J-A08010-19


NON-PRECEDENTIAL DECISION - SEE SUPERIOR COURT I.O.P. 65.37

    WELLS FARGO INSURANCE                      :   IN THE SUPERIOR COURT OF
    SERVICES USA, INC.                         :        PENNSYLVANIA
                                               :
                       Appellant               :
                                               :
                                               :
                v.                             :
                                               :
                                               :   No. 612 WDA 2018
    EDGEWOOD PARTNERS INSURANCE                :
    CENTER, SEAN ANDREAS, ZACHARY              :
    MENDELSON, CHARLES YORIO,                  :
    PHILLIP WAKIN, JANICE ZEWE,                :
    SALLY KRAUSS, KURT KARSTENS                :
    AND PETER KOSTORICK                        :

                   Appeal from the Order Entered April 3, 2018
               In the Court of Common Pleas of Allegheny County
                    Civil Division at No(s): No. GD-17-14022


BEFORE: PANELLA, P.J., STABILE, J., and McLAUGHLIN, J.

MEMORANDUM BY PANELLA, P.J.:                          FILED OCTOBER 25, 2019

        Wells Fargo Insurance Services USA, Inc., (hereinafter “WFIS”) appeals

from the order entered on April 3, 2018, in the Allegheny County Court of

Common Pleas denying its petition for special and preliminary injunction.1

Specifically, WFIS contends the trial court erred in failing to enforce restrictive

covenants, including non-compete provisions, that Appellees Sean Andreas,

Zachary Mendelson, Charles Yorio, Phillip Wakin, Janice Zewe, Sally Krauss,

Kurt Karstens and Peter Kostorick (“Individual Appellees”) signed while they

were employed by various companies. After thorough review, we affirm.

____________________________________________


1   This is an interlocutory appeal as of right. See Pa.R.A.P. 311(a)(4).
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      The relevant facts and procedural history, as best can be discerned from

the record, are as follows. WFIS is a national commercial insurance brokerage

business.   WFIS’s business is predicated on fostering close relationships

between it and its employees as well as its employees and its clients.

      WFIS is a wholly owned subsidiary of ACO Brokerage Holdings

Corporation (“ACO”). In turn, until November 30, 2017, Wells Fargo held all

of the shares of ACO. Wells Fargo then sold its shares of ACO to USI. As a

result, WFIS became a wholly owned subsidiary of USI. WFIS has since legally

changed its name to USI Insurance Services National.

      The Individual Appellees were all high-level employees of WFIS. The

Individual Appellees resigned from their employer throughout September and

October of 2017. Immediately thereafter, they went to work for Edgewood

Partners Insurance Center (“EPIC”), which, as a full-service national

commercial insurance brokerage firm, is in a similar if not identical business

to WFIS. Around the time the Individual Appellees began working for EPIC,

they sent e-mail announcements to customers and brokers of their former

employer, which included, inter alia, marketing material for EPIC, new contact

information, and identification of their new employment at EPIC. Upon receipt

of these e-mails, if there was a follow-up question directed at the Individual

Appellees, they would provide an answer to that question.

      Several carriers or clients that received information from the Individual

Appellees initiated broker of record (“BOR”) letters, identifying that they were

moving their business from WFIS to EPIC.        Those letters stated that the

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carriers and clients had not been solicited nor induced by the individual

Appellees.

      On October 13, 2017, WFIS filed a complaint asserting that Individual

Appellees had violated various restrictive covenants that governed their

behavior after their employment with WFIS ended. WFIS also sought to enjoin

the Individual Appellees from allegedly continuing to violate the restrictive

covenants.

      The trial court entered a temporary restraining order, directing

Individual Defendants from soliciting WFIS’s employees or clients. This order

remained in effect until the trial court was able to hold a hearing on WFIS’s

request for a preliminary injunction.      After a two day hearing, held in

November 2017, the trial court ultimately denied WFIS’s application for a

preliminary injunction.     After the   trial court denied its motion for

reconsideration, WFIS filed this timely appeal.

      WFIS raises the following four issues:

      1) Did the trial court abuse its discretion or misapply the law in
      holding that WFIS did not have a protectable business in enforcing
      the restrictive covenants contained in the Individual Appellees’
      employment agreements because WFIS’s former parent company,
      Wells Fargo & Company, sold its ownership interest in WFIS to USI
      Insurance Services, LLC, where WFIS continued to operate in the
      commercial insurance brokerage business?

      2) Did the trial court abuse its discretion or misapply the law in
      holding that multiple communications sent by the Individual
      Appellees to current WFIS clients, which included, among other
      things, marketing materials touting their new employer, EPIC, did
      not amount to client solicitation in violation of their respective



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      employment agreements and that WFIS did not suffer irreparable
      harm as a result of said solicitation?

      3) Did the trial court abuse its discretion or misapply the law in
      refusing to enforce the non-accept provisions of the Individual
      Appellees’ employment agreements?

      4) Did the trial court abuse its discretion in not addressing WFIS’s
      claim that EPIC and Individual Appellees improperly solicited
      WFIS’s employees in violation of their employment agreements?

See Appellant’s Brief, at 3-5.

      We review the denial of a preliminary injunction for an abuse of

discretion. See Duquesne Light Company v. Longue Vue Club, 63 A.3d

270, 275 (Pa. Super. 2013) (citation omitted).

      The standard of review applicable to preliminary injunction
      matters is “highly deferential”. This “highly deferential” standard
      of review states that in reviewing the grant or denial of a
      preliminary injunction, an appellate court is directed to “examine
      the record to determine if there were any apparently reasonable
      grounds or the action of the court below.”

Id. (citation omitted) (formatting altered). Conversely,

      we will interfere with the trial court’s decisions regarding a
      preliminary injunction only if there exist no grounds in the record
      to support the decree, or the rule of law relied upon was palpably
      erroneous or misapplied. It must be stressed that our review of
      a decision regarding a preliminary injunction does not reach the
      merits of the controversy.

Santoro v. Morse, 781 A.2d 1220, 1225 (Pa. Super. 2001).

      To establish a right to a preliminary injunction, a party must

demonstrate six “essential prerequisites”:

      1) that the injunction is necessary to prevent immediate and
         irreparable harm that cannot be adequately compensated by
         damages;

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      2) that greater injury would result from refusing an injunction
         than from granting it, and, concomitantly, that issuance of an
         injunction will not substantially harm other interested parties
         in the proceedings;

      3) that a preliminary injunction will properly restore the parties to
         their status as it existed immediately prior to the alleged
         wrongful conduct;

      4) that the activity it seeks to restrain is actionable, that its right
         to relief is clear, and that the wrong is manifest, or, in other
         words, must show that it is likely to prevail on the merits;

      5) that the injunction it seeks is reasonably suited to abate the
         offending activity; and,

      6) that a preliminary injunction will not adversely affect the public
         interest.

Warehime v. Warehime, 860 A.2d 41, 46-47 (Pa. 2004) (quotation marks

and citation omitted). “The burden is on the party who requested preliminary

injunctive relief.” Id., at 47. Further, a trial court has apparently reasonable

grounds for its denial of injunctive relief where it finds that the petitioner has

not satisfied any one of the “essential prerequisites.” Id., at 46. Therefore,

we may affirm if the trial court was correct in concluding that WFIS failed to

establish any one of the six prerequisites.

      We focus on the trial court’s analysis of the fourth prerequisite, whether

WFIS established a clear right to relief, as it is controlling. The trial court

concluded, inter alia, that WFIS failed to demonstrate that EPIC or the

Individual Appellees solicited WFIS’s employees or clients in violation of their

non-solicitation agreements. See Trial Court Opinion, 10/02/18, at 6 (non-


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paginated opinion). The trial court found this to be a “close question.” Id., at

7.

      Despite this disposition, the court found that “WFIS solely relied on

emails sent by the [Individual Appellees] to clients to inform the clients that

they were moving to a new company.” Id., at 6-7. The court ascertained

that “these emails sent by the [Individual Appellees] informing clients of their

impending move do not rise to the level that would be deemed solicitation.”

Id., at 7. “This is especially true when the contract entered into … did not

specifically define the term ‘solicitation.’”   Id.   Further, as to the “non-

acceptance” provisions, the court found that such clauses, as contained within

the Individual Appellees’ agreements, were “overbroad and therefore an

unreasonable restraint on trade.” Id., at 7-8.

      Essentially, the trial court found that WFIS had failed to establish that

the Individual Appellees had breached non-solicitation covenants. Contract

interpretation is a question of law; therefore, this Court is not bound by the

trial court’s interpretation. See Kraisinger v. Kraisinger, 928 A.2d 333, 339

(Pa. Super. 2007). “In construing a contract, the intention of the parties is

paramount and the court will adopt an interpretation which under all

circumstances ascribes the most reasonable, probable, and natural conduct of

the parties, bearing in mind the objects manifestly to be accomplished.”

Charles D. Stein Revocable Trust v. General Felt Industries, Inc., 749

A.2d 978, 980 (Pa. Super. 2000) (citation omitted).


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      In determining the intent of the parties to a written agreement,
      the court looks to what they have clearly expressed, for the law
      does not assume that the language of the contract was chosen
      carelessly.

      When interpreting agreements containing clear and unambiguous
      terms, we need only examine the writing itself to give effect to
      the parties’ intent. The language of a contract is unambiguous if
      we can determine its meaning without any guide other than a
      knowledge of the simple facts on which, from the nature of the
      language in general, its meaning depends. When terms in a
      contract are not defined, we must construe the words in
      accordance with their natural, plain, and ordinary meaning. As the
      parties have the right to make their own contract, we will not
      modify the plain meaning of the words under the guise of
      interpretation or give the language a construction in conflict with
      the accepted meaning of the language used.

      On the contrary, the terms of a contract are ambiguous if the
      terms are reasonably or fairly susceptible of different
      constructions and are capable of being understood in more than
      one sense. Additionally, we will determine that the language is
      ambiguous if the language is obscure in meaning through
      indefiniteness of expression or has a double meaning. Where the
      language of the contract is ambiguous, the provision is to be
      construed against the drafter.

In re Jerome Markowitz Trust, 71 A.3d 289, 301 (Pa. Super. 2013)

(citation omitted).

      When a contract is found to be ambiguous, “extrinsic or parol evidence

may be considered to determine the intent of the parties.” Z & L Lumber Co.

of Atlasburg v. Nordquist, 502 A.2d 697, 700 (Pa. Super. 1985) (citations

omitted). “While unambiguous contracts are interpreted by the court as a

matter of law, ambiguous writings are interpreted by the finder of fact.” Kripp

v. Kripp, 849 A.2d 1159, 1163 (Pa. 2004) (citation omitted).


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      In relevant part, the non-solicitation clause contained within the “Wells

Fargo company” agreement prohibits an employee, for a period of two years

following termination for any reason, from soliciting, participating in, or

promoting the solicitation of any of the company’s clients, customers, or

prospective customers with whom he or she had material contact for the

purpose of providing products or services that are in competition with the

company’s products or services.      See, e.g., Wells Fargo Non-Solicitation

Agreement, at 2 (non-paginated). However, none of the agreements in the

record define “solicitation.”

      Solicitation is defined as “[t]he act of asking for or trying to obtain

something from someone.”        www.lexico.com/en/definition/solicitation, last

accessed 9/24/19. The most relevant of five definitions provided by Black’s

Law Dictionary (8th Ed. 2004) is “[a]n attempt or effort to gain business.” In

contrast, WFIS contends that the Individual Appellees’ e-mails were actions

that were taken “to awake or incite to action, or conduct [that was] intended

to and calculated to incite the desired act.”   Meyer-Chatfield v. Century

Business Servicing, Inc., 732 F.Supp.2d 514, 522 (E.D. Pa. 2010) (internal

quotation marks omitted).

      We conclude that, as it is used in the relevant covenants, the term

“solicitation” is not ambiguous. When used with other employees as the

object, the agreements clearly prohibit the Individual Appellees from obtaining

the other employees’ services for a competing business concern. Similarly,


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when used with clients or customers as the object, the agreements clearly

prohibit the Individual Appellees from attempting to gain their business for a

competing business concern.

      It is important to note that all of these definitions require a specific state

of mind. Pursuant to these definitions, a person cannot solicit without

intending to obtain something from the other person. As a result, to determine

that a person has engaged in solicitation, the finder of fact must find that the

person intentionally acted in a manner that they believed would result in

obtaining something from the other person.

      Here, the trial court did not explicitly define solicitation. Instead, it

merely noted that the agreements at issue do not explicitly define solicitation.

However, nothing in the court’s analysis establishes that it used a definition

contrary to our conclusion above. We therefore conclude that the trial court

did not commit an error of law.

      We turn to the trial court’s application of the law to the evidence of

record. As noted above, we apply a highly deferential review of the court’s

factual findings. See Duquesne Light Company, 63 A.3d at 275. The court

found that WFIS had failed to present sufficient evidence to support a finding

that either the Individual Appellees or EPIC had solicited or continue to solicit

employees or clients. See Trial Court Opinion, 10/2/18, at 6-7. This finding is

explicitly a finding of a lack of evidence, not a finding that Individual Appellees

had established a lack of solicitation. As petitioner, WFIS bore the burden of


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proving every prerequisite for a preliminary injunction. See Warehime, 860

A.2d at 66.

      Turning to the record, we note that it is uncontested that the Individual

Appellees sent e-mail communications to clients that were utilizing WFIS’s

services. Those e-mails varied, with some merely describing that the sender

was moving on to employment with EPIC and providing new contact

information, others described in detail EPIC’s business operations and

website’s URL, while a few even included EPIC’s marketing materials. Many

of the e-mails suggested contacting the individual sender if the recipient had

any further questions. It is further uncontested that some of WFIS’s clients

transferred their business to EPIC and signed BOR letters stating they had not

been solicited and were moving their business voluntarily.

      While the court is not explicit as to its exact reasoning, applying our

highly deferential standard of review we conclude that the court could have

reasonably found that the e-mails sent by the Individual Appellees to clients

were not intended to obtain the clients’ business. As WFIS repeatedly asserts,

the insurance industry is an industry heavily reliant on relationships. See,

e.g., Appellant’s Brief at 7; see also Complaint, 10/13/17, at ¶ 1. It is not

unreasonable to find that 1) the Individual Appellees had relationships with

the clients they sent e-mails to; 2) the e-mails were intended to alert these

clients of the Individual Appellees’ change in contact information; and 3) the

e-mails were intended to serve the social function of informing social


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relationships of a significant change in life circumstances. We therefore

conclude there is an apparently reasonable basis for the trial court’s

conclusion.

      WFIS cites to a series of federal cases, most of which were adjudicated

outside of the state of Pennsylvania, in support of its argument to the contrary.

However, it only cites to two non-precedential decisions from our Court. In

both decisions, we affirmed orders granting preliminary injunctions. As such,

in both cases our standard of review required us to apply the highly deferential

standard of review in favor of the petitioner.

      Turning to the issue of soliciting employees from WFIS, the trial court

found that WFIS has failed to present sufficient evidence on this point as well.

WFIS suggests that the Individual Appellees “admitted to meeting with,

discussing, and conferencing with one another about the opportunity at

EPIC[;] this conduct was intended to incite action and cause the employees to

join the new EPIC team.” Appellant’s Brief, at 46.

      However, WFIS does not point to any specific evidence indicating that

one employee solicited another. Instead, WFIS summarily concludes that the

Individual Appellees “admitted to meeting with, discussing, and conferencing

with one another about the opportunity at EPIC, and this conduct was intended

to incite action and cause the employees to join the new EPIC team.” Id., at

44. WFIS cites to testimony that one Appellee had meetings and conference

calls with other Individual Appellees about a potential move to EPIC.       See


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N.T., 11/17/17, at 183-85. Eventually that same Appellee made an individual

decision to move to EPIC and “discuss[ed] that decision and the facts that

contributed to that decision with [other Individual Appellees.]” Id., at 184.

However, by that point, the Individual Appellees, already cognizant of EPIC’s

interest, had met with EPIC, and even did so a group, coming to be “known

as the group of seven.” Id., at 183. Therefore, given the chronology, we

cannot say that the trial court’s analysis was unreasonable.

      On the question of the non-accept provisions, the trial court held, inter

alia, that the specific clauses were an “unreasonable restraint on trade.” Trial

Court Opinion, 10/02/18, at 8 (citation omitted).          WFIS claims that the

Diodato case relied upon by the trial court is distinguishable from the present

case because: 1) the plaintiff in Diodato was terminated; 2) that plaintiff was

greatly impacted by the restrictive covenant’s ability for him to earn a living;

3) the third parties in that case (i.e., the former clients) unilaterally sought

the plaintiff’s services. See Diodato v. Wells Fargo Insurance Services,

USA, Inc., 44 F.Supp.3d 541 (M.D. Pa. 2014).

      WFIS does not present a convincing reason to disregard the trial court’s

reliance on Diodato. First, WFIS, again, cites to no controlling case law on

this issue. Second, the “termination” present in Diodato is hardly distinct

from the affidavits indicating that Mark Susco, then senior vice president and

managing director of WFIS, told the Individual Appellees to have a “Plan B”

regarding employment when         the   effective   sale   of   WFIS was   being


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contemplated. See, e.g., Affidavit of Sean K. Andreas, at 3. Third, while the

possible impact of an individual’s ability to earn a living is a relevant

consideration in a restrictive covenant analysis, we reiterate that the trial

court found the Individual Appellees’ actions were not solicitations. Therefore,

the non-accept provisions effectively bar WFIS’s clients from doing business

with the Individual Appellees under any circumstance. As a result, we agree

that the non-accept clauses “more broadly restrain[] free trade. By its express

terms, the provision purports to restrict the liberty of third parties who, of

their own volition, unilaterally seek” the Individual Appellees’ services.

Diodato, 44 F.Supp.3d at 570.

      Accordingly, we are of the opinion that WFIS “has not shown an interest

so compelling as to warrant a blanket prohibition on [the Individual Appellees’]

acceptance of unsolicited business from former customers, restricting … the

free will of the businesses that [they] formerly serviced.” Id. (emphasis in

original). Our highly deferential standard of review leads us to the conclusion

that the trial court has not abused its discretion, and we affirm the trial court’s

finding to not enforce the non-accept provisions.

      Although the trial court found several bases in its conclusion that WFIS

was not entitled to a preliminary injunction, we affirm its decision and

conclude that WFIS has failed at least one of the “essential prerequisites”

necessary for a preliminary injunction.        In accordance with the specific

restrictive covenants binding the Individual Appellees coupled with the facts


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of this case and given the Individual Appellees’ behavior not constituting

“solicitation” as well as the overbroad scope of the non-acceptance provision,

the activity WFIS seeks to restrain is not actionable, and WFIS has not

demonstrated that its right to relief is clear. See Warehime, 860 A.2d at 46-

47. Thus, the trial court did not err in denying WFIS’s petition for a preliminary

injunction.

      Order affirmed.

      Judge McLaughlin joins the memorandum.

      Judge Stabile concurs in the result.


Judgment Entered.




Joseph D. Seletyn, Esq.
Prothonotary



Date: 10/25/2019




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