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Ruger Chemical Co., Inc. v. Universal Preservachem

March 27, 2009

RUGER CHEMICAL CO., INC. PLAINTIFF-RESPONDENT/ CROSS-APPELLANT,
v.
UNIVERSAL PRESERVACHEM, INC., MICHAEL RAVITZ, DANIEL RAVITZ, AND TAMMY HUGHES JENNERICH, DEFENDANTS-APPELLANTS/CROSS-RESPONDENTS.



On appeal from the Superior Court Of New Jersey, Law Division, Middlesex County, Docket No. L-1895-04.

Per curiam.

NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION

Argued October 20, 2008

Before Judges Reisner, Sapp-Peterson and Alvarez.

Defendants, Universal Preservachem, Inc. (UPI),*fn1 Michael Ravitz, Daniel Ravitz, and Tammy Hughes Jennerich (Jennerich) (collectively "defendants"), appeal from the judgment of the trial court, following a bench trial, finding (1) that defendant, Jennerich, breached her employment contract and duty of loyalty arising out of her disclosure of confidential information relating to plaintiff's customer and supplier information; and (2) that defendants, Michael Ravitz, Daniel Ravitz, and UPI knew of and facilitated Jennerich's conduct. The court entered judgment in favor of plaintiff for $144,144, exclusive of prejudgment interest, which the court also awarded in a post-judgment application.

On appeal, defendants contend (1) the court erred when it failed to dismiss the complaint after striking plaintiff's damages expert; (2) erred when it allowed plaintiff to use portions of defendants' expert's findings as part of plaintiff's case-in-chief; (3) that plaintiff failed to establish a causal connection between the documents Jennerich allegedly removed and the products that UPI sold; (4) the court failed to consider evidence that the two products with the largest dollar sales volumes were never sold to San Mar, a Ruger customer, by UPI during the relevant time period; (5) the court erred in failing to admit deposition testimony related to the reasons San Mar decreased its customer requirements from plaintiff; (6) the court erred in permitting testimony from two Ruger employees, Dorothy Bergheimer and Kelly Hayward; and (7) erred by permitting gross profits as a measure of damages. We have considered each of these contentions in light of the record and applicable legal contentions and reject each of them.

Plaintiff, who is a reseller of chemical products, purchases products from suppliers and then repackages them into sizes which are convenient for customer use. UPI, a competitor of Ruger, is engaged in the same business. Michael Ravitz is Vice President of Sales and Marketing for UPI, while Daniel Ravitz is its President. Jennerich, before joining UPI in January 2001, worked for Ruger, first as a customer service representative in 1989. One year later, she also became a purchasing agent. In both positions, she had access to information about Ruger's products, customers and suppliers, which information was treated by Ruger as confidential.

On November 13, 1992 Jennerich signed a confidentiality agreement with Ruger. The agreement did not, however, contain a non-compete clause. The information protected under the agreement included a list of actual or potential customers not known to the public, call lists, price lists, discounts, purchasing history, and individual contacts. Also covered under the agreement were the identities of manufacturers, distributors, suppliers, and contractors not publicly known. The agreement was binding during and after employment. The consideration for the agreement was Jennerich's employment.

In May 2000, Ruger was sold. A new employment agreement was prepared that contained a non-compete agreement. Jennerich never executed the agreement because she resigned before the agreement was presented to her for her signature. She submitted her resignation, effective January 30, 2001, in a written letter dated January 16, 2001. She continued working, however, until approximately January 26. On January 30, 2001, she signed an employment agreement with UPI.

In November 2002, Ruger filed a seven-count complaint against defendants. A non-jury trial commenced on January 16, 2007, and consumed four trial days. At its conclusion, the court issued a written opinion in which it found that Jennerich breached her contract with Ruger, breached her common law duty of loyalty, and that as a result of Jennerich's breach, Ruger sustained a loss of business to UPI and damages. The court also found that the Ravitz brothers and UPI knew of and facilitated this wrongful conduct. The court rejected plaintiff's claim for punitive damages, finding no conduct on the part of defendants that rose to the level of wantonness that would justify an award of punitive damages. The court entered judgment in favor of plaintiff in the amount of $144,144.

On appeal, defendants raise the following points for our consideration:

POINT I

THE TRIAL JUDGE ERRED BY FAILING TO DISMISS THE CASE AFTER STRIKING PLAINTIFF'S DAMAGE EXPERT ON DEFENDANT[S'] MOTION TO STRIKE EXPERT AND FOR SUMMARY JUDGMENT.

POINT II

THE TRIAL JUDGE ERRED BY ALLOWING PLAINTIFF TO USE PORTIONS OF DEFENDANT[S'] EXPERT'S FINDINGS ON PLAINTIFF'S CASE-IN-CHIEF.

POINT III

REGARDLESS OF THE COURT'S CREDIBILITY FINDING THAT MS. JENNERICH IMPROPERLY REMOVED RUGER DOCUMENTS BEFORE WORKING FOR UPI, NO PROXIMATE CAUSE WAS EVER ESTABLISHED BETWEEN THOSE DOCUMENTS ALLEGEDLY REMOVED AND ANY PRODUCTS SOLD BY UPI WHICH FORMED RUGER'S DAMAGE CLAIM.

[POINT] A

THE TRIAL JUDGE ERRED BY FAILING TO CONSIDER THE EVIDENCE OF PRODUCTS WITH THE TWO LARGEST DOLLAR SALES VOLUME, NEVER SOLD BY UPI TO SAN MAR DURING THE RELEVANT PERIOD, WHICH SAN MAR STOPPED BUYING FROM ...


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