| Operative Cake Corp. v Nassour |
| 2007 NY Slip Op 50858(U) [15 Misc 3d 1127(A)] |
| Decided on April 11, 2007 |
| Supreme Court, Queens County |
| Hart, J. |
| Published by New York State Law Reporting Bureau pursuant to Judiciary Law § 431. |
| As corrected in part through April 30, 2007; it will not be published in the printed Official Reports. |
Operative Cake Corp., Plaintiff,
against Edward Nassour, Defendant. |
Defendant Edward Nassour has moved again for summary judgment dismissing the complaint against him.
The complaint alleges the following: Plaintiff Operative Cake Corp. ("Cake Corp."), a wholesaler of, inter alia, packaged bakery items such as pies and cakes, sells its products to independent jobbers or truck drivers, who, in turn, sell the products to small grocery stores in the New York metropolitan area. Plaintiff Cake Corp. initially hires the drivers and assists them in finding customers, and the drivers eventually become independent businessmen who purchase routes from the plaintiff and who continue to buy the plaintiff's products. The plaintiff employed defendant Edward Nassour ("Nassour") for approximately 25 years as a manager. In late 2000, defendants Nassour, Ronald Weber, Farris Nassour, and Guillermo Solas, while still employees of the plaintiff, conspired to establish a business that would go into competition with their employer. In September, 2000, defendant Nassour incorporated defendant King Edward Food Distribution Corporation, one of the plaintiff's competitors, and he is now an employee, officer, director, or shareholder of defendant King Edward. Defendant Nassour, defendant Weber, and defendant Farris Nassour, now employees of defendant King Edward, had access to the plaintiff's confidential information, which included drivers' routes, price lists, and inventory records. On or about February 23, 2001, after defendant Nassour voluntarily stopped working for plaintiff Cake Corp., he and the plaintiff entered into an agreement having a restrictive covenant whereby Nassour promised not to have a business relationship with drivers, suppliers, employees, or competitors of the plaintiff in consideration of $41,000. However, before he left the plaintiff's employ, defendant Nassour took the plaintiff's files, including its customer lists and pricing information. In or about May, 2001, defendants Weber, Farris Nassour, Matias, and Solas left the plaintiff's employ, taking with them the plaintiff's customer lists, and went to work for defendant [*2]King Edward. The defendants have used the plaintiff's confidential information to solicit the plaintiff's customers.
Defendant Nassour swears that he left the plaintiff's employ after Sam Jacobson, one of the plaintiff's principals, expressed an intention to reduce the former's salary. Nassour denies taking any of the plaintiff's files with him when he left the business. Nassour also swears that the plaintiff's drivers were all independent contractors who developed routes with customers on their own and that the names of these drivers are easily discoverable.
On or about July 17, 2001, plaintiff Cake Corp. brought this action for, inter alia, unfair competition. (Defendant King Edward allegedly ceased doing business on or about November 30, 2002, and plaintiff Cake Corp. has allegedly rehired defendant Ronald Weber, defendant Juan Matias, and defendant Diomedes Marcelino.) This court denied defendant Nassour's first motion for summary judgment by decision and order dated May 11, 2004. The court held, inter alia, that there were issues of fact pertaining to causes of action based on unfair competition, misappropriation of trade secrets, breach of restrictive covenant, and breach of fiduciary duty. On October 14, 2004, the defendant took the deposition of Sam Jacobson, the plaintiff's major owner at relevant times. Asserting that Jacobson's deposition revealed a case based only on conjecture, defendant Nassour has again moved for summary judgment.
The opponent of a motion for summary judgment has the burden of producing evidence in admissible form sufficient to show that there is an issue of fact which must be tried. (See, Alvarez v Prospect Hospital, 68 NY2d 320.) Plaintiff Cake Corp. successfully carried this burden. Contrary to defendant Nassour's contention, this case does not rest on "pure conjecture." (Compare, Hanly v Quaker Chemical Co., Inc., 29 AD3d 860; Rendon v Castle Realty, 28 AD3d 532.) In regard to the causes of action for unfair competition and misappropriation of trade secrets, this court previously determined that there are triable issues of fact with respect to whether the information allegedly misappropriated by defendant Nassour constitutes trade secrets and whether he used such information to gain an unfair advantage over competitors. (See, e.g., Spectron Glass and Electronics, Inc. v Marianovsky, 273 AD2d 374; U.S. Reinsurance Corp. v Humphreys, 240 AD2d 264.) These issues remain in the case. In opposition to the instant motion, plaintiff Cake Corp. submitted evidence that, for example, (1) a King Edward invoice for customer Felix Dilone contains a customer identification number identical to the customer identification number for him used by the plaintiff, (2) King Edward assigned customer identification numbers to Jose Hernandez and Gregory Mota used by the plaintiff, and (3) Nassour solicited Felix Dilone, Hal Militsky, Ramiro Guzman, and Gregory Mota, four of the plaintiff's drivers, for the purchase of goods from King [*3]Edward. In regard to the cause of action for breach of fiduciary duty, "[i]t is settled law that an employee is prohibited from acting in any manner inconsistent with his or her employment and must exercise good faith and loyalty in performing his or her duties ***." (Chemfab Corp. v Integrated Liner Technologies Inc., 263 AD2d 788, 789; see, Mega Group Inc. v Halton, 290 AD2d 673.) As this court previously found, there is a genuine issue of fact concerning whether defendant Nassour breached his fiduciary duty created by such evidence as an employment agreement between King Edward and Nassour dated September 26, 2000, approximately five months prior to the latter's departure from plaintiff Cake Corp., the resignation of other Cake Corp. employees shortly after Nassour's departure from the same company, and the deletion of computer files. In regard to the cause of action for breach of covenant, a restrictive covenant is enforceable to the extent necessary to prevent the disclosure or use of trade secrets or confidential customer information. (Reed, Roberts Associates, Inc. v Strauman, 40 NY2d 303; see, Cliff v R.R.S. Inc., 207 AD2d 17.) Defendant Nassour promised not to have any "business related conversations with any of [Cake Corp.'s ] employees *** suppliers, drivers, [and] competitors during this time [one year]," in consideration of a payment of $41,000. The plaintiff has created a genuine issue of fact concerning whether Nassour breached this promise by the submission of affidavits from Ramiro Guzman and Felix Dilone, two of the plaintiff's drivers, which state that Nassour urged them to buy products from King Edward, and by the submission of the defendant's deposition testimony concerning his contacts with Flowers Bake shop, one of the plaintiff's suppliers.
Accordingly, the motion is denied.
Short form order signed herewith.
J.S.C.
Dated: April 11, 2007J.S.C.