USI Insurance Services v. Frieman, E. ( 2022 )

J-A24019-21
NON-PRECEDENTIAL DECISION - SEE SUPERIOR COURT I.O.P. 65.37
USI INSURANCE SERVICES : IN THE SUPERIOR COURT OF
NATIONAL, INC. F/K/A AND F/D/B/A : PENNSYLVANIA
WELLS FARGO INSURANCE :
SERVICES USA, INC. V. ERIC M. :
FRIEMAN AND RCM&D SELFINSURED :
SERVICES COMPANY, INC. D/B/A :
RCM&D :
:
Appellants : No. 2163 EDA 2020
:
USI INSURANCE SERVICES :
NATIONAL, INC. F/K/A AND F/D/B/A :
WELLS FARGO INSURANCE :
SERVICES USA, INC. :
:
Appellant :
:
V. ERIC M. FRIEMAN AND RCM&D :
SELFINSURED SERVICES COMPANY, :
INC. D/B/A RCM&D
Appeal from the Judgment Entered October 23, 2020
In the Court of Common Pleas of Philadelphia County Civil Division at
No(s): No. 180100954
USI INSURANCE SERVICES : IN THE SUPERIOR COURT OF
NATIONAL, INC. F/K/A AND F/D/B/A : PENNSYLVANIA
WELLS FARGO INSURANCE :
SERVICES USA, INC. V. ERIC M. :
FRIEMAN AND RCM&D SELFINSURED :
SERVICES COMPANY, INC. D/B/A :
RCM&D :
:
Appellants : No. 2211 EDA 2020
:
USI INSURANCE SERVICES :
NATIONAL, INC. F/K/A AND F/D/B/A :
WELLS FARGO INSURANCE :
SERVICES USA, INC. :
:
Appellant :
:
:
J-A24019-21
V. ERIC M. FRIEMAN AND RCM&D :
SELFINSURED SERVICES COMPANY,
INC. D/B/A RCM&D
Appeal from the Judgment Entered October 23, 2020
In the Court of Common Pleas of Philadelphia County Civil Division at
No(s): No. 180100954
BEFORE: LAZARUS, J., DUBOW, J., and PELLEGRINI, J.*
MEMORANDUM BY DUBOW, J.: FILED FEBRUARY 9, 2022
USI Insurance Service National, Inc., et al. (“USI”) and Eric M. Frieman
(“Frieman”) have filed these cross-appeals from the October 23, 2020
judgment entered after a bench trial in this action in which USI alleged that
Frieman breached a non-solicitation and non-compete agreement.1 After
careful review, we affirm.
The facts and procedural history are as follows. In 2008, Frieman began
working for USI’s predecessor-in-interest, Wells Fargo,2 as an insurance sales
executive for employer benefits. In the insurance industry, this position is
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* Retired Senior Judge assigned to the Superior Court.
1 USI also claimed that RCM&D Self-Insured Services Company, Inc.
(“RCM&D”) intentionally interfered with USI’s contractual relationship with
Frieman. For reasons explained below, the trial court found in favor of RCM&D
on this claim. RCM&D filed a notice of appeal from the trial court’s verdict,
but on December 3, 2020, discontinued its appeal by praecipe.
2 USI is the successor-in-interest to Wells Fargo, who was Frieman’s employer
from 2008-2016. On December 1, 2017, after Frieman had left Wells Fargo’s
employ, USI purchased all the equity interests of Wells Fargo. As USI
purchased Wells Fargo, Wells Fargo changed its name to “USI Insurance
Services International, Inc.” It is this entity who filed this breach of contract
action against Frieman. Therefore, throughout this memorandum, we refer to
Wells Fargo as USI.
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known as a “producer.” Producers are responsible for initiating new client
relationships on behalf of the firm. Once the client relationship is established,
a producer becomes the “face of the firm.”3
In 2010, USI required its producers to execute an agreement that
contained non-solicitation and non-compete provisions (the “Agreement”).
Frieman signed the Agreement on July 22, 2010. The Agreement prohibited
Frieman from, inter alia, soliciting and accepting business from clients he
serviced while employed by USI for a period of two years after leaving the
employment of USI for any reason. Relevantly, the Agreement also required
Frieman to “communicate the contents of . . . the non-solicitation and non-
disclosure sections of this Agreement to any prospective employer.”4 USI
provided Frieman with additional consideration in exchange for signing the
Agreement. Specifically, Frieman became eligible to participate in USI’s new
performance-based compensation plan (the “Producer Plan”), which entitled
him to receive an “[a]dditional 1% on [n]ew [r]evenue and [a]dditional 1%
on [n]et [n]ew [r]evenue” as defined in the Producer Plan.5
Frieman left his job at USI in November 2016, and began working for a
competitor, RCM&D Self-Insured Services Company, Inc. (“RCM&D”), also as
a producer. Prior to being hired, Frieman informed RCM&D that he had
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3 Trial Ct. Op., 4/15/21, at 5.
4 Agreement § IV. Injunctive Relief & Damages.
5 Producer Plan Appendix A.
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entered into the non-solicitation Agreement with USI but represented to
RCM&D that the Agreement was invalid and not enforceable because his
signature on it had been forged.6 RCM&D and Frieman had several
conversations about Frieman soliciting USI’s clients and RCM&D knew that
Frieman would solicit the clients whom he serviced while employed by USI to
bring their business to RCM&D. Early in his employment with RCM&D, Frieman
created and submitted to RCM&D a business plan in which he identified as one
of his business objectives soliciting the clients whom he serviced while
employed by USI to bring their business to RCM&D.
Frieman proceeded to solicit 18 clients with whom he worked while
employed by USI, and those clients subsequently moved their business to
RCMD. As a result, USI lost approximately $1.1 million per year in revenue.
On January 5, 2018, USI filed a complaint raising one count of Breach
of Contract against Frieman and one count of Intentional Interference with
Contract against RCM&D. Following discovery and the filing of pre-trial
motions in limine, on July 15, 2019, this case proceeded to a two-day bench
trial.
Relevantly, to refute Frieman’s assertion that his signature on the
Agreement had been forged, USI presented the testimony of, and a report
authored by, J. Wright Leonard, a forensic document examiner. Ms Leonard,
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6 Despite taking the position that his signature had been forged, Frieman
admitted that even after discovering the supposedly forged document in his
employment file, he did not report the alleged forgery to anyone at USI. N.T.
Trial, 7/15/19, at 101.
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whom the trial court qualified as an expert in document and handwriting
examination and analysis, described the similarities and differences between
Frieman’s signature on the Agreement and the signatures on a September 1,
2005 deed and an October 4, 2010 mortgage. Ms. Leonard testified that there
were “indications” that the same person who signed the Agreement also
signed the deed and the mortgage.7 She explained that she used the term
“indications” as a qualified opinion because of the limited number of
comparison signature samples available to her and because she did not have
the original, signed document to review.8
Frieman testified that he did not sign the Agreement and that he told
prospective employers that his signature on the Agreement had been forged.
Frieman denied that he has two styles of signature, and denied that the
signature on the September 1, 2005 deed was his. He did, however, admit
that he previously owned the property described in the September 1, 2005
deed, that he sold the property to the grantees listed on the deed, and that
he sold the property listed in the deed for the amount listed on it. Frieman
also denied placing his signature on the October 4, 2010 mortgage whereby
Frieman and his wife borrowed $147,000 from Wells Fargo Bank. He did
admit, however, that he received the $147,000 from Wells Fargo for the
mortgage and that he has been paying back the mortgage.
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7 N.T. Trial, 7/15/19, at 154-56.
8 Id. at 155-56, 163
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With respect to the calculation of damages, USI presented the testimony
of two expert witnesses: Robert Bryan Tilden, Jr., an expert in the retail
insurance brokerage industry and agency evaluation; and Francis Brulenski,
an expert in the evaluation and calculation of economic damages. 9 Mr.
Tilden’s testimony pertained to USI’s “retention rate” on the “book of
business” serviced by USI as an average of 89%. Based on this average
retention rate, Mr. Brulenski opined as to the amount of loss suffered by USI
as a result of Frieman’s breach of the Agreement over a period of 10 years.
USI also submitted evidence of the gross commissions received by RCM&D for
the 18 clients Frieman solicited in violation of the agreement totaling
$1,073,560.00.
On June 23, 2020, after considering the testimony and evidence
presented at trial and the parties’ post-trial submissions, the trial court
entered a verdict in favor of USI on its breach of contract claim against
Frieman. The court found that the non-solicitation Agreement between
Frieman and USI was enforceable, Frieman has two styles of signature that
he uses interchangeably, Frieman’s signature had not been forged, and
Frieman had breached the Agreement when he solicited USI’s customers in
his subsequent employment with RCM&D. The court awarded USI
$1,073,560.21 in damages. With respect to USI’s intentional interference with
contract claim against RCM&D, the court determined that RCM&D reasonably
____________________________________________
9 The trial court also admitted into evidence expert reports authored by these
witnesses.
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believed that the Agreement was unenforceable based on Frieman’s
representations that someone had forged his signature on the Agreement and
that RCM&D had not taken purposeful action to interfere with the contractual
relationship between USI and Frieman. The court, therefore, entered a verdict
in favor or RCM&D on this claim.
On July 2, 2020, USI filed a Motion to Mold the Verdict to include pre-
judgment interest. All parties subsequently filed post-trial motions. On
August 14, 2020, the trial court held a hearing on the motions. On October
17, 2020, the trial court entered three separate orders denying each of the
outstanding motions.
On October 23, 2020, the trial court prothonotary entered judgment on
the verdict and this appeal followed. The parties and the trial court have
complied with Pa.R.A.P. 1925.
USI raises the following issues on appeal:
1. Did the trial court err as a matter of law in concluding that USI
did not meet its burden to show that RCM&D interfered with
USI’s non-solicitation contract with Frieman, even though the
court found that the evidence demonstrated that RCM&D (a)
knew about Frieman’s non-solicitation obligations, (b)
expected Frieman to solicit prohibited clients upon joining
RCM&D, (c) knew that Frieman actively solicited the business
of eighteen (18) prohibited clients, and (d) facilitated the
transfer of the business of prohibited clients to RCM&D?
2. Did the trial court err in refusing to award pre-judgment
interest on the damages awarded to USI and against Frieman
for breach of contract where the damages awarded constituted
lost profits and USI was deprived of the use of those funds due
to Frieman’s breaches?
USI’s Brief at 3-4.
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Frieman and RCMD raise the following issues on appeal:
[1.] Did the trial court err by relieving USI of its burden to
establish an enforceable contract[] by relying on Appellant’s
expert’s testimony where she testified that there were mere
“indications” that Frieman signed the agreements, which she
admitted was a “very weak opinion” and could not testify that
Frieman signed the agreements with a reasonable degree of
professional certainty[] and where [USI] was unable to produce
an original version of the signed agreements, did not present any
witness to testify to Frieman signing the agreements, and failed
to present any evidence at trial that Frieman received, reviewed,
negotiated, and or returned the agreements to Appellant?
[2.] Did the trial court err in finding that [Frieman’s] illusory
change in compensation and resulting payment of $1,760 was
sufficient “new and valuable” consideration as to bind [Frieman]
to a post-employment restrictive covenant where the agreements
said that Frieman would receive the new consideration even if he
didn’t sign, where the new agreement lowered commissions from
other lines of business, and which imposed new thresholds before
Frieman would be paid a commission on new business—potentially
resulting in Frieman actually receiving less compensation, where
the agreements were presented at a time where Frieman could
not develop and new business that would be payable under the
agreements, and where the $1,760 payment restricted Frieman
from soliciting his million dollar book of business, which he could
have sold for more than $900k, and where the $1,760 payment
was approximately half of one percent (0.5%) of Frieman’s
commission-based salary?
[3.] Did the trial court err by awarding in excess of one million
dollars ($1,000,000.00) in damages where [] Frieman developed
seventeen (17) out of the eighteen (18) clients prior to joining
[USI], where the revenue did not require investment by [USI] to
generate that business, where [Frieman] was not previously
bound by any restrictive covenants relating to that business, and
where [USI’s] only protectable interest in Frieman’s clients
extended to one client (CSX Logistics) that Frieman developed
while employed and being paid by [USI], the damages for which
[USI] admits was between forty thousand dollars ($40,000) and
fifty[-]five thousand dollars ($55,000.00)?
[4.] Did the trial court err as a matter of law and/or abuse its
discretion by awarding damages in excess of one million dollars
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($1,000,000.00) as the total gross commission received by
RCM&D without any deduction for the costs that USI would have
incurred in generating the revenue if the clients didn’t follow
Frieman to his new employer, without taking into account actual
commissions received by Frieman from the clients, or calculating
the actual damage (or loss of profits) suffered by [USI] as a result
of Frieman diverting those clients?
Frieman’s Brief at 1-4.
Appeal of USI
Intentional Interference with Contract Claim
USI asserts that the trial court erred in not entering judgment
notwithstanding the verdict (“JNOV”) in its favor on its intentional interference
with contract claim against RCMD. We review the denial of a request for JNOV
for an error of law that controlled the outcome of the case or an abuse of
discretion. Hutchinson v. Penske Truck Leasing Co., 876 A.2d 978, 984
(Pa. Super. 2005). In this context, an “[a]buse of discretion occurs if the trial
court renders a judgment that is manifestly unreasonable, arbitrary or
capricious; that fails to apply the law; or that is motivated by partiality,
prejudice, bias or ill-will.” Id..
When reviewing the denial of a request for JNOV, the appellate court
examines the evidence in the light most favorable to the verdict winner.
Thomas Jefferson Univ. v. Wapner, 903 A.2d 565, 569 (Pa. Super. 2006).
Thus, “the grant of [JNOV] should only be entered in a clear case[.]” Id.“Questions of credibility and conflicts in the evidence are for the trial court to
resolve and the reviewing court should not reweigh the evidence. Absent an
abuse of discretion, the trial court’s determination will not be disturbed.” Holt
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v. Navarro, 932 A.2d 915, 919 (Pa. Super. 2007) (citation omitted). Our
scope of review over questions of law, however, is plenary. Buckley v
Exodus Transit & Storage Corp., 744 A.2d 298, 305 (Pa. Super. 1999).
There are two bases upon which a movant is entitled to JNOV: “one, the
movant is entitled to judgment as a matter of law, and/or two, the evidence
was such that no two reasonable minds could disagree that the outcome
should have been rendered in favor of the movant.” Rohm and Haas Co. v.
Continental Cas. Co., 781 A.2d 1172, 1176 (Pa. 2001) (citation omitted).
When an appellant challenges a verdict on this latter basis, we will grant relief
only “when the [] verdict is so contrary to the evidence as to shock one’s
sense of justice.” Sears, Roebuck & Co. v. 69th St. Retail Mall, L.P., 126
A.3d 959, 967 (Pa. Super. 2015) (citation omitted).
USI claims that the court misapplied the law to the evidence when it
concluded that, although USI presented evidence that RCM&D was aware of
Frieman’s contractual obligations under the non-solicitation Agreement, USI
failed to present evidence that RCMD took purposeful faction to interfere with
those contractual obligations. USI’s Brief at 22-23. USI argues, to the
contrary, that the evidence at trial demonstrated that RCM&D intentionally
and purposefully engaged in conduct designed to interfere with Frieman’s
contractual obligations under the Agreement, expected and instructed
Frieman to solicit USI clients to move their business to RCM&D, and took steps
to provide RCM&D security in case a court determined that the Agreement
was valid. Id. at 23-24. USI argues that this evidence demonstrates that
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RCM&D was not passively indifferent to Frieman’s contractual obligations, but
rather it calculated its actions to interfere with them. Id. at 25-26.
To prevail on a claim for intentional interference with contract, a plaintiff
is required to prove, by a preponderance of the evidence four elements: (1)
the existence of a contractual relationship between the complainant and a
third party; (2) purposeful action on the part of the defendant intended to
harm the existing relationship; (3) the absence of privilege or justification on
the part of the defendant; and (4) actual harm to the complainant as a result
of the defendant’s conduct. Maverick Steel Co. v. Dick Corp./Barton
Malow, 54 A.3d 352, 354-55 (Pa. Super. 2012).
“The second element requires proof that the defendant acted for the
specific purpose of causing harm to the plaintiff [and] is closely
intertwined with the third element, which requires a showing that [the
defendant]’s actions were not privileged.” Empire Trucking Co. v. Reading
Anthracite Coal Co., 71 A.3d 923, 933–34 (Pa. Super. 2013) (internal
citation and quotation marks omitted, emphasis added). See also Glenn v.
Point Park College, 272 A.2d 895, 899 (Pa. 1971) (“It must be emphasized
that the tort we are considering is an intentional one: the actor is acting as he
does [f]or the purpose of causing harm to the plaintiff.”). “Thus, in order to
succeed in a cause of action for tortious interference with a contract, a plaintiff
must prove not only that a defendant acted intentionally to harm the plaintiff,
but also that those actions were improper.” Empire Trucking, 71 A.3d at
934.
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After considering the evidence presented by USI in support of this claim,
the trial court concluded that USI “offered no evidence of purposeful action on
the part of RCM&D that was specifically intended to harm the contractual
relationship between USI and Frieman.” Trial Ct. Op., 6/20/20, at 13. The
trial court observed that the record evidence established that: (1) RCM&D had
knowledge of the Agreement, but believed that it was invalid because Frieman
had told RCM&D that his signature had been forged; (2) RCM&D had
knowledge that Frieman intentionally violated the potentially-valid non-
solicitation Agreement; (3) RCMD and Frieman had several conversations
about Frieman soliciting the clients he serviced while employed by USI to
migrate to RCM&D; and (4) Frieman created and submitted to RCM&D a plan
of his business goals in which he listed migrating his book of USI clients to
RCM&D. Trial Ct. Op., 4/15/21, at 24-25. Nevertheless, the court found that,
notwithstanding that RCM&D “benefitted from Frieman’s breach [of the
Agreement] by receiving the solicited clients’ business, and had knowledge of
the potential violation, USI failed to establish any action taken by RCM&D to
interfere with the Agreement.” Id. at 25. Thus, the court concluded that USI
failed to satisfy the second element of the tort of intentional interference with
contract, that is, failed to establish that RCM&D acted for the specific purpose
of causing harm to USI.
Evaluating the evidence in the light most favorable to RCM&D as we
must, we agree with the trial court that despite offering proof that RCM&D
was aware of the Agreement between USI and Frieman and benefitted from
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Frieman’s breach of the Agreement, USI failed to prove by a preponderance
of the evidence that RCM&D acted with the specific purpose of causing harm
to USI. Accordingly, the trial court did not abuse its discretion in denying
USI’s request for JNOV on its intentional interference with contract claim.10
Denial of Claim for Liquidated Damages
In its second issue, USI claims that the trial court erred in denying its
motion to mold the verdict to include prejudgment interest on its verdict
against Frieman.11 USI’s Brief at 31-41. “Our review of an award of pre-
judgment interest is for abuse of discretion.” Cresci Constr. Serv., Inc. v.
Martin, 64 A.3d 254, 258 (Pa. Super. 2013) (citation omitted). An abuse of
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10 USI also claims that the court erred in concluding that USI did not prove
the third element of its intentional interference with contract claim, i.e. that
RCM&D’s actions were “improper,” and in ratifying RCM&D’s conduct, which
USI asserts violates the “rules of the game.” Id. at 26-29. This claim is moot
in light of our conclusion that the trial court did not err in determining that
USI failed to adduce sufficient evidence to prove the second element of the
claim.
11In support of this claim, USI asserts that the trial court abused its discretion
by misapplying the four factors set forth in Feather v. United Mine Workers
of Am., 711 F.2d 530, 540 (3d Cir. 1983) (explaining that, in determining
whether an award of prejudgment interest is appropriate, a court must
consider: (1) whether the claimant has been less than diligent in prosecuting
the action; (2) whether the defendant has been unjustly enriched; (3) whether
an award would be compensatory; and (4) whether countervailing equitable
considerations militate against a surcharge), and presents argument in its
Brief pertaining to the four Feather factors including citation primarily to
extra-jurisdictional authority. See USI’s Brief at 31-40. We observe,
however, that the Feather four-factor guide has not been adopted by
Pennsylvania courts and that we are not bound by the decisions of the federal
courts. McEwing v. Lititz Mut. Ins. Co.,77 A.3d 639, 648 n.7 (Pa. Super.
2013). We, thus, confine our analysis to the argument presented by USI and
set forth infra that is grounded in Pennsylvania law.
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discretion is more than a mere error in judgment; rather, it requires a finding
that the trial court overrode or misapplied the law, or that the decision was
manifestly unreasonable or the result of bias, prejudice, partiality, or ill-will
as evidenced by the record. Kraisinger v. Kraisinger, 34 A.3d 168, 175
(Pa. Super. 2011).
Where the contract at issue sets forth a liquidated sum, pre-judgment
interest is awarded as a matter of right. Somerset Cmty Hosp. v. Allan B.
Mitchell & Assocs, Inc., 685 A.2d 141, 148 (Pa. Super. 1996). Where,
however, as here, the breach of contract damages are unliquidated, an award
of pre-judgment interest is left to the discretion of the trial court, in light of
all the circumstances. See Cresci, supra at 264; Frank B. Bozzo, Inc. v.
Electric Weld Div. of Fort Pitt Div. of Spang Indus., Inc., 498 A.2d 895,
901 (Pa. Super. 1985).
“[C]ompensation for delay in the nature of interest may [] be awarded
if, in the circumstance of the case[,] justice so requires, . . . [such that] the
plaintiff will not be fully compensated unless he receives compensation for the
delay.” Bozzo, 498 A.2d at 896, 900 (citation and internal quotation marks
omitted). In other words, the plaintiff has suffered injuries that, for the
plaintiff to be fully compensated for the loss from the breach, requires an
interest award “added for the delay in obtaining the award of damages.” Id.
at 899 (citation omitted).
“The basic premise underlying the award of prejudgment interest to a
party centers on the fact that the breaching party has deprived the injured
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party of using interest accrued on money which was rightfully due and owing
to the injured party.” Widmer Eng’g, Inc. v. Dufalla, 837 A.2d 459 (Pa.
Super. 2003). To determine whether the circumstances of the case warrant
an award of prejudgment interest, the court must consider whether the fault
for nonpayment rests with the defendant or the plaintiff. Marrazzo v.
Scranton Nehi Bottling Co., 263 A.2d 336, 338 (Pa. 1970). Where the fault
of nonpayment rests with the defendant, an award to the plaintiff of
prejudgment interest is appropriate. Id.Section 354 of the Restatement (Second) of Contracts addresses the
recovery of prejudgment interest and has been adopted as the law of this
Commonwealth. See Fernandez v. Levin, 548 A.2d 1191, 1193 (Pa. 1988).
Under subsection (2) of Section 354, if the sum due as a result of the breach
of contract “cannot be determined by the party in breach with sufficient
certainty to enable him to make a proper tender,” the decision of whether to
award prejudgment interest is left to judicial discretion[.]” Restatement
(Second) of Contracts § 354 (cmt. d).
USI argues that “all fault for the consequential damages of Frieman’s
breach plainly rests with him[]” because: (1) he did not offer to compensate
USI for the losses his breach of the Agreement caused; (2) he did not attempt
to mitigate USI’s losses; (3) he maintained his position that the Agreement
was invalid in the face of compelling evidence to the contrary, which “forced
USI to litigate this matter through trial and to incur the considerable costs and
expenses associated therewith.” USI’s Brief at 40-41.
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The trial court explained its denial of USI’s motion to mold the verdict
to include prejudgment interest as follows:
This court’s award has sufficiently and fully compensated USI for
its losses from the clients solicited by Frieman. The award of
interest as compensation for delay is the exception under
Pennsylvania law and is used only in the most severe
circumstances where the breaching party is at fault for not settling
the dispute by paying the amount owed. Here, in a non-
compete/non-solicit breach of contract, Frieman could not have
immediately paid to USI an amount for the clients. There is no
established method by which a company’s good will from clients
is calculated into dollar amounts, so Frieman is not at fault for the
delay in compensation to USI. Frieman could not have paid
compensation to USI at the time of the breach because any
damages or loss involved several disputed factors that would
change the calculated amount. Such changes include the time
period for which each client stayed with USI, the amount of the
revenue or profits generated by the clients, and the amounts paid
by Frieman’s new employer to secure those clients. Moreover, the
nature of this breach, that is, a non-compete/non-solicit is not a
type of purposeful delay of non-payment, but instead merely a
dispute that required litigation to determine the amount lost.
Trial Ct. Op., 12/13/21, at 7 (unnecessary punctuation omitted).
In other words, the trial court concluded that the amount of damages
due as a result of Frieman’s breach of the Agreement was not sufficiently
definite to allow him to make a proper determination of payment. Thus, the
award of prejudgment interest was left to the trial court’s discretion. In
exercising its discretion, the trial court explained that because litigation was
required to determine the amount lost, the fault for the delay in payment of
the award did not rest with Frieman. As such, the trial court determined that
USI was not entitled to prejudgment interest. We find no abuse of discretion
in that determination. USI is not, therefore, entitled to relief on this claim.
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Frieman’s Appeal
Weight of the Evidence
In his first issue, Frieman claims that the trial court erred in finding that
USI met its burden to prove that the Agreement was valid and enforceable.
In particular, Frieman asserts that USI did not establish that there was the
requisite “meeting of the minds” between USI and Frieman because it failed
to prove that Frieman ever received, negotiated, agreed to, or signed the
Agreement, did not produce an original version of the Agreement, did not
provide testimony from a witness who saw Frieman sign the agreement, and,
instead only provided the testimony of USI’s Executive Vice President, Peter
Gilbertson, who did not work for USI at the relevant time. Frieman’s Brief at
36-40. Frieman further argues that the trial court erroneously relied on USI’s
expert’s qualified opinion to determine that the signature on the Agreement
was, in fact, Frieman’s. Id. at 40-44. These claims essentially challenge the
weight the trial court gave to the evidence.
When reviewing a weight claim, we are mindful of the following
principles:
Appellate review of a weight claim is a review of the [trial court’s]
exercise of discretion, not of the underlying question of whether
the verdict is against the weight of the evidence. Because the trial
judge has had the opportunity to hear and see the evidence
presented, an appellate court will give the gravest consideration
to the findings and reasons advanced by the trial judge when
reviewing a trial court’s determination that the verdict is against
the weight of the evidence. One of the least assailable reasons
for granting or denying a new trial is the lower court’s conviction
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that the verdict was or was not against the weight of the evidence
and that a new trial should be granted in the interest of justice.
In re Estate of Smaling, 80 A.3d 485, 490 (Pa. Super. 2013) (citing
Commonwealth v. Clay, 64 A.3d 1049, 1055 (Pa. 2013)).
The trial court may award a new trial “only when the jury’s verdict is so
contrary to the evidence as to shock one’s sense of justice. In determining
whether this standard has been met, appellate review is limited to whether
the trial judge’s discretion was properly exercised, and relief will only be
granted where the facts and inferences of record disclose a palpable abuse of
discretion.” Samuel–Bassett v. Kia Motors Am., Inc., 34 A.3d 1, 39 (Pa.
2011) (citation omitted). The “factfinder is free to believe all, part, or none
of the evidence and to determine the credibility of the witnesses. Id. (citation
omitted). A mere conflict in testimony is not a sufficient basis for a new trial.
Winschel v. Jain, 925 A.2d 783, 788 (Pa. Super. 2007).
Frieman challenges the weight the trial court gave to the testimony of
USI’s witnesses, especially its expert witness, and the court’s failure to credit
Frieman’s own testimony that his signature had been forged. In reaching its
decision to find that the Agreement was valid and enforceable against
Frieman, the court reviewed the evidence, which was conflicting, and credited
USI’s evidence. In particular, the trial court considered the exemplars of
Frieman’s signature on the Agreement, a deed, and a mortgage agreement
provided as evidence by USI, and the testimony of USI’s expert witness
pertaining to these exemplars, and expressly found that the Frieman’s
testimony concerning the signature exemplars lacked credibility and
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demonstrated that Frieman had two styles of signature that he used
interchangeably. Trial Ct. Op., 4/15/21, at 11-16. Based on the weight it gave
to the evidence and its credibility determinations, the court concluded that
Frieman failed to prove that his signature on the Agreement was forged and,
thus, it was enforceable against him. We cannot and will not reweigh the
evidence or override the trial court’s credibility determinations. Frieman is,
therefore, not entitled to relief on this claim.
Adequacy of the New Consideration
In his second issue, Frieman asserts that the Agreement was
unenforceable because USI did not pay him adequate new and valuable
consideration to sign it. Frieman’s Brief at 45-55. Frieman claims that the
trial court erred by failing to consider the sufficiency of the consideration
offered to Frieman—which ultimately amounted to $1,760—to sign the
Agreement and ignored that the Agreement purportedly provided that Frieman
would receive the adjustment in pay whether or not he signed the
Agreement.12 Id. Frieman argues that this consideration was illusory, de
____________________________________________
12 This claim is belied by the testimony of USI’s regional finance manager,
John Kluxen, that USI would not have calculated, much less paid, Frieman the
new consideration if Frieman had not signed the Agreement. N.T., 7/15/19,
at 1854-85.
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minimus, and insufficient to bind an employee making in excess of $300,000
a year with a book of business worth in excess of $900,000.13 Id. at 49-55.
Where, as here, a non-compete agreement is required after an
employee has already begun employment,
it is enforceable only if the employee receives “new” and valuable
consideration — that is, some corresponding benefit or a favorable
change in employment status. Sufficient new and valuable
consideration has been found by our courts to include, inter alia,
a promotion, a change from part-time to full-time employment, or
even a change to a compensation package of bonuses, insurance
benefits, and severance benefits. Without new and valuable
consideration, a restrictive covenant is unenforceable.
Socko v. Mid-Atl. Sys. Of CPA, Inc., 126 A.3d 1266, 1275 (Pa. 2015)
(citations and footnotes omitted). See also Davis & Warde, Inc. v. Tripodi,
616 A.2d 1384, 1388 (Pa. Super. 1992) (concluding execution of non-compete
clauses by former at-will employees was supported by adequate
consideration; “[n]ot only were they offered continued employment with new
responsibilities, but each was given a cash payment, a guarantee of certain
job benefits, including a favorable change in the employer’s automobile
reimbursement policy, and a guaranteed severance benefit in the event of
termination”).
____________________________________________
13Within this issue, Frieman has also asserted that “the restrictions are not in
furtherance of protecting [USI’s] legitimate interests.” Frieman’s Brief at 55-
59. We decline to address this claim as it does not correspond with, and is
not fairly suggested by, the issue as presented in Frieman’s Statement of
Questions Involved. Graziani v. Randolph, 856 A.2d 1212, 1216 (Pa. Super.
2004); Pa.R.A.P. 2116(a) (stating, inter alia, “[n]o question will be considered
unless it is stated in the statement of questions involved or is fairly suggested
thereby”).
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“The adequacy of consideration to support a restrictive covenant is an
issue of law.” Tripodi, 616 A.2d at 1387. Pennsylvania courts have not
established a bright-line rule governing the minimum quantum of
consideration required to validate a post-employment restrictive covenant;
however, our courts have found consideration for a new restrictive covenant
obligation to be insufficient only in the clearest circumstances where the
consideration was truly illusory or de minimis. See, e.g., George W. Kistler,
Inc. v. O’Brien, 347 A.2d 311, 314-16 (Pa. 1975) (payment of $1.00 and
continued employment was insufficient); Markson Bros. v. Redick, 66 A.2d
218, 221 (Pa. Super. 1949) (reducing terms of oral employment agreement
to writing without any change to terms was not adequate consideration to
support restrictive covenants).
In contrast, this Court has held that a contractual promise that confers
upon an employee an opportunity to make more money in the future is
sufficient consideration to support a new restrictive covenant. See, e.g.,
Wainwright’s Travel Serv., Inc. v. Schmolk, 500 A.2d 476, 478 (Pa.
Super. 1985) (holding that an employee’s receipt of ownership interest in her
company, which brought the potential for future gains, was a beneficial change
in employment that was adequate consideration for her restrictive covenant);
Modern Laundry & Dry Cleaning Co. v. Farrer, 536 A.2d 409, 412 (Pa.
Super. 1988) (holding that the employee’s “opportunity to increase his
earnings due to his change in employment status is sufficient consideration to
support the restrictive covenant in his employment contract.”).
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The trial court opined that: “Frieman received new and valuable
consideration in the form of added compensation in exchange for signing the
Agreement, as reflected by an increase in his commission rate for the 2010
plan year, which included an added one per cent (1%) of any new revenue,
plus an extra one percent (1%) of the net new revenue.” Trial Ct. Op.,
4/15/21, at 18. It concluded that “[t]he increased commission rates on new
revenue and also on net new revenue is a favorable change in Frieman’s
employment terms and is unlike the ‘clearest circumstances’ where
Pennsylvania courts found the consideration ‘truly illusory or de minimis.’” Id.
at 19.
Given the foregoing, we find no basis to disturb the trial court’s
conclusion that the increased commission rates offered to Frieman in
exchange for his assent to be bound by the Agreement—resulting in a
payment of nearly $2,000—constituted new and valuable consideration.
Accordingly, Frieman is not entitled to relief on this claim.
Damages/Remittitur
In his final two issues, Frieman challenges the trial court’s denial of his
request for remittitur.14 He asserts that the court committed reversible error
when it calculated USI’s damages by considering the revenue generated by
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14Frieman has presented only one section of argument in support of his third
and fourth issues in contravention of Pa.R.A.P. 2119(a) (requiring that “[t]he
argument [] be divided into as many parts as there are questions to be
argued[.]”). We, thus, consider these issues together and address only the
arguments set forth and properly developed in this section.
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RCMD from 18 clients misappropriated by Frieman without considering the
“legitimate interests the agreement sought to protect[,]” i.e., the loss of CLX
Logistics as a USI client. Frieman’s Brief at 59-60, 61-63. He argues that,
because USI conceded that Frieman already had 17 of the 18 clients prior to
his employment by USI and USI did not incur any expenses to develop those
17 clients, USI’s only legitimate protectable interest causally related to
Frieman’s breach is the loss of the one client developed by Frieman during his
USI employment—CLX Logistics. Id. at 61-62. He further claims that the
damages award is not causally related to Frieman’s breach because they do
not account for the costs that USI would have incurred in generating the
revenue or the actual lost profits suffered by USI because of Frieman diverting
USI’s clients. Id. at 60-61. Last, Frieman asserts that the damages award is
excessive. Id. at 64-65.
The decision to grant a new trial limited to damages or a remittitur is
within the trial court’s discretion. Tong-Summerford v. Abington Mem’l
Hosp., 190 A.3d 631, 653 (Pa. Super. 2018). An appellate court will not find
a verdict excessive unless it is so grossly excessive as to shock the court’s
sense of justice. Whitaker v. Frankford Hosp. of City of Phila., 984 A.2d
512, 523 (Pa. Super. 2009) (citation omitted).
This Court has consistently held that:
The determination of damages is a factual question to be decided
by the fact-finder. The fact-finder must assess the testimony, by
weighing the evidence and determining its credibility, and by
accepting or rejecting the estimates of the damages given by the
witnesses. Although the fact-finder may not render a verdict
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based on sheer conjecture or guesswork, it may use a measure of
speculation in estimating damages. The fact-finder may make a
just and reasonable estimate of the damage based on relevant
data, and in such circumstances may act on probable, inferential,
as well as direct and positive proof.
Discover Bank v. Booker, 259 A.3d. 493, 497 (Pa. Super. 2021) (quoting
Judge Tech. Servs., Inc. v. Clancy, 813 A.2d 879, 885 (Pa. Super. 2002).
We afford the trial courts considerable deference to calculate damages.
Dibish v. Ameriprise Fin., Inc., 134 A.3d 1079, 1089 (Pa. Super. 2016).
Furthermore, we are mindful that:
Damages for breach of contract should place the aggrieved party
[] as nearly as possible in the same position it would have
occupied if there had been no breach. To that end, the aggrieved
party may recover all damages, provided (1) they were such as
would naturally and ordinarily result from the breach, or (2) they
were reasonably foreseeable and within the contemplation of the
parties at the time they made the contract, and (3) they can be
proved with reasonable certainty.
Ely v. Susquehanna Aquacultures, Inc., 130 A.3d 6, 10 (Pa. Super. 2015)
(brackets, citation, and internal quotation marks omitted).
We first address Frieman’s claim that USI had only a “legitimate
protectable interest” in the business of USX Logistics because it was the only
one of the 18 clients whose business Frieman improperly diverted to RCM&D
that Frieman actually developed as a client during his period of employment
with USI.
As the trial court aptly noted, we recognize that “trade secrets of an
employer, customer goodwill and specialized training and skills required from
the employer are all legitimate interests protectable through a general
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restrictive covenant.” WMI Grp., Inc. v. Fox., 109 A.3d 740, 749 (Pa. Super.
2015). Additional protectable business interests of the employer include those
that “relate to an employee’s special skills; the safeguarding of customer
goodwill; proprietary business information, including processes, trade secrets,
and inventions; as well as the time and resources the employer has invested
in the training of its employees.” Socko, 126 A.3d at 1273.
Thus, as this non-exhaustive list makes clear, the time and expense to
develop a client is not the only legitimate protectable business interest an
employer may have and seek to protect through a restrictive covenant. The
trial court found that USI designed the agreement to protect its legitimate
business interests including: “the customer and client goodwill of USI in the
clients whom Frieman serviced while employed with [USI], and the time and
resources invested in training Frieman and maintaining its clients.” Trial Ct.
Op., 4/15/21, at 21 (citing to N.T. 7/15/19, at 33, 35-36, where Peter
Gilbertson, USI’s Executive Vice President, explained the purpose of the
Agreement is to recognize the investment that USI makes over time in training
its employees and maintaining its clients and that Frieman’s clients are
“complex” and “require typically a lot more resources beyond the producer.
There’s a team of people every day, day in and day out [that] are interacting
with those clients. And those assets are delivered at a considerable expense
and investment of the firm.”). We agree and, therefore, conclude that
Frieman’s claim that USI had no legitimate business interest in clients
developed by Frieman prior to his USI employment fails.
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In addressing Frieman’s claim that the trial court’s damages award is
excessive, the trial court explained that it based its damages calculation on
the credible testimony and reports of USI’s expert witnesses Mr. Tilden and
Mr. Brulenski. We cannot and will not reweigh the experts’ testimony or the
trial court’s conclusions based on the testimony. We, thus, conclude that the
award of damages is within the range of USI’s harm, was supported by
competent evidence, and is not shocking in light of Frieman’s misappropriation
of 18 clients from USI. The trial court did not, therefore, abuse its discretion
in denying Frieman’s request for remittitur.
Judgment affirmed.
Judgment Entered.
Joseph D. Seletyn, Esq.
Prothonotary
Date: 2/09/2022
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