BBB Industries v. Cardone Industries ( 2022 )

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NON-PRECEDENTIAL DECISION - SEE SUPERIOR COURT I.O.P. 65.37
BBB INDUSTRIES, LLC., A DELAWARE : IN THE SUPERIOR COURT OF
LIMITED LIABILITY COMPANY : PENNSYLVANIA
:
Appellant :
:
:
v. :
:
: No. 3003 EDA 2019
CARDONE INDUSTRIES, INC. A :
PENNSYLVANIA CORPORATION :
Appeal from the Order Entered September 11, 2019
In the Court of Common Pleas of Philadelphia County Civil Division at
No(s): No. 160801387
BEFORE: PANELLA, P.J., OLSON, J., and COLINS, J.*
MEMORANDUM BY COLINS, J.: FILED APRIL 12, 2022
BBB Industries, LLC (“BBB”) appeals from the September 11, 2019 order
of the trial court granting summary judgment in favor of Cardone Industries,
Inc. (“Cardone”) and dismissing BBB’s complaint asserting claims against
Cardone under the Pennsylvania Uniform Trade Secrets Act (“PUTSA”).1 BBB
also challenges trial court rulings precluding two of its proposed expert
witnesses and prohibiting BBB from raising certain theories of
misappropriation of trade secrets at trial. After careful review, we affirm the
grant of summary judgment in favor of Cardone and therefore we do not reach
BBB’s remaining appellate issues.
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* Retired Senior Judge assigned to the Superior Court.
1 12 Pa.C.S. §§ 5301-5308.
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The parties to this appeal are competitors in the automotive parts
industry. The underlying action arises out of Cardone’s alleged
misappropriation of BBB’s trade secrets related to BBB’s contract with the
National Automotive Parts Association (“NAPA”) to supply NAPA with power-
steering products in two of its nine national divisions. NAPA is a nationwide
network of automotive part distribution centers and retail stores and is owned
and operated by its parent company, Genuine Parts Company (“GPC”).
Complaint ¶15; Answer ¶15. GPC owns the distribution centers and certain
of the NAPA retail stores, but other retail locations are owned by third-party
independent resellers. Complaint ¶15; Answer ¶15.
Historically, BBB supplied only remanufactured rotating electrical parts,
such as starters and alternators, to NAPA, but BBB entered the power-steering
market in 2010 after acquiring another remanufacturer. Complaint ¶¶13, 19;
Answer ¶19. At that time, Cardone was among the largest remanufacturers
of aftermarket auto parts and the exclusive supplier for several NAPA
divisions; however, the quality of Cardone’s power-steering products had
come under criticism following the transfer of operations from Philadelphia,
where Cardone is headquartered, to Mexico. Complaint ¶¶8, 14, 18; Answer
¶¶8, 14, 18. In 2011, BBB bid on and was awarded the contract to become
the sole power-steering parts supplier in NAPA’s Mountain Division, a contract
which had previously been held by Cardone. Complaint ¶¶6, 23; Answer ¶¶6,
23. In 2012, BBB replaced Cardone as the power-steering supplier for NAPA’s
Western Division. Complaint ¶¶6, 23; Answer ¶¶6, 23.
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BBB alleges in its complaint that its power-steering products enjoyed an
excellent reputation with NAPA and NAPA’s customers, and in late 2012, BBB
entered into negotiations with NAPA to take over as supplier in three additional
divisions. Complaint ¶¶6, 23, 29. BBB asserts that the negotiations should
have wrapped up quickly as NAPA was already in possession of BBB’s pricing
and other information, which BBB had uploaded to NAPA’s secure website for
suppliers, NAPA Sales Team (“NST”). Id. ¶¶2, 17, 29. Among the proprietary
information that BBB uploaded to NST included invoice and downstream
pricing for retail customers and independent resellers; “back-end” rebates for
off invoice line items or for reaching certain sales milestones; direct shipping
discounts for resellers; and changeover incentives and terms. Id. ¶21. BBB
understood its information on the NST site to be secure based upon NAPA’s
“vendor code of conduct” requiring suppliers to respect each other’s
intellectual property rights, NAPA’s internal policy prohibiting its employees
from sharing a supplier’s information with another supplier, and the
representations of the third-party administrator of the site. Id. ¶¶16, 17.
While BBB anticipated that the negotiations to take over additional NAPA
divisions would proceed smoothly, it did not turn out as BBB expected;
instead, according to the complaint, Cardone “began a deliberate, aggressive
campaign to undermine BBB and NAPA’s burgeoning commercial relationship”
using illegally obtained BBB trade secret information. Id. ¶6. BBB alleges
that the misappropriation of its trade secrets began as late as October 2012
when a Cardone employee obtained downstream pricing for over 2,600 BBB
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power-steering parts; the Cardone employee shared this information by email
with his co-workers, stating that the BBB pricing information “isn’t ours.” Id.
¶25. According to BBB, Cardone used the stolen pricing data to submit a
competing bid for the three NAPA divisions in December 2012 with significantly
lower prices and improved terms and incentives as compared to Cardone’s
existing deal with NAPA. Id. ¶30.
BBB alleges that, while it eventually secured the power-steering
business in the three new NAPA divisions, its eventual take-over on July 1,
2013 had been delayed for months as a result of the misappropriation and
was on significantly less favorable terms than its existing deal with NAPA. Id.
¶¶6, 31. As part of the new deal, BBB was required to drop its prices for all
power-steering parts it supplied to NAPA, both in its three new divisions and
in the two existing divisions it serviced, and also to decrease its prices for all
its business with NAPA. Id.
On August 11, 2016, BBB filed this instant action against Cardone
asserting one claim under the PUTSA. In addition to the October 2012
unauthorized access of confidential information described above, BBB
identified several additional alleged misappropriations of trade secrets in its
complaint, including June 2013, December 2013, and March 2014 “raid[s]” by
a Cardone employee of the secure BBB area of the NST website. Id. ¶¶32-
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37.2 BBB alleges that Cardone misappropriated material it knew or should
have known was confidential and protected by non-disclosure agreements “by
improperly accessing the NST website” or “by inducing NAPA personnel to
disclose BBB’s secrets” despite knowing the information was confidential. Id.
¶¶43-46. BBB asserts that it sustained damages based on the delay in the
expansion of its business with NAPA, price decreases on power-steering
products and other products sold to NAPA, as well as an extension of payment
terms to NAPA. Id. ¶48. Finally, BBB alleges that Cardone received profits
above and beyond what it otherwise would have received from NAPA as a
result of the misappropriation. Id.
Following discovery, Cardone filed an initial motion for summary
judgment, which the trial court denied on September 24, 2018. On March 6
and 7, 2019, the trial court heard oral argument on various motions in limine
filed by the parties. Three of those rulings are at issue here. First, the trial
court granted Cardone’s oral motion to preclude the expert testimony of
Joseph W. Lesovitz, BBB’s expert in business valuation and financial forensics,
finding that Lesovitz’s testimony would not have allowed the jury “to engage
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2 BBB maintains that, after discovery, it has identified as many as ten
instances of Cardone’s misappropriations of its trade secrets. BBB first
learned of Cardone’s alleged theft of its trade secrets in 2014 during discovery
in connection with a lawsuit that Cardone brought in Tarrant County, Texas
against BBB and Joel Farina, an ex-Cardone employee who allegedly stole
numerous confidential documents from Cardone prior to joining BBB.
Complaint ¶3; Answer ¶3. According to the parties, this lawsuit remains
pending.
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in anything other than speculation to determine the type of damages that
were requested or demanded by BBB[.]” N.T., 3/7/19, at 35. Second, the
trial court granted Cardone’s motion in limine to preclude the expert testimony
of Larry R. Samuelson, a former NAPA senior executive, as the court found
that Samuelson’s testimony would not be based on “personal knowledge” and
would improperly touch on legal conclusions that were ultimately up to the
jury. N.T., 3/6/19, at 149-53; Docket #136, Order, 3/11/19. Finally, the trial
court granted Cardone’s motion to prevent BBB from relying at trial on other
theories of trade secret misappropriation aside from the “improper means”
theory alleged in the complaint. Docket #135, Order, 3/11/19; see 12 Pa.C.S.
§ 5302.
On May 1, 2019, after the resolution of the motions in limine, Cardone
filed a second summary judgment motion limited to the issue of damages
causation. On September 11, 2019, the trial court granted that motion.
Docket #212, Order, 9/11/19. In its later opinion explaining the rationale for
its summary judgment ruling, the trial court emphasized the fact that BBB did
not seek any discovery from NAPA, which was weighing numerous other
factors in deciding whether to award business to BBB including issues related
to quality control, supply chain reliability, and its own profit incentives. Trial
Court Opinion, 8/31/20, at 1-2, 8, 10. The court concluded that BBB could
not rely only on its valuation expert, Lesovitz, to prove damages, as his report
was based upon “countless assumptions” regarding how the alleged
misappropriation would have affected NAPA’s negotiation position and would
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have to have been resolved through numerous jury interrogatories. Id. at 7-
10.
In light of the insufficient damages evidence, the trial court determined
that the jury would only be able to “speculate on what factors motivated
NAPA’s negotiations without BBB” and would not be able to “isolate how much
[of] BBB’s loss, if any, was caused by Cardone’s alleged misappropriation of
pricing trade secrets.” Id. at 11. Because BBB relied by its own choosing on
“conjecture” rather than evidence of NAPA’s business decisions that would
have “provide[d] reasonable certainty to measuring damages,” the court
found that summary judgment should be granted in favor of Cardone. Id. at
13. BBB filed a timely notice of appeal from the trial court’s September 11,
2019 order.3
BBB raises the following issues for our review:
1. BBB offered extensive evidence that Cardone, its competitor,
improperly accessed BBB’s trade secrets and used that
information to derail BBB’s negotiations to serve as a supplier of
power-steering products to [NAPA]. Ignoring that evidence, the
trial court granted summary judgment in favor of Cardone on
BBB’s trade secret misappropriation claim on the ground that BBB
could only prove its case by offering direct testimony from a third
party customer, NAPA. Did the trial court err as a matter of law
in granting summary judgment to Cardone on that basis?
2. The trial court excluded the testimony of BBB’s damages
expert, Joseph W. Lesovitz, on the ground that, in the absence of
direct testimony from NAPA, BBB’s claim for damages was purely
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3 The trial court did not request that BBB file a concise statement of errors
complained of on appeal. The court filed a Pa.R.A.P. 1925(a) opinion on
August 31, 2020.
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speculative. Was this holding legally erroneous and an abuse of
the trial court’s discretion?
3. The trial court excluded portions of the testimony of BBB’s
automotive-parts industry expert, Larry R. Samuelson, who
sought to offer his opinion on the competitive value of the
information taken by Cardone as well as the meaning of
specialized terms appearing in Cardone’s emails, on the ground
that BBB could not prove its case without direct testimony from
NAPA and that Samuelson lacked direct personal knowledge of the
facts at issue. Was this holding legally erroneous and an abuse of
the trial court’s discretion?
4. The trial court held that BBB could only present evidence at trial
supporting an “improper means” theory of misappropriation, even
though BBB’s complaint also contained allegations supporting a
“duty” and “accident or mistake” theory of misappropriation under
12 Pa. Cons. Stat. §§ 5302(2)(ii)(C) & 5302(3)(iii). Did the trial
court err as a matter of law in so holding?
BBB Brief at 5-6 (suggested answers omitted).
BBB first argues that the trial court erred in granting summary judgment
on the issue of damages because it offered extensive, uncontradicted evidence
that Cardone used BBB’s trade secrets in a way that materially harmed BBB’s
power-steering business. This evidence included internal Cardone discussions
evidencing that it used BBB’s confidential information to its advantage as well
as contemporaneous communication from NAPA before and after Cardone
submitted its counterbid incorporating the trade secrets, which demonstrated
the effect of the counterbid on BBB’s business relationship with NAPA. BBB
asserts that the timeline of events established in the summary judgment
record makes clear that its negotiations with NAPA halted immediately after
Cardone’s counterbid and that NAPA’s demands to BBB that it offer better
pricing and terms only happened after the counterbid.
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BBB cites to several purported errors of law by the trial court in its
decision to grant summary judgment in favor of Cardone. First, BBB contends
that the trial court erred in speculating as to other motivations for NAPA’s
demands on BBB during contract negotiations, when the court was required
to view all evidence in the light most favorable to BBB. In addition, BBB
asserts that the trial court improperly faulted BBB for not offering direct
evidence from NAPA to substantiate damages when it is well-established that
circumstantial evidence is sufficient to raise a general issue of material fact,
including on the issue of damages. Finally, BBB avers that the trial court
incorrectly held that challenges in calculating damages in this matter rendered
them speculative as a matter of law, as the question of whether damages are
speculative is concerned with whether damages can be proven at all, not with
difficulties in calculating the amount.
“[S]ummary judgment is appropriate only in those cases where the
record clearly demonstrates that there is no genuine issue of material fact and
that the moving party is entitled to judgment as a matter of law.” In re
Risperdal Litigation, 223 A.3d 633, 639 (Pa. 2019) (citation omitted).
Under our Rules of Civil Procedure, “a record that supports summary judgment
will either (1) show the material facts are undisputed or (2) contain insufficient
evidence of facts to make out a prima facie cause of action or defense and,
therefore, there is no issue to be submitted to the jury.” Cigna Corp. v.
Executive Risk Indemnity, Inc., 111 A.3d 204, 210-11 (Pa. Super. 2015)
(citation omitted); see also Pa.R.Civ.P. 1035.2.
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In addressing a motion for summary judgment, the trial court must take
all facts of record and reasonable inferences therefrom in the light most
favorable to the non-moving party and must resolve all doubts as to the
existence of a genuine issue of material fact against the moving party.
Salsberg v. Mann, 262 A.3d 1267, 1269 (Pa. Super. 2021) (en banc). Thus,
the trial court may only grant summary judgment “where the right to such
judgment is clear and free from all doubt.” Risperdal Litigation, 223 A.3d
at 639 (citation omitted).
The issue of whether the record supports the grant of summary
judgment is a question of law as to which our standard of review is de novo,
and our scope of review is plenary. Id.; Salsberg, 262 A.3d at 1269.
Accordingly, we need not defer to the determinations made by the trial court.
Summers v. Certainteed Corp., 997 A.2d 1152, 1159 (Pa. 2010) (citation
omitted). “If there is evidence that would allow a fact-finder to render a
verdict in favor of the non-moving party, then summary judgment should be
denied.” Salsberg, 262 A.3d at 1269 (citation omitted).
Under the PUTSA, a plaintiff can recover damages “both [for] the actual
loss caused by misappropriation and the unjust enrichment caused by
misappropriation that is not taken into account in computing actual loss.” 12
Pa.C.S. § 5304(a). Where damages are not recoverable based upon the actual
loss or unjust enrichment methods, a court may also award damages
calculated from “a reasonable royalty for a misappropriator’s unauthorized
disclosure or use of a trade secret.” Id. “[O]ne cannot be held liable for
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damages for misappropriation of a trade secret without proof of actual harm
through past use or disclosure[.]” Den-Tal-Ez, Inc. v. Siemens Capital
Corp., 566 A.2d 1214, 1232 (Pa. Super. 1989) (en banc).
“Generally, under Pennsylvania law, damages need not be proved with
mathematical certainty, but only with reasonable certainty, and evidence of
damages may consist of probabilities and inferences.” Bailets v.
Pennsylvania Turnpike Commission, 181 A.3d 324, 336 (Pa. 2018). “It is
only required that the proof afford a reasonable basis from which the fact-
finder can calculate the plaintiff’s loss.” Witherspoon v. McDowell-Wright,
241 A.3d 1182, 1188 (Pa. Super. 2020) (quoting Delahanty v. First
Pennsylvania Bank, N.A., 464 A.2d 1243, 1258 (Pa. Super. 1983)).
Although the evidence does not require mathematical precision, a plaintiff
must put present “sufficient facts” such that the fact-finder “can arrive at an
intelligent estimate [of damages] without conjecture.” Id. (quoting
Delahanty, 464 A.2d at 1257-58). “[T]he test of whether damages are
remote or speculative has nothing to do with the difficulty in calculating the
amount, but deals with the more basic question of whether there are
identifiable damages[; t]hus, damages are speculative only if the uncertainty
concerns the fact of damages rather than the amount.” Logan v. Mirror
Printing Co. of Altoona, Pa., 600 A.2d 225, 227 (Pa. Super. 1991) (citation
and emphasis omitted).
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Upon review, we ascertain no error in the trial court’s grant of summary
judgment in favor of Cardone.4 Initially, we note that the summary judgment
record in this matter is replete with evidence that, as part of its negotiation
practice, NAPA shared BBB’s and Cardone’s business information between and
among each other during the 2010 to 2013 time period when the parties were
competing for NAPA’s power-steering parts business. BBB employees
admitted during depositions that NAPA provided information to BBB relating
to Cardone’s independent reseller discounts, back-end rebates, and
distribution center pricing during the relevant time period. See Cardone
Motion for Summary Judgment, 3/12/18, Exhibit A at 54-55, Exhibit B at 234-
37, Exhibit L at 155-57, 176. Moreover, one of the principal avenues through
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4 Preliminarily, we note that our ability to thoroughly set forth the underlying
facts in this case has been substantially impeded by the parties’ filing of large
portions of the summary judgment record under seal in the trial court
pursuant to a jointly agreed upon protective order. See Docket #14, Agreed
Protective Order Regarding the Disclosure and Use of Discovery Materials,
10/5/16, at 1 (limiting disclosure of all “confidential, proprietary, trade secret,
and/or commercially sensitive information”). In this Court, the parties filed
heavily redacted briefs and designated much of their reproduced record as
under seal, including the entire portions of deposition transcripts of BBB and
Cardone employees to the extent relied upon at summary judgment and email
chains the confidentiality of which appears to be based solely upon mere
references to the status of negotiations with NAPA. While we recognize that
protective orders are expressly permitted during the discovery phase of
litigation “to protect a party . . . from unreasonable annoyance,
embarrassment, oppression, burden or expense,” see Pa.R.Civ.P. 4012, we
caution the parties from their overzealous use of the protective order with
respect to these summary judgment proceedings. See A.A. v. Glicken, 237
A.3d 1165, 1170 (Pa. Super. 2020) (noting that there exists a common law
presumption of openness of judicial proceedings and that the judicial record
should only be closed to the public on good cause shown).
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which BBB alleges that Cardone misappropriated its trade secrets was by way
of a “mysterious email” sent by a NAPA employee to a Cardone employee in
August 2012. BBB Brief at 14; BBB Opposition to Motion for Summary
Judgment, 5/31/19, Exhibit 37. While this does not alter the fact that we
must assume for our present analysis that Cardone improperly obtained BBB’s
trade secrets, the evidence of NAPA’s frequent information sharing among
business competitors necessarily informs our analysis of the primary issue in
this appeal of whether BBB has produced evidence sufficient to show that it
suffered damages from Cardone’s alleged misappropriations.
BBB’s alleged damages in this case fall into three categories. First, BBB
asserts that its takeover of additional NAPA divisions for which negotiations
appeared to be winding down at the end of 2012 was delayed for several
months until July 2013 as a result of Cardone’s December 2012 bid
incorporating BBB’s trade secrets. Second, BBB contends that it was required
to offer more favorable terms and pricing to NAPA after Cardone tendered its
bid. And third, BBB maintains that Cardone’s use of the confidential
information prevented BBB from becoming the nationwide power-steering
parts supplier for NAPA and limited it to only taking over three of the remaining
seven regional divisions.
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As the trial court explained in its opinion, however, BBB’s decision to not
seek any discovery from NAPA5 is fatal to BBB’s attempt to show, with any
degree of reasonable certainty, that BBB sustained these claimed damages.
In the absence of firsthand testimony from NAPA employees or internal NAPA
communications, BBB relies in large part on NAPA’s communications to BBB
and Cardone, which BBB argues show that it was the superior supplier in
NAPA’s eyes and poised to take over all of NAPA’s power-steering business
when negotiations began in 2012. For example, NAPA told Cardone as early
as 2010 that its power-steering parts had engendered numerous customer
complaints regarding the quality of the parts. BBB Opposition to Motion for
Attorney’s Fees, 10/10/19, Exhibit 1 at 342; BBB Opposition to Motion for
Summary Judgment, 5/31/19, Exhibit 21. In addition, BBB cites to NAPA’s
warnings to Cardone in late 2012 that it was at risk of losing NAPA’s power-
steering business. BBB Opposition to Motion for Summary Judgment,
5/31/19, Exhibits 40, 41.
However, the summary judgment record calls into question whether
NAPA’s communications to BBB and Cardone accurately revealed NAPA’s
bargaining position and its true view of its competing parts suppliers. While
NAPA asked BBB to make certain concessions to match Cardone on payment
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5 BBB stated below that it made the intentional business decision to not
“disturb an important client [i.e. NAPA] by unnecessarily dragging them into
discovery.” BBB Opposition to Motion In Limine to Preclude Samuelson
Testimony, 5/3/18, ¶5; see also N.T., 3/6/19, at 36-38.
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terms and incentives, the record is devoid of evidence to show that these
requests were based upon an actual Cardone counter proposal rather than
being simply a negotiation tactic. Cardone Motion for Summary Judgment,
3/12/18, Exhibit C at 230, 238-39, Exhibit L at 130-31; BBB Opposition to
Motion for Summary Judgment, 5/31/19, Exhibit 63. In addition, as NAPA’s
description of quality issues at its competitor shifted over the course of
negotiations, BBB employees began to question internally whether NAPA was
being entirely truthful during the negotiations. BBB Opposition to Motion for
Summary Judgment, 5/31/19, Exhibit 60.
By virtue of the fact that BBB chose not to take evidence directly from
NAPA, whether in the form of interrogatories, discovery of internal
communications, or through depositions, a jury would only be left to guess as
to the key issue in this case relating to the factors NAPA considered—and the
relative weight afforded to each of these factors—when awarding its power-
steering parts business. BBB introduced into the record at least circumstantial
evidence that NAPA was evaluating its power-steering parts suppliers on
factors entirely separate from pricing and the other negotiated terms of the
supplier agreements. BBB Opposition to Motion for Summary Judgment,
5/31/19, Exhibit 32. However, as the trial court explained, “the record is
silent on whether these factors are assumed to be equal” or, assuming they
are weighted differently, “which [factors are] more important to NAPA.”
Docket #212, Order, 9/11/19, at 2. In the absence of firsthand evidence from
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NAPA, its decision-making process remains entirely obscured from view. See
id. at 3 (“Without hearing from NAPA, it’s all guesswork.”).
Moreover, by relying on the out-of-court statements of NAPA employees
to prove that the company looked more favorably on one of its suppliers over
another, BBB is offering the NAPA statements for the truth of the matter
asserted and thus runs squarely into the rule against hearsay. See Pa.R.E.
801(c), 802. In Pennsylvania, a trial court may consider hearsay presented
by a non-movant in opposition to a summary judgment motion but only if the
party relying on the hearsay can demonstrate to the trial court “a plausible
avenue for the admission at trial of the hearsay.” Kardos v. Armstrong
Pumps, Inc., 222 A.3d 393, 402 (Pa. Super. 2019); see also Petrina v.
Allied Glove Corp., 46 A.3d 795, 799 (Pa. Super. 2012).
BBB argues that NAPA’s out-of-court statements “fall squarely within
the hearsay exception for ‘[a] statement of the declarant’s then-existing state
of mind[.]’”6 BBB Reply Brief at 9 (quoting Pa.R.E. 803(3)). As our Supreme
Court has recently explained, “a singular expression of the declarant’s state
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6 BBB also asserts that this Court should not undertake an inquiry into the
potential admissibility of the NAPA evidence because the trial court did not
definitively rule that the communications at issue are hearsay. BBB Reply
Brief at 9. While the trial court did not expressly rule that the NAPA
statements are inadmissible hearsay, the question of whether such
communications were covered by exceptions to the hearsay rule was debated
at hearings on the motions in limine. See N.T., 3/6/19, at 174-75. In any
event, this Court is not bound by the rationale of the trial court, and we may
affirm its ruling on any basis. Commonwealth v. Goodmond, 190 A.3d
1197, 1202 n.4 (Pa. Super. 2018).
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of mind” is generally admissible under our Rules of Evidence but where a
statement “contains both a state of mind component and a ‘fact-bound’
component,” the statement is inadmissible unless the “fact-bound” assertion
falls within a separate hearsay exception. Commonwealth v. Fitzpatrick,
255 A.3d 452, 479-80 (Pa. 2021) (citation omitted). The NAPA statements
here are exactly this type of “compound statements” mixing NAPA’s state of
mind concerning the performance of its suppliers and a “fact-bound”
component involving the actual quality of the products that the suppliers were
providing to NAPA. Id. at 473, 480 (citation omitted). Therefore, these
statements would be inadmissible at trial unless a separate hearsay exception
is put forth for the fact-based component that would offer “a plausible avenue
for the admission at trial of the hearsay.” Id. at 479-80; Kardos, 222 A.3d
at 402. No such alternate exception to the hearsay rule has been asserted.
In opposing Cardone’s summary judgment motion, BBB also relies on
the views of its own employees and Cardone employees concerning
negotiations with NAPA as well as the “timeline of events” before and after
Cardone submitted its competing bid in December 2012. BBB Brief at 33.
Thus, BBB employees believed that NAPA was negotiating aggressively and
that the deal was essentially wrapped up by late 2012, while Cardone
executives recognized during the same time period that there was a strong
possibility that it would lose additional NAPA divisions. BBB Opposition to
Motion for Summary Judgment, 5/31/19, Exhibit 17 at 229, 234, Exhibits 33,
55. From BBB’s perspective, the deal that seemed all but done stalled after
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Cardone submitted its competing bid in December 2012, resulting in BBB
having to submit its own revised proposal on less favorable terms in early
2013. Id., Exhibit 17 at 229-30, 234, Exhibits 63-65.
While this evidence sheds some light on the negotiations, BBB’s and
Cardone’s internal, subjective views on their business dealings with NAPA fail
to show within a reasonable degree of certainty how Cardone caused NAPA to
take specific action that damaged BBB. For example, while BBB asserts that
it sustained damages based upon a delay of several months before its
takeover of additional NAPA divisions was completed in July 2013, BBB points
to no evidence that the transition was set to occur earlier and instead relies
only on its employees’ belief that a deal was almost complete before
Cardone’s counter-bid and BBB’s expectation that the transition would have
occurred earlier. Id., Exhibit 17 at 234, 422. Similarly, the claim of damages
arising out of BBB only obtaining three new NAPA divisions instead of all the
remaining seven is based upon the fact that BBB was having discussions with
NAPA about taking over all the remaining divisions, rather than any concrete
plan for NAPA to transfer the full slate of its divisions to BBB. Id., Exhibit 17
at 299, Exhibit 59. Without evidence from NAPA itself, we are left only with
BBB and Cardone looking from the outside in on NAPA’s decision-making
process. Based upon the summary judgment record, the jury would therefore
be left to speculate not just on the amount of damages but whether Cardone
caused the claimed damages at all. Logan, 600 A.2d at 227.
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Finally, we observe that the testimony of BBB’s expert witnesses would
not have filled in the holes in BBB’s case with respect to damages causation.
The testimony of BBB’s financial valuation expert, Lesovitz, would have served
to assist in calculating damages based upon the various harms BBB allegedly
suffered arising out of Cardone’s trade secret misappropriations. See Cardone
Motion in Limine to Preclude Portions of Expert Report and Opinions of
Lesovitz, 3/19/18, Exhibit A (Lesovitz Expert Report) at 1-3. However, as BBB
acknowledges in its brief, Lesovitz would have “merely quantified and added
up the damages” in his testimony and he would not independently “show
evidence of damages causation.” BBB Brief at 34; see also id. at 50; BBB
Reply Brief at 18 n.2. Similarly, BBB’s industry expert, Samuelson, would
have drawn on his work experience at NAPA and other automotive aftermarket
companies to identify the types of information that would be classified as trade
secrets within the industry and Cardone’s business performance during the
relevant time period. See Cardone Motion in Limine to Preclude Portions of
Expert Report and Opinions of Samuelson, 3/16/18, Exhibit A (Samuelson
Expert Report) at 1. Nevertheless, as BBB recognizes on appeal, the
testimony of Samuelson, who lacked any firsthand knowledge of NAPA’s
deliberations in 2012 and 2013, does not create a genuine issue of material
fact with respect to the issue of whether BBB actually sustained any damages
from Cardone’s actions. See BBB Brief at 50.
Accordingly, based upon the absence in the record sufficient facts that
would have allowed a jury to arrive at an intelligent estimate of damages
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without conjecture, we find no error in the trial court’s grant of summary
judgment in favor of Cardone on the issue of damages causation.
Witherspoon, 241 A.3d at 1188; Logan, 600 A.2d at 227. As we have
concluded that the trial court did not err in awarding summary judgment in
favor of Cardone, we need not address BBB’s remaining three appellate issues
concerning the trial court’s exclusion of its two experts, Lesovitz and
Samuelson, and the court’s decision that BBB could only present evidence of
misappropriation under an “improper means” theory. We therefore affirm the
trial court’s September 11, 2019 order.
Order affirmed.
Judgment Entered.
Joseph D. Seletyn, Esq.
Prothonotary
Date: 4/12/2022
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