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Forman Industries, Inc. v. Blake-Ward

September 15, 2008

FORMAN INDUSTRIES, INC., PLAINTIFF-APPELLANT,
v.
ROBERT BLAKE-WARD AND UNITED FIXTURES COMPANY, INC., INDIVIDUALLY AND/OR DOING BUSINESS AS J & D ASSOCIATES, NATIONAL STORE FIXTURES, AND RETAIL SERVICE SOLUTIONS, DEFENDANTS-RESPONDENTS, AND JOSEPH MC GOWAN, CONSOLIDATED CONTRACTORS, LLC, LEE DONAT, JAMIE DE REAMER, FORTE CARPENTRY, INC., UNITED FIXTURES COMPANY, INDIVIDUALLY AND/OR DOING BUSINESS AS J & D ASSOCIATES, NATIONAL STORE FIXTURES AND RETAIL SERVICE SOLUTIONS, DEFENDANTS.



On appeal from the Superior Court of New Jersey, Law Division, Middlesex County, Docket No. L-5332-06.

Per curiam.

NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION

Argued May 7, 2008

Before Judges Sapp-Peterson, Messano and Newman.

This appeal arises out of a former employment relationship between plaintiff, Forman Industries, Inc. (Forman), and defendant, Robert Blake-Ward. Plaintiff claimed that during the course of Blake-Ward's employment with Forman, he breached a duty of loyalty to it by diverting confidential information and customers to his new employer, defendant J & D Associates (J & D), a division of defendant United Fixtures Company, Inc. (UFCI), which induced Blake-Ward to engage in such conduct, and subsequently both Blake-Ward and UFCI reaped the benefits of Blake-Ward's disloyalty. Plaintiff also alleged that defendants' actions constituted unfair competition and misappropriation, tortious interference, breach of contract and unjust enrichment. Finally, plaintiff contended defendants breached state and federal computer protection statutes in the course of their scheme. The motion judge granted defendants' summary judgment motion in its entirety and dismissed plaintiff's complaint. The present appeal followed.

On appeal plaintiff raises the following points for our consideration:

POINT I

IN GRANTING THE DEFENDANTS' MOTIONS FOR SUMMARY JUDGMENT, THE TRIAL COURT ERRED BY MISAPPLYING THE APPROPRIATE SUMMARY JUDGMENT STANDARD.

POINT II

BY MISAPPLYING THE SUMMARY JUDGMENT STANDARD, THE TRIAL COURT ERRED IN DISMISSING FORMAN'S CLAIMS FOR BREACH OF DUTY OF LOYALTY.

POINT III

THE TRIAL COURT ERRED IN DISMISSING FORMAN'S CLAIMS FOR MISAPPROPRIATION OF PROPRIETARY OR CONFIDENTIAL INFORMATION AND UNFAIR COMPETITION.

POINT IV

BY MISAPPLYING THE SUMMARY JUDGMENT STANDARD, THE TRIAL COURT ERRED IN DISMISSING FORMAN'S CLAIMS FOR TORTIOUS INTERFERENCE.

POINT V

BY MISAPPLYING THE SUMMARY JUDGMENT STANDARD, THE TRIAL COURT ERRED IN DISMISSING FORMAN'S CLAIMS FOR UNJUST ENRICHMENT.

POINT VI

THE TRIAL COURT ERRED IN DISMISSING FORMAN'S CLAIMS FOR VIOLATION OF THE NEW JERSEY COMPUTER RELATED OFFENSES ACT AND THE FEDERAL COMPUTER FRAUD AND ABUSE ACT.

POINT VII

THE TRIAL COURT ERRED IN DISMISSING FORMAN'S CLAIMS BASED ON BLAKE-WARD'S BREACH OF HIS EMPLOYMENT AGREEMENT.

POINT VIII

IN HOLDING THAT UFCI CANNOT BE LIABLE TO FORMAN AS A SUCCESSOR TO UFC, THE TRIAL COURT ERRED IN APPLYING DELAWARE SUCCESSOR LIABILITY LAW AND IGNORING THE EVIDENCE DIRECTLY IMPLICATING UFCI IN BLAKE-WARD'S WRONGFUL CONDUCT.

We have considered each of the points raised in light of the record, arguments of counsel, and applicable legal principles. We disagree with the court's determination that UFCI was not a successor corporation to United Fixtures Company (UFC) for liability purposes and the court's determination that "no rational fact-finder could admit the authenticity of [the alleged restrictive covenant]," but conclude that these rulings do not affect the court's grant of summary judgment in favor of defendants. With the exception of these two rulings, we affirm substantially for the reasons set forth in Judge LeBlon's May 25, 2007 comprehensive and well-reasoned written opinion.

Plaintiff, formed in 1984, is a closely held New Jersey corporation that specializes in, among other things, remodeling work and inspection/maintenance services for racks, displays and lighting systems, product displays and storage solutions for the retail and commercial industry across the United States. Although its headquarters is in New Jersey, its retail repair operation, Retail Repair Services, where Blake worked, was set up in Atlanta because its biggest customer, Home Depot, is also located there. Forman's majority shareholders are Scott and Steven Forman.*fn1

Blake-Ward joined Forman in 2003 and brought with him more than ten years of service in maintenance, retail repair and operations in retail establishments such as Home Depot and The Sports Authority. As a result of his prior relationship with those companies, Blake-Ward had developed a number of contacts within the large retail industry that proved valuable to plaintiff. Blake-Ward reported to Joseph McGowan, who, until his voluntary resignation in January 2005, was Forman's chief operating officer and a director of Forman.

In December 2004, McGowan shared with Blake-Ward his intention to leave the company and to start a business that would compete with plaintiff. McGowan invited Blake-Ward to join him in this new venture. The two men had a number of discussions about the venture, Blake-Ward reviewed the proposed venture's business plan and provided biographical information to McGowan in the event he decided to accept the offer. He ultimately declined the offer. McGowan voluntarily left Forman, effective January 31, 2005, and directed all of his energy to Consolidated Contractors, LLC (Consolidated), a corporation created by the management group of Forman for the purpose of engaging in contracts for union work. When it was created, McGowan was ...


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