Computer Print Systems, Inc. v. Lewis

• Decision Date: 10 October 1980
• Citation: 422 A.2d 148,212 U.S.P.Q. 626,281 Pa.Super. 240
• Parties: COMPUTER PRINT SYSTEMS, INC. v. David A. LEWIS, Victor S. Liss and C. P. C. Associates, Inc., Appellants.
• Court: Pennsylvania Superior Court

422 A.2d 148

281 Pa.Super. 240, 212 U.S.P.Q. 626

COMPUTER PRINT SYSTEMS, INC. v. David A. LEWIS, Victor S. Liss and C. P. C. Associates, Inc., Appellants.

Superior Court of Pennsylvania.

October 10, 1980

Argued June 6, 1979. [Copyrighted Material Omitted]

Benjamin E. Zuckerman, Norristown, for Victor S. Liss and C. P. C. Associates, Inc., appellants at No. 2841 and appellees at No. 3016.

Anthony R. Thompson, Allentown, for Computer Print Systems for appellee at Nos. 2841 and 3016.

Kenneth R. Williams, Doylestown, for David Lewis, appellee.

Before PRICE GATES and DOWLING, JJ. ^[*]

PRICE, Judge.

This appeal is from an action in equity by appellee for conspiracy to usurp a corporate opportunity and for conversion of computer programs. The chancellor denied appellee's request for a preliminary injunction restraining appellants from utilizing the computer programs, and on the trial on the merits, he found no support for the conspiracy charge but entered judgment for $18,000, representing the value of the computer programs appropriated by appellants. Appellants now appeal alleging numerous instances of error. Finding no merit to these contentions, we affirm the order in the trial court.

Appellants' first contention on appeal is that there was a variance between the allegata and probata which mandates entry of judgment non obstante veredicto. The evidence presented at trial established that appellee is a data processing service company specializing in the field of direct mail advertising and the development of computer programs to accomplish the direct mail requirements of its clients. Appellant David Lewis (Lewis) was an officer of appellee serving as administrative manager and vice-president from May of 1973 until January 1975 and thereafter as its president until May 7, 1976. Appellant C. P. C. Associates, Inc. (CPC) was a customer of appellee from 1973 until May 1976, and appellant Victor Liss (Liss) was CPC's president and one of its principal shareholders. Another individual Kurt Schneider (Schneider), is the sole shareholder of appellee and also figured prominently in the proof at trial.

From 1973 until 1976, Lewis was extensively involved in the day to day operations of appellee and maintained exclusive control over the management of the CPC account. This control entailed the processing of the monthly direct mailing requirements of CPC and was accomplished by specialized computer programs. ^[1] In January 1975, Lewis requested permission to make copies of the computer programs used to process the CPC account and to deliver them to CPC as a precaution against fire. Schneider refused this request, stating that it was against company policy to give copies of programs developed by appellee to its customers, which policy served as an inducement to prevent the customers from taking their account to another computer processor.

In or about June of 1975, another company in which Schneider owned 100% of the stock encountered financial difficulties and ceased activity. As a result, Liss became fearful that a similar fate would befall appellee, thus forcing a disruption of CPC's monthly mailing operation. Consequently, Liss informed Lewis that unless CPC could acquire "backup" copies of the computer programs used to process its work, it would take its account to another company. In response, Lewis procured taped copies of the programs along with machine code instructions without informing Schneider and turned them over to Liss in June of 1975. At that time, Liss did not know that it was contrary to appellee's corporate policy for Lewis to supply these items. Liss obtained the items but did not use them and continued to maintain the CPC account with appellee.

In January of 1976, Lewis expressed dissatisfaction with his position with appellee and commenced discussion with Schneider regarding a termination of his employment. In March of that year, he submitted to Schneider his resignation but remained with CPC until May 7, 1976. At or about the beginning of April 1976, Liss discovered for the first time that Lewis was terminating his relationship with appellee. Somewhat concerned, he sought to induce Schneider to retain Lewis by threatening to take his account to a competing computer processor if Lewis was not available to manage the CPC account. Apparently, Liss was concerned that the CPC account would not receive the individualized attention that had been the hallmark during Lewis' tenure with appellee. When these efforts failed, and unbeknownst to Schneider, Liss contacted Lewis on April 20, 1976, and agreed to hire Lewis to process the CPC account as an independent consultant. Lewis agreed, and in preparation for this task, he purchased several blank computer tapes. On April 23, 1976, he utilized the facilities of appellee to run a test of the blank tapes to determine that they were in good condition. For some unexplained reason, however, the log that records the use of the computer at appellee's facility was torn so as not to reflect this use by Lewis on April 23, 1976.

On May 1, 1976, Schneider learned for the first time that Lewis was to take over the processing of the CPC account. By correspondence dated May 4 and May 14, 1976, Liss instructed Schneider to relinquish to Lewis the programs and all other material used to process the CPC account. Schneider did not respond to these letters, and on May 17, 1976, a "final settlement" meeting was held, attended by Lewis, Liss and Schneider. At that meeting, Schneider refused to deliver the material and for the first time informed Liss that the programs were the exclusive property of appellee and did not belong to CPC. At no time did either Lewis or Liss reveal that CPC still retained the copies of the programs obtained in June of 1975. After the meeting, Lewis also informed Liss that in his assessment the tapes and other material did not belong to CPC, but Liss responded by telling Lewis "not to worry about it."

The next day, May 18, 1976, Liss turned the backup tapes over to Lewis who secured the services of an independent computer processing company and, with the benefit of the 1975 backup tapes, was able to develop new programs to process the CPC account in time for the direct mailing at the end of May. Shortly thereafter, Schneider learned that the computer at appellee's office had been utilized on April 23, 1976, and that this use was not reflected in the computer log. This, plus the knowledge that Lewis had developed programs to process the CPC account in an extremely short period of time, led Schneider to suspect that Lewis had appropriated copies of the CPC tapes in April 1976 as part of a conspiracy to usurp the CPC account at a time when he still maintained his contacts with appellee and had access to its facilities.

On June 8, 1976, appellee filed suit charging appellants with conversion of the CPC tapes and conspiracy to have Lewis breach his fiduciary duty as an officer of appellee and to usurp appellee's corporate opportunity. The complaint was verified by Schneider and proceeded upon the premise that appellants had been conspiring to divert the CPC account from appellee from the time Lewis first contemplated terminating his employment relationship with appellee in January 1976, until the final negotiations in April 1976, and that Lewis had converted copies of the CPC programs in furtherance of the conspiracy. Not until after the complaint had been filed did Schneider discover the correct account of how CPC had obtained copies of the computer programs. At the termination of trial the chancellor concluded that the evidence was insufficient to support the allegation regarding the usurpation of the corporate opportunity, ^[2] but entered a verdict on the claim for conversion of the computer programs.

Appellants' first contention on appeal is that the variance between the allegation in the complaint that they procured copies of the computer programs in a surreptitious manner during the period from January 1 to May 1, 1976, and the actual evidence adduced at trial that the program tapes were obtained in June 1975 requires a reversal. We disagree.

First, we note that appellee was afforded numerous opportunities by appellants during the course of trial to rectify the alleged variance by amending its complaint, but declined, stating that in its assessment the complaint did not restrict the allegation of conversion to the specific time period from January 1, to May 1, 1976. Without dissecting the separate allegations in appellee's complaint to determine if the conversion theory was specifically restricted to the time frame alleged by appellants, we hold that even if appellee's complaint is interpreted as so limited, we would decline to enter judgment non obstante veredicto in the instant case.

The general rule requiring conformity between the allegata and probata is intended to avoid the injustice that would result by confronting a defendant at trial with proof of a cause of action of which he was not put on notice and which he is not prepared to defend. See, e. g., Freer v. Parker, 411 Pa. 346, 192 A.2d 348 (1963); Willinger v. Mercy Catholic Medical Center of Southeastern Pennsylvania, Fitzgerald Mercy Division, 241 Pa.Super. 456, 362 A.2d 280 (1976), aff'd, 482 Pa 441, 393 A.2d 1188 (1978). The rule will not be employed, however, to create a mere technical impediment to frustrate the administration of justice, Hrivnak v. Perrone, 472 Pa. 348, 372 A.2d 730 (1977); Domineck v. Tuskan, 201 Pa.Super. 608, 193 A.2d 626 (1963), and one of the most important considerations is whether the defendant was misled or surprised in his preparation and presentation of the case by the variance. See Freer v. Parker, supra; Smith v. Allegheny County, 397 Pa. 404, 155 A.2d...