Scott, D. v. Giacomelli, L.
2090 EDA 2015
Pa. Super. Ct.Jul 27, 2016Background
- Donna Scott operated Buckingham Dance & Exercise Studio; Laura Giacomelli taught there as an independent contractor from 2007 and was promoted/raised for the 2010–2011 season.
- On August 29, 2010 Giacomelli signed a Service/Not to Compete Agreement (nine‑month term plus one‑year post‑term restriction), prohibiting solicitation of studio students and operation of a competing dance business within 25 miles.
- Giacomelli ran a competition team (Buckingham Dance Company) whose fees she collected and for which she maintained records; the team operated under Buckingham’s name and location and helped drive studio enrollments.
- Giacomelli left Buckingham after the 2010–2011 season and opened Libra Dance Studio about 8–10 miles away on August 1, 2011; many students followed her.
- Scott sued for enforcement of the restrictive covenant, injunctive relief, and damages; after a non‑jury trial the trial court found the covenant enforceable and awarded Scott $96,217 in compensatory damages; the denial of post‑trial relief was affirmed on appeal.
Issues
| Issue | Plaintiff's Argument (Scott) | Defendant's Argument (Giacomelli/Libra) | Held |
|---|---|---|---|
| Enforceability / consideration | Agreement was ancillary to employment and supported by raise/title change as consideration | Agreement lacked adequate consideration because pay/title were agreed earlier orally (Kistler‑type facts) | Covenant ancillary and supported by consideration; parties did not form a complete binding oral contract before signing, so written Agreement validly supported by raise/title |
| Geographic scope / protectable interest | 25‑mile radius and 1‑year term are reasonable to protect Buckingham’s customer base and goodwill | 25‑mile radius is overbroad and unduly restricts earning capacity; Buckingham has no proprietary methods to protect | Court found protectable customer base/goodwill; 25‑mile radius and 1‑year duration reasonable and enforceable |
| Duress / timing of signing | Covenant not signed voluntarily because presented shortly before season start after she gave up other jobs | Scott coerced Giacomelli into signing with no time/ability to seek counsel | Court rejected duress: Giacomelli could have obtained other employment, received benefit under Agreement, and effectively ratified it by performing and accepting pay |
| Damages / expert testimony | Scott proved causally related economic damages (trial court accepted and adjusted CPA’s work) | Expert’s late revision exceeded report scope; damages speculative and not properly shown (lost profits vs. lost revenue) | Court allowed expert testimony; trial court adjusted flawed areas and award based on credibility; damages award sustained |
Key Cases Cited
- Sidco Paper Co. v. Aaron, 465 Pa. 586, 351 A.2d 250 (Pa. 1976) (restrictive covenants enforceable if ancillary to employment, reasonably necessary, and reasonably limited)
- Morgan’s Home Equip. Corp. v. Martucci, 390 Pa. 618, 136 A.2d 838 (Pa. 1957) (same principle for employee restrictive covenants)
- Hess v. Gebhard & Co., 808 A.2d 912 (Pa. 2002) (restrictive covenants not favored; enforce only as reasonably necessary)
- George W. Kistler, Inc. v. O’Brien, 347 A.2d 311 (Pa. 1975) (oral pre‑employment agreement can negate consideration for a later signed covenant)
- Thermo‑Guard, Inc. v. Cochran, 596 A.2d 188 (Pa.Super. 1991) (elements for enforceability: ancillary, adequate consideration, reasonable temporal/geographic scope)
- Litten v. Jonathan Logan, Inc., 286 A.2d 913 (Pa.Super. 1971) (doctrine and elements of economic duress)
- Worldwide Auditing Servs. v. Richter, 587 A.2d 772 (Pa.Super. 1991) (damages for covenant breaches can be difficult to calculate; courts may accept reasonable approximations)