DelVecchio Reporting Services, LLC v. Edwards

Decision Date13 July 2017
Docket NumberCV166061264S
CourtConnecticut Superior Court
PartiesDelVecchio Reporting Services, LLC v. Clifford Edwards et al

UNPUBLISHED OPINION

MEMORANDUM OF DECISION

Thomas Corradino, Judge Trial Referee.

This case involves a request for a temporary injunction. As the verified complaint sets forth the action has been brought to enforce Independent Court Reporter's Agreements entered into by each of the defendants. The defendants maintain that a temporary injunction should not be granted and the agreements should not be enforced. The court will give a brief factual background to the plaintiff's position and cite the relevant portions of the agreements which are the basis of this action.

Mr DelVecchio started the plaintiff LLC in 1988. As of the date of trial in November 2016 Mr. DelVecchio testified his LLC had 150 clients and had 25 court reporters working for him as independent contractors.

The court will now discuss the nature of his business as testified to by Mr. DelVecchio but will have to address it in more detail when it discusses the legal concepts involved which are prerequisites for temporary injunctive relief. Aside from depositions, the plaintiff company covers arbitrations, planning and zoning hearings, provides video tape services, lines up interpreters, and locates court reporters in other parts of the country. Clients include lawyers and law firms. DelVecchio said that " a client is anybody that would hire you to perform court reporting services." The company is hired by towns, companies school boards, for example. He said so-called national reporting services subcontract with him to provide court reporters because they do not have their own court reporters in all states. Esquire is one such service and has been a client since 1996. DelVecchio estimates his company has performed " tens of thousands" assignments for Esquire over the time of their relationship. Out of state lawyers and for example, insurance companies contact Esquire if they have to have a deposition done and Esquire would then contact DelVecchio Reporting Services, LLC for a court reporter.

As far as geographical distribution of Connecticut clients is concerned, Mr. DelVecchio testified that the majority of his clients are in Fairfield and New Haven County with some in Hartford County. In four counties the company has only three clients--Middlesex, New London, Litchfield, Tolland. But DelVecchio said even in the counties where his clients are concentrated there are thousands of lawyers who are not his clients. Mr. DelVecchio also testified that there are several Connecticut reporting services who share clients with his company. DelVecchio has built up his client base through hard work advertising and good will. He testified that his client list is very important to him since, armed with a list of his clients competitors could " hone in" on some of his clients and such an effort would be more likely of success because through his open policy with the reporters, they would know the rates that he charged. He, however, has no written agreements with his clients to use his company's services including. But he does have an agreement with Esquire as to rates charged by his company. In this regard Mr. DelVecchio said that only twelve days after the Edwards resigned from his company on November 2016, Esquire said it was lowering the rates it had been paying to him for the five previous years.

Mr DelVecchio went on to say that he and his wife worked extremely hard to develop his business. He spent $200, 000 on advertising alone. He created a unique business model which informed court reporters of how the company operated and was building itself. This fostered loyalty and gave the company a competitive advantage. The Edwardses' violation of the agreements they signed, according to him, placed his business in danger.

The court will now refer to the agreements which form the basis of the plaintiff's complaint. It will then set forth the legal concepts that it will use to decide the case and try to apply those concepts to the facts of the case as brought out by Mr. DelVecchio's testimony at trial reviewing also the cross examination of DelVecchio and the direct of Mr Clifford Edwards and Mrs. San Edwards, offered to question his claims.

Mr. Edwards started working for DelVecchio in 2001; his wife began working for the company in 1996. On November 9, 2009 they each signed the agreements which are the subject of this law suit and form the basis of the claim for relief in this case.

The agreement at issue was signed by Clifford Edwards on October 27, 2009, San Edwards on November 3, 2009 and by Mr. DelVecchio on November 6, 2009. The agreement is a six-page document entitled " Independent Court Reporter's Agreement." The first paragraph states that " In consideration of the mutual promises, covenants, and conditions set forth herein, and in further consideration of the company's agreement to refer work to the Reporter and the Reporter accepts the engagement upon the terms and conditions set forth in this agreement and the parties hereto agree as follows: (Sixteen paragraphs follow.)

Paragraph two declares reporters signing the agreement sign as: an independent contractor not as an employee. Paragraph 3(c) states that " (c) The reporter is not prohibited from working for other persons or entities provided that performing such services does not interfere or conflict with the reporter's obligations to the company under the terms of this agreement." Subparagraph j provides " (j) all client referrals and assignments shall be handled exclusively by the company."

Paragraph 5 of the agreement, entitled " non-solicitation, " in the introductory subsection states " (a) The reporter agrees that during the term of this agreement and for a period of five years following its termination, the reporter will not, either directly or indirectly, for his/her own account or as a principal, employee stockholder, officer, agent, consultant, advisor, independent contractor or in any other capacity whatsoever." Subparagraphs of (a) state the reporter shall not (i) Provide or attempt to provide services similar to those provided by the company to any clients or prospective client, except as otherwise permitted under this agreement and at the Company's request; (ii) Call on, solicit, induce, take away or divert, or attempt to call on, solicit, induce, take away or divert (by solicitation or other means), or cause the loss of any client or prospective client of the company; (iii) Interfere with, disrupt or attempt to disrupt the relationship, contractual or otherwise, between the company any of its clients, prospective clients, employees, referral sources, contracting agencies, agencies providing business opportunities, vendors, or any entity doing business with the company; (iv) Solicit, persuade, attempt to contract with or employ, recruit, or attempt to solicit or recruit any employee or independent contractor employed by or under contract with the company to terminate their employment or business relationship with the company or to be employed by or provide services to any other business entity at the expense of the company.

The term client is not explicitly defined in the agreement but subsection 3 states:

3. Scope of services and relationship. The reporter agrees to perform independent court reporter services as referred and/or assigned to the reporter from time to time by the company for the company's clients ('clients') at clients' places of business or at locations designated by clients ('Services') . . .

Section 6 of The Agreement is entitled " Confidentiality, Trade Secrets, and Non Disclosure" provides that the reporter " will not use for any purpose, disclose or disseminate any confidential information to any third person or party, including the Reporter's family members except as authorized by the company and required for carrying out the Reporter's duties under the agreement." The term confidential information is described in subsection (1). Subsection (1) states the term " Confidential Information" as used in this agreement includes information, whether or not recorded in any medium, disclosed to or known by [the defendants] by virtue of his or her participation and/or providing services under this agreement, including: (I) Company information that gives it a competitive advantage over others who do not know or have access to such information and (ii) non-public client information disclosed to [the defendants] in depositions, examinations, or other proceedings. Examples of Confidential Information include, without limitation, all means and methods by which the Company conducts its business, client and customers lists, identity of clients and prospective clients, client contacts, pricing of company services, company credit terms, company financial information, identity and/or other lists of the company's other reporters, compensation, operational procedures, policies, protocols, work volume, pay structure and any and all other proprietary and/or confidential information of the company that are deemed to be trade secrets.

A.

The court will now discuss the legal concepts involved in deciding this case. The court has relied heavily on an article in 36 COA.2d 103 entitled: " Cause of Action to Enforce Non-competition Covenant in Employment Contract, " Richard Kaye, L.D. It is an extremely lengthy and thorough discussion, 194 pages in length not including the 2016 Supplement containing case annotations.

(i)

In Section 1, page 144 the article starts the discussion by saying: " Although the principles discussed in this article have been applied not only to parties involved in a conventional...

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