982 F. Supp. 2d 616
D. Maryland2013Background
- EDI Precast, LLC (Plaintiff) is a precast concrete installer; Raymond K. Carnahan, Jr. was a senior project manager who signed a 2007 noncompete/ confidentiality agreement and worked for EDI until January 2012.
- Carnahan formed Northern Virginia Erectors, LLC (NVE) and performed precast jobs for Arban Precast while still employed by EDI; some work involved EDI employees and at least one EDI welding machine.
- Plaintiff sued Carnahan and NVE on multiple theories (14 counts) including breach of duty of loyalty, fraud by nondisclosure, civil conspiracy, trespass/conversion, breach of the noncompete, and unjust enrichment; a court injunction (entered by consent) later superseded the written noncompete and bars precast work until Feb. 2, 2014.
- Plaintiff moved for partial summary judgment on liability for several counts (I, III, V, VII, XIII, XIV); Defendants opposed.
- The court evaluated undisputed facts in Plaintiff’s favor except where disputes exist (viewed for Defendants) and resolved which claims can be decided as a matter of law at summary judgment.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Breach of duty of loyalty (Count I) | Carnahan solicited/accepted work from an EDI customer (Arban) while employed and used EDI resources, violating duty of loyalty | Carnahan did not actively solicit the work; thus no usurpation/solicitation | Granted for Plaintiff — Carnahan breached duty of loyalty by taking an opportunity offered by an EDI customer without informing EDI |
| Breach of contract (Noncompete) (Count XIII) | Noncompete bars competing precast work; Carnahan violated it by working for Arban/NVE while employed | Defendants: (1) Agreement refers to a different "EDI, LLC" entity; (2) most noncompete restraints take effect only upon termination | Denied for Plaintiff; court finds the agreement refers to EDI Precast, LLC but most contractual restraints did not apply while Carnahan remained employed; court will consider granting SJ for Defendants unless Plaintiff shows cause |
| Fraud by concealment/nondisclosure (Count III) | Carnahan had a duty to disclose side work and intentionally concealed it causing EDI harm | Defendants dispute intent and causation; factual disputes over whether EDI would have acted differently | Denied for Plaintiff — factual gaps (intent and justifiable reliance) preclude summary judgment |
| Trespass/Conversion (Count VII) | Defendants used EDI equipment/materials and employees for NVE work, amounting to trespass or conversion | Defendants contend use was limited, often during employees’ off-hours or with permission; no evidence of conversion/exclusion of possession | Denied for Plaintiff — disputed facts and lack of proof of conversion; single use of welding machine insufficiently shown to be trespass as alleged |
| Unjust enrichment (Count XIV) | EDI seeks disgorgement of compensation paid to Carnahan because he retained salary while competing | Defendants: salary was earned for work actually performed for EDI; unjust enrichment not the right remedy | Denied for Plaintiff; court finds unjust enrichment not appropriate and will enter SJ for Defendants absent Plaintiff’s showing |
| Civil conspiracy (Counts V, XII) | NVE conspired with Carnahan to injure EDI | Defendants: no underlying tort by NVE; conspiracy requires underlying actionable tort and capacity to commit it | Denied for Plaintiff; granted SJ for Defendants likely because NVE owed no fiduciary duty and no proven underlying tort by NVE |
Key Cases Cited
- Ricci v. DeStefano, 557 U.S. 557 (2009) (summary judgment factual-viewing principle)
- Celotex Corp. v. Catrett, 477 U.S. 317 (1986) (summary judgment burden-shifting)
- Anderson v. Liberty Lobby, 477 U.S. 242 (1986) ("scintilla of evidence" insufficient to defeat summary judgment)
- Weichert Co. of Md., Inc. v. Faust, 419 Md. 306 (2011) (duty of loyalty is implied in employment contracts)
- Md. Metals, Inc. v. Metzner, 282 Md. 31 (1978) (employee must refrain from soliciting business belonging to employer)
- Shapiro v. Greenfield, 136 Md. App. 1 (2000) (corporate opportunity/usurpation doctrine)