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DSCL LLC v. Wolf

Superior Court of Maine, Cumberland

June 2, 2016

DSCL LLC, Plaintiff
v.
TODD WOLF, Defendant

          ORDER ON DEFENDANT'S MOTION FOR SUMMARY JUDGMENT

          Nancy Mills, Justice

          Before the court is defendant Todd Wolfs motion for partial summary judgment on count II of his counterclaim against plaintiff DSCI, LLC, in which defendant asks the court to declare that the non-compete agreement does not prohibit defendant from participating in and /or bidding in response to requests for information (RFIs) and requests for proposals (RFPs). For the following reasons, the motion is denied. FACTS

         Plaintiff is in the business of providing telephone, internet, and computer services. (Pl.'s Addt'l S.M.F. ¶ 1.) In October 2014, plaintiff purchased the assets of Unified Technologies, Inc. (Unified) for more than $1 million. (Id. ¶ 2.) These assets included all of Unified's contracts, as well as its good will. (Id. ¶¶ 3, 5.) The purchase and sale agreement identified approximately 200 customers who had contracts with Unified at the time of the sale. (Id. ¶ 4.) Of these customers, 46 were non-profit, educational, governmental entities, or quasi-governmental entities. (Id. ¶ 9.)

         At the time of the sale, defendant was a shareholder and employee of Unified, as well as its president. (Id. ¶ 6.) Defendant received approximately $500, 000.00 from the sale. (Id.7.) On October 1, 2014, the parties executed a non-competition and non-

         DISCUSSION

         1. Standard of Review

         Summary judgment is appropriate "if the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any . . . show that there is no genuine issue as to any material fact." M.R. Civ. P. 56(c). "A material fact is one having the potential to affect the outcome of the suit." MP Assocs. v. Liberty, 2001 ME 22, ¶ 12, 771 A.2d 1040. "A genuine issue exists when sufficient evidence supports a factual contest to require a factfinder to choose between competing versions of the truth at trial." Burdzel v. Sobus, 2000 ME 84, ¶ 6, 750 A.2d 573. In contract disputes, the "test is whether the moving party presented the court with undisputed facts which would necessarily be determinative of the meaning of the contract." Tondreau v. Sherwin-Williams Co., 638 A.2d 728, 730 (Me. 1994) (citation omitted).

         2. Motion for Partial Summary Judgment

         a. Interference and Solicitation

         Defendant argues that, if the RFIs and RFPs are initiated by the entities, and not by defendant, defendant's response to these requests cannot be viewed as intentional interference or solicitation under the agreement. (Def.'s Mot. Summ. J. 2-4.) Plaintiff counters that defendant's response to RFIs and RFPs from plaintiff's customers would interfere with plaintiff's business relationships by soliciting its customers to instead form a relationship with defendant's company. (Pl.'s Opp'n Mot. Summ. J. 2-4.)

         Section 3(A) of the agreement provides in part that defendant shall not, until October 2016, "intentionally interfere in any material respect with the business relationships (whether formed prior to or after the date of this Agreement) between [plaintiff] and its Affiliates and customers or suppliers of [plaintiff] and its Affiliates." solicitation agreement (agreement), as well as an agent agreement. (Supp. S.M.F. ¶¶ 4-5.) Defendant was represented by counsel during the negotiation of these agreements. (Pl.'s Addt'l S.M.F. ¶ 15.) On September 8, 2015, plaintiff terminated the agent agreement, effective October 8, 2015. (Supp. S.M.F. ¶ 6.)

         On September 29, 2015, plaintiff filed a verified complaint, in which plaintiff alleges one count of breach of contract. Specifically, plaintiff alleges that defendant breached the agreement by causing several of plaintiff's customers to cancel their contracts with plaintiff and enter into a business relationship with defendant's company, Wolf Technology Group. In addition to the verified complaint, plaintiff filed a motion for a temporary restraining order. Defendant opposed the motion on October 16, 2015. On December 7, 2015, the court denied the motion, finding that plaintiff had not demonstrated either irreparable injury or a likelihood of success on the merits.

         Defendant filed an answer and counterclaim on January 28, 2016. In the counterclaim, defendant alleges two causes of action: count I, breach of contract; and count II, declaratory judgment. In count II, defendant seeks a declaratory judgment that the agreement does not prohibit defendant from participating in and/or bidding in response to RFIs and RFPs from non-profit, educational, governmental, and quasi-governmental entities. See 5 M.R.S. §§ 1825-B, 1825-D (2015).

         On February 22, 2016, defendant filed a motion for partial summary judgment on count II of his counterclaim. Plaintiff opposed the motion on March 14, 2016. Plaintiff filed an opposing statement of material facts that admitted all of defendant's facts and asserted 15 additional facts. Defendant filed a reply on April 4, 2016.[1] (Supp. S.M.F. ΒΆ 4; Ex. A 2.) Similarly, section 3(C) provides that defendant shall not "solicit or entice, or attempt to solicit or entice, any clients or customers of [plaintiff] or its Affiliates or potential clients or customers of [plaintiff] and its Affiliates, for purposes of diverting their business or ...


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