HARRISBURG – A panel trio of judges from the Superior Court of Pennsylvania ruled that a Butler County court was incorrect when it ruled that an appeal in a breach of contract and commercial disparagement case was untimely, and remanded the action for further proceedings.
Superior Court judges John T. Bender, Anne E. Lazarus and Daniel D. McCaffery ruled on March 2 to reverse and remand the Butler County Court of Common Pleas’s decision, in Hook-N-Haul, LLC’s action against Michael Burr and Uncle Mike’s Towing & Recovery.
“In June of 2019, the appellant [Hook-N-Haul], an Ohio company, purchased the assets – including a customer list and phone number – from a Pennsylvania towing business, and began operating a towing and repair company in Butler County, Pennsylvania. Burr was a ‘senior employee’ at the former company. Appellant hired him as a driver and mechanic, who also had management responsibilities,” McCaffery said.
On June 24, 2019, ancillary to his employment with appellant, Burr signed a non-disclosure agreement, which precluded him from engaging in competition with appellant or using any confidential information obtained during his employment for a period of two years after any termination.
The agreement specified it would be governed by the laws of the state of Ohio.
Burr terminated his employment with the appellees on Sept. 12, 2019. Shortly thereafter, he started his own towing company, Uncle Mike’s. Appellant asserts Burr used ‘proprietary information’ he obtained as an employee of appellant to divert clients to his new company, and made ‘disparaging statements’ about appellant, which resulted in ‘financial damage.’
Hook-N-Haul, LLC filed a civil complaint against Burr and Uncle Mike’s Towing & Recovery on May 29, 2020, seeking both injunctive relief and money damages for claims of breach of contract, intentional interference with business relations, commercial disparagement, and unfair competition.
On June 23, 2020, appellant filed a motion for a preliminary injunction, requesting the court prohibit appellees from “operating their towing business in competition [with appellant] during the pendency of this action.”
But, the trial court entered an order denying appellant’s motion for preliminary injunction on June 23, 2020, finding that it was unqualified to apply Ohio law.
In the present case, appellant was required to file a notice of appeal within 30 days of the court’s order denying its motion for preliminary injunction — that is, by July 23, 2020. Therefore, the opposition argued that the appellant’s notice of appeal, docketed on July 30, 2020, was facially untimely.
However, Hook-N-Haul had its appeal docketed to the Superior Court on July 30, 2020. Weeks later, on Sept. 2, 2020, the Court ordered appellant to show cause why the appeal should not be quashed as untimely.
The appellant then filed a timely response.
“Appellant explained that it had confirmed with the trial court prothonotary, via telephone, that its notice of appeal was received one day before the July 23, 2020 filing deadline. However, appellant claims that on July 24, it was ‘informed that the notice of appeal would need to be re-submitted due to an issue with signatures thereupon.’ Appellant re-submitted the notice of appeal, which was not docketed until July 30,” McCaffery said.
The Superior Court ultimately declined to quash this appeal.
It cited in part, Pennsylvania Rule of Appellate Procedure 902: “Failure of an appellant to take any step other than the timely filing of a notice of appeal does not affect the validity of the appeal, but it is subject to such action as the appellate court deems appropriate, which may include, but is not limited to, remand of the matter to the lower court so that the omitted procedural step may be taken.”
“Here, appellant avers, and the trial court acknowledges, that it submitted a notice of appeal within the requisite 30-day period. However, due to an ‘issue with signatures,’ the document had to be re-submitted, and was ultimately docketed after the 30-day appeal period. Pursuant to Rule 905(a)(3), the trial court prothonotary should have time-stamped and docketed appellant’s notice of appeal on the date it was submitted, regardless of whether it lacked proper signatures. Accordingly, in our view, appellant’s signature error falls squarely within the exception of Rule 902,” McCaffery said.
“Appellant’s next two issues challenge the trial court’s decision to deny appellant’s motion for a preliminary injunction based upon a lack of jurisdiction, and without first conducting a hearing or receiving a response from appellees. We agree appellant is entitled to relief.”
The Superior Court said its review of the transcript from the June 23, 2020 hearing revealed that the trial court concluded it lacked jurisdiction to consider the appellant’s motion, based solely upon the Ohio law provision in the parties’ non-disclosure agreement.
However, the Court further noted that provision applies solely to the parties’ “choice of law” in construing the agreement – it does not state the parties agree to submit to the jurisdiction of the state of Ohio.
“Furthermore, we agree with appellant that the trial court had both personal and subject matter jurisdiction over this dispute. Burr resides in Pennsylvania and Uncle Mike’s is incorporated in Pennsylvania. We also agree that the trial court had subject matter jurisdiction over the action,” McCaffery said.
“Here, the trial court had jurisdiction to consider the terms of the non-disclosure contract executed by appellant and Burr. Appellant also contends the trial court erred when it denied the motion without first conducting a hearing, or receiving any response from appellees. Again, we agree.”
The Superior Court ultimately reversed and remanded the disposition of the case.
“Thus, because we conclude the trial court erred when it denied appellant’s motion for a preliminary injunction based upon a lack of jurisdiction, and without first conducting a hearing, we reverse the order, and remand for a proper hearing.”
Superior Court of Common Pleas case 814 WDA 2020
Butler County Court of Common Pleas case 20-10423
From the Pennsylvania Record: Reach Courts Reporter Nicholas Malfitano at nick.malfitano@therecordinc.com