Panhandle Cleaning & Restoration, Inc. v. Vannest et al

Filing 75

FINDINGS OF FACT AND CONCLUSIONS OF LAW, Court finds in favor of plaintiff Panhandle Cleaning & Restoration, Inc. and against defendant Shahn Golec in this injunctive proceedings. This civil action is DISMISSED and STRICKEN from the active of this Court. Clerk directed to enter judgment. Signed by Senior Judge Frederick P. Stamp, Jr on 4/3/13. (cc)

IN THE UNITED STATES DISTRICT COURT
FOR THE NORTHERN DISTRICT OF WEST VIRGINIA
PANHANDLE CLEANING &
RESTORATION, INC.,
Plaintiff,
v.

Civil Action No. 5:11CV178
(STAMP)

RONALD W. VANNEST,
CHARLES W. WYCKOFF
and SHAHN GOLEC,
Defendants.
FINDINGS OF FACT AND CONCLUSIONS OF LAW
I.

Procedural History

Panhandle Cleaning & Restoration, Inc. (“Panhandle”) filed
this civil action in the Circuit Court of Ohio County, West
Virginia against defendants, Ronald W. Vannest (“Vannest”), Charles
W. Wyckoff (“Wyckoff”) and Shahn Golec (“Golec”), which action was
then removed to this Court.

The suit alleged that Panhandle is

engaged in the business of providing contracting services for the
construction,

restoration

and

remodeling

of

residential

and

commercial structures and that the three defendants entered into a
written agreement with Panhandle.1
that

defendant

Panhandle

1

to

Golec
be

entered

employed

into

Plaintiff Panhandle alleged
a

written

generally

as

agreement
a

with

construction

Since the plaintiff thereafter settled with defendants
Vannest and Wyckoff on all claims and Panhandle settled its suit
for monetary damages with Golec, this case was tried before this
Court on the sole issue of a request for a permanent injunction
proceeding only against defendant Golec.

superintendent/designer under a written agreement attached to the
complaint as Exhibit C. The agreement which Panhandle alleges that
it entered into with Golec contains what is known as a noncompetition and non-solicitation covenant as set forth in paragraph
7 which is quoted verbatim in Finding of Fact No. 27 below.
Panhandle alleges that Golec has violated the non-competition
provision under paragraph 7 by impermissibly contacting and/or
otherwise interacting with clients of Panhandle with the intent to
perform work that is directly in competition with the services
provided by Panhandle and by soliciting current employees to leave
their employment with Panhandle to begin work with defendant’s
business, all of which violates the non-competition and nonsolicitation covenant contained in paragraph 7 of the alleged
employment contract with Golec.

Panhandle further alleged that it

has suffered immediate and irreparable harm for which there is no
adequate remedy at law.

Consequently, plaintiff sought injunctive

relief for the breach of contract as well as damages for the breach
of contract.2

Defendants filed a counterclaim against Panhandle.

Following

discovery,

all

parties

filed

motions

for

summary

judgment.

Panhandle filed a motion for partial summary judgment.

In that motion, plaintiff argued that the non-competition and nonsolicitation covenants are valid and enforceable because they are

2

At no time in this civil action did Panhandle seek a
preliminary injunction under Federal Rule of Civil Procedure 65.
2

limited in scope and geography.
time

that

this

Court

should

Panhandle did not argue at that
find

that

Golec

violated

these

covenants but instead stated that this question should be left for
the jury to determine at trial.

Defendant Golec responded to

plaintiff’s motion by alleging that he did not sign the employment
agreement and, thus, the covenants did not apply to him.

Further,

Golec claimed that the covenants are generally not enforceable
because Panhandle has no specific business interest it is seeking
to protect and the covenant is too broad in both scope and
geography.
arguing

Defendant Golec filed a motion for summary judgment

that

he

did

not

breach

the

employment

agreement.

Alternatively, Golec asserted that even if he did breach the
employment agreement, there was no evidence of any monetary loss.
This Court found that genuine issues of material fact exist as to
whether Golec did sign the employment agreement.

Also, this Court

found that further inquiry needed to be made into exactly what
Panhandle’s business is and, thus, what type of work constitutes
being in direct competition with Panhandle.

However, this Court,

in stating the procedure to follow in determining whether a
restrictive covenant is reasonable, found that the restrictive
covenant in the alleged contract with Golec is at least valid and
enforceable as to time -- two years -- and geography -- fifty
miles.

The covenant places a two-year, fifty-mile restriction on

an employee after leaving Panhandle’s employment. This Court found

3

that this restriction is not excessively broad under West Virginia
case law. Therefore, this Court granted in part Panhandle’s motion
for partial summary judgment and denied defendant Golec’s motion
for summary judgment. Following the summary judgment rulings, this
Court scheduled a non-jury trial on the issue of the requested
injunction and scheduled a jury trial on the question of damages
following the bench trial.

As noted above, having been advised

during the summary judgment process that Panhandle had settled its
claims against defendant Vannest and Wyckoff, this Court in its
memorandum opinion and order dealing with the summary judgment
motion dismissed all claims against Vannest and Wyckoff.

ECF No.

55.
Further, by stipulation approved by this Court, the parties
agreed to permit Panhandle to amend its complaint to remove the
previous Count II, a breach of contract (damages) claim.
71 and 72.

ECF Nos.

Finally, following the injunction bench trial, the

parties stipulated to a dismissal of defendant Golec’s counterclaim
against Panhandle and, therefore, only the sole count for permanent
injunctive relief remained pending.
With the elimination of the jury trial on the damages claim
(previous Count II), the Court conducted a non-jury hearing on the
request for an injunction by Panhandle against Golec, following
which counsel for Panhandle and Golec submitted written closing
arguments.

4

Based upon this Court’s review of the evidence at the hearing
on the injunction claim and upon resolution of factual disputes
after giving due consideration to both the credibility of the
witnesses and the various documents admitted as exhibits as well as
those previously filed in this civil action, this Court pursuant to
Federal Rule of Civil Procedure 52(a) hereby makes the following
findings of fact and conclusions of law and finds that plaintiff
Panhandle Cleaning & Restoration, Inc. is entitled to injunctive
relief against defendant Shahn Golec in the manner set forth below.
II.
1.

At

the

Findings of Fact

one-day,

non-jury

trial

on

the

permanent

injunction issue, four witnesses testified: Robert C. Contraguerro,
Jr., Thomas M. Contraguerro, Bruce Cionni and Shahn Golec.
2.

Robert C. Contraguerro, Jr. (“Contraguerro, Jr.”) is the

vice president of Panhandle and the part owner of Panhandle along
with his father, Robert Contraguerro, Sr. (“Contraguerro, Sr.”).
Contraguerro, Jr. manages the estimating sales force and oversees
the operations of Panhandle.
3.
and

then

Panhandle started in 1977 as a carpet cleaning company
expanded

to

other

services,

including

restoration

following fires. Panhandle’s business then moved into the field of
reconstruction, remodeling, and new construction which included
kitchens,

bathrooms,

basements,

construction of new homes.

5

room

additions

and

even

the

4.

Panhandle advertises its business extensively through

various forms of traditional media and most recently through a
website and facebook.
5.

At the time of the hearing, Panhandle had three homes

under construction “from ground up.”
6.

Panhandle, through its construction expansion and the

opening of a division in that area, became interested in defendant
Golec through its knowledge of his experience in construction
design.

Panhandle,

therefore,

hired

Golec

to

manage

its

construction division.
7.

Panhandle, by that time a fairly large company, had the

ability to create a showroom and to establish vendor relationships,
including exclusive relationships with certain kitchen cabinet
manufacturers.
its

accounting

Panhandle also had substantial personnel to manage
system

and

software.

Golec,

in

Panhandle’s

estimation, had the skill to perform the work as well as to make
purchases in order to market a particular job.
8.

In

its

work,

Panhandle

obtained

written

agreements with certain but not all of its employees.

employment
So-called

“field employees” such as hourly laborers, truck drivers, and
carpenters did not have written employment agreements.

However,

Panhandle did require written agreements with certain “management
personnel” such as members of its sales and marketing force,

6

project managers and other individuals having access to company
business data, fee schedules and similar special information.
9.

Such employment agreements with management personnel

specifically

also

set

forth

specific

salaries,

benefits,

commissions and other compensation.
10.

These employment agreements benefitted both Panhandle and

the employee by setting forth to a particular employee what
Panhandle would provide to an employee and what Panhandle expected
of that employee.
11.

Written

agreements

for

certain

management

employees

contained non-competition clauses protecting Panhandle in certain
ways when an employee left Panhandle’s employment by preventing the
employee from competing directly or indirectly with Panhandle and
from using certain vendor and customer lists to the detriment of
Panhandle

as

well

as

prohibiting

a

departing

employee

from

soliciting Panhandle’s existing employees to leave Panhandle to
work for the departing employee.
12.

Contraguerro, Jr. testified that Panhandle entered into

such an employment agreement with defendant Golec because he was
managing a division of Panhandle.

Any such employee would be

required to enter into a written employment agreement which would
protect Panhandle from an employee upon his or her leaving the
company from soliciting other Panhandle employees, from using
information on customer and vendor lists, from obtaining trade

7

secrets, from using information about pricing, software programs
and from using similar specific information.
13.

Golec (or any similar employee) could use Panhandle’s

information concerning particular pricing levels to compete with
Panhandle by undercutting Panhandle’s price on a job.
14.

Golec had access to particular customer lists which

contained contact information, including address and telephone
numbers (including cell phone numbers).

This access would provide

Golec with information that he could use to his benefit (upon
leaving Panhandle) and, therefore, to Panhandle’s disadvantage and
detriment.
15.

Golec’s use of the above and other protected information

as a general contractor upon leaving Panhandle’s employment would
be considered competing with Panhandle under the terms of the
employment agreement.
16.

Panhandle invested over half a million dollars in its

showrooms regarding new construction services which is only one
portion of its business.
17.

Golec’s experience lay in new construction design.

He

brought to Panhandle a computer design program known as “20-20”,
which program Panhandle had not previously possessed.
18.

Panhandle advertises as a general contractor, one of

about thirty listed in the Wheeling and vicinity Yellow Pages.

8

Contraguerro, Jr. stated that the construction business in that
geographic area is a “pretty competitive business.”
19.

Thomas

M.

Contraguerro

(“T.

Contraguerro”)

is

vice

president of operations at Panhandle and, as such, deals with human
resources topics at that company, including hiring and firing of
employees,

screening

employment

applicants

and

performing

background checks.
20.

T. Contraguerro testified that all of Panhandle’s office

employees have written employment agreements which are standard
with any changes usually being made only as to name, address,
compensation and insurance information.
21.

T. Contraguerro testified that Panhandle had a written

employment agreement with defendant Golec.

This agreement dated

January 22, 2010 was admitted as plaintiff Panhandle’s Exhibit No.
1.

Pl.’s Compl. Ex. C.
22.

Golec’s

T. Contraguerro testified that the agreement contains
signature.

He

recognized

Golec’s

signature

on

this

agreement from his signature on other documents.
23.

T. Contraguerro stated at the injunction hearing that

Golec was actually in T. Contraguerro’s office with T. Contraguerro
when Golec reviewed the employment agreement and then signed the
agreement.
24.

T. Contraguerro testified that, at the time of the

signing, Golec asked a specific question about whether, if Golec

9

ever left his employment with Panhandle, he would be able to return
to his previous employer, to which T. Contraguerro responded that
under the terms of the agreement in that situation, Golec would not
be able to perform the type of work he was doing for Panhandle such
as

new

construction,

including

kitchen

and

bath

design

and

cabinetry work. At that time, Golec then stated that he planned to
be with Panhandle “for the rest of his career” and that he would
have no problem signing the agreement.

Golec then signed the

agreement in T. Contraguerro’s presence and was provided a copy of
the agreement.
25.

It was noted during the injunction hearing that the

employment agreement (Pl.’s Ex. 1) contains a lengthy blank space
at page 7 with the signatures being on a separate page 8.

T.

Contraguerro did not know why page 7 contained the blank space or
why the separate page 8 with the signatures was placed in the
agreement in that way.

However, T. Contraguerro denied that

Panhandle added Golec’s signature to Panhandle’s Exhibit No. 1 and
denied that Golec did not sign the agreement.
26.

T. Contraguerro testified that Golec requested no changes

to the agreement and that the employment agreement is the same type
of agreement that other Panhandle employees signed.
27.

Paragraph

7

of

the

employment

agreement

entered

Panhandle’s Exhibit No. 1 contains the following language:
7.
Non-Competition; Reimbursement of Training/
Certification. Employee hereby agrees that for a period
10

as

of two (2) years from and after the date on which the
Employee ceases to be employed with the Employer for
whatever reason, Employee will not, within a radius of
fifty (50) miles of the Employer’s then current business
address, directly or indirectly: (i) be employed by, or
work as a consultant or other independent contractor, for
another Employer which is either a client and/or customer
of the Employer or which is in competition with the
Employer; (ii) directly or indirectly, own, manage,
finance, or control any person, firm, or corporation
engaged in a similar line of business and in competition
with the Employer; (iii) solicit the Employer’s customers
and clients, or (iv) directly or indirectly solicit any
of the Employer’s employees to leave employment with the
Employer. The Employee expressly acknowledges that this
covenant is reasonable and will not prevent or impose an
undue hardship or otherwise prevent the Employer from
earning a livelihood during the time it is in effect.
In addition to the above, in the event that the
Employer has incurred expenses in the training and/or
certification of the Employee and the Employee either (i)
voluntarily ceases employment with the Employer; or (ii)
is terminated for misconduct by the Employer, then the
Employee shall reimburse the Employer for all of the
costs attributed to such training and/or certification as
follows:
A.
If the termination of employment occurs within
one (1) year from the completion of such training and/or
certification, reimbursement shall for all such costs.
B.
If termination of employment occurs within two
(2) years from such training and/or certification,
reimbursement shall for two-thirds of such costs.
C.
If termination of employment occurs within
three (3) years from the completion of such training
and/or certification, reimbursement shall for one-third
of such costs.
The Employee’s reimbursement obligation hereunder shall
cease upon the third anniversary of such training and/or
certification.
The Employee hereby expressly authorizes the
Employer to withhold all or any portion of any
reimbursement obligation from any unpaid wages or other
11

compensation which may be due and owing to Employee as of
the date of termination of employment.
Employee acknowledges and agrees that the rights of
the Employer under this Agreement are of a specialized
and unique character and that irreparable harm will
result to the Employer if the Employee fails to perform
his obligation under this Agreement.
Therefore, the
Employer may, in addition to any other remedies and
damages available, seek an injunction in a court of
competent jurisdiction to restrain any such failure or
refusal by the Employee to comply with the provisions of
this Agreement.
The Employer shall be entitled to
recover all costs incurred in the enforcement of this
Agreement, including reasonable attorney’s fees.
28.

Defendant Golec testified at the trial that he never

signed any employment agreement with Panhandle.

Golec was shown a

counterclaim that he and the two other defendants filed in this
civil action.

That counterclaim (ECF No. 6) asserted, among other

things, that Golec “signed an employment agreement with Panhandle
which

was

materially

different

from

attached as Exhibit C to the complaint.

the

EMPLOYMENT

AGREEMENT

The employment agreement

actually signed by defendant Golec did not contain a non-compete
provision.”

At trial, Golec testified that he never signed any

employment agreement and that what he stated in the counterclaim
about there being another agreement with Panhandle was “a mistake.”
Golec stated that the signature on his answers to interrogatories
filed in this case (Def.’s Ex. 1) and the signature on the
employment agreement (Pl.’s Ex. 1) “are similar, but they don’t
appear to be the same.”

Golec testified that he did not remember

12

having a conversation with T. Contraguerro that he was planning to
stay at Panhandle for the rest of his career.
29.

Contraguerro, Jr. testified that Golec had “been gone

from Panhandle” for “about a year,” meaning that he left in or
around October 2011. In a pretrial document, counsel for plaintiff
stated that “[i]n or around November 2011, each of the Defendants
resigned

from

their

positions

with

Panhandle.”

Counsel

for

defendant Golec in a pretrial document stated: “Each of the
defendants left the employment of Panhandle in 2011.”

Panhandle’s

list of exhibits filed before the then scheduled jury trial, to
which there was no objection filed, includes: Exhibit No. 14: pay
stubs representing payment made to Shahn Golec, dated August 26,
2011; Exhibit No. 12: employee COBRA notice to Shahn Golec, dated
August 26, 2011, noting the end of employment was “voluntary,”
along with a certified mail receipt; and Exhibit No. 13: mail
receipt and express mail label dated August 25, 2011, with a
notation that it deals with “mailing information of Shahn Golec
Final Paycheck.”
30.

T. Contraguerro testified that after Golec left his

employment with Panhandle, T. Contraguerro was driving with his
fiancé looking at various homes and went to one location around St.
Clairsville, Ohio in an area called Barkcamp, near Barkcamp State
Park.

A sign in front of one construction site had the name of a

company that T. Contraguerro believed to be a company operated by

13

Golec.

T. Contraguerro called the telephone number listed on the

sign and was connected with Golec’s voice mail.

T. Contraguerro

also recognized a vehicle in front of the site as belonging to Mark
Thomas, a former employee of Panhandle. The Barkcamp area, outside
of St. Clairsville, Ohio, is less than fifty miles from Panhandle’s
Wheeling, West Virginia location.
31.

T. Contraguerro stated that he returned about a week

later to the construction site and took photographs (Pl.’s Ex. 2).
The photographs show a new home being built and a sign indicating
Custom Contractors as the builder.

The photographs showed Golec

standing near the sign as well as vehicles of Joby Martin and Mark
Thomas, two former employees of Panhandle.
32.

Golec admitted he was operating as a general contractor

using the name Custom Contractors.

Golec also admitted that he

was building a house under that name outside of Barkcamp, starting
construction there in June 2012 and that this was the first
building project that he undertook after leaving his employment
with Panhandle.
33.

Golec testified that even while he was employed at

Panhandle, he was working on “outside projects” on his own, such as
kitchen remodeling and installing floor tile.
34.
Panhandle,

Bruce

A.

testified

Cionni
that

(“Cionni”),
Golec

called

a

cabinet

him

after

builder
Golec

at

left

employment at Panhandle to see how Cionni was doing and to tell

14

Cionni that Golec was now in “business for himself.”

Cionni said

that Golec said he was not calling to “solicit a job or anything
like that.”

Golec told Cionni he would be printing ads in the

newspaper for employment with the company.

Golec told Cionni that

he had financial backing and that Golec had a few jobs lined up in
the construction field.

Cionni stated he and Golec were pretty

good friends and that Cionni felt from the conversation with Golec
that Golec was talking about the “possibility” of Cionni coming to
work for Golec.
35.

Any finding made by this Court which is not a finding of

fact shall be deemed a conclusion of law.
III.
1.

Conclusions of Law

Both parties agreed that in determining whether to grant

injunctive relief in a civil action of this nature, the plaintiff
must prove:
(1) that it has suffered an irreparable injury; (2) that
remedies available at law, such as monetary damages, are
inadequate to compensate for that injury; (3) that,
considering the balance of hardships between the
plaintiff and the defendant, a remedy in equity is
warranted; and (4) that the public interest would not be
disserved by a permanent injunction.
eBay, Inc. v. MerExchange, LLC, 547 U.S. 388, 126 S. Ct. 1837, 64
L.Ed.2 641 (2006).

While the above case deals with a permanent

injunction and the parties seek relief on this basis, this Court
can only grant injunctive relief for the time period provided in

15

paragraph 7, in this case, two years from the date Golec ceased
employment with Panhandle.
2.

In determining the credibility of the witnesses who

testified at this hearing, this Court has been guided by a number
of factors, including the manner in which a witness testified, any
bias that the witness may have, the character of the testimony
given, and any evidence contrary to the testimony of the witness.
3.
admitted

Based upon this Court’s review of all of the evidence
or

consideration

considered
to

the

at

the

credibility

hearing
of

the

and

after

witnesses

and

giving
those

documents admitted into evidence at the hearing or otherwise
considered as relevant, this Court finds that plaintiff Panhandle
Cleaning & Restoration, Inc. has proven by a preponderance of the
evidence

that

defendant

Shahn

Golec

voluntarily

signed

the

employment agreement with Panhandle Cleaning & Restoration, Inc.
(Pl.’s Ex. 1) dated the 22nd day of January, 2010, which contained
the non-competition provision set forth in paragraph 7; that Golec
was aware of the terms of the 2010 employment agreement, including
paragraph 7; that Golec, thereafter, after leaving his employment
with Panhandle breached the terms and conditions of the employment
agreement including paragraph 7 by directly engaging in prohibited
construction projects as a general contractor through his own
contracting business and by soliciting other employees of Panhandle
to leave employment with Panhandle and to work for Golec, all

16

within the prohibited time period of two years and within the
prohibited geographic limitation of fifty miles from Panhandle’s
business address in Wheeling, West Virginia; and that Golec acted
in competition with Panhandle during the prohibited time period and
geographic location. Further, the covenant in paragraph 7 protects
Panhandle’s business interests as a general contractor.
4.

Golec’s actions in violation of paragraph 7 of his

employment agreement with Panhandle have caused Panhandle to suffer
irreparable injury not compensable adequately through monetary
damages because of the nature of the right that is injured and
that, after considering the balance of hardship between Panhandle
and

Golec,

warranted.

a

remedy

The

in

public

equity

through

interest

is

injunctive

served

by

relief

seeing

to

is
the

enforcement of valid commercial agreements which include reasonable
non-competition provisions, such as those contained in paragraph 7
of the January 22, 2010 employment agreement between Panhandle and
Golec.
5.

Defendant Golec is enjoined from further acting contrary

to and in violation of the provisions of paragraph 7 of his
employment agreement until August 26, 2013, which this Court
determines is two years from August 26, 2011, which this Court
finds

is,

more

likely

than

not,

the

final

date

of

Golec’s

employment with Panhandle, and which this Court finds as to Golec

17

to be the “date on which Employee ceases to be employed with the
Employer” under the subject employment agreement.
6.

Any conclusion of law by this Court which is not a

conclusion of law shall be deemed a finding of fact.
7.

This Court finds in favor of the plaintiff Panhandle

Cleaning & Restoration, Inc. and against defendant Shahn Golec in
this injunctive proceeding.
It is ORDERED that this civil action be DISMISSED and STRICKEN
from the active docket of this Court.
IT IS SO ORDERED.
The Clerk is DIRECTED to transmit a copy of these findings of
fact and conclusions of law to counsel of record herein.

Pursuant

to Federal Rule of Civil Procedure 58, the Clerk is DIRECTED to
enter judgment on this injunctive matter.
DATED:

April 3, 2013

/s/ Frederick P. Stamp, Jr.
FREDERICK P. STAMP, JR.
UNITED STATES DISTRICT JUDGE

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