law Library

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## Opinion text

IN THE UNITED STATES DISTRICT COURT
FOR THE WESTERN DISTRICT OF PENNSYLVANIA
REVZIP, LLC AND POWER HOUSE SUBS ) Case No. 3:19-cv-191
CORPORATE, LLC, )
)
Plaintiffs, ) JUDGE KIM R. GIBSON
)
v. )
)
MICHAEL MCDONNELL d/b/a )
SUBPREME FUNDRAISNG AND )
CATERING, CHRISTOPHER )
MCDONNELL, JACOB BEARER, DANA _)
BEARER, SUPREME FUNDRAISING )
AND CATERING, LLC, POWER HOUSE __)
ENTERPRISES, LLC, POWER HOUSEIL ) .
LLC, AND POWER HOUSE CATERING, _ )
LLC, )
)
Defendants. )

MEMORANDUM OPINION
Before the Court is a Motion for Summary Judgment filed by defendants Michael
McDonnell (“Mike”) d/b/a Subpreme Fundraising and Catering (“Subpreme”), Christopher
McDonnell (“Chris”), Jacob Bearer (“Jake”), Dana Bearer (“Dana”), Supreme Fundraising and
Catering, LLC (“Supreme”), Power House Enterprises, LLC (“PHE”), Power House II, LLC
(“PH2”), and Power House Catering, LLC (“PHC”) (collectively, “Defendants”). (ECF No. 148).
Defendants seek judgment as a matter of law against plaintiffs REVZIP, LLC (“REVZIP”), and
Power House Subs Corporate, LLC (“PHCorp”) (collectively, “Plaintiffs”), who filed the
operative Second Amended Complaint in the present action on June 23, 2020. (ECF No. 80). For
the following reasons, the Court GRANTS IN PART and DENIES IN PART Defendants’ Motion
for Summary Judgment.

I. BACKGROUND
This case centers on a submarine sandwich (“sub”) business called Power House Subs.
Mike started this business in 2017 and sold it to Plaintiffs in 2018. Shortly thereafter, Mike
departed from Power House Subs and Mike’s nephew Jake opened a competing sub business
called Supreme. Plaintiffs have sued Mike, Jake, other members of their family, and the corporate
entities operated by these individuals, asserting sixteen claims that relate in various ways to the
sale of Power House Subs and its aftermath.
Given the many individuals, entities, and agreements relevant to this dispute, the Court
provides below a detailed summary of this case’s factual background. This summary provides
both material facts and immaterial facts that are nonetheless necessary for understanding the
issues presented. These facts are undisputed unless otherwise provided. As explained in Section
IIL, infra, many of these undisputed facts are those which were inadequately disputed by the
parties and have consequently been deemed admitted.

a. CREATION OF POWER HOUSE SUBS
Mike opened Power House Subs on February 3, 2017. (ECF No. 150 at 10 J 50; ECF No.
160 at 6 J 50). Mike is the legal owner of three entities related to this business: PHE, PH2, and
PHC (collectively, the “Seller Entities”). (ECF No. 150 at 5-6 {J 7, 15-20; ECF No. 160 at 4-5 {J
7, 15~20).
Shortly thereafter, two of Mike’s relatives joined him in operating Power House Subs:
Mike’s nephew —Jake—became the business’ front-of-house manager, (ECF No. 150 at 10 { 48;
ECF No. 160 at 6 { 48), while Mike’s brother—Chris— assisted Mike in overseeing the business’
fundraising operations. (ECF No. 150 at 10 J 49; ECF No. 160 at 6 J 49). Mike and Chris also
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received help with business operations from their sister—Dana—who is also Jake’s mother. (ECF
No. 150 at 5 {J 13-14, 10 55; ECF No. 160 at 4 {J 13-14, 6 55).
b. ACQUISITION OF POWER HOUSE SUBS
In June 2018, Mike was approached by nonparty Ryan DelBaggio (“Ryan”), who informed
Mike that nonparty EMG Brands, LLC (“EMG”) was interested in buying Power House Subs from
him. (ECF No. 150 at 11-12 [J 59, 70-71; ECF No. 160 at 7 {1 59, 70-71). EMG is owned by three
nonparty individuals: Brice Mertiff (“Brice”), John Russell (“John”), and William Russell
(“William”). (ECF No. 150 at 12 65; ECF No. 160 at 7 | 65). EMG is also an affiliate of nonparty
Elevation Holdings, LLC (“Elevation”). (ECF No. 150 at 12 J 69; ECF No. 160 at 7 69).
In the fall of 2018, EMG presented Mike with an offer to purchase Power House Subs.
(ECF No. 150 at 13 { 74; ECF No. 160 at 7 74).1. In November 2018, Mike, EMG, and other
stakeholders executed two agreements effectuating the sale of Power House Subs: the Operating
Agreement (“OA”) and the Asset Purchase Agreement (“APA”) (collectively, the “Acquisition
Agreements”). The Acquisition Agreements were executed between Mike, Elevation, Ryan, and.
three other parties that the Court must briefly introduce.
The first is John Wesley Cook (“Wes”), about whom the parties have left much unclear.
Defendants refer to an individual named “John Cook,” (ECF No. 150 at 11 J 83), but Plaintiffs
assert that “Wes Cook and John Cook are the same person.” (ECF No. 160 at 8 J 81). As explained
in Section III, infra, because Plaintiffs improperly assert this fact without any record citation, the
Court must consequently disregard this clarificatory response. (See id.). The Court nonetheless

1 More specifically, EMG presented Mike with two purchase options. (ECF No. 150 at 13 74; ECF No. 160
at 7 74). The details of these options are disputed by the parties, (ECF No. 150 at 13 75-76; ECF No.
160 at 7 [| 75-76), but these details are immaterial and need not be discussed further.
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finds for purposes of this memorandum opinion that “Wes Cook” and “John Cook” are in fact
the same person, given Defendants’ reference to this individual elsewhere as “John W. Cook,”
(ECF No. 150 at 17 J 122), as well as Plaintiffs’ identification of a defendant named “John Wesley
Cook.” (ECF No. 80 at 1). Although Plaintiffs assert claims against Wes in the Second Amended
Complaint, (see ECF No. 80 at 44 {J 292-93, 298), they appear to abandon those claims in their
briefings. See infra Section IV.a.v.3. Plaintiffs do not even include Wes in the list of named
defendants in the case captions of more recent briefings. (See, e.g, ECF No. 160 at 1). But, there
is no dispute that Wes was a party to both of the Acquisition Agreements.
The second is Power House Subs Corporate, LLC (“PHCorp”). The parties’ concise
statements of material facts do not provide adequate background on PHCorp, but their exhibits
indicate that PHCorp is “[t]he purchasing entity of [Power House Subs’] assets and operations”
formed as a “joint venture between EMG, [Mike], and Ryan.” (See ECF No. 164 at 211). Once this
entity was created by the OA, it purchased through the APA “Jalll future business and
opportunities” relating to Power House Subs. (See id. at 210).
The third is REVZIP, LLC (“REVZIP”). REVZIP is not an original signatory of either the
OA or the APA, (ECF No. 150 at 13-14 {J 80, 87; ECF No. 160 at 8 J 80, 87), but Elevation (an
affiliate entity of EMG that appears to contract on its behalf) later assigned its majority
membership interest in PHCorp to REVZIP. (ECF No. 150 at 21 132; ECF No. 160 at 11 {[ 132).
Brice was formerly the Chief Strategy Officer of PHCorp and now owns REVZIP. (ECF No. 150
at 4 2,5; ECF No. 160 at 4 {[ 2, 5).
This background is necessary for understanding the following material portions of the
Acquisition Agreements:
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i. OPERATING AGREEMENT
On November 8, 2018, Mike, Wes, Elevation, and Ryan formed PHCorp by executing the
entity’s OA. (ECF No. 150 at 13 J 79; ECF No. 160 at 8 J 79). Pursuant to this agreement, Mike,
Ryan, and Wes held 15%, 15%, and 5% of the membership interest in PHCorp, respectively, while
Elevation held a 65% majority interest. (ECF No. 150 at 14 { 81; ECF No. 160 at 8 { 81). Two
sections of the OA are material:

Section 5.03: Under this section, Mike and Ryan agreed “to not take any actions to
compete with [PHCorp] unless approved by Elevation Holdings, LLC” for two years
beginning on the date of separation. (ECF No. 155 at 8-9 § 5.03).
e Section 10.04: This section provides that the OA “has been adopted to govern the
operation of the Company, and shall be binding on and inure to the benefit of the
Members and their respective heirs, personal representatives, successors, and assigns.”
(ECF No. 155 at 16 § 10.04). A “Member” is “[a]ny person or entity who at the time is a
record holder or record owner of Units.” (Id. at 2 § 1.01).
ii, ASSET PURCHASE AGREEMENT
On November 12, 2018, the Seller Entities, Mike, and Wes (collectively, the “Sellers”)
executed the APA with Power House Subs, LLC and Power House Subs Investments, LLC
(collectively, the “Buyers”). (ECF No. 150 at 14 { 86; ECF No. 160 at 8 { 86). Despite identifying
the “Buyers” as two entities— “Power House Subs, LLC” and “Power House Subs Investments,
LLC” —the APA makes clear that there is a single buyer involved: PHCorp. (ECF No. 155 at 35).
The following six provisions of the APA are material:

e Background Paragraph C: This paragraph states that, through the APA, the Sellers
“desire to sell and assign to [PHCorp] substantially all of the assets associated with the
operation of [PHE, PH2, PHC, and Power House Subs, LLC (‘the Businesses’)].” (ECF No.
150 at 14 { 88; ECF No. 160 at 8 { 88).
e Section 1 - Purchased Assets: This section provides that, “[a]t the Closing . . . [Sellers]
shall sell and deliver to [PHCorp], free and clear of all encumbrances, all of the assets,
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rights, and interests of every conceivable kind or character, whatsoever, whether real,
personal, or mixed, tangible or intangible (including all goodwill), in electronic form or
otherwise, that on the Closing Date are owned by [Sellers] or in which [Sellers have] an
interest of any kind, including without limitation [to] those assets set forth in Schedule 1a
(the ‘Purchased Assets’) ....” (ECF No. 150 at 15 J. 89; ECF No. 160 at 8 89) (emphasis
omitted).
e Subsection 1.1.6: Although there is no Schedule 1a attached to the APA identifying the
Purchased Assets, (ECF No. 150 at 15 J 90; ECF No. 160 at 8 J 90), section 1.1 provides
what appears to be a list the Purchased Assets. (See ECF No. 155 at 20 § 1.1). Material
here is subsection 1.1.6, which provides that “[Power House Subs, LLC] shall purchase
from [PHE] and [PH2] [t]he business conducted as a going concern, including. . .
telephone and fax numbers.” (ECF No. 150 at 15 { 91; ECF No. 160 at 8 { 91).

e Section 7.11—Name Change Documents: This section states that “Sellers shall have taken
all required actions to change all entity names and transfer or terminate all fictitious
names relating to their operation of the Businesses and shall have delivered to Buyers a
certified copy of documents evidencing the same.” (ECF No. 155 at 25 § 7.11).

e Section 10.13 - Title to Purchased Assets: This section warrants that Sellers “are the sole
and absolute owners of the Purchased Assets .... There is no property used in the
operation of the Businesses that is owned by or an interest in which is claimed by any
other person or entity[.]” (ECF No. 150 at 15 { 92; ECF No. 160 at 8 { 92).
e Section 13 - Noncompetition Agreement: Under this section, Sellers agreed not to
compete with PHCorp and its subsidiaries, successors, and assigns within a 25-mile radius
of the Businesses for a period of two years from the date of closing. (ECF No. 150 at 15 J
92; ECF No. 160 at 8 {| 92).

Despite Mike’s role as a counterparty to PHCorp in the APA, it does not appear that Mike
and the other Sellers divested their shares in PHCorp pursuant to this agreement. As best the
Court can gather from the briefings, Mike, Ryan, and Wes all retained minority ownership shares
of PHCorp after selling the Power House Subs assets to it and continue to own those shares at
present.
c. POST-ACQUISITION AGREEMENTS

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The parties agree that, “[fJollowing the Power House Subs acquisition (‘the Acquisition’),
all Power House Subs employees were employed by EMG.” (ECF No. 150 at 16 {| 98; ECF No.
160 at 9 J 98). To be more specific, EMG (through Elevation) became the majority owner of
PHCorp under the OA, and PHCorp became the owner of the Power House Subs business and
its assets under the APA. EMG thereby became the employer of PHCorp’s employees, whose
work was the operation of Power House Subs.
In this capacity, EMG entered into the following seven material agreements:
i. CONFIDENTIALITY AGREEMENTS
Following the Acquisition, EMG required all of PHCorp’s employees to sign
confidentiality agreements in order to continue their employment with Power House Subs. (ECF
No. 150 at 16 99; ECF No. 160 at 9 { 99). On December 2 and 3, 2018, respectively, Chris and
Jake entered into Confidential Information Agreements with EMG (collectively, the
“Confidentiality Agreements”). (ECF No. 150 at 17 J] 101; ECF No. 160 at 9 { 101).
ii. LICENSING AGREEMENT
In or around May 31, 2019, EMG executed a Licensing Agreement with PHCorp’s other
shareholders. (ECF No. 150 at 19 J 116; ECF No. 160 at 10 { 116). The Licensing Agreement
created a limited territory where Power House Subs could operate unencumbered from any
Power House Subs franchise. (ECF No. 150 at 19 { 117; ECF No. 160 at 10 {[ 117).
iii, ASSIGNMENT OF RIGHTS AGREEMENT
Also on May 31, 2019, PHCorp, REVZIP, Mike, Ryan, Wes, and Elevation entered into an
Assignment of Rights Agreement (“ARA”). (ECF No. 150 at 19 { 118; ECF No. 160 at 10 {[ 118).
Pursuant to the ARA, PHCorp “irrevocably conveys, sells, transfers and assigns to [Elevation] all
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of [PHCorp’s] rights and obligations under any agreements purporting to license or otherwise
grant rights in or to any of the Intangible Assets.” (ECF No. 150 at 19 { 119; ECF No. 160 at 10 {f
119). Section 8(e) of the ARA, titled “Binding Agreement; Successors,” states that “no assignment
of [the ARA] will be effective without the express written consent of the other party.” (ECF No.
150 at 19 { 120; ECF No. 160 at 10 {[ 120).
As noted, although EMG is not a direct party to the ARA, Elevation appears to be acting
in EMG’s stead in the ARA and in all subsequent material agreements.
iv. NONCOMPETITION & NON-SOLICITATION AGREEMENT
Effective May 31, 2019, Elevation and Mike entered into a Noncompetition and Non-
Solicitation Agreement (“NCA”). (ECF No. 150 at 20 J 123; ECF No. 160 at 10 □ 123). The
following sections of the NCA are material:

e Section 1 — Confidentiality Obligation: Pursuant to this section, Mike agreed to not
“directly or indirectly, [himself] or through another person or entity, use or disclose
Confidential Information to any third party or use any advantages derivable from
Confidential Information for any purpose except to operate the Businesses consistent with
the License Agreement.” (ECF No. 150 at 20 { 127; ECF No. 160 at 11 (127).
e Section 2 —- Noncompetition Obligation: Pursuant to this section, Mike agreed to not
“directly or indirectly, for a period of two (2) years from the later of (i) termination or
expiration of the License Agreement or (ii) termination of employment . . . engage in or
participate in... any business selling sandwiches, wraps, or salads, or conducting food-
based fundraising ... within a radius of twenty-five (25) miles of any Business location of
[PHCorp].” (ECF No. 150 at 20-21 | 129; ECF No. 160 at 11 129).
v. REVZIP ASSIGNMENT AGREEMENT
Also on May 31, 2019, REVZIP acquired Elevation’s majority ownership interest in
PHCorp through the Assignment of Membership Interest and Consent and Agreement of
Members to Assignment and Right of Reassignment agreement (the “REVZIP Assignment

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Agreement” or “RAA”). (ECF No. 5-2 at 59).2 Under the RAA, “[Elevation] . . . assigns, transfers,
and conveys to [REVZIP] sixty-five (65) Class A Units of membership interest (accounting for
sixty-five percent (65%) of all presently outstanding units) in [PHCorp]....” (Id). This
agreement thereby made REVZIP the majority owner of PHCorp.
vi. ASSIGNMENT OF RIGHTS & NONCOMPETITION PROTECTION
AGREEMENT
Notwithstanding the above, Defendants assert that REVZIP acquired Elevation’s interest
in PHCorp on October 19, 2019, through the Assignment of Rights and Noncompetition
Protection Agreement (“ARNPA”). (ECF No. 150 at 21 { 132). Plaintiffs properly controverted
this assertion, (ECF No. 160 at 11 { 132), and the Court finds that this transfer of ownership
occurred on May 31, 2019, through the RAA rather than the ARNPA. The Court further finds
that the representation made in the ARNPA that “Elevation sold its Membership Interest to
REVZIP, LLC, on approximately May 31, 2020” contained a typo, and it construes the agreement
to mean that the sale took place on May 31, 2019.
The signatories to the ARNPA are EMG and PHCorp. (ECF No. 155 at 90). The purpose
of this agreement was “to ratify and document the assignment of all rights under the Confidential
Information Agreements and all claims, causes of action, rights to sue, and rights to enforce
arising under or relating to the Confidential Information Agreements and/or any employees or
past employees of [EMG] who provided services to or on behalf of [PHCorp]....” (Id. { F).
vii. ASSIGNMENT OF RIGHTS & CONFIDENTIAL INFORMATION
AGREEMENT
2 The parties’ signatures on this agreement are dated from June 4-6, 2019, but the agreement expressly
states that the parties entered into it on May 31, 2019. (ECF No. 5-2 at 59). The Court will treat the latter
date—May 31, 2019—as the date on which REVZIP acquired Elevation’s majority ownership share of
PHCorp.
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On June 19, 2020, EMG and PHCorp entered into the Assignment of Rights and
Confidential Information Agreement (“AORCIA”). (ECF No. 150 at 21 135; ECF No. 160 at 11
{ 135). The AORCIA states that “[EMG] is an affiliate entity of [Elevation]” who has “held a 65%
membership interest in [PHCorp] . . . from approximately November 2018 until approximately
May 31, 2020.” (ECF No. 150 at 21 J 136; ECF No. 160 at 11 {1 136). During the time in which
Elevation was “the majority owner of [PHCorp], all employees staffing and working for or in
[PHCorp’s] business were employed by [EMG].” (ECF No. 150 at 22 {| 137; ECF No. 160 at 11 J
137).
d. MIKE’S DEPARTURE FROM POWER HOUSE SUBS
On August 7, 2019, Mike informed Brice that he was leaving PHCorp and intended to

open and operate a business that would compete with Power House Subs. (ECF No. 150 at 22 {
138; ECF No. 160 at 11 { 138). Holding the position of PHCorp’s Chief Strategy Officer at that
time, Brice had the authority to sign and terminate contracts on PHCorp’s behalf. (ECF No. 150
at 22 J 142; ECF No. 160 at 11 { 142). Brice was also aware that the Acquisition Agreements
prohibited Mike from opening a competing business. (ECF No. 150 at 22 J 143; ECF No. 160 at
11 ¥ 143).
However, the parties dispute the following factual questions relating to this meeting:
e Whether Brice, having been told by Mike about his plans to depart PHCorp and open □
business that would compete with Power House Subs, wished Mike “good luck,” (ECF
No. 150 at 22 { 140; ECF No. 160 at 11 { 140);
e Whether Brice informed Mike that opening a competing business would violate an
agreement previously entered into by the parties, (ECF No. 150 at 23 J 145; ECF No. 160
at 12 J 145);

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e Whether, during the meeting, Brice told Mike that the agreements Mike had made with
EMG were “irrelevant,” (ECF No. 150 at 23 J 146; ECF No. 160 at 12 J 146); and

e Whether Ryan or Brice informed Mike by text message that opening a competing
business would violate an agreement previously made by the parties, (ECF No. 150 at 23
{ 149; ECF No. 160 at 12 { 149).
The parties do not specify the exact date on which Mike departed PHCorp, but the Court
gathers from their statements of material facts that Mike’s meeting with Brice on August 7, 2019,
marked his official departure from the corporation. Additionally, there is no indication from the
record that Mike divested his share of PHCorp ownership upon departure.
e. MIKE’S RETENTION OF CUSTOMER INFORMATION
Relevant to Mike’s departure from PHCorp are certain pieces of customer information
that Mike had access to while he was employed at PHCorp, and which he retained access to
following his departure therefrom (the “Customer Information”). The Customer Information was
contained in three locations: (a) the list of current and potential customers that PHCorp created
and Mike used in his selling efforts (the “Customer List”); (b) the Google calendar used only by
Chris, PHCorp’s general manager, and the company’s delivery drivers (the “Google Calendar”);
and (c) Mike’s personal cell phone, which Mike used to conduct business for Power House Subs
(“Mike’s Power House Phone”). (ECF No. 160 at 35 ¥ 380).
i. CUSTOMER LIST
PHCorp created the Customer List to identify and track current and potential customers,
including their names, points of contact, phone numbers, emails, and notes about appointments,
interactions, preferences, and other information garnered from the customer or prospect. (ECF
No. 160 at 35 J 381). For the duration of his time as a PHCorp employee, Mike tracked his

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fundraiser sales in the Customer List. (Id. at 36 J 383). Thus, at the time of Mike’s departure, the
Customer List represented eight months of customer visits, sessions offering PHCorp’s samples,
client interactions, and fundraiser commitments. (Id. J 385).
The names of some of the businesses contained in the Customer List may be obtained by
internet searches, but many of the phone numbers and addresses cannot, nor can the records of
customer contacts, notes, and fundraiser commitments. (ECF No. 160 at 36 J 386). Thus, although
some information contained in the Customer List is publicly available, the Customer List itself is
not. (See id. 385). Only Mike, Ryan, Brice, and PHCorp’s fundraising director had access to the
Customer List, which was stored on PHCorp’s password-protected Google cloud drive. (Id. {
387).
After the Acquisition, Mike was issued a PHCorp company Google Chromebook laptop
(the “Chromebook”). (ECF No. 150 at 40 300; ECF No. 160 at 23 {| 300). Mike used the
Chromebook in his capacity as a sales representative for PHCorp, (ECF No. 150 at 40 { 301; ECF
No. 160 at 23 { 301), and he only had access to the Customer List through this device. (ECF No.
160 at 36 I 387). At some point prior to his departure from PHCorp, Mike used his phone to take
pictures of the Customer List as displayed on the Chromebook. (ECF No. 160 at 32, 34 {T'¥ 362,
368).3 These pictures showed customer names, phone numbers, and notes about customers, as
well as dates on which Mike had visited them while at PHCorp. (Id. at 32 { 363). Mike took the
pictures “for future reference” because he “shouldn’t have been able to [access the Customer
Information] because the Chromebook would have ordinarily been shut down by the

3 When asked whether he took the pictures before or after he had left PHCorp, Mike responded: “I would
assume it was after. I would have no reason to take it before.” (ECF No. 160 at 34 J[ 368).
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administrator.” (Id. at 34 J 368). When shown the pictures during his deposition, Mike said that
it “looks like customers that I was adding in the Chromebook to solicit while at Power House. . .

. I put all of my contacts that I was soliciting in the Chromebook on a spreadsheet.” (Id. at 33 J
365). And, when asked whether he told anyone else that he took the Customer Information, Mike
said: “They were my leads. ... Because they were my contacts.... They were my personal
[contacts]. I made those contacts with them.” (Id. { 366).
ii, GOOGLE CALENDAR
The Google Calendar contained the names of customers, the customers’ contact people,
the customers’ phone numbers and email addresses, the dates and locations of customers’
fundraisers, the numbers and types of subs ordered, and other notes regarding customers and
their orders. (ECF No. 164 at 20 [J 35, 65). Access to the Google Calendar was protected by
password. (ECF No. 160 at 36 J 389). As a general practice, PHCorp would change the Google
Calendar password of a departing employee to prevent future logins from that individual. (Id. J
390). PHCorp believed that this practice was an effective means of preventing non-employees
from accessing the Google Calendar. (See id. at 37 J 391).
iii. MIJKE’S POWER HOUSE PHONE & NUMBER
Mike used his personal phone number—(814) 327-6275—to operate Power House Subs
(“Mike’s Power House Number”). (ECF No. 160 at 31 ¥ 353). Mike’s Power House Number was

on Power House Subs’ billboards and order forms, and it was the main number used for Power
House Subs at the time of the Acquisition. (Id. { 354).
The phone attached to Mike’s Power House Number (“Mike’s Power House Phone”)
contained Customer Information that Mike had compiled for Power House Subs and then sold to
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PHCorp under the APA. (ECF No. 160 at 32 J 359). This Customer Information was not generally
available to the public. (Id. { 361).
Mike has refused to transfer his phone number to Plaintiffs since departing from PHCorp.
(ECF No. 160 at 31 357). Mike testified in his deposition that, after his departure from PHCorp,
he used the phone to contact two of the Power House Subs’ customers—nonparties Lindy Hilling
(“Lindy”) and Steve Walters (“Steve”) —and inform them of his intent to open a new fundraising
business. (ECF No. 150 at 24 J 153; ECF No. 160 at 12 {[ 153).
f. CREATIONS OF SUBPREME & SUPREME
On August 8, 2019, Mike applied to register the fictitious name “Subpreme Fundraising
and Catering.” (ECF No. 150 at 23 { 151; ECF No. 160 at 12 151). This application was granted
on August 12, 2019. (ECF No. 150 at 24 ¥ 152; ECF No. 160 at 12 1 152). The resulting entity was
not a limited liability company, and it did not have any of the licenses or permits necessary to
operate a commercial food business in Pennsylvania. (ECF No. 150 at 25 165-66; ECF No. 160
at 13 165-66). Defendants assert that Subpreme “has a principal place of business” in
Hollidaysburg, Pennsylvania, but they do not specify what the nature of Subpreme’s business is.
(ECF No. 150 at 5 7).
A few days earlier—on August 3, 2019—Mike had contacted Steve to share that he was
starting anew company and wanted Steve’s business. (ECF No. 160 at 25 1314). During a follow-

up conversation on August 7, 2019, Mike told Steve that he had left PHCorp and again solicited
Steve’s business—this time for Subpreme. (Id. at 26 [| 315). Steve told Mike that his organization,
the Future Business Leaders of America (“FBLA”), would use Subpreme for future fundraisers.
(Id. 317). The parties dispute whether these contacts ultimately led to lost fundraising for
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PHCorp, (ECF No. 150 at 25 {| 162; ECF No. 160 at 13 {[ 162), but they do not dispute that Steve
and Lindy (both associated with FBLA) were regular customers of Power House Subs. (ECF No.
154 at 136:9-13).
On August 15, 2019, Mike received a Cease-and-Desist letter from Plaintiffs. (ECF No. 150
at 25 { 163; ECF No. 160 at 13 { 163). The letter notified Mike that he was not allowed to compete
against Power House Subs under his agreements with Plaintiffs. (ECF No. 160 at 35 379). Mike
lived at that time in the same household as Chris, Dana, and Jake, (id. at 38 { 403), and these three
relatives of Mike were aware of the Cease-and-Desist letter and its content. (Id. at 35 J 379).
Although the parties disagree on much of what happened thereafter, they do agree that,
on August 27, 2019, one of the defendants created a new business entity called “Supreme
Fundraising and Catering, LLC.” (ECF No. 150 at 26 ¥ 180; ECF No. 160 at 15 { 180). Defendants
maintain that Jake is the sole member of this business, (ECF No. 150 at 26 {J 181-82), but Plaintiffs
allege that Mike is both a member of Supreme and its de facto owner. (ECF No. 160 at 14 {J 181-
82). Jake himself never agreed not to compete against Power House Subs, (ECF No. 150 at 26 {
178; ECF No. 160 at 14 { 178), and Plaintiffs allege that Mike made Jake his “front at Supreme” to
circumvent his own non-compete obligations. (ECF No. 159 at 11).
The parties also do not dispute that Supreme performed sixteen fundraisers, or that ten of
those fundraisers involved customers of Power House Subs. (ECF No. 160 at 34 {J 369, 372). Nor
do they dispute that most of those ten fundraisers generated over $1,000 in revenue. (Id. J] 372).
Indeed, Defendants acknowledge that PHCorp offered facts showing that it suffered at least
$1,200 in lost fundraising due to Supreme’s competition with Power House Subs. (ECF No. 169
at 11).
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These other events relating to Supreme are material:

e On August 15, 2019, nonparty Jenny Behe (“Jenny”) asked Chris: “What's Jake doing?”
(ECF No. 160 at 28 { 337). Chris informed her that Jake “will work for [MJike soon.” (Id.).
On October 23, 2019, Chris and Dana exchanged the following text messages:
Chris: Maybe you can try to talk to Jake. It will be his company someday .. . but
we have to get it opened. No way Mike’s going to let someone have control or
ownership again. You need to trust this . . . cause the last thing you want for [J]ake
... is Mike looking elsewhere to get funds and give away their ownership ... and
he will do that if forced to.
Dana: Do you really believe that Jake should be working for Michael? They are
both drama queens[.]
Chris: There will be tough times. But I really think Jake’s good at it. And in the
long run it will be good for him. But you have to call him and get him to back off.
If there[‘s] any more delays we will screw ourselves for spring fundraisers. Get us
open|{.]
Tell him to keep his other job and see how things go up there.
Dana: I really don’t need [M]Jike[‘s] hoagie drama right now. It’s going to happen
in time whether he’s a lunatic or not.
Chris: Just tell [JJake not to fight him. No reason to raise voices. Let him open.
You want income for the house. Let this open now.
(ECF No. 160 at 29 343).
e Messages between Dana and Chris on October 25, 2019, reflect Dana’s coordination with
Mike about securing their father’s life insurance proceeds so they “can solicit when we
are opening.” (ECF No. 160 at 30 {J 346-47). During his deposition, Chris gave the
following testimony regarding this correspondence:
Q: And you're telling Dana, “Mike wants to know if you can ask [the] insurance
company [for] an approximate day for funds.” Why does Mike care?
A: We're a family and we are broke? I don’t know.
Q: Well, you kind of say why he cares[,] right? “So we can solicit when we are
opening.”
A: Well, if I’m worried about getting money from Dana to help get the business,
Supreme[,] open, and Mike wasn’t allowed to, then I might have made the
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reference, you know, that Mike’s broke too, so. We all lived together. We all used
the same car. It’s really not a stretch.
(ECF No. 160 at 38 { 403).
On November 6, 2019, Dana informed Chris that she would buy Supreme a slicer from
nonparty John Rutter, and Chris told her in response that “Mike already had [Rutter] get
us one.” (ECF No. 160 at 38 { 348). And, on December 22, 2019, Dana sent Chris options
for shop equipment and directed Chris to “[t]alk to MIKE about it[.]” (Id. {[ 350).
e On September 18, 2019, Mike advised Steve that Supreme was the same as Subpreme, and
that the product produced by both entities was the same. (ECF No. 160 at 26 1319). Mike
also told Steve that Supreme would soon be ready to cater Steve’s FBLA fundraisers. (Id.
{ 320). When Steve sought catering from Supreme for FBLA’s October 2019 fundraiser
but did not get a timely response from Mike, Steve sought catering from Power House
Subs instead. (Id. J[ 321).
e On October 31, 2019, Mike spoke again with Steve and advised him “to talk to his nephew,
Jake, or his brother Chris moving forward[.]” (ECF No. 160 at 26 {[ 322). Mike also told
Steve that Supreme was in Jake’s name but assured him that the product and everything
else would still be the same. (Id.).
e On November 5, 2019, Jake emailed Steve and told him that Supreme was opening on
November 15, 2019, and asked Steve to contact him. (ECF No. 160 at 27 328). Steve had
never provided Jake with his contact information. (Id. {| 329).
On December 27, 2019, Steve received an email from the address
“supremefundraisers@gmail.com” stating that it was from Jake and announcing that
“Tw]e are open for business!” (ECF No. 160 at 27 J 331). Steve told Jake that he wished
to hold a fundraiser catered by Supreme in January 2020. (Id. J 332).
e On January 24, 2020, Steve held a fundraiser catered by Supreme and paid Supreme
$1,191.25 for its services. (ECF No. 160 at 27 J 333).
g. CHRIS’ DEPARTURE FROM PHCORP
Chris left PHCorp on September 16, 2019, (ECF No. 160 at 37 {{ 395), but he did not sign
out of the Google Calendar upon his departure. (Id. at 393). By not signing out, Chris retained

access to the Google Calendar even after his password had been changed. (Id. [[ 392-93). Chris

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took advantage of this access on multiple occasions in October 2019 before finally losing access at
the end of that month. (Id. [] 396-97).
The Court highlights one notable instance of Chris accessing the Google Calendar: on
October 16, 2019, nonparty John Macak, who was still working at PHCorp, told Chris about a
fundraiser where Power House Subs had forgotten to deliver some salad dressing that was part
of the order. (ECF No. 160 at 37 J 396). Chris responded: “I saw the dressing on my calendar
and knew they’d forget. Ill be talking to our friend in clarion [sic], that will be her last
powerhouse experience.” (Id.).
h. THE SECRET RECIPES AND FUNDRAISING METHODS
Also relevant to Mike and Chris’ departures from PHCorp are certain “Secret Recipes”
and Fundraising Methods used in Power House Subs’ business. As discussed in Section IV.a.v,
infra, Plaintiffs claim at Count XV that Defendants sold these assets to PHCorp through the APA,
and that Defendants’ argument that these assets are not proprietary is itself a breach of ownership
warranty Defendants made in that agreement. The following information may offer helpful
background, but no facts regarding either the Secret Recipes or the Fundraising Methods are
material.
i. SECRET RECIPES
The “Secret Recipes” at issue are recipes for two types of salad dressing: the Light
Dressing and the Dark Dressing. (ECF No. 150 at 29-32 207-259; ECF No. 160 at 16-19 {1
207-252). The parties dispute whether the Dark Dressing was made by Power House Subs and
used in its sandwiches or salads. (ECF No. 150 at 34 J 248; ECF No. 160 at 19 248). Neither
party asserts that the Light Dressing was made by Power House Subs, but both generally dispute
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whether this recipe was disclosed to PHCorp employees who were not bound by confidentiality
agreements, (ECF No. 150 at 30-31 221-27; ECF No. 160 at 17-18 {J 221-27), and whether this
recipe was easily accessible to such employees. (ECF No. 150 at 31-33 [] 228-42; ECF No. 160 at
18-19 YJ 228-42).
iw FUNDRAISING METHODS
In the Second Amended Complaint, Plaintiffs state that “[t]he fundraising portion of the
Business relies on secret business methods and techniques” that “enable Plaintiffs to produce
more subs faster than competing sub shops[,]” which they call the “Fundraising Methods[.]”
(ECF No. 80 at 5 26, 28). The Court gathers from the parties’ concise statements of material
facts that the “assembly methods” discussed therein are the same as the “fundraising methods”
discussed in the Second Amended Complaint. (See ECF No. 150 at 35-39 {J 260-86; ECF No. 160
at 20-21 [J 260-86). The parties agree on facts relating to use of an “Original Method” and an
“Updated Method” at Power House Subs, (ECF No. 150 at 35-38 {J 260-80; ECF No. 160 at 20—
21 {I 260-80), and they also agree that Supreme did not use these assembly methods to make its

own sandwiches. (ECF No. 150 at 38 J] 281-82; ECF No. 160 at 21 {| 281-82).
i. THE PRESENT ACTION
PHCorp and its majority shareholder, REVZIP, initiated this action on November 6, 2019.
(ECF No. 1). They filed the operative Second Amended Complaint on June 23, 2020, naming as
defendants Mike d/b/a Subpreme, Chris, Jake, Dana, Wes, Supreme, and the Seller Entities (i.e.,
PHE, PH2, and PHC). (ECF No. 80).
On December 5, 2022, Defendants filed a sealed Motion for Summary Judgment. (ECF
No. 148). On this date, Defendants also filed under seal a Memorandum of Law in Support of
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Motion for Summary Judgment (“Defendants’ Supporting Brief”), (ECF No. 149); a Concise
Statement of Material Facts in Support of Motion for Summary Judgment (“Defendants’ Concise
Statement of Material Facts”), (ECF No. 150); an Appendix of Documents in support of the Motion
for Summary Judgment (“Defendants’ Appendix”) (ECF No. 151); and five other documents
offered in support of Defendants’ Motion for Summary Judgment. (See ECF Nos. 152-56).4
On January 23, 2022, Plaintiffs filed their Memorandum in Opposition to Defendants’
Motion for Summary Judgment (the “Response”). (ECF No. 159). They also filed on this date an
accompanying Concise Statement of Material Facts. (ECF No. 160). On January 27, 2023, Plaintiffs
sought leave from the Court to file an appendix to their Response under seal. (ECF No. 161). The
Court granted this leave on January 31, 2023, (ECF No. 163), and Plaintiffs filed their appendix
on the same day (“Plaintiffs’ Appendix”). (ECF No. 164).
On January 31, 2023, the parties filed a Joint Motion for Leave to File Additional Briefing,
seeking leave for Defendants to file a Reply Brief and for Plaintiffs to file a Sur-Reply Brief. (ECF
No. 165). On February 2, 2023, the Court entered an order granting this motion on the following
terms: Defendants would have until February 10, 2023, to file their Reply Brief, and Plaintiffs
would have until February 17, 2023, to file their Sur-Reply Brief. (ECF No. 167 at 1). Defendants

4 These documents include the following: (1) the transcript of Ryan’s deposition on September 14, 2021,
(ECF No. 152); (2) the transcript of nonparty Alyssa DelBaggio’s deposition on September 15, 2021, (ECF
No. 153); (3) the transcript of nonparty Shaun D’Angelo’s deposition on September 15, 2021, (ECF No. 154);
(4) the OA, (ECF No. 155); and (5) the EMG Employee Handbook as of March 1, 2019, (ECF No. 156).
5 The Court originally set January 6, 2023, as Plaintiffs’ deadline for filing their response to Defendants’
Motion for Summary Judgment. (ECF No. 139). However, on December 30, 2022, the parties jointly
stipulated that this deadline should be moved to January 20, 2023. (ECF No. 157). On January 3, 2023, the
Court set a new filing deadline consistent with the parties’ stipulation. (ECF No. 158).
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timely filed their Reply Brief on February 10, 2023, (ECF No. 169), and Plaintiffs timely filed their
Sur-Reply Brief on February 17, 2023. (ECF No. 170).
II. LEGAL STANDARD
Summary judgment is appropriate when “there is no genuine dispute as to any material
fact and the movant is entitled to judgment as a matter of law.” FED. R. CIv. P. 56(a); see also
Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 247 (1986). The parties must support their positions
by “citing to particular parts of materials in the record, including depositions, documents,
electronically stored information, affidavits or declarations, stipulations (including those made
for purposes of the motion only), admissions, interrogatory answers, or other materials.” FED. R.
Civ. P. 56(c)(1)(A). “[T]he mere existence of some alleged factual dispute between the parties will
not defeat an otherwise properly supported motion for summary judgment; the requirement is
that there be no genuine issue of material fact.” Anderson, 477 U.S. at 247-48 (emphasis original).
A disputed fact is material if it might affect the case’s outcome under applicable substantive law.
See Boyle v. Cty. of Allegheny, Pa., 139 F.3d 386, 393 (3d Cir. 1998) (citing Anderson, 477 U.S. at 247—
48). Summary judgment is unwarranted where a reasonable jury, based on the evidence
presented, could return a verdict favoring the non-movant on the issue on which the movant
seeks summary judgment. See Anderson, 477 U.S. at 248.
When deciding a motion for summary judgment, the Court must draw all inferences in a
light most favorable to non-movant without weighing the evidence or questioning the witnesses’
credibility. See Boyle, 139 F.3d at 393. The movant has the burden of demonstrating the absence
of a genuine issue of material fact, while the non-movant must establish the existence of each
element for which it bears the burden of proof at trial. See Celotex Corp. v. Catrett, 477 U.S. 317,
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323 (1986). If the movant has pointed to record evidence sufficient to demonstrate that no genuine
issues of fact remain, the burden falls on the non-movant to identify record evidence
controverting the movant’s position. See Schulz v. Celotex Corp., 942 F.2d 204, 210 (3d Cir. 1991).
Rule 56 requires the non-movant to go beyond the pleadings and show, through record evidence,
that there is a genuine issue for trial. See Celotex v. Catrett, 477 U.S. at 324.
Ill. THE SUMMARY JUDGMENT RECORD
The Court must determine which statements of material fact are admitted and which are
denied. As explained below, the Court finds that Plaintiffs failed to properly controvert
Defendants’ statements of material fact in the following paragraphs of Defendants’ Concise
Statement of Material Facts, (ECF No. 150): {| 7, 21-32, 34-36, 41-43, 45, 50-58, 65, 67-68, 72-73,
80-83, 90, 106, 113, 116, 136, 141, 150, 165, 191, 198, 206-08, 217, 219, 220-23, 225, 253, 265, 267,
322-24, and 326. Likewise, the Court finds that Defendants failed to properly controvert the
following paragraphs of Plaintiffs’ “Additional Material Facts at Issue,” (ECF No. 160 at 24): {7
303-340 and 342-403. The Court will therefore deem those paragraphs admitted for purposes of
deciding Defendants’ summary judgment motion.
The Federal Rules of Civil Procedure and this Court’s Local Rules contain specific
provisions directing how parties should present facts in support of, or in opposition to, a

summary judgment motion. Federal Rule of Civil Procedure 56(c)(1) provides that “[a] party
asserting that a fact cannot be or is genuinely disputed must support the assertion by” either
“citing to particular parts of materials in the record” or “showing that the materials cited do not
establish the absence or presence of a genuine dispute, or that an adverse party cannot produce
admissible evidence to support that fact.” FED. R. Civ. P. 56(c)(1). The Local Rules, in turn, require
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a responding party to “admit[] or deny[] whether each fact contained in the moving party’s
Concise Statement of Material Facts is undisputed and/or material[,]” and to “set[] forth the basis
for the denial if any fact... is not admitted in its entirety (as to whether it is undisputed or
material), with appropriate reference to the record[.]” LCvR 56.C.1.a—b (emphasis added). “In
clarifying what qualifies as an ‘appropriate reference to the record|[,]’ the Rule refers to LCvR
56.B.1, which states that such references must ‘cite to a particular pleading, deposition, answer to
interrogatory, admission on file or other part of the record supporting the party’s statement,
acceptance, or denial of the material fact.’” Rozier v. United Metal Fabricators, Inc., 3:09-CV-257,
2012 WL 170197, at *2 (W.D. Pa. Jan. 19, 2012) (quoting LCvR 56.B.1).
The Court strictly adheres to the summary judgment procedures set forth both by the
Federal and Local Rules, and it deems inadequately denied statements of fact as admitted for

purposes of deciding a summary judgment motion. See Rozier, 2012 WL 170197, at *2. These rules
apply with equal force to both movants and non-movants. See Mastalski v. GEICO Gen. Ins. Co.,
No. 20-CV-1321, 2022 WL 17668801, at *1 n.1 (W.D. Pa. Dec. 14, 2022) (holding that, because
“Defendant has not responded to Plaintiff's Concise Statement of Material Facts and Additional
Material Facts . . . in accordance with Rule 56.D of the Local Rules of [this Court] . . . Plaintiffs’
Additional Material Facts (which cite to evidence of record in accordance with Local Rule 56.C.1)
...can be deemed admitted for purposes of deciding Defendant’s summary judgment motion”)
(citing LCvR 56.E).
Each party in this case has failed to properly controvert certain statements of material fact
offered by the other. Because there are common defects shared by the parties’ responses, the

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Court will address paragraphs that received improper responses of the same sort together. As
noted, it will deem those facts admitted.

a. MATERIALITY DENIALS
Defendants assert that Plaintiffs failed to adequately controvert the following twenty-six
paragraphs: (ECF No. 150 {¥ 21-32, 34-36, 50-57, 67, 72-73, 113). Defendants offer two
arguments in support of this assertion: first, by denying these twenty-six paragraphs on grounds
of materiality, Plaintiffs did not indicate that they are “factually disputed.” (ECF No. 169 at 5).
And second, “[nJone of these 26 paragraphs include citations to the record.” (Id.).
Plaintiffs respond to both arguments by asserting simply that, although “Defendants may
not like that Plaintiffs deny assertions . . . based on their immateriality,” such denials were
nonetheless “done consistent with the rules[.]” (ECF No. 170 at 6). On the contrary, this Court
has recently held that
legal opinions and conclusions, statements about opposing counsel, what
evidence is admissible at trial and other extraneous commentary, including whether
a fact proffered by the [opposing party] is “immaterial,” are not facts and thus, are not
proper responses to a statement of material facts.
POM of Pa., LLC v. Pa. Skill Games, LLC, 18-CV-722, 2012 WL 1788405, at *2 (W.D. Pa. May 5, 2021)
(emphasis added). Thus, assertions of immateriality “will be disregarded in connection with
determining if a material fact is disputed.” Id.°

6 Other courts in the Third Circuit have found that such assertions are “perhaps not deficient to the point
of warranting that the corresponding statement of fact be deemed admitted[.]” Park v. Veasie, No. 3:09-CV-
2177, 2011 WL 1831708, at *4 (M.D. Pa. May 11, 2011). Courts taking this alternative perspective have
instead struck the offending party’s statement of material facts in its entirety and given that party an
opportunity to properly re-file the statement. See, e.g., id. (striking a counter-statement of facts and
permitting the filing party to “re-file in strict accordance with Local Rule 56.1” where the statement
contained responses that “lodg[ed] an evidentiary objection to purportedly immaterial facts’); Smith v.
Spencer, No. 1:16-CV-2157, 2019 WL 2502554, at *7 (M.D. Pa. Feb. 27, 2019) (striking the entire statement of
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Moreover, Plaintiffs fail to support these denials with “appropriate reference[s] to the
record],]” as Local Rule 56 clearly mandates. LCvR 56.C.1.b. Plaintiffs likewise fail to support
them by “citing to particular parts of materials in the record[,]” or “showing that the materials
cited do not establish the absence or presence of a genuine dispute, or that an adverse party
cannot produce admissible evidence to support that fact.” FED. R. CIv. P. 56(c)(1).
Based on the above, the Court will deem Plaintiffs’ responses to these paragraphs to be
admissions. See Westfield Ins. v. Detroit Diesel Corp., No. 3:10-CV-100, 2012 WL 1611311, at *1 (W.D.
Pa. May 8, 2012) (deeming facts in a party’s concise statement of material facts admitted when
opposing party failed to adequately controvert them).
b. DENIALS WITH ADDITIONAL COMMENTS
Defendants argue that Plaintiffs “deny and insert additional unsupported ‘factual’
commentary” to the following 53 paragraphs, (ECF No. 169 at 5): (ECF No. 150 16, 18, 20, 41—
43, 45, 58, 63, 65, 67, 75-76, 80, 89, 106, 116-17, 122, 125, 130, 132, 138, 140-41, 149-50, 173, 181,
198, 206-08, 217, 219-223, 225, 232, 236, 240, 246, 265, 267, 285-86, 291, 302, 322-24). Plaintiffs
respond by arguing that “every instance of denial is made by showing that it conflicts with other
facts in Defendants’ own Statement of Material Facts or by citing to evidence (including specific
statements in declarations and depositions) supporting the denial in the parties’ appendices.”
(ECF No. 170 at 6).
Local Rule 56.C.1 imposes the same requirements on non-movants when they partially
deny a fact as when they wholly deny one: the response must “set[] forth the basis for the denial”

facts and permitting the offending parties to re-file their statements to “enforce compliance with our local
rules and promote judicial efficiency”) (citing Park, 2011 WL 1831708, at *3).
-25-

for a fact “not admitted in its entirety (as to whether it is undisputed or material), with
appropriate reference to the record[.]” LCvR 56.C.1.b. This rule cites to Local Rule 56.B.1 “for
instructions regarding format and annotation[,]” id., which states in relevant part: “[a] party must
cite to a particular pleading, deposition, answer to interrogatory, admission on file or other part
of the record supporting the party’s statement, acceptance, or denial of the material fact.” LCvR
56.B.1.
The paragraphs listed above, which explain a denial with additional comments but
provide no supporting record citation, generally do not constitute proper responses. However,
the Court excepts from this conclusion those paragraphs where the additional comment directly
references Defendants’ Concise Statement of Material Facts and the specific part of the record
cited therein. One example is paragraph 140 of Plaintiffs’ Concise Statement of Material Facts,
which states: “Deny. The record does not support the assertion.” (ECF No 160 at 11 {{ 140).
Although this response does not contain a specific reference to the record, it does reference the
corresponding paragraph in Defendants’ Concise Statement of Material Facts, which itself refers
to the record. (ECF No. 150 at 22 ¥ 140). The Court deems such responses “[iJntelligble citations
to the record” because they do not require the Court to “sift[] through the evidentiary record
without adequate guidance][.]” Goins v. Newark Housing Auth., No. 15-CV-2195, 2019 WL 6769266,
at *1n.2 (D.NJ. Dec. 11, 2019). The paragraphs fitting this description are as follows: {{ 16, 18,
20, 63, 75-76, 117, 125, 130, 132, 138, 140, 149, 173, 181, 232, 236, 240, 246, 285-86, 291, and 302.
The Court will deem these remaining responses to be admissions: [J 41-43, 45, 58, 65, 67,
80, 106, 116, 141, 150, 198, 206-08, 217, 219, 220-23, 225, 265, 267, and 322-24.

c. ADMISSIONS WITH ADDITIONAL DENIALS
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Defendants argue that Plaintiffs give nine responses that, “although styled as admissions,
are in actuality either blanket denials or partial denials—none of which [are] supported by a
citation to the record.” (ECF No. 169 at 5). The nine responses that Defendants identify are
Plaintiffs’ responses to the following: (ECF No. 150 [I 7, 68, 81-83, 90, 136, 165, 191).
As the Court has previously noted, the Federal Rules of Civil Procedure clearly state that
party asserting that a fact ... is genuinely disputed must support the assertion by . . . citing
to particular parts of materials in the record... FED. R. Civ. P. 56(c)(1). Of the nine paragraphs
that Plaintiff identifies, eight of them dispute Defendants’ factual assertions without citing to
support in the record (the ninth affirms Defendant's assertion without making any denial
whatsoever).’” Insofar as those paragraphs deny facts asserted by Defendants without supporting
those denials with record citations, the Court will deem those denials to be admissions.
d. UNANSWERED PARAGRAPHS
Each party here failed to respond to certain statements of material fact offered by the
other. Plaintiffs do not address paragraphs 253 and 326 of Defendants’ Concise Statement of
Material Facts. (See ECF No. 160 at 19, 24). Defendants, in turn, do not address any of the
additional material asserted in Plaintiffs’ Concise Statement of Material Facts. (See generally ECF
No. 169). That is, Defendants do not respond to paragraphs 303-403 of Plaintiffs’ “Additional
Material Facts at Issue.” (ECF No. 160 at {J 303-403). Because virtually all of Plaintiff's
additional statements of material fact cite to record evidence in accordance with Local Rule 56.C.1,

7 In paragraph 90, Defendants assert that “[t]here is no Schedule 1A attached to the APA identifying the
Purchased Assets.” (ECF No. 150 {| 90) (citation omitted). In response, Plaintiffs “[a]dmit that the copy of
the APA referenced does not have a Schedule la.” (ECF No. 160 ¥ 90). Plaintiffs do not controvert
Defendants’ assertion at paragraph 90 because their response is fully consistent with that assertion.
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the Court will deem these facts admitted. See Kitko v. Young, No. 3:10-CV-189, 2013 WL 530816,
at *1 (W.D. Pa. Sept. 20, 2013) (holding that “[flacts insufficiently denied and not otherwise
controverted ... have been deemed admitted”). The Court will therefore deem admitted the
following statements of material fact: (ECF No. 150 253, 326; ECF No. 160 {J 303-340, 342-
403).
IV. DISCUSSION
a. BREACH OF CONTRACT (COUNTS I II, IL, XIV, XV)
Plaintiffs assert breach of contract claims under Pennsylvania state law at Counts [, II, IIL,
XIV, and XV. (ECF No. 22-26, 41-45). To succeed on a breach of contract claim, a plaintiff must
establish three elements: (1) the existence of a contract, including its essential terms; (2) a breach
of the contract; and (3) resultant damages. Kelly v. Peerstar LLC, No. 3:18-CV-126, 2020 WL
5077940, at *15 (W.D. Pa. Aug. 26, 2020) (citing Meyer, Darragh, Buckler, Bebenek & Eck, P.L.L.C. v.
Law Firm of Malone Middleman, P.C., 137 A.3d 1247, 1258 (Pa. 2016)).
For the following reasons, the Court will grant Defendants’ motion for summary
judgment on Count XV, and it will deny this motion on Counts I, III, and XIV. As for Count II,
the Court will grant Defendants’ motion for summary judgment as to the claims it raises against
Wes and the Seller Entities, but it will deny this motion as to those claims raised against Mike.
i. OPERATING AGREEMENT (COUNT J)

8 There is one paragraph in Plaintiff's “Additional Material Facts at Issue” that does not have a record
citation: paragraph 340. (ECF No. 160 at 28 {| 340). However, paragraph 341 includes only a record citation,
and this citation appears to correspond with the factual content asserted in paragraph 340. (See id. at
340-41). The Court will therefore construe paragraph 340 as having the citation provided in paragraph
341, and it will construe paragraph 341 as having no content at all. Although an admission to paragraph
341 would be inconsequential, the Court does not deem Defendants’ lack of response to this paragraph as
an admission.
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At Count I, Plaintiffs claim that Mike breached the non-compete provision contained in
Section 5.03 of the OA by taking “definitive actions to compete” against Power House Subs. (ECF
No. 80 at 22-23). This provision barred Mike from “tak[ing] any actions to compete with Power
House Subs unless approved by Elevation” for two years beginning on the date of separation.
(ECF No. 155 at 8-9 § 5.03). For the following reasons, the Court denies Defendants’ motion for

summary judgment on this claim.
Contrary to Defendants’ assertion that REVZIP is “a stranger to the [OA]” and therefore
“cannot assert rights thereunder[,]” (ECF No. 149 at 10), the Court finds that REVZIP does have
standing to enforce that agreement. Section 10.04 of the OA states:
This Agreement has been adopted to govern the operation of the Company, and
shall be binding on and inure to the benefit of the Members and their respective heirs,
personal representatives, successors, and assigns.
(ECF No. 155 at 16) (emphasis added). The OA defines “Member” as “[a]ny person or entity who
at the time is a record holder or record owner of Units.” (Id. at 2 § 1.01). Elevation assigned its
majority membership interest in PHCorp to REVZIP under the RAA. (ECF No. 5-2 at 59). As
assignee of this interest, REVZIP currently benefits from the OA and may therefore enforce it.
As for the substance of Count I, there are two genuine questions of material fact
underlying the legal question of whether Mike breached the OA. First, the parties dispute
whether Mike took steps to compete with Power House Subs. (ECF No. 150 at 25 164; ECF No.
160 at 13 {[ 164). Second, the parties dispute whether Plaintiffs had approved of Mike’s efforts to
do so. (ECF No. 150 at 22-23 {J 140, 145-47, 149-50; ECF No. 160 at 11-12 {Jf 140, 145-47,
50). Because either would provide the Court with a sufficient basis for denying Defendants’

-29-

motion for summary judgment on Count I, the Court will only discuss the record evidence
relating to the latter factual question.
The following facts are not disputed: on August 7, 2019, Mike informed Brice that he was
leaving PHCorp and intended to open and operate a business in competition with Power House
Subs. (ECF No. 150 at 22 {J 138-39; ECF No. 160 at 11 JJ 138-39). As Chief Strategy Officer of
PHCorp, Brice had the authority to sign and terminate contracts on the company’s behalf. (ECF
No. 150 at 22 { 142; ECF No. 160 at 11 { 142). Brice also knew that Mike was prohibited from
competing against Power House Subs under the OA. (ECF No. 150 at 22 J 143; ECF No. 160 at 11
{ 143).
Left in dispute are these questions of material fact:

e Whether Brice, having been told by Mike about his plans to depart PHCorp and open a
competitor to Power House Subs, wished Mike “good luck],]” (ECF No. 150 at 22 { 140;
ECF No. 160 at 11 { 140);
e Whether Brice informed Mike that competing with Power House Subs would violate the
contractual obligations under the OA not to compete, (ECF No. 150 at 23 J 145; ECF No.
160 at 12 145); and

e Whether, during the August 7 meeting, Brice told Mike that the prior agreements Mike
had entered into with EMG— including the OA—were “irrelevant.” (ECF No. 150 at 23
146; ECF No. 160 at 12 {[ 146).

9 Defendants’ statement of material fact at paragraph 138 reads in full: “On August 7, 2019, Mike met with
Brice at Perkins in Altoona, Pennsylvania to discuss discrepancies with this income.” (ECF No, 150 at 22 J
138). Plaintiffs deny this statement, asserting that “[t]he record cited does not support the assertion
regarding discrepancies with Mike’s income.” (ECF No. 160 at 11 { 138). The Court does not find the
intended subject of the meeting to be material, and it deems the remaining content of paragraph 138
admitted due to the absence of any objection by Plaintiffs to it.
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Because the above disputes of fact might affect this case’s outcome by determining whether Brice
relieved Mike of his contractual obligation under the OA not to compete against Power House
Subs, these disputes are material. Boyle, 139 F.3d at 393.
There is also a genuine question of material fact as to whether Plaintiffs suffered damages
from Mike’s purported breach of the OA. The parties do not dispute that Supreme performed 16
fundraisers, and that ten of those fundraisers involved customers of Power House Subs. (ECF
No. 160 at 34 [J 369, 372). Nor do they dispute that most of those ten fundraisers generated more
than $1,000 in revenue. (Id. 372). In fact, Defendants expressly admit that Plaintiffs have offered.
facts showing that they suffered at least $1,200 in lost fundraising revenue due to Supreme’s
competition with Power House Subs. (ECF No. 169 at 11) (“The only customer who claims they
were induced by Mike to leave [Power House Subs] is [Steve] Walters. Assuming such
inducement was true, it would only account for the $1,200 Supreme received from [Steve]
Walters.”) (emphasis original).
Lastly, the parties do not dispute that the OA was a valid contract that obligated Mike not
to compete against Power House Subs. Because a jury could find in Plaintiffs’ favor on each of
the elements of their breach of contract claim at Count I, the Court will deny Defendants’ motion
for summary judgment on this claim.
ii, ASSET PURCHASE AGREEMENT (COUNT ID
At Count II, Plaintiffs claim that Mike, Wes, and the Seller Entities (i.e., PHE, PH2, and
PHC) each breached the APA with respect to Sections 13, 1.1.6, and 7.11 thereof. (ECF No. 80 at
23-25). Specifically, they claim that these defendants breached (a) Section 13, by “competing...
against Power House[,]” “diverting trade, business, customers, and vendors from Power
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House[,]” and “soliciting employees from Power House to leave their employment with Power
House and enter into employment or other contractual arrangements with competitors of Power
Housef[;]” (b) Section 1.1.6, “by failing to transfer the telephone numbers of Mike and Chris used
in the operation of the Business[;]” and (c) 7.11, “by failing to transfer to Power House or
terminate the fictitious name ‘Power House Subs’ and failing to amend the entity names for
[PHE], [PH2], and [PHC].” (Id. at 23-24). For the following reasons, the Court grants Defendants’
motion for summary judgment on these claims as to Wes and the Seller Entities, and it denies the
motion on these claims as to Mike.
There is a question of material fact as to whether Mike breached Section 13 of the APA.
This section, titled “Noncompetition Agreement[,]” provides that the Sellers will not compete
with the Buyers and their subsidiaries, successors, and assigns within a 25-mile radius of the
Businesses for a period of two years from the date of closing. (ECF No. 150 at 15 {1 92; ECF No.
160 at 8 J 92). Defendants argue that Plaintiffs failed to adduce evidence demonstrating that
Mike breached Section 13 “[flor the reasons discussed in Section (a)(i)(2) of [their] brief” —i.e.,
that Brice consented to Mike’s plan to open a competing business. (ECF No. 149 at 12, 14). The
Court found there to be a question of material fact as to whether Brice gave such consent, see supra
Section IV.a.i, and the Court finds the same question at issue here.
There is also a question of material fact as to whether Mike breached Section 1.1.6 of the
APA. Defendants argue that Mike did not breach Section 1.1.6 by “fail[ing] to turn over his
personal telephone number as well as the personal telephone number of Chris” because this
section “makes no reference to the personal telephone numbers of Mike and Chris.” (ECF No.
149 at 14) (emphasis original). However, the plain meaning of the APA indicates that these
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personal phone numbers would indeed constitute “Purchased Assets” transferred under the
APA. Section 10.13 provides that “Sellers are the sole and absolute owners of the Purchased
Assets.... There is no property used in the operation of the Businesses that is owned by or an interest in
which is claimed by any other person or entity[.]” (ECF No. 150 at 15 {| 92; ECF No. 160 at 8 { 92)
(emphasis added). The “Purchased Assets” are listed in Section 1, and Section 1.1.6 makes clear
that telephone numbers used in business operations are no exception. (ECF No. 150 at 15 □□ 91;
ECF No. 160 at 8 J 91) (Purchased Assets include “[t]he business conducted as a going concern,
including . ... telephone and fax numbers”). Because Mike used his personal phone number to
operate Power House Subs, (see ECF No. 154 at 133), but did not turn over this number to PHCorp
once he departed the company, (ECF No. 160 at 31 357), a reasonable jury could find that Mike
breached Section 1.1.6.
Lastly, there is a question of material fact as to whether Mike breached Section 7.11 of the
APA. Defendants do not dispute that Mike has refused to terminate Power House-related entities
and fictitious names, (see ECF No. 149 at 13-15), but argue only that there is no record evidence
showing that Plaintiffs “suffered any damage due to Mike . . . failing to transfer or terminate the
fictitious names ‘Power House Subs,’ ‘Power House Enterprises, LLC,’ ‘Power House II, LLC,
and ‘Power House Catering, LLC.” (id. at 15). On the contrary, record evidence indicates that
Mike’s refusal to terminate Power House-related entities and fictitious names has produced a
situation where “Plaintiffs will have to pay for them to be shut down and terminated, if even
possible[,]” and where their continued existence “causes confusion.” (ECF No. 164 at 119 {[ 24).
There is therefore a material question as to whether Plaintiffs suffered damages from Mike’s
breach of Section 7.11.
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Although there is sufficient record evidence indicating that Mike breached the APA, there
is no such evidence indicating that either the Seller Entities or Wes did so. In the Second
Amended Complaint, Plaintiffs allege that the Seller Entities breached “Section 1.1.6 .. . by failing
to transfer the telephone numbers of Mike and Chris used in the operation of the Business[,]” and
“Section 7.11... by failing to transfer to Power House or terminate the fictious name ‘Power
House Subs’ and failing to amend the entity names for [PHE], [PH2], and [PHC].” (ECF No. 80
at 23:191, 24:192). But in their briefings, Plaintiffs identify Mike as the cause of these breaches.
(ECF No. 159 at 20) (arguing that “Mike’s refusal to transfer Mike’s Power House Phone Number”
and his refusal “to terminate the fictious names” of the Seller Entities violated his obligations
under the APA). There is no evidence in the record indicating that the Seller Entities themselves
breached the APA. Additionally, Plaintiffs do not argue in their briefings that Wes breached the
APA, and there is likewise no evidence indicating that he did.
Based on the above, the Court will grant Defendants’ motion for summary judgment on
Count I as to its claims against Wes and the Seller Entities, but it will deny this motion as to its
claims against Mike.
iii. NON-COMPETITION, NON-SOLICITATION, & CONFIDENTIALITY
AGREEMENTS (COUNT ITD)
At Count HI, Plaintiffs claim that Mike breached the NCA. (ECF No. 80 at 25-26). The
Court denies Defendants’ motion for summary judgment on this claim in its entirety.
Under the NCA, Mike agreed not to (1) disclose PHCorp’s confidential information, or (2)
compete with Power House Subs within a 25-mile radius for two years following his departure
from PHCorp. (See ECF No. 150 at 20-21 {J 127, 129; ECF No. 160 at 11 {1 127, 129). As the

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Court will explain in Section IV.c.iii, infra, the record indicates that Mike misappropriated
PHCorp’s trade secrets. And, as the Court previously explained in Section IV.a.i, supra, the record
also indicates that Mike competed against Power House Subs within the 25-mile radius and
within two years of his departure from PHCorp. Either of these facts could support a jury finding
that Mike breached the NCA.
iv. CHRIS AND JAKE’S BREACHES OF CONTRACT (COUNT XIV)
At Count XIV, Plaintiffs claim that Chris and Jake violated their Confidentiality
Agreements with EMG and, in turn, with REVZIP. (ECF No. 80 at 41-42). Specifically, they claim
that Chris and Jake breached these agreements by “us[ing] and disclos[ing] confidential
information belonging to [PHCorp] and relating to their employment by and services provided
to [PHCorp], including .. . Customer Information, Secret Recipes, Fundraising Methods, vendor
information, and employee information.” (Id. at 42). For the following reasons, the Court will
deny Defendants’ motion for summary judgment on this claim.
Following the Acquisition, all Power House Subs employees became employees of
PHCorp and its majority shareholder, EMG. (ECF No. 150 at 16 { 98; ECF No. 160 at 9 J 98). In

10 Defendants’ arguments to the contrary are unconvincing. They argue that Plaintiffs lack standing to
assert their breach of contract claim at Count III “for the reasons discussed in Section (a)(i)(1) of this Brief.”
(ECF No. 149 at 15). They further argue that Count III “is duplicative of the other claims asserted
throughout the Second Amended Compilaint[,]” and that, “[f]or the reasons discussed at length in Section
IV(a)(#)(2) and Section (a)(ii)(2) of this Brief, Plaintiffs have failed to adduce evidence showing Mike
breached a contractual duty owed to Plaintiffs.” (Id. at 16). Lastly, Defendants argue that Count III “fails
because Plaintiffs again have not produced any evidence showing [they were] damaged by Mike’s alleged
breach of the NCA.” (id.). Although Defendants’ brief at ECF No. 149 does not have any sections for
“(a1)” “TV(a)G)(2),” or “TV(a)Gi)(2),” this argument seems to reference Sections V(A)(1)(i)-(ii) and
V(A)(2)(ii), which argue that Mike did not did not breach the OA and APA, respectively. (See id. at 9-15).
Thus, in Section V(A)(3), Defendants argue that Mike did not breach the NCA for the same reasons offered
in V(A)(1)-(2). The Court rejected those arguments for Counts I and II, see supra Sections IV.a.i-ii, and it
rejects them for Count II as well.
-35-

the course of this transition, EMG required all Power House Subs employees to sign the
Confidentiality Agreements as a condition of their employment with PHCorp. (ECF No. 150 at
16 J 99; ECF No. 160 at 9 J 99). Defendants do not dispute that Chris and Jake breached the
Confidentiality Agreements, (see ECF No. 149 at 16-17), but argue instead that Plaintiffs cannot
enforce the Confidentiality Agreements because the agreements did not contain an assignability
provision that would allow REVZIP to enforce EMG’s rights as successor to EMG’s majority
interest in PHCorp. (Id.) (citing Hess v. Gebhard & Co., 808 A.2d 912, 921 (Pa. 2002)). In response,
Plaintiffs argue that the rule Defendants cite to from Hess is not meant to apply in situations
“[w]here the successor entity is essentially the same . . . such that the nature of the employment
relationship does not change following the transaction[.]J” (ECF No. 159 at 17) (citing TSG
Finishing LLC v. Bollinger, No. 14-CV-2058, 2016 WL 4690884, at *5 (N.C. Super. Aug. 26, 2016)).
The Court finds that REVZIP may enforce the Confidentiality Agreements. Under
Pennsylvania law, “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 the sale of assets.” Hess, 808 A.2d at
922. However, the Third Circuit has recognized that “under Pennsylvania law .. . a stock sale,
unlike a sale of assets, does not alter the corporate entity.” Zambelli Fireworks Mfg. Co., Inc. v.
Wood, 592 F.3d 412, 422 (3d Cir. 2010). The parties dispute here whether the transfer of ownership
over PHCorp from EMG to REVZIP deprived REVZIP of the ability to enforce the Confidentiality
Agreements previously entered into by EMG because there was no specific assignability
provision relating to those agreements. EMG’s affiliate, Elevation, sold EMG’s majority interest
to REVZIP through the RAA, which transferred to REVZIP “sixty-five (65) Class A Units of
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membership interest... in [PHCorp.]” (ECF No. 5-2 at 59). The Court interprets the RAA as a
sale of stock rather than a sale of assets, and this interpretation leads it to hold that the RAA did
not need a specific assignability provision to assign its rights under the Confidentiality
Agreements to REVZIP.
Because REVZIP can enforce the Confidentiality Agreements against Chris and Jake, and
because Defendants do not dispute that Chris and Jake breached those agreements, the Court will
deny Defendants’ motion for summary judgment on Count XIV.

v. MIKE, WES, & SELLERS’ BREACHES OF PURCHASE AGREEMENT
(COUNT XV)
At Count XV, Plaintiffs allege that Mike, Wes, and the Seller Entities breached the APA
by “alleg[ing] that the Secret Recipes, Customer Information, and Fundraising Methods are not
solely the property of Plaintiff [PHCorp,]” and that “they and/or other parties are owners of, have
rights to, or are otherwise using” those pieces of information. (ECF No. 80 at 44 292-93).
Plaintiffs allege that this conduct violated the APA’s conveyance to PHCorp of the “Purchase
Assets,” as the APA defines that term. (Id. at 43 J 287, 45 J 299). They also allege that Mike
breached the APA’s noncompetition agreement “by competing against [PHCorp,]” (id. at 45 7
298), and that both Mike and Wes breached this agreement “by taking actions .. . that would tend
to divert business from [PHCorp].” (Id. I] 297-98).
For the following reasons, the Court will grant Defendants’ motion for summary
judgment on all claims asserted at Count XV.
1. MIKE & SELLER ENTITIES

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Plaintiffs claim that, because “[t]he Secret Recipes and Customer Information are assets
that were used in the Power House Subs business and as such were assets transferred as part of
the APA[,]” Mike and the Seller Entities “breached their warranties [made in the APA] when
they said [that they] owned this customer information and [were] selling it.” (ECF No. 159 at 21).
Regarding this claim, Defendants assert that Plaintiffs have “no proprietary interest in the
Dressing Recipes, the Customer List, and the Assembly Methods.” (ECF No. 149 at 17). But
Defendants do not address the thrust of Plaintiffs’ claim, which is that, “7f [PHCorp] did not own
the Secret Recipes or the Customer Information, then [Sellers] breached the APA.” (ECF No. 159
at 21) (emphasis original). This claim is contingent on a legal determination that no proprietary
interest can be held in the information at issue. “If this is the case,” —i.e., if this information
cannot be owned as property —then “APA Sellers breached their warranties when they said [that
they] owned this customer information and [were] selling it” because they too would have lacked
ownership over the information. (Id.).
The Court will grant Defendants’ motion for summary judgment on Count XV, but not
for any deficiency in Plaintiffs’ reasoning. Were the Court to find that Plaintiffs lacked a
proprietary interest in the Secret Recipes, Customer Information, and Fundraising Methods, it
would have found sufficient evidence in the record to support a jury finding favorable to
Plaintiffs on Count XV. However, as explained in Section IV.c.ii, infra, the Court does find that
Plaintiffs have a proprietary interest in the Customer Information (Plaintiffs abandon their claims
in that section as they relate to the Secret Recipes and Fundraising Methods). Because the
contingency underlying Plaintiffs’ argument at Count XV will not obtain, the Court may properly
enter judgment on this claim as a matter of law.
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2. MIKE
The Court will grant Defendants’ motion for summary judgment on Plaintiffs’ other claim
against Mike at Count XV: that Mike “breached the noncompetition agreement contained in the
[APA] by competing against [PHCorp] and taking actions . . . that would tend to divert business
from [PHCorp].” (ECF No. 80 at 45 {[ 297). This claim is an apparent duplicate of one asserted
by Plaintiffs at Count II. As discussed in Section IV.a.ii, supra, Plaintiffs claim at Count I that
Mike breached Section 13 of the APA by “competing . . . against [PHCorp,]” “diverting trade,
business, customers, and vendors from [PHCorp,]” and “soliciting employees from [PHCorp] to
leave their employment with [PHCorp] and enter into employment or other contractual
arrangements with competitors of [PHCorp].” (ECF No. 80 at 23 { 190). The Court is authorized
to dismiss duplicative claims, Pansini v. Trane Co., No. 17-CV-3948, 2019 WL 2409740, at *2 (E.D.
Pa. June 7, 2019), and it will do so here.
3. WES
The Court will also grant Defendants’ motion for summary judgment on the claim
Plaintiffs’ assert at Count XV against Wes individually. Specifically, Plaintiffs claim that Wes
“breached the noncompetition agreement contained in the [APA] by taking actions that would
tend to divert business from [PHCorp] when he for example, ‘liked’ and upvoted posts by
Defendants regarding their competing sub sandwich business.” (ECF No. 80 at 45 {[ 298).
However, Plaintiffs apparently abandon this claim in their briefing. (See ECF No. 159 at 20)
(treating Count XV as a claim that “Mike and the APA Sellers Breached the APA”). Summary
judgment on this claim is proper because claims raised in a complaint but ignored at summary
judgment are deemed waived. McCowan v. City of Phila., 603 F. Supp. 3d 171, 193 (E.D. Pa. 2022).
-39-

b. TORTIOUS INTERFERENCE WITH EXISTING CONTRACTUAL
RELATIONS (COUNT IV)"
At Count IV, Plaintiffs claim that Chris, Jake, Dana, Subpreme, and Supreme tortiously
interfered with the contractual relations Plaintiffs had with Mike by “convincing Mike they
would assist him in competing against Plaintiffs and circumvent his requirements under the
APA, OA, and License Noncompete, and actually assisted him in so doing.” (ECF No. 80 at □□□
For the following reasons, the Court will deny Defendants’ motion for summary judgment
on this claim as to Chris, Jake, and Dana, but it will grant this motion as to Subpreme and
Supreme.
To allege tortious interference with a contract under Pennsylvania law, a plaintiff must
allege four elements: (1) that a contractual relationship existed between the plaintiff and another
party; (2) that the defendant intended to harm that contractual relationship by purposefully
interfering with it; (3) that the defendant lacked privilege or justification for its conduct; and (4)
that the plaintiff suffered actual damages as a result of the defendant’s conduct. Acumed LLC v.
Advanced Surgical Servs., Inc., 561 F.3d 199, 212 (3d Cir. 2009); Acclaim Sys., Inc. v. Infosys, Ltd., No.
13-CV-7336, 2015 WL 4257463, at *3 (E.D. Pa. July 14, 2015).
The Defendants only dispute two elements of this tort: (2) that Defendants intended to
harm Mike’s contractual relations with Plaintiffs through purposeful interference; and (4) that

11 Plaintiffs asserted two additional tortious interference claims at Counts IX and X. (ECF No. 80 at 34-36).
However, they do not contest the dismissal of these claims. (ECF No. 159 at 23-24). The Court will
therefore grant Defendants’ motion for summary judgment on Counts IX and X.
2 Plaintiffs also assert this claim against an entity called “Georgie’s.” (ECF No. 80 at 26-27). However,
they do not discuss Georgie’s in any of their briefings, let alone offer record evidence indicating that
Georgie’s tortiously interfered with Mike’s contractual relations. Therefore, insofar as Plaintiffs assert the
tortious interference claim at Count IV against Georgie’s, the Court will grant Defendants’ motion for
summary judgment on that claim.
-40-

Plaintiffs suffered actual damages because of Defendants’ conduct. Acumed, 561 F.3d at 212. The
record contains evidence sufficient to support a jury finding favorable to Plaintiffs on both of
these elements.
There is a genuine question of material fact as to whether Defendants intended to harm
Mike’s contractual relations with PHCorp by purposely interfering with the OA, the APA, and
the NCA. The record indicates that Dana, Chris, and Jake knew about the Cease-and-Desist Letter
telling Mike that he was prohibited from competing with Power House Subs. (ECF No. 160 at 35
{ 379). It also indicates that, notwithstanding their knowledge of this prohibition, these three
defendants knew about Mike’s efforts to establish a competing sub business and actively assisted
Mike in this effort. Specifically:
e Messages between Dana and Chris on October 25, 2019, reflect Dana’s coordination with
Mike about securing their father’s life insurance proceeds so they “can solicit when we
are opening.” (ECF No. 160 at 30 {J 346-47). On November 6, 2019, Dana informed Chris
that she would buy Supreme a slicer from nonparty John Rutter, and Chris told her in
response that “Mike already had [Rutter] get us one.” (Id. { 348). And, on December 22,
2019, Dana sent Chris options for shop equipment and directed Chris to “[t]alk to MIKE
about it[.]” (Ud. J 350).
e The record reflects Dana and Chris’s understanding that Mike, rather than Jake, is the
actual owner and controlling force behind Supreme. In a series of text messages
exchanged on October 23, 2019, Chris and Dana wrote the following:
Chris: Maybe you can try to talk to Jake. It will be his company someday . . . but we have
to get it opened. No way Mike’s going to let someone have control or ownership again.
You need to trust this... cause the last thing you want for [Jake .. . is Mike looking
elsewhere to get funds and give away their ownership .. . and he will do that if forced to.
Dana: Do you really believe that Jake should be working for Michael? They are both
drama queensJ.]
Chris: There will be tough times. But I really think Jake’s good at it. And in the
long run it will be good for him. But you have to call him and get him to back off.

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If there [are] any more delays we will screw ourselves for spring fundraisers. Get
us open[.]
Dana: I really don’t need [M]ike[’s] hoagie drama right now. It’s going to happen
in time whether he’s a lunatic or not.
Chris: Just tell []]ake not to fight him. No reason to raise voices. Let him open. You
want income for the house. Let this open now.
(ECF No. 160 at 29 { 343) (emphasis added).
Critically, the record indicates that Chris and Dana knew that Mike’s involvement with
Supreme violated Mike’s contractual obligations. Chris gave the following testimony in
his deposition:
Q: And you’re telling Dana, “Mike wants to know if you can ask [the] insurance
company [for] an approximate day for funds.” Why does Mike care?
A: We're a family and we are broke? I don’t know.
Q: Well, you kind of say why he cares right? “So we can solicit when we are
opening.”
A: Well, if I’m worried about getting money from Dana to help get the business,
Supreme[,] open, and Mike wasn’t allowed to, then I might have made the reference,
you know, that Mike’s broke too, so. We all lived together. We all used the same
car. It’s really not a stretch.
(ECF No. 160 at 38 { 403) (emphasis added).
The above evidence could lead a reasonable jury to conclude that Chris, Dana, and Jake
helped Mike launch Supreme’s business, knowing full well that Mike was breaching his
contractual obligations not to compete against Power House Subs.
In contrast, no reasonable jury could conclude that Subpreme tortiously interfered with
Mike’s contractual relations. Plaintiffs acknowledge that Mike is “d/b/a” —i.e., doing business
as—Subpreme. However, “[u]nder Pennsylvania law, ‘the use of a fictitious name does not create

a separate legal entity, but is merely descriptive of a person or corporation who does business
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under another name.” Gentry v. Sikorsky Aircraft Corp., 383 F. Supp. 3d 442, 453 (E.D. Pa. 2019)
(quoting Burlington Coat Factory of Pa., LLC v. Grace Const. Mgmt. Co., LLC, 126 A.3d 1010, 1024
(Pa. Super. 2015)). Subpreme is not a separate party from Mike, and a reasonable jury could no

more find that both Mike and Subpreme are liable than it could find Mike liable twice on one
claim.
A reasonable jury would be similarly unable to conclude that Supreme tortiously
interfered with Mike’s contractual relations. “When a corporation infringes in obedience to the
command of an officer with power to cause the corporation to comunit or refrain from committing
the infringing act, and when that officer participates in and contributes to the infringement, they
are in the eye of the law joint tortfeasors and both are liable . . . for the injuries they have jointly
inflicted[.]” Hitchcock v. Am. Plate Glass Co., 259 F. 948, 953 (3d Cir. 1919). The parties agree that
Jake was an owner of Supreme, (ECF No. 150 at 5 { 11; ECF No. 160 at 4 [ 11), and a jury could
find on this basis that Jake had “the power to cause” Supreme to interfere with Mike’s contractual
relations. Hitchcock, 259 F. at 953. And, as discussed above, record evidence indicates that Jake
did interfere with those relations. However, the Court finds no evidence indicating that Jake
interfered with Mike’s contractual relations through Supreme, such that he both had the power to

cause Supreme’s interference and actually did cause it. Moreover, as the alleged interference with
Mike’s contractual relations caused Supreme to compete with Power House Subs, concluding that
Supreme interfered with these relations would be to conclude, nonsensically, that Supreme
caused Mike to cause it (Supreme) to so compete. A reasonable jury could not find that Supreme
interfered with Mike’s contractual relations, which is just as well because Supreme has been
closed for over two years. (ECF No. 150 at 29 { 205; ECF No. 160 at 16 {[ 205) (agreeing that
-43-

Supreme ceased operations in or around December 2020). The Court will therefore grant
Defendants’ motion for summary judgment on Count IV as to Supreme.
There is also a genuine issue of material fact as to whether Plaintiffs suffered actual
damages from the purported tortious interference. Lost profits stemming from a breach or
interference with a contract are recoverable if: “(1) there is . .. evidence to establish the damages
with reasonable certainty; (2) the damages were the proximate cause of the wrong; and (3) the
damages were reasonably foreseeable.” Brisbin v. Superior Valve Co., 398 F.3d 279, 289 (3d Cir.
2005) (internal quotations omitted). Plaintiffs allege that they were damaged by Chris, Dana, and
Jake’s tortious interference because these defendants assisted Mike in earning revenue for
Supreme during the contractual noncompetition period that might have otherwise gone to
PHCorp. (ECF No. 159 at 22). This allegation is supported by record evidence indicating that
Supreme performed sixteen fundraisers with PHCorp customers, most of which generated over
$1,000 in revenue. (ECF No. 160 at 34 {J 369, 372). It is further supported by Defendants’
admission that Plaintiffs offered facts showing that they suffered at least $1,200 in lost revenue.
(ECF No. 169 at 11). A reasonable jury could find that Plaintiffs suffered a loss in revenue, that
Supreme’s competition against Power House Subs was the proximate cause of this revenue loss,
and that this revenue loss was the foreseeable consequence of Supreme’s competition.
Because there are genuine questions of material fact as to whether Chris, Dana, and Jake
tortiously interfered with Mike’s contractual relations, the Court will deny Defendants’ motion
for summary judgment on Count IV as to these three individuals. However, for the reasons
explained above, the Court will grant this motion on Count IV as to Subpreme and Supreme.
c. MISAPPROPRIATION OF TRADE SECRETS (COUNTS V, VI)
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At Counts V and VI, Plaintiffs claim that Mike, Chris, Jake, and Dana misappropriated
Plaintiffs’ trade secrets in violation of the Defend Trade Secrets Act (“DTSA”), 18 U.S.C. § 1831 et

seq., and the Pennsylvania Uniform Trade Secrets Act (“PUTSA”), 12 PA.C.S. § 5301 et seq. (ECF
No. 80 at 27-32). For the following reasons, the Court grants Defendants’ motion on these claims

as to Jake and Dana but denies it on these claims as to Mike and Chris.
Plaintiffs assert that Power House Subs’ Secret Recipes, Fundraising Methods, and
Customer Information are “trade secrets” protected under DTSA and PUTSA. (ECF No. 80 at 27—
32). However, in their summary judgment briefings, Plaintiffs apparently abandon this claim as
to the Secret Recipes and Fundraising Methods. (See ECF No. 159 at 24) (asserting only that
certain “categories of Customer Information are trade secrets of Plaintiffs”); (ECF No. 170 at 9)
(addressing only Defendants’ arguments regarding pieces of Customer Information).
Accordingly, Counts V and VI only assert claims regarding the Customer Information. Del. State
Univ. v. Thomas Co., Inc., 2020 WL 6799605, at *40 (D. Del. Nov. 19, 2020) (“[W]here a party
responds to a dispositive motion, but only addresses some subset of the arguments that are the
subject of the motion, courts have consistently held that the claims that are not defended are
deemed abandoned.”).
Defendants argue that (a) the pieces of Customer Information at issue are not “trade
secrets” protected under DISA and PUTSA, and (b) even if they were trade secrets, Plaintiffs
failed to offer evidence supporting misappropriation claims under either statute. (ECF No. 149
at 16-26). Although “[t]he question of whether certain information constitutes a trade secret is a
question of fact to be resolved by the jury or the trier of fact[,] factual issues are subject to

summary judgment whenever the law as applied to uncontroverted facts shows that the movant
-45-

is entitled to summary judgment[.]” Camelot Tech., Inc. v. RadioShack Corp., No. 01-CV-4719, 2003
WL 403125, at *5 (E.D. Pa. Feb. 13, 2003). See also Youtie v. Macy’s Retail Holding, Inc., 653 F. Supp.
2d 612, 623 (E.D. Pa. 2009). The Court must therefore determine whether there are any
controverted facts that might prevent it from ruling on the existence of trade secrets as a matter
of law. If there are such facts, the Court will find that a material question of fact exists that
requires denial of summary judgment on Counts V and VI. If there are no such facts, the Court
will determine whether trade secrets exist and, if they do, it will consider whether a material
question of fact exists as to whether those trade secrets were misappropriated.
i. COMPOSITION OF “CUSTOMER INFORMATION”
The “Customer Information” at issue includes “lists and accounts of current and past
customers and vendors, their current and past orders, contact information, and other information
about customers and prospective customers, generally and specifically ... which are not generally
known or readily ascertainable by persons outside of [PHCorp].” (ECF No. 80 at 5). Plaintiffs
further specify that “[PHCorp] compiled much of its customer information into two platforms:
the list of customers and potential customers that [PHCorp] created and Mike used in his selling
efforts (the ‘Customer List’) and the Google calendar (‘Google Calendar’) used by Chris,
[PHCorp’s] general manager, and [PHCorp’s] delivery drivers.” (ECF No. 159 at 24). Plaintiffs
also include within the scope of “Customer Information” the customer contact information stored

on Mike’s Power House Phone. (Id.).
In short, Plaintiffs’ “Customer Information” is information of the above description
located in three locations: (1) the Customer List, (2) the Google Calendar, and (3) Mike’s Power
House Phone. (ECF No. 160 at 35 J 380). For the sake of convenience, the Court will refer to the
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customer information located at each of these locations as a different “type” of customer
information, although there appears to be substantial overlap in the content housed in each
location.
ii. EXISTENCE OF TRADE SECRETS
Having identified the constitutive components of Plaintiffs’ “Customer Information,” the
Court finds that each of these components is a trade secret under both federal and state law. “To
prevail on a claim for misappropriation of trade secrets under DTSA and PUTSA, a plaintiff must
first establish the existence of a trade secret.” Elmagin Capital, LLC v. Chen, 555 F. Supp. 3d 170,
177 (E.D. Pa. 2021) (citing 18 U.S.C. §§ 1836(b)(1), 1839(3), (5); 12 Pa. C.S. § 5302).
Although the DTSA and the PUTSA use different wording, both statutes define a
‘trade secret’ as information that: (1) the owner has taken reasonable means to keep
secret; (2) derives independent economic value, actual or potential, from being
kept secret; (3) is not readily ascertainable by proper means; and (4) others who
cannot readily access it would obtain economic value from its disclosure or use.
Jazz Pharms., Inc. v. Synchrony Grp., LLC, 343 F. Supp. 3d 434, 444 (E.D. Pa. 2018).
For DTSA, this definition includes “all forms and types of financial, business, scientific,
technical, economic, or engineering information, including patterns, plans, compilations,
program devices, formulas, designs, prototypes, methods, techniques, processes, procedures,
programs, or codes.” 18 U.S.C. § 1839(3). Similarly, for PUTSA, the definition of “trade secret”
includes “[ijnformation, including a formula, drawing, pattern, compilation including a customer
list, program, device, method, technique or process.” 12 Pa. C.S. § 5302.
For the following reasons, the Court holds that all three types of Customer Information
identified by Plaintiffs are “trade secrets” under both DTSA and PUTSA.
1. CUSTOMER LIST
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The Court holds that the Customer List constitutes a trade secret under DISA and PUTSA
because such compilations are protected under both statutes. 18 U.S.C. § 1839(3) (including “all
forms and types of... compilations” under DTSA’s trade secret definition); 12 Pa. C.S. § 5302
(including any “compilation including a customer list” under PUTSA’s trade secret definition).
As the Pennsylvania Supreme Court has recognized, in businesses where “permanent and.
exclusive relationships are established between customers and salesmen,” “[t]he customer lists
and customer information which have been compiled by such firms represent a material
investment of employers’ time and money,” are “highly confidential,” and qualify as a trade
secret subject to protection. Morgan’s Home Equip. Corp. v. Martucct, 136 A.2d 838, 842 (Pa. 1957).
Although customer lists are not protected when they are “available through published lists of
suppliers and other catalogue and sales publications[,]” id. at 842 n.2, the record here does not
indicate that the Customer List is available through other sources of that kind. Only Mike, Ryan,
and Brice had access to the Customer List, which was stored on PHCorp’s password-protected
Google cloud drive. (ECF No. 160 at 36 {| 387). The names of some of the businesses contained
in the Customer List may be obtained by internet searches, but many of the phone numbers and
addresses cannot be found in this manner, nor can the records of customer contacts, notes, and
fundraiser commitments. (Id. | 385). Indeed, Defendants do not dispute Plaintiffs’ assertion that
the Customer List is “not publicly available.” (Id. {| 386). The Customer List therefore qualifies
as a trade secret under both federal and state law.
2. GOOGLE CALENDAR
The Google Calendar contained the names of customers and their contact people,
customers’ phone numbers and email addresses, the dates and locations of customers’
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fundraisers, the numbers and types of subs ordered, and other related notes. (ECF No. 160 at 36
{ 388). Although the Google Calendar itself cannot be considered a trade secret, the Court finds
that certain of the information contained therein—namely, (a) customer names, (b) customer
contact persons, (c) customer contact information, (d) customer fundraiser dates and locations,
(e) quantities and types of subs ordered, and (d) other order and customer notes—are trade
secrets under both DTSA and PUTSA. These collections of information are compilations of the

same sort as the Customer List, and they deemed “trade secrets” for the same reasons.
Additionally, PHCorp took reasonable means to keep this information secret, including
use of a password to limit access to the Google Calendar, (ECF No. 160 at 36 { 389), and a practice
of changing the Google Calendar’s password whenever an employee who knew the password
left the company. (Id. { 390). This information, “represent[ing] a material investment of
[PHCorp’s] time and money,” Morgan’s Home Equip., 136 A.2d at 842, derives independent
economic value from being kept secret. Because the Google Calendar is password-protected, and
because much of the information contained therein cannot be obtained by mere internet searches,
(ECF No. 160 at 36 {1 386, 389), that information is not readily ascertainable by proper means.
And, given the apparent value that the information has for PHCorp, competitors (actual or
potential) would obtain economic value from the information’s unauthorized disclosure or use.
The pieces of information listed above therefore constitute “trade secrets” under state and federal
law. Jazz Pharms., 343 F. Supp. 3d at 444.
3. MIKE’S POWER HOUSE PHONE
Lastly, the pieces of customer information stored on Mike’s Power House Phone—
specifically, customer contact details and other information not available online or otherwise,
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(ECF No. 160 at 32 361)—also constitute trade secrets for similar reasons. Because this
information was not generally available to the public, nor was it made public by Plaintiffs
themselves, (id.), the Court finds that Plaintiffs took reasonable means to keep the information
secret, and that the information was not readily ascertainable by proper means. Additionally,
because the information was compiled over several years of business and eventually sold to
PHCorp through the APA, (id.), it evidently had independent economic value in being kept secret
from those who could not readily access it. These pieces of information would therefore
constitute “trade secrets” under DISA and PUTSA as well. Jazz Pharms., 343 F. Supp. 3d at 444.
iti, MISAPPROPRIATION
Having determined that the three types of Customer Information identified by Plaintiffs

are trade secrets, the Court must now determine whether the record contains evidence sufficient
to allow a reasonable jury to conclude that Defendants misappropriated this information.
Under both DTSA and PUTSA, “misappropriation” of trade secrets includes the
“acquisition of a trade secret of another by a person who knows or has reason to know that the
trade secret was acquired by improper means” or the “disclosure or use of a trade secret of
another without express or implied consent.” PDC Machs. Inc. v. Nel Hydrogen A/S, No. 17-5399,
2018 WL 3008531, at *2 (E.D. Pa. June 15, 2018) (citing 18 U.S.C. § 1839(5); 12 Pa. Cons. Stat. Ann.
§ 5302). Whether misappropriation occurred is a question of fact. Elmagin, 555 F. Supp. 3d at 180.
Plaintiffs have produced evidence sufficient to support a jury finding that Defendants
misappropriated their Customer List by using it to solicit fundraisers from Power House Subs to
Supreme. The parties do not dispute the following facts:

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Mike took pictures on his phone of PHCorp’s customer list that was on the Chromebook
while the Chromebook was in Mike’s possession. (ECF No. 160 at 32 { 362);
e The pictures that Mike took of the customer lists showed customer names, phone
numbers, and notes about customers, as well as dates on which Mike had visited them
while at PHCorp. (Id. {| 363);
When shown the pictures, Mike said that it “looks like customers that I was adding in the
Chromebook to solicit while at Power House. ... I put all of my contacts that I was
soliciting in the Chromebook on a spreadsheet.” (Id. at 33 §[ 365);
e When asked whether he told anyone else that he took the Customer Information, Mike
said: “They were my leads. ... Because they were my contacts .... They were my personal
[contacts]. I made those contacts with them.” (Id. { 366);
Mike took the pictures “for future reference” because he “shouldn’t have been able to
[access the Customer Information] because the Chromebook would have ordinarily been
shut down by the administrator.” (Id. at 34 {| 368);
e When asked whether he took the pictures before or after he had left PHCorp, Mike
responded: “I would assume it was after. I would have no reason to take it before.” (Id.).
This evidence indicates that Mike acquired a trade secret by improper means—i.e., by taking a
photo of the Customer List after he had left PHCorp but before he had lost access to the
Chromebook, knowing full well that he should not have had access to this information as a former
employee. It also indicates, in conjunction with other evidence discussed above, that Mike used
the Customer List without PHCorp’s consent to solicit Power House Subs’ customers for his own
competing business.
The record also contains evidence indicating that Defendants misappropriated the trade
secrets contained on the Google Calendar and Mike’s Power House Phone by using them without
PHCorp’s consent. Regarding the Google Calendar, the parties do not dispute the following:
e Access to the Google Calendar is protected by password and, when an employee leaves
PHCorp, the company changes the former employee’s password to prevent future logins
to the Google Calendar by that individual. (ECF No. 160 at 36 {| 389-90);
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e Because Chris never signed out of the Google Calendar after his departure from PHCorp,
he retained access to the Google Calendar even after his password had been changed. (Id.
at 37 392-93);
e Chris accessed the Google Calendar regularly after leaving PHCorp on September 16,
2019, and was able to see all of the information contained therein. (Id. J 395); and

e On October 31, 2019, Chris wrote to John Macak: “Ha ha. They finally erased my
calendar.” (Id. 397).
This evidence shows that PHCorp took affirmative steps to keep former employees like Chris
from accessing the Google Calendar, but that, due to an oversight on PHCorp’s part, Chris
retained access to the calendar after his departure from the company. It also shows that Chris
continued to access the Google Calendar after his departure, despite knowing that he should not
have had continued access to it.
As for Mike’s Power House Phone, the record contains evidence that Mike used the trade
secrets contained therein without PHCorp’s consent. After his departure from Power House
Subs, Mike used his phone solicit business from two of Power House Subs’ regular customers—
Steve and Lindy—and succeeded at making them into Supreme’s earliest customers. (ECF No.
150 at 24 YJ 153; ECF No. 160 at 12 { 153; ECF No. 164 at 259). This evidence could allow a
reasonable jury to conclude that Mike used the proprietary customer information contained on
his Power House Subs phone to draw business away from Power House Subs and toward
Supreme.
Regarding Mike and Chris, Plaintiffs’ have offered evidence supporting each element of
their misappropriation of trade secrets claim with respect to each trade secret composing Power
House Subs’ “Customer Information” (i.e., the Customer List, the Google Calendar, and Mike’s

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Phone Information). In contrast, Plaintiffs have offered no evidence indicating that Dana and
Jake misappropriated this Customer Information. The Court will therefore grant Defendants’
motion for summary judgment on Counts V and VI as to Dana and Jake and deny it on those
counts as to Mike and Chris.
d. BREACH OF FIDUCIARY DUTY (COUNT XID)
At Count XII, Plaintiffs claim that Chris breached certain fiduciary duties that he owed to
PHCorp. (ECF No. 80 at 38-39). This claim is preempted by PUTSA and the Court will therefore
grant Defendants’ motion for summary judgment on it.
PUTSA “displaces conflicting tort, restitutionary and other law of this Commonwealth
providing civil remedies for misappropriation of a trade secret,” with the exception of “(1)
contractual remedies, whether or not based upon misappropriation of a trade secret; (2) other
civil remedies that are not based upon misappropriation of a trade secret; or (3) criminal remedies,
whether or not based upon misappropriation of a trade secret.” 12 Pa. Cons. Stat. Ann. § 5308(a)—
(b). Therefore, unless a claim falls within one of these exceptions, it is preempted by PUTSA to
the extent it is based on the same conduct that constitutes a misappropriation of trade secrets.
Kimberton Healthcare Consulting, Inc., v. Primary PhysicianCare, Inc., 2011 WL 6046923, at *4 (E.D.
Pa. Dec. 6, 2011) (citing Youtie, 626 F. Supp. 2d at 521).
Plaintiffs’ breach of fiduciary duty claim is neither a contract remedy nor a criminal
remedy, and it appears to be based solely on alleged misappropriation of trade secrets. Plaintiffs
admit that “PTUSA ... preempts Count XII only if the dressing recipes, assembly methods, and
customer information are deemed to be trade secrets under the PUTSA[.]” (ECF No. 159 at 33).

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Because the Court found in Section IV.c.ii, supra, that the Customer Information is indeed a trade
secret, there is no dispute that PUTSA preempts Count XII.
Accordingly, the Court will grant Defendants’ motion for summary judgment on this
claim. Hassell v. Budd Co., 374 F. Supp. 3d 433, 444 (E.D. Pa. 2019) (granting motions for summary
judgment “[t]o the extent that Plaintiff's claims are pre-empted”).
e. CIVIL CONSPIRACY (COUNT XID)
At Count XII, Plaintiffs claim that Defendants conspired with one another to achieve
certain unlawful purposes alleged at other counts—namely, (a) misappropriation of Plaintiffs’
Secret Recipes, Fundraising Methods, and Customer Information in violation of DTSA and
PUTSA; (b) Misappropriation of Plaintiffs’ confidential information; (c) Termination and/or
disruption of Plaintiffs’ business relationships with its members, employees, customers, vendors,
and landlord; (d) Breach of the Confidentiality Agreements of Chris and Jake; and (e) Defamation
of Plaintiffs’ businesses. (ECF No. 80 at 39-41).
For the following reasons, the Court will grant Defendants’ motion for summary
judgment on this claim in its entirety; that is, with respect to all of the unlawful purposes listed
above.
i. UNLAWFUL PURPOSES (a) & (b)
The Court held in Section IV.c.ii, supra, that the Customer Information at issue constituted

a trade secret, and it holds in Section IV.f, infra, that Plaintiffs’ Misappropriation of Confidential
Information claim is preempted by PUTSA because it is based on conduct constituting a
misappropriation of trade secrets under that statue. The Court likewise holds that Plaintiffs’ Civil

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Conspiracy claim is preempted as to “unlawful purposes” (a) and (b) listed above, as both involve
trade secret misappropriation as well.
As noted above, PUTSA preempts claims that are not (1) a contractual remedy, (2) a civil
remedy not based on the misappropriation of a trade secret, or (3) a criminal remedy. 12 Pa. Cons.
Stat. Ann. § 5308(a)-(b). The unlawful purposes at (a) and (b)—i.e., misappropriation of trade
secrets and confidential information—are both based on the misappropriation of trade secrets,
and neither is a contractual or criminal remedy. Therefore, PUTSA preempts Count XIII as to
these allegations.
ii, UNLAWFUL PURPOSES (c) & (e)
Plaintiffs have not opposed dismissal of their Tortious Interference with Business
Relationships claims at Counts IX and X, or of their Business Defamation claim at Count XI. (ECF
No. 159 at 23-24, 35). Because the conduct alleged in Counts IX, X, and XT is that which Plaintiffs
allege Defendants to have conspired in (c) and (e), the Court’s dismissal of Counts IX, X, and XI
leads the Court to dismiss Count XIII as to these unlawful purposes. Boyanowski v. Capital Area
Intermediate Unit, 215 F.3d 396, 407 (3d Cir. 2000) (“A verdict on civil conspiracy should yield to

a finding for the defendant on the underlying tort because the cause of action is wholly
subordinate to the underlying tort’s existence.”).
iii, UNLAWFUL PURPOSE (d)
As for (d), although Plaintiffs’ Breach of Contract claim against Chris and Jake at Count
XIV is based on misappropriation of the Customer Information that the Court has found to bea
trade secret, (ECF No. 80 at 42), PUTSA does not preempt “contractual remedies, whether or not
based upon misappropriation of a trade secret[.]” 12 Pa. Cons. Stat. Ann. § 5308(b)(1). Therefore,
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PUTSA does not preempt Plaintiffs’ Civil Conspiracy claim as to the unlawful purposes alleged
in Count XIV. Triage Consulting Grp., Inc. v. Implementation Mgmt. Assistance, Inc., No. 12-CV-4266,
2013 WL 3283462, at *4 (E.D. Pa. June 27, 2013) (“By its express terms, the PUTSA does not

preempt Plaintiff's breach of contract claim against [the defendant], regardless of whether it is
based on [the defendant’s] alleged misappropriation of Plaintiff's trade secrets.”).
However, Plaintiffs’ Civil Conspiracy claim still fails as to (d) because “[a] breach of
contract cannot serve as the basis for a civil conspiracy claim.” Assurity Life Ins. Co. v. Nicholas,
No. 14-CV-6522, 2015 WL 5737397, at *5 (E.D. Pa. Oct. 1, 2015). Plaintiffs could only have brought
a Civil Conspiracy claim relating to the Confidentiality Agreements based on a Tortious
Interference claim. However, the only Tortious Interference claim that Plaintiffs assert in this
matter is Count IV, which alleges that Chris, Jake, and others tortiously interfered with the
contractual relations Plaintiffs had with Mike, and not the other way around. (ECF No. 80 at 26—
27). It makes far more sense to understand (d)—“Breach of the Confidentiality Agreements of
Chris and Jake” —as referring to Plaintiffs’ claim that Chris and Jake violated the Confidentiality
Agreements at Count XIV. (Id. at 41-42). For this reason, Court will grant summary judgment to
Defendants on Count XIII as to this claim as well.
f. MISAPPROPRIATION OF CONFIDENTIAL INFORMATION (COUNT VI)
At Count VIL Plaintiffs assert that Defendants misappropriated confidential information,
(ECF No. 1 at 32-33). The Court will grant Defendants’ motion for summary judgment on this
claim because it is based on alleged misappropriation of the same pieces of information as the
Misappropriation of Trade Secrets claim (i.e., “the Customer List, information from the Google
Calendar, and information from Mike’s [Power House Subs] Phone”). (ECF No. 159 at 35). These

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pieces of information constitute trade secrets, see supra Section IV.c.ii, and a civil state law claim
is preempted by PUTSA to the extent it is based on conduct constituting misappropriation of
trade secrets. See 12 Pa. Cons. Stat. Ann. § 5308(a)-(b); Kimberton, 2011 WL 6046923 at *4.
Plaintiffs’ claim at Count VII is wholly based on such conduct, and the Court therefore finds it
wholly preempted.
g. CONVERSION (COUNT VII)
At Count VII, Plaintiffs claim that Mike converted the Chromebook laptop and a 2009
Ford Econoline. (ECF No. 80 at 33-34). However, Plaintiffs have informed the Court that they
do not oppose dismissal of this claim because Mike has since returned those items to PHCorp.
(ECF No. 159 at 35). The Court will therefore grant Defendants’ motion for summary judgment
on this claim.
h. BUSINESS DEFAMATION (COUNT XI)
At Count XI, Plaintiffs claim that Defendants defamed their business. (ECF No. 80 at 36-
37). However, Plaintiffs have informed the Court that they do not oppose dismissal of this claim.
(ECF No. 159 at 35). The Court will therefore grant Defendants’ motion for summary judgment
on this claim.
An appropriate order follows.

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IN THE UNITED STATES DISTRICT COURT
FOR THE WESTERN DISTRICT OF PENNSYLVANIA
REVZIP, LLC AND POWER HOUSE SUBS ) Case No. 3:19-cv-191
CORPORATE, LLC, )
)
Plaintiffs, ) JUDGE KIM R. GIBSON
)
v. )
)
MICHAEL MCDONNELL d/b/a )
SUBPREME FUNDRAISNG AND )
CATERING, CHRISTOPHER )
MCDONNELL, JACOB BEARER, DANA _ )
BEARER, SUPREME FUNDRAISING )
AND CATERING, LLC, POWER HOUSE __)
ENTERPRISES, LLC, POWER HOUSEI, )
LLC, AND POWER HOUSE CATERING, _ )
LLC, )
)
Defendants. )

ORDER
AND NOW, on this __/ __ day of May, 2023, the Court having considered Defendants’
Motion for Summary Judgment, (ECF No. 148), IT IS HEREBY ORDERED as follows:
(1) Defendants’ motion at ECF No. 148 is GRANTED on Counts VIL, VOL IX, X, XL, XIL XUL XV,
and XVI.
(2) Defendants’ motion at ECF No. 148 is DENIED on Counts I, I, and XIV.
(3) Defendants motion at ECF No. 148 is GRANTED IN PART on Count II as to the claims
against (i) John Wesley Cook; (ii) Power House Enterprises, Inc.; (iti) Power House II, LLC;
and (iv) Power House Catering, LLC. This motion is DENIED IN PART on Count II as to
the claims against Michael McDonnell.

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(4) Defendants’ motion at ECF No. 148 is GRANTED IN PART on Counts V and VI as to the
claims against (i) Dana Bearer and (ii) Jacob Bearer. This motion is DENIED IN PART on
Counts V and VI as to the claims against (i) Michael McDonnell and (ii) Christopher
McDonnell.
(5) Defendants’ motion at ECF No. 148 is GRANTED IN PART on Count IV as to the claims
against (i) Subpreme Fundraising and Catering; (ii) Supreme Fundraising and Catering, LLC;
and (iii) Georgie’s. This motion is DENIED IN PART on Count IV as to the claims against
(i) Christopher McDonnell; (ii) Dana Bearer; and (iii) Jacob Bearer.

BY THE COURT:

WA Pee MAPS
KIM R. GIBSON
UNITED STATES DISTRICT JUDGE

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Source: Frix Law Library, https://www.frixlaw.com/law-library/cases/10418984. Public record. Not legal advice.