MUTUAL INDUSTRIES, INC. v. AMERICAN INTERNATIONAL INDUSTRIES

Filing 43

MEMORANDUM AND/OR OPINION. SIGNED BY HONORABLE R. BARCLAY SURRICK ON 5/24/17. 5/24/17 ENTERED AND COPIES E-MAILED AND FAXED BY CHAMBERS.(mbh, )

THE UNITED STATES DISTRICT COURT
FOR THE EASTERN DISTRICT OF PENNSYLVANIA

MUTUAL INDUSTRIES, INC.
v.
AMERICAN INTERNATIONAL
INDUSTRIES

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CIVIL ACTION
NO. 11-5007

SURRICK, J.

MAY 24 , 2017
MEMORANDUM

Presently before the Court is Defendant American International Industries’ Motion for
Summary Judgment. (ECF No. 30.) For the following reasons, Defendant’s Motion will be
denied.
I.

BACKGROUND
Plaintiff Mutual Industries, Inc. is a Pennsylvania corporation that sells beauty supplies.

(Am. Compl. ¶¶ 1, 3-6, ECF No. 10.) Defendant American International Industries is the
“leading manufacturer and distributor of beauty supply products and skin care products.” (Id. ¶
11.) This is a diversity action in which Plaintiff alleges that Defendant sought to eliminate
Plaintiff from the beauty supply market by tortiously interfering with five distribution contracts
that Plaintiff had with three different representative groups. (Id. ¶¶ 2, 11, 12.)
A.

Procedural History

Plaintiff commenced this lawsuit in the Court of Common Pleas in Philadelphia,
Pennsylvania. (Compl., Notice of Removal, Ex. A, ECF No. 1.) Defendant removed the action
to this Court pursuant to 28 U.S.C. § 1332 and 28 U.S.C. § 1441. (Notice of Removal ¶ 14.)
Defendant filed a motion for a more definite statement. (ECF No. 3.) A Memorandum (ECF
No. 8) and accompanying Order (ECF No. 9) were issued, granting in part and denying in part

Defendant’s motion. Plaintiff subsequently filed an Amended Complaint in compliance with this
Order. Defendant filed an Answer to the Amended Complaint. (ECF No. 12.)
At the conclusion of discovery, Defendant filed the instant Motion for Summary
Judgment. (Def.’s Mot., ECF No. 30.) Plaintiff filed a Response (Pl.’s Resp., ECF No. 33), and
Defendant filed a reply. (Def.’s Reply, ECF No. 33.) This Motion is now ripe for disposition.
A.

Factual Background
1.

Mastex Industries

Plaintiff claims that the dispute between it and Defendant stems from an underlying
disagreement about Plaintiff’s use of the trade name Mastex on some of its products. (Id.) In
October 2008, Plaintiff purchased Mastex Health, a division of Mastex Industries, Inc., a
company that manufactures professional beauty supplies and at-home healthcare products. (Id.) 1
Defendant subsequently purchased Thermal Spa Products, 2 a separate division of Mastex
Industries, without knowledge that Plaintiff had previously purchased a different division of
Mastex. (Pl.’s Resp. 4; Ryzman Dep. 52-54, Pl.’s Resp. Ex. 9.) 3
In 2010, both Plaintiff and Defendant attended the CosmoProf trade show in Las Vegas,
Nevada. 4 (Pl.’s Resp. 2.) At the show, Plaintiff’s booth appeared under the name “Mutual
1

In the Amended Complaint, Plaintiff alleges that it purchased “Mastex Industries.”
(Am. Compl. ¶ 3.) Plaintiff’s Response to Defendant’s Motion states that it purchased Mastex
Health. (Pl.’s Resp.) This is consistent with the information provided in Martin Lipkowitz’s
affidavit (Lipkowitz Aff. ¶ 5, Pl.’s Resp. Ex. 7) and his deposition testimony (Lipkowitz Dep.
71, Pl.’s Resp. Ex. 8).
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Thermal Spa sold paraffin wax and other related products. (Pl.’s Resp. 2.)

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Neither party provides a date for when Defendant purchased Thermal Spa.

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CosmoProf is the largest annual beauty trade show in the world. Manufacturers and
manufacturing representative groups attend the show to see, sell, and showcase their products.
(Pl.’s Resp. 2; Lipkowitz Dep. 46.)
2

Industries Mastex Health” and several of their products were also labeled with this name.
(Lipkowitz Dep. 96-97.) According to Plaintiff, at some time around 10:30 a.m. on July 18 (Pl.’s
Resp. 6; Lipkowitz Dep. 63, 92), Zvi Ryzman, Defendant’s owner, along with its Vice-President
Terry Cooper, and Vice-President of Sales, Mark Moesta, approached Plaintiff’s booth. (Pl.’s
Resp. 4; Lipkowitz Dep. 120; Ryzman Dep. 32.) At the time, Martin Lipkowitz, the National
Sales Manager of Plaintiff’s beauty division was representing Plaintiff at the booth. (Lipkowitz
Dep. 111.) At Plaintiff’s booth, there was a confrontation because Plaintiff was displaying a
paraffin wax warmer that Ryzman thought Defendant “owned the mold to” and because Plaintiff
was using the trade name Mastex that Ryzman also thought Defendant owned. (Ryzman Dep.
44-46, 54; Lipkowitz Dep. 115-116.)
Cooper entered Plaintiff’s booth, and began picking up and examining Plaintiff’s display
products. (Lipkowitz Dep. 112-13.) Cooper accused Plaintiff of being “unprofessional” and
claimed that Plaintiff had no right to display the products under the Mastex name. (Id. at 115.)
Cooper took the paraffin wax warmer off a shelf in the back of Plaintiff’s booth and said the
warmer belonged to Defendant. (Lipkowitz Dep. 115.) Cooper then pulled Plaintiff’s label off
of the wax warmer, which revealed some writing. (Id.) Lipkowitz claims that after Cooper
pulled Plaintiff’s label off the wax warmer, he saw that there was something else printed there,
but was unsure what it read. (Id. at 117-18.) Lipkowitz took the warmer back from Cooper and
put it under the table in Plaintiff’s booth. (Id. at 119.) During this time, Moesta was taking
pictures of the items Plaintiff had on display. (Id. at 119-20.)
Ryzman was also involved in the confrontation. According to Lipkowitz, Ryzman
“started to scream” at him, so that everyone in the surrounding booths could hear. (Id. at 122.)
Ryzman said, “Your boss is a crook and a thief and a cheat and a liar, and he has no right

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showing these products. He has no right using the name Mastex.” (Lipkowitz Dep. 122.)
Ryzman also told Lipkowitz “he should be ashamed of himself” and called him “dishonest” and
a disgrace to the industry. (Id.) Ryzman claims the confrontation was not “comfortable,” but he
did not admit that he was yelling. (Ryzman Dep. 48-49.) Ryzman also did not remember if
onlookers watched the incident, but said that it was unlikely because the confrontation happened
early in the morning. (Id. at 49.) Finally, Lipkowitz asked Ryzman and the others to leave, to
which Ryzman responded that his lawyers would be in contact with Plaintiff. (Lipkowitz Dep.
125.) Ryzman testified that the entire confrontation lasted about two or three minutes. (Ryzman
Dep. 48.) A short time later, a representative from Defendant delivered a cease and desist letter
to Lipkowitz asking Plaintiff to cease marketing its products under the Mastex trademark. (Pl.’s
Resp. Ex. 3, Cooper Letter Ex.; Lipkowitz Dep. 130.)
Following this confrontation, a few individuals from other companies, including Irv
Morgenstern, Ron Grazulo, and a client from Texas, approached Lipkowitz and told him that
Ryzman had been discussing the incident, and had been making disparaging comments about
Plaintiff and Lipkowitz. (Lipkowitz Dep. 62-68, 74-86; Lipkowitz Aff. 40-41.) Lipkowitz
claims that he was told by a “couple of people that were around [Defendant’s] booth that the
owner was telling people that he doesn’t want any of their rep groups to sell or represent Mutual
Industries.” (Lipkowitz Dep. 62.)
Ryzman admits that after the confrontation at Cosmoprof, he learned that Plaintiff had
purchased the right to use the name “Mastex Health.” (Ryzman Dep. 57-58.) In fact, on
September 21, 2010, Plaintiff and Defendant entered into a settlement agreement under which
the parties agreed that Plaintiff was permitted to use the name “Mastex Health.” (Def.’s Answer,
Ex. B.)

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2.

BTB Sales & Marketing, Inc. Contracts

BTB Sales & Marketing, Inc. (“BTB”) represents manufacturers of professional beauty
products. (Edward Berger Aff. ¶ 3, Def.’s Mot. Ex. G.) BTB is comprised of two separate
divisions that are separate companies: the northeast division and the southeast division. (Eric
Berger Dep. 12-13, Def.’s Mot. Ex. H.) Both divisions are owned by Eric Berger, Edward
Berger, and Frank Turchi. (Eric Berger Dep. 12-13; Lipkowitz Dep. 26-27.) On March 1, 2010,
Plaintiff entered into a manufacturer’s representative agreement with BTB Northeast and BTB
Southeast whereby BTB agreed to market and sell Plaintiff’s various product lines. (Pl.’s Resp.
Ex. 1, BTB Northeast Contract; Pl.’s Resp. Ex. 2, BTB Southeast Contract; Lipkowitz Dep. 34.)
BTB also represented some of Defendant’s products at that time. (Eric Berger Dep. 22-23.)
At the 2010 Cosmoprof show, Eric Berger witnessed from a distance the “verbal
standoff” between Plaintiff and Defendant. (Eric Berger Dep. 24, 28.) Eric Berger believed that
the argument was about Plaintiff using the name Mastex on some of its products. (Eric Berger
Dep. 24.) After discussing the argument between Plaintiff and Defendant with the other BTB
owners, BTB determined that it was possible that issues between Plaintiff and Defendant would
continue to arise in the future. (Eric Berger Dep. 25, 27-28, 31-32.) At Cosmoprof, Eric Berger
and Frank Tucci discussed what had happened between Plaintiff and Defendant with Defendant’s
employees. (Id. at 31-32.) Then, BTB determined that it was in its best interest to stop
representing Plaintiff’s products. (Id. at 32.) BTB informed Defendant that BTB would no
longer be representing Plaintiff’s products. (Id. at 32-33.) On July 20, 2010, BTB terminated its
agreement with Plaintiff for the Northeast region. (Pl.’s Resp. 7; Lipkowitz Dep. 43.)
According to Edward Berger, BTB’s decision to discontinue its agreement with Plaintiff was
“made solely by BTB, and was not influence[d] in any way by [Defendant].” (Edward Berger

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Aff. ¶ 11.) Eric Berger explained that BTB’s decision was based on BTB’s “feelings of just that
[Cosmoprof] show and [Plaintiff and Defendant’s] argument and things like that.” (Eric Berger
Dep. 34.)
On March 1, 2011, BTB renewed its one-year contract with Plaintiff for the Southeast,
through Eric Berger. (Pl.’s Resp. 9.) One month later, on April 1, 2011, BTB terminated the
renewed contract and stopped representing Plaintiff in the Southeast. (Lipkowitz Dep. 43, 135.)
BTB decided to “disengage[] completely” from representing Plaintiff after BTB heard from its
customers that Plaintiff was pursuing a lawsuit against Defendant. (Eric Berger Dep. 41-42.)
Eric Berger testified that no one from BTB ever spoke to Defendant about the current lawsuit.
(Eric Berger Dep. 42-43.)
3.

VNC Contracts

VNC Sales & Marketing (“VNC”) represents manufacturers of professional beauty
products. (Coleman Dep. 10, Def.’s Mot. Ex. C.) VNC is made up of five territories, which are
each separate legal entities controlled by either Charlie Coleman or Kevin Van Nest. (Id. at 10,
37.) Coleman owns a majority share in and operates VNC Northeast and VNC Midwest. (Id. at
37-38; Van Nest Dep. 10-11, Def.’s Mot. Ex. E.) Van Nest owns a majority share in and
operates VNC Southwest, VNC Westcoast, and VNC Southeast. (Van Nest Dep. 10-11.) VNC
represents Defendant’s product lines in the northeast, midwest, and southwest. (Coleman Dep.
12-13.) VNC represented many of these lines in 2010. (Id.)
On October 1, 2010, Plaintiff and VNC Northeast entered into a contract whereby VNC
agreed to represent Plaintiff’s products in the northeast. (Pl.’s Resp. Ex. 5.) On November 1,
2010, VNC Westcoast also entered into a contract with Plaintiff, agreeing to represent Plaintiff’s
products throughout the west coast. (Pl.’s Resp. 8; Pl.’s Resp. Ex. 4.) On March 19-20, 2011,

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Plaintiff appeared at the Northeast Beauty Representatives Association (“NeBRA”) Eastern
Buying Conference Trade Show under the VNC banner because VNC Northeast was
representing Plaintiff at the time. (Lipkowitz Aff. ¶¶ 53-54.)
On April 1, 2011, Plaintiff received a letter from Coleman and Van Nest of VNC. (Pl.’s
Resp. Ex. 6.) The letter informed Plaintiff that VNC was terminating its relationships with
Plaintiff “as to all lines and for all purposes effective April 1, 2011.” (Pl.’s Resp. Ex. 6.) The
letter did not cite a reason for the termination. (Id.) According to Coleman, the termination
letter was sent because Plaintiff’s product line “was just not generating enough,” and VNC’s
representatives needed to concentrate on the larger lines. (Coleman Dep. 27-28.) Coleman
decided that VNC would stop representing Plaintiff’s products in the northeast region. (Coleman
Dep. 31, 33.) Coleman said his decision was not discussed with Defendant. (Coleman Dep. 3233.) John Madia, the territory manager for VNC Westcoast (Coleman Dep. 10-11), decided to
stop representing Plaintiff’s products on the west coast. 5 (Van Nest Dep. 16.) According to
Madia, VNC’s decision to terminate its agreement with Plaintiff “was made solely by VNC, in
the best interests of the company, and was not controlled by [Defendant].” (Def.’s Ex F, Madia
Aff. ¶ 8.) Lipkowitz testified that David Harrison, John Madia, and two female representatives
each told him that VNC had to resign Plaintiff’s product line because Coleman had received a
call from Defendant “saying that we would suggest that you no longer represent Mutual
Industries.” (Lipkowitz Dep. 157-59, Lipkowitz Aff. ¶ 60.)

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Coleman said VNC’s decision to stop representing Plaintiff’s products on the Westcoast
was made by Van Nest. (Coleman Dep. 32-22.) This conflicts with Van Nest’s testimony that
he had nothing to do with terminating VNC Westcoast’s agreement with Plaintiff. (Van Nest
Dep. 21.)
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4.

CFN Contract

CFN Beauty Representation or CFN Sales and Marketing (“CFN”) represents
manufacturers of professional beauty products. (Cohen Aff. ¶ 3, Def.’s Mot. Ex. J; Cohen Dep.
8, Def.’s Mot. Ex. K.) CFN is a partnership owned by Charles Cohen, Steven Nutile, and Gary
Fishkin. (Cohen Dep. 8.) CFN represents some of Defendant’s brands in the northeast. (Cohen
Dep. 11.) On July 16, 2010, at Cosmoprof, Cohen visited Plaintiff’s booth, and according to
Lipkowitz, expressed interest in representing Plaintiff’s products in the Midwest region. (Pl.’s
Resp. 4; Lipkowitz Aff. ¶¶ 26-27; Lipkowitz Dep. 168-69.) Cohen allegedly told Lipkowitz “I
would like to have [Plaintiff’s product line] for the Midwest,” and agreed to send Lipkowitz a
contract. (Lipkowitz Dep. 169.) Cohen says that no such interest was ever expressed. (Cohen
Dep. 17.) A few days later, Cohen informed Plaintiff via telephone that CFN would not
represent Plaintiff’s product line. (Pl.’s Resp. 7; Lipkowitz Aff. ¶ 49; Cohen Dep. 19.)
Lipkowitz claims Cohen said “we would love to represent you in the midwest, but a lot of us
reps are under pressure from [Defendant] not to be involved with you.” (Lipkowitz Dep. 170.)
Cohen again denied making any such statements, and said CFN declined to represent Plaintiff’s
product line because Cohen was not interested in doing business with Lipkowitz. (Cohen Dep.
19-20.) Cohen states that CFN’s decision to not enter into a business relationship with Plaintiff
was “made solely by CFN, and was not influenced in any way by [Defendant].” (Cohen Aff. ¶
9.) Further, Cohen says that CFN was never contacted by Defendant with regard to Plaintiff’s
interest in having CFN represent its products. (Id. at ¶ 8; Cohen Dep. 20-21.)
5.

Plaintiff’s Other Contracts with Manufacturing Representatives

Plaintiff also has contracts with other companies that represent manufacturers of
professional beauty products. (See Lipkowitz Aff. ¶ 67.) Specifically, Plaintiff has a contract

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with Lewis and Associates for representation on the west coast, and with Jay Stone for
representation in the southwest. (Id. ¶ 67.) Both Lewis and Associates and Jay Stone still
represent Plaintiff’s product lines. (Id. ¶ 69.) Neither company represents any of Defendant’s
product lines. (Id. ¶ 68.)
II.

LEGAL STANDARD
A.

Summary Judgment Standard

Under Federal Rule of Civil Procedure 56(a) summary judgment is appropriate “if the
movant shows that there is no genuine dispute as to any material fact and the movant is entitled
to judgment as a matter of law.” The moving party has the initial burden of showing that no
genuine issue of material fact exists. Adderly v. Ferrier, 419 F. App’x 135, 136 (3d Cir. 2011)
(citing Celotex Corp. v. Catrett, 477 U.S. 317, 323 (1986)). If the movant carries his burden, the
nonmoving party must “set forth specific facts demonstrating a genuine issue for trial.” Id; see
also Celotex, 477 U.S. 317 at 324 (“[T]he nonmoving party [must] [] go beyond the pleadings
and by her own affidavits, or by the depositions, answers to interrogatories, and admissions on
file, designate specific facts showing that there is a genuine issue for trial.”); Fireman’s Ins. Co.
of Newark, N. J. v. DuFresne, 676 F.2d 965, 969 (3d Cir. 1982) (nonmovant cannot “rely merely
upon bare assertions, conclusory allegations or suspicions”).
In determining if a factual dispute is genuine, the Court must consider whether “the
[record] evidence [taken as a whole] is such that a reasonable jury could return a verdict for the
nonmoving party . . . . The mere existence of a scintilla of evidence in support of the plaintiff’s
position will be insufficient; there must be [significantly probative] evidence on which the jury
could reasonably find for the plaintiff.” Bialko v. Quaker Oats Co., 434 F. App’x 139, 141, n.4
(3d Cir. 2011) (quoting Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248, 252 (1986)). “A

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disputed fact is material if it would affect the outcome of the suit as determined by the
substantive law.” J.S. ex rel. Snyder v. Blue Mountain Sch. Dist., 650 F.3d 915, 925 (3d Cir.
2011) (quoting Gray v. York Newspapers, Inc., 957 F.2d 1070, 1078 (3d Cir. 1992)). The Court
must view facts and inferences in the light most favorable to the nonmoving party. Id. We are
not permitted to resolve factual disputes or make credibility determinations. Seigel Transfer, Inc.
v. Carrier Exp., Inc., 54 F.3d 1125, 1127 (3d Cir. 1995).
B.

Applicable Law

Initially, we address what law applies to Plaintiff’s claims. In federal diversity cases, a
federal court applies the conflict-of-law rules of the forum state in which it sits. See Garcia v.
Plaza Oldsmobile LTD., 421 F.3d 216, 219 (3d Cir. 2005). Under Pennsylvania choice-of-law
rules, “the first question to be answered in addressing a potential conflict-of-laws dispute is
whether the parties explicitly or implicitly have chosen the relevant law.” Assicurazioni
Generali, S.P.A. v. Clover, 195 F.3d 161, 164 (3d Cir. 1999). Courts should apply the state law
that the parties have agreed upon. Id.; Atl. Pier Assocs., LLC v. Boardakan Rest. Partners, 647
F. Supp. 2d 474, 486 (E.D. Pa. 2009) (“Generally, if the parties have agreed to the applicable
law, that agreed upon law should be given effect.”). Here, the parties agree that Pennsylvania
law governs Plaintiff’s tortious interference claims. (See Def.’s Mot. 21; Pl.’s Resp. 12.)
Accordingly, we will apply Pennsylvania law to Plaintiff’s claims.
III.

DISCUSSION
Pennsylvania recognizes both interference with existing contractual relations and

interference with prospective contractual relations as branches of the tort of interference with a
contract. See U.S. Healthcare, Inc. v. Blue Cross of Greater Phila., 898 F.2d 914, 925 (3d Cir.
1990). “While the two branches of tortious interference are distinct, they share essentially the

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same elements.” Brokerage Concepts, Inc. v. U.S. Healthcare, Inc., 140 F.3d 494, 529 (3d Cir.
1998). A claim for intentional interference with contractual or prospective contractual relations
requires proof of:
(1) the existence of a contractual or prospective contractual or
economic relationship between the plaintiff and a third party;
(2) purposeful action by the defendant, specifically intended to
harm an existing relationship or intended to prevent a prospective
relation from occurring;
(3) the absence of privilege or justification on the part of the
defendant;
(4) legal damage to the plaintiff as a result of defendant’s conduct;
and
(5) for prospective contracts, a reasonable likelihood that the
relationship would have occurred but for the defendant’s
interference.
Id.
A.

Tortious Interference with a Contract

Here, the parties do not dispute that Plaintiff had contracts with third-parties BTB and
VNC. Under these contracts, BTB Northeast, BTB Southeast, VNC Northeast, and VNC
Westcoast had agreed to sell and market Plaintiff’s product lines. Therefore, the first element of
a claim for tortious interference with a contract has been satisfied. The legal damage element of
tortious interference is similarly not in dispute at this time. Therefore, the fourth element of a
tortious interference claim has been satisfied for present purposes. (Pl.’s Resp. 12.)
The second and third elements of tortious interference, which are closely related, are not
as clear in this case. The second element—purposeful action intended to harm—requires that
Plaintiff show that Defendant acted for the purpose of causing harm to Plaintiff. Glenn v. Point
Park College, 272 A.2d 895, 899 (Pa. 1971). While Defendant did not have to act with the
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specific intent to interfere with Plaintiff’s contract, it must have acted “improperly and with the
knowledge that such interference is substantially certain to occur.” Barmasters Bartending Sch.,
Inc. v. Authentic Bartending Sch., Inc., 931 F. Supp. 377, 386 (E.D. Pa. 1996) (citation omitted).
Intent can often be inferred from circumstantial evidence such as a defendant’s state of mind and
possible motives. Geyer v. Steinbronn, 506 A.2d 901, 910 (Pa. Super. Ct. 1986) (explaining that
because it is rare for a defendant to declare he intended to interfere with a contractual
relationship, a jury is often “called upon to draw an inference from circumstantial evidence” on
whether the requisite intent existed).
The third element—absence of privileges or justification—requires Plaintiff to show
Defendant’s actions were improper. Empire Trucking Co., Inc. v. Reading Anthracite Coal Co.,
71 A.3d 923, 934 (Pa. Super. Ct. 2013). In determining whether or not an actor’s conduct was
“proper,” the Court is guided by the following factors:
(a) the nature of the actor’s conduct, (b) the actor’s motive, (c) the interests of the
other with which the actor’s conduct interferes, (d) the interests sought to be
advanced by the actor, (e) the social interests in protecting the freedom of action
of the actor and the contractual interests of the other, (f) the proximity or
remoteness of the actor’s conduct to the interference and (g) the relations between
the parties.
Nathanson v. Med. Coll. of Pa., 926 F.2d 1368, 1388-89 (3d Cir. 1991).
Although what is not proper conduct in a given situation is not capable of being precisely
defined, the central inquiry is whether the defendant’s conduct is “sanctioned by the ‘rules of the
game’ which society has adopted.” Glenn, 272 A.2d at 899. In applying these factors, the issue
in each case is “whether the interference is improper or not under the circumstances; whether,
upon a consideration of the relative significance of the factors involved, the conduct should be
permitted without liability, despite its effect of harm to another.” Phillips v. Selig, 959 A.2d 420,
430 (Pa. Super. Ct. 2008) (citation omitted). Normal competitive activities do not constitute
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tortious interference with a contract. See Gilbert v. Otterson, 550 A.2d 550, 554 (Pa. Super. Ct.
1988).
1.

Interference with BTB Northeast Contract

It appears from Plaintiff’s Amended Complaint and Plaintiff’s Response that Plaintiff is
alleging that Defendant interfered with the contract Plaintiff had with BTB Northeast by
accusing Plaintiff of unethical business practices at Cosmoprof and by directing BTB to stop
doing business with Plaintiff. (Am. Compl. ¶¶ 10-15; Pl.’s Resp. 13-14.) Defendant moves for
summary judgment claiming that Plaintiff has not produced “a single piece of evidence” to
support its claim. (Def.’s Mot. 29.) Plaintiff claims that it has supplied enough evidence to
survive this Motion. (Pl.’s Resp. 13-14.) A review of the record reveals that Plaintiff has
established that material facts are in dispute with regard to whether Defendant intentionally and
improperly interfered with the BTB Northeast contract.
Plaintiff’s version of the events at Cosmoprof would support the inference that Defendant
acted purposefully to harm Plaintiff. Lipkowitz testified that on July 18, 2010, Defendant’s
owners and employees came to Plaintiff’s Cosmoprof booth and “screamed” accusations and
insults at Lipkowitz for several minutes, allowing all of the manufacturing representative groups
in the surrounding area to hear. (Lipkowitz Dep. 122.) Ryzman specifically accused Plaintiff of
having no right to use the Mastex name. In fact, Plaintiff did have the right to use the Mastex
name and some of the accusations made by Ryzman were later determined to be untrue. At
Cosmoprof, BTB’s Eric Berger witnessed this confrontation. Defendant’s employees then spoke
to the owners of BTB about the confrontation, at which time BTB decided it was in BTB’s best
interest to stop representing Plaintiff in the northeast. BTB informed Defendant of its decision.
BTB’s Eric Berger also admitted that BTB Northeast stopped representing Plaintiff because of

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the confrontation between Plaintiff and Defendant at Cosmoprof, although he said that
Defendant did not explicitly pressure BTB into terminating its contract with Plaintiff. Defendant
disputes these facts to the extent that Ryzman did not admit he was “screaming,” but called the
confrontation uncomfortable. Ryzman also said he did not remember if manufacturing
representative groups were around during the confrontation, but he thought that it was unlikely
because the confrontation occurred early in the morning. These factual disputes affect whether a
jury can infer that Defendant intended to harm Plaintiff.
Viewing these disputed facts in the light most favorable to Plaintiff, a reasonable
factfinder could conclude that at Cosmoprof, Defendant’s owner and employees acted with the
intent to harm Plaintiff by publicly and conspicuously confronting and insulting Plaintiff when
Plaintiff was surrounded by manufacturing representative groups. A jury may further find that
Defendant’s employees acted with the knowledge that a public confrontation with Plaintiff at
Cosmoprof was substantially likely to interfere with contracts that Plaintiff had with
manufacturing representative groups that were present. Thus, if Plaintiff’s version of the events
at Cosmoprof is believed to be true by a jury, the second element of tortious interference with a
contract will have been established. See Rossi v. Schlarbaum, 600 F. Supp. 2d 650, 660 (E.D.
Pa. 2009) (denying summary judgment on tortious interference claim when the plaintiff’s version
of the facts supported intent to interfere).
Plaintiff’s version of the events at Cosmoprof could also support a finding that
Defendant’s conduct was improper. Defendant’s owner went to Plaintiff’s booth because he
thought Plaintiff was misrepresenting Defendant’s wax warmer and trade name, a motive that
could be considered proper. Empire Trucking Co., 71 A.3d at 935 (“[A]ct[ing] to protect a
legitimate business interest alone does not privilege [a competitor’s] actions.”). However, the

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way in which Defendant’s owner and employees insulted and accused Plaintiff of wrongdoing,
which caused BTB Northeast to terminate its contract with Plaintiff two days later, cannot be so
easily labeled as proper. Phillips, 959 A.2d at 433 (stating that “in some circumstances
misrepresentations and/or rumor mongering by a competitor may constitute improper
interference with contractual relations”). There is a dispute over how Ryzman confronted
Plaintiff and which of the representatives were present during the confrontation. These two facts
impact a determination of whether Defendant’s conduct was proper because the nature of
Defendant’s conduct and Defendant’s motive are factors that should be considered in evaluating
“proper” conduct. If Plaintiff proves that Ryzman was in fact yelling at Plaintiff’s booth when
manufacturing representative groups were around, a reasonable factfinder could find Defendant’s
conduct improper. Overall, a jury must resolve factual disputes surrounding what happened at
Cosmoprof before a determination can be made with regard to whether Defendant’s actions fall
outside the societal “rules of the game” or were simply normal competitive behavior.
Plaintiff has established that factual questions remain with regards to what happened at
Cosmoprof that are material to determining whether Defendant intentionally and improperly
interfered with Plaintiff’s contract with BTB Northeast. Consequently, issues for trial remain,
and summary judgment is not appropriate on Count I, as it relates to the BTB Northeast contract.
2.

Interference with BTB Southeast and VNC Contract

Plaintiff claims that Defendant tortiously interfered with the contracts that Plaintiff had
with BTB Southeast and VNC. Plaintiff alleges that Defendant directed BTB Southeast and
VNC to terminate their respective contracts with Plaintiff. Plaintiff contends that Defendant’s
interference can be inferred from circumstantial evidence that primarily relates to the timing and

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context of the termination. 6 Most notably, both BTB Southeast and VNC terminated their
respective contracts with Plaintiff on the exact same day, without any prior notice. “We are []
mindful that the evidence relied upon by the non-moving party need not be direct evidence, but
may be circumstantial evidence and the inferences reasonably deducible therefrom.” InfoSAGE,
Inc. v. Mellon Ventures, L.P., 896 A.2d 616, 626 (Pa. Super. Ct. 2006); see also Geyer, 506 A.2d
at 910 (“[T]he jury usually will be called upon to draw an inference from circumstantial
evidence.”). Courts are permitted to infer factual conclusions based on circumstantial evidence
when “human experience indicates a probability that certain consequences can and do follow
from the basic circumstantial facts.” Edward J. Sweeney & Sons, Inc. v. Texaco, Inc., 637 F.2d
105, 116 (3d Cir. 1980).
i.

BTB Southeast

BTB Southeast renewed its contract with Plaintiff on March 1, 2011. The contract was
renewed for one year, and termination of the contract was permitted with ninety days written
notice. However, on April 1, 2011, only one month after renewing its contract, BTB Southeast
cancelled its contract with Plaintiff. BTB Southeast did not provide any prior notice to Plaintiff,
either written or oral, before terminating the contract. BTB Southeast decided to “disengage[]
completely” from representing Plaintiff after BTB heard from its customers that Plaintiff was
pursuing a lawsuit against Defendant. (Eric Berger Dep. 41-42.) By cancelling its Southeast

6

Plaintiff also offers direct evidence that Defendant tortiously interfered with Plaintiff’s
contracts. Plaintiff alleges that agents from both BTB Southeast and VNC told Lipkowitz that
Defendant had pressured them into terminating their respective contracts with Plaintiff.
(Lipkowitz Dep. 63, 138-167.) Defendant argues that Lipkowitz’s statements are inadmissible
hearsay, and offers deposition testimony from Coleman and Berger, who deny many of the
Lipkowitz assertions. Since we conclude that Plaintiff has offered sufficient circumstantial
evidence to demonstrate that there is a dispute of material fact as to whether Defendant
improperly intervened in Plaintiff’s contractual relationships, we need not address the hearsay
issue at this time. That issue will be addressed based upon the circumstances at trial.
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contract without any notice one month after signing its renewal lease, BTB did not honor its oneyear contract with Plaintiff, nor did it provide the required ninety-day notice.
ii.

VNC

VNC signed a contract with its Northeast region on October 1, 2010, and signed a
contract with its Westcoast region on November 1, 2010. VNC was required to provide thirty
days written notice in order to terminate its contracts with Plaintiff. Like BTB Southeast, VNC
terminated all of the contracts that it had with Plaintiff on April 1, 2011. VNC did not provide
any prior notice, either written or oral, before terminating its contracts with Plaintiff. Rather,
VNC simply sent a fax to Plaintiff stating it was terminating its relationships with Plaintiff “as to
all lines and for all purposes effective April 1, 2011.” (Pls. Resp. Ex. 6.) VNC’s fax did not cite
any reason for its termination.
In addition, VNC cancelled its contract with Plaintiff only ten days after Plaintiff
displayed its products under the Mastex brand at the 2011 NeBRA Eastern Buying Conference
Trade Show. Specifically, Plaintiff was displaying its Mastex products under the VNC banner.
Lipkowitz stated while at the NeBRA trade show, he spoke with one of VNC’s representatives,
Charlie Coleman. According to Lipkowitz, Coleman said “we look for a great relationship
between [VNC] and [Plaintiff].” 7 (Lipkowitz Dep. 140.) Lipkowitz stated that Coleman said he
7

Defendant argues that these statements should be rejected as inadmissible hearsay. We
agree that “hearsay statements can be considered on a motion for summary judgment only if they
are capable of admission at trial.” Shelton v. Univ. of Med. & Dentistry of New Jersey, 223 F.3d
220, 226 n.7 (3d Cir. 2000). However, we disagree with Defendant that these statements are not
necessarily capable of admission at trial.
The statements may be admissible “depending on the purpose for which they [a]re used.”
New L&N Sales & Mktg., Inc. v. Menaged, No. 97-4966, 1998 WL 575270, at *5 (E.D. Pa. Sept.
9, 1998); see also E.E.O.C. v. Standard Register Co., 805 F. Supp. 2d 77, 81 n.5 (M.D. Pa. 2011)
(holding that the court is permitted to consider the deposition testimony because the non-moving
party “might offer th[e] statement into evidence for some purpose other than to prove the truth of
the matter asserted” (citation omitted)). Here, Coleman’s statements might be used to
demonstrate his intent, motive, or plan. See United States v. Hernandez, 176 F.3d 719, 726 (3d
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was “very, very happy with [Plaintiff’s] line.” (Id. at 142.) It is notable that VNC was
representing Plaintiff’s Mastex products at the NeBRA trade show ten days before VNC
suddenly terminated the contract. Since Defendant created an improper disturbance at
Cosmoprof in 2010 because Plaintiff was selling its products under the Mastex brand, and since
Plaintiff similarly marketed its products under the Mastex brand at NeBRA in 2011, it would be
reasonable for a jury to infer that Defendant may have acted improperly in order to keep its
consumer base. Plaintiff has produced evidence showing that only ten days before it suddenly
terminated its relationship with Plaintiff, VNC was satisfied with Plaintiff. Given that VNC also
had a contractual relationship with Defendant at the time, a reasonable jury could conclude that
Defendant influenced VNC to terminate its contract with Plaintiff after observing VNC promote
Plaintiff’s Mastex products.
This fact, coupled with the fact that BTB Southeast terminated its contract with Plaintiff
on the exact same day, raises a dispute of material fact as to whether Defendant tortiously
interfered in Plaintiff’s contractual relationships with BTB Southeast and VNC. Lipkowitz
testified that “[t]he only sales Reps that have ever dropped [Plaintiff] did so either at the
CosmoProf . . . or ten days after the 2011 NeBRA show . . . .” (Lipkowitz Affidavit 7.) At both
of those trade shows, Plaintiff was displaying its Mastex products. Plaintiff maintains that the
only time that a sales representative has terminated a contract with Plaintiff is if the sales
representative also had an ongoing contractual relationship with Defendant.
Cir. 1999) (“The rule is now firmly established that there are times when a state of mind, if
relevant, may be proved by contemporaneous declarations of feeling or intent.” (citation and
internal quotation marks omitted)).
Given that these statements may be capable of admission at trial, we will consider them at
this stage. We note, however, that this consideration does not make the statements automatically
admissible at trial. See Fraternal Order of Police, Lodge 1 v. City of Camden, 842 F.3d 231, 239
(3d Cir. 2016) (“We do not, of course, intend this ruling to control whether these out-of-court
statements will actually be admitted at trial. That question need not be answered now.”).
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In this case, human experience would permit a reasonable jury to find that Defendant
improperly interfered with Plaintiff’s contractual relationships with BTB Southeast and VNC.
Accordingly, issues for trial remain, and summary judgment is not appropriate as it relates to
Plaintiff’s contracts with BTB Southeast and VNC.
B.

Tortious Interference with a Prospective Contract

To establish a “prospective contractual relationship,” Pennsylvania law requires that there
be an “objectively reasonable probability” that a contract would have come into existence.
Schulman v. J.P. Morgan Inv. Mgmt., Inc., 35 F.3d 799, 808 (3d Cir. 1994) (citing Thompson
Coal Co. v. Pike Coal Co., 412 A.2d 466, 471 n.7 (Pa. 1979)). The probability must be
“something less than a contractual right but more than a mere hope that there will be a future
contract.” Acumed LLC v. Advanced Surgical Serv., Inc., 561 F.3d 199, 213 (3d Cir. 2009)
(citation omitted). “This is an objective standard which of course must be supplied by adequate
proof.” Polay v. West Co., No. 88-9877, 1990 WL 59351, at *10 (E.D. Pa. May 7, 1990)
(citations omitted).
Plaintiff alleges that Defendant tortiously interfered with the prospective contract that
Plaintiff had with CFN. As evidence that there was a prospective contract, Plaintiff refers to
Lipkowitz’s interactions with CFN employee, Chuck Cohen. Lipkowitz testified that at
Cosmoprof, he called Cohen over to his booth and told Cohen about Plaintiffs’ products, and his
desire to do business with CFN. Lipkowitz stated that Cohen brought four sales representatives
over to Lipkowitz’s booth. Cohen subsequently left Lipkowitz’s booth and then returned twenty
minutes later. According to Lipkowitz, Cohen stated that he “would like to have [Plaintiff’s line]
for the Midwest.” (Lipkowitz Dep. at 168-69.) In response, Lipkowitz told Cohen to call him on
Thursday, that they would “set up a sales meeting” during that phone call, and that he would then

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“fly out to Chicago as soon as the sales meeting is available.” (Id.) In response, Cohen then
stated “that sounds good to me” and told Lipkowitz that he would call him on Thursday. 8 (Id.)
Cohen specifically rejects making any of these statements. Cohen stated that he never
told Lipkowitz that he was interested in representing Plaintiff, and that he would never want to
be involved in conducting business with Lipkowitz. A review of the record reveals that Plaintiff
has established that material facts are in dispute with regard to whether there was a prospective
contract between CFN and Plaintiff. Cohen’s alleged statements at Cosmoprof indicate that
there is more than a “mere hope” that there would be a contractual relationship between CFN and
Plaintiff. Acumed, 561 F.3d at 213 (citation omitted). Cohen’s statements suggest that he
intended to sell Plaintiff’s products, and that he intended to set up meetings with Lipkowitz in
order to develop this business relationship. This is sufficient to demonstrate a prospective
contractual relationship between CFN and Plaintiff.
Lipkowitz states that Cohen called him the Thursday following Cosmoprof, informing
him that he did not wish to represent Plaintiff’s products. Cohen denies this. According to
Lipkowitz, Cohen reaffirmed during the phone call that he would “love to represent [Plaintiff] in
the Midwest,” however he did not attempt to form a business relationship with Plaintiff.
(Lipkowitz Dep. 170.) As discussed above, if Plaintiff proves that Ryzman was in fact yelling at
Plaintiff’s booth when manufacturing representative groups were in the vicinity, a reasonable
jury may find that Defendant acted with intent to harm Plaintiff’s prospective contract, and may
thus find Defendant’s conduct improper. Given the testimony that Cohen demonstrated an
interest in representing Plaintiff, and yet refused to do business with Plaintiff shortly after
8

Defendant argues that Cohen’s statements should not be considered because they are
inadmissible hearsay. Similar to the reasoning above, there is a possibility that Cohen’s
statements could be used to show his then-existing state of mind to prove his intent, plan, or
motive—that he intended to form a contractual relationship with Lipkowitz in the future. Again,
the admissibility of any hearsay statements will be determined at trial.
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Cosmoprof, Plaintiff has established that material facts are in dispute as to whether Defendant
improperly interfered with this potential contract. Therefore, issues for trial remain, and
summary judgment is not appropriate as it relates to Plaintiff’s prospective contract with CFN.
IV.

CONCLUSION
For the foregoing reasons, Defendant’s Motion for Summary Judgment will be denied.
An appropriate Order follows.

BY THE COURT:

_________________________
R. BARCLAY SURRICK, J.

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