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TekTree, LLC v. Borla Performance Industries, Inc.

Court of Common Pleas of Delaware, New Castle

September 16, 2013

TEKTREE, LLC, Plaintiff,
v.
BORLA PERFORMANCE INDUSTRIES, INC., and RONGYU XIA, individually Defendants.

Submitted: August 2, 2013

Stokes Nolte, Esq. Reilly, Janiczek & McDevitt Attorney for Plaintiff

Scott G. Wilcox, Esq. Whiteford, Taylor, and Preston Attorney for Defendant Borla Performance Industries, Inc.

Kelly A. Green, Esq. Smith, Katzenstein, & Jenkins Attorney for Defendant Rongyu Xia

ORDER ON DEFENDANT BORLA PERFORMANCE INDUSTRIES, INC.'S MOTIONS FOR SUMMARY JUDGMENT

Alex Smalls, Chief Judge.

On August 2, 2013, this Court held a hearing on two motions for summary judgment filed by Defendant Borla Performance Industries, Inc. ("Borla"). In its first motion for summary judgment, Borla seeks summary judgment on the claim brought by Plaintiff TekTree, LLC ("TekTree"), alleging that a contractual agreement existed between the parties, and that Borla breached a non-solicitation provision of the agreement when Borla's former employee, Rongyu Xia ("Xia"), sought and secured employment with TekTree's client, Lincoln Financial Group ("Lincoln Financial"). In its second motion, Borla seeks summary judgment on its counterclaim against TekTree, in which Borla claims TekTree owes payment for a backlog of invoices in the amount of $15, 750.00.

At the close of the hearing, the Court reserved decision. This is the Court's final decision and order.

FACTUAL AND PROCEDURAL POSTURE

On November 3, 2011, TekTree and Borla entered a Professional Services Agreement ("Agreement"), whereby Borla's employees were to provide services to TekTree's clients as requested in subsequent Purchase Orders. That same day, TekTree and Borla executed a Purchase Order for Borla's employee, Xia, to provide services to TekTree's client, Lincoln Financial. Xia worked with Lincoln Financial under this arrangement until April 30, 2012, when she resigned from her employment with Borla. Upon accepting Xia's resignation, Borla's Vice President of Human Resources, Debbie Juszak, advised Xia that for one year she was not permitted to provide any direct or indirect services to any clients introduced by TekTree, and that doing so could result in legal action against both Xia and Borla.

After her resignation from Borla, Xia began working for Lincoln Financial. On May 3, 2012, TekTree wrote to Borla, informing Borla that Xia's employment with Lincoln Financial constituted a breach of the Agreement, and demanding $20, 000 in liquidated damages. TekTree sent a similar letter to Xia, demand that she pay liquidated damages of $20, 000.00 for breach of contract and tortious interference. On May 10, Borla responded to TekTree's demand letter, stating that Borla had met all of its contractual obligations.

This action commenced on July 24, 2012. TekTree filed the Complaint against Borla and Xia, alleging: that Borla breached the Agreement with TekTree; that Xia was in violation of the agreement and breached the Demand Note/Training Contract she signed with TekTree, and; that Xia had engaged in tortious interference with contractual obligations by intentionally convincing Lincoln Financial to end its agreement with TekTree. TekTree seeks judgment in the amount of $20, 000.00 from Borla and $20, 000.00 from Xia, for a total of $40, 000.00 in damages.

On August 31, 2012, Borla filed an answer denying liability for Xia's actions. Borla also filed a counterclaim, seeking compensation in the amount of $15, 750.00 from TekTree for unpaid invoices for services rendered by Xia.

After the discovery period ended, Borla filed two motions for summary judgment. In its first motion, Borla seeks summary judgment on TekTree's breach of contract claim against Borla. In its second motion, Borla seeks summary judgment on its breach of contract ...


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