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Kyle v. Apollomax, LLC

United States District Court, Third Circuit

November 1, 2013

RONALD KYLE, Plaintiff,
v.
APOLLOMAX, LLC, O'NEILL, LLC d/b/a O'NEILL INNOVATIONS, and MICHAEL O'NEILL, Defendants. APOLLOMAX, LLC and O'NEILL, LLC d/b/a O'NEILL INNOVATIONS, Defendants/Counterclaim-Plaintiffs,
v.
RONALD KYLE, Plaintiff/Counterclaim-Defendant, and DOUGLAS PORCELLI, Counterclaim-Defendant/ Counterclaim-Plaintiff.

Christopher Viceconte, Esq., GIBBONS PC, Wilmington, DE; John Q. Lewis, Esq., TUCKER ELLIS LLP, Cleveland, OH; Seth J. Linnick, Esq., TUCKER ELLIS LLP, Cleveland, OH. ttorneys for Defendants/Counterclaim-Plaintiffs Apollomax, LLC, O'Neill, LLC d/b/a O'Neill Innovations, and Michael O'Neill.

Seth J. Reidenberg, Esq., TYBOUT, REDFEARN & PELL, Wilmington, DE; Alan L. Frank, Esq., ALAN L. FRANK LAW ASSOCIATES, P.C., Jenkintown, PA; Susan B. Pliner, Esq., ALAN L. FRANK LAW ASSOCIATES, P.C., Jenkintown, PA Attorneys for Plaintiff/Counterclaim-Defendant Ronald Kyle and Counterclaim-Defendant/Counterclaim-Plaintiff Douglas Porcelli.

MEMORANDUM OPINION

ANDREWS, U.S. DISTRICT JUDGE

Ronald Kyle ("Kyle") initiated legal action against Michael O'Neill ("Mr. O'Neill"), Apollomax, LLC, and O'Neill, LLC d/b/a O'Neill Innovations (collectively, the "Defendants") on February 8, 2012. (D.I. 1). On March 14, 2013, the Defendants filed an answer to Kyle's claims and counterclaimed against Douglas Porcelli ("Porcelli"), one of Kyle's colleagues and a former Apollomax employee. (D.I. 11). Porcelli answered with affirmative defenses on December 13, 2012 and he also counterclaimed against the Defendants, alleging six causes of action: breach of contract, fraudulent misrepresentation, unjust enrichment, libel, slander per se, and promissory estoppel. (D.I. 121). The Defendants filed the instant motion for summary judgment against Porcelli on May 17, 2013, seeking the dismissal of all six counterclaims. (D.I. 174). The motion is fully briefed. (D.I. 175, 189 & 200). For the reasons that follow the Court will grant the Defendants' motion for summary judgment as to Counts I to III and V and will deny the Defendants' motion for summary judgment as to Counts IV and VI.

I. BACKGROUND

In August 2011, Mr. O'Neill hired Porcelli to be the Vice President of Retail Sales for O'Neill, LLC d/b/a O'Neill Innovations ("ONI"). (D.I. 121 at 14; D.I. 189-2 at 3). Mr. O'Neill is the sole member of ONI, which is a Delaware LLC that acts as a holding company for Mr. O'Neill's intellectual property. (D.I. 189-1 at 3). In addition, ONI owns 85% of Apollomax, LLC-another Delaware LLC that sells Maxfit® gloves. (Id. at 4).

Although he began working for ONI without a written contract, Porcelli claims that he requested a base salary and a partial ownership stake in ONI as part of his overall compensation package in his initial employment discussions with Mr. O'Neill. (D.I. 189 at 4). During subsequent discussions Porcelli asserts that he reiterated his request for a 5% ownership stake in ONI and that Mr. O'Neill agreed in principle, thereby forming a contract despite the fact that the parties never reduced any of the terms to writing. (Id. at 5). Since Porcelli never received any ownership interest, he claims a breach of contract. Porcelli also asserts Mr. O'Neill's unfulfilled promise to give him 5% of ONI forms the basis for several other claims. The Defendants, on the other hand, deny that any oral contract ever existed. (D.I. 175 at 2).

The business relationship was brief, and Mr. O'Neill fired Porcelli in January 2012 after approximately three months of employment. (D.I. 121 at 15). Shortly after Mr. O'Neill terminated Porcelli, Mr. O'Neill sent an email to Kyle and several others titled "The devil is at work" with a link to a newspaper article reporting that Porcelli was arrested for stalking. (D.I. 189-3 at 4). Several heated emails were exchanged, and this lawsuit followed.

II. LEGAL STANDARD

"The court shall grant summary judgment if the movant shows that there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law." FED. R. Civ. P. 56(a). A "material fact" is one that "could affect the outcome" of the proceeding. See Lamont v. New Jersey, 637 F.3d 177, 181 (3d Cir. 2011). The moving party bears the burden of demonstrating the absence of a genuine issue of material fact. Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 586 n.10 (1986). However, "the burden on the moving party may be discharged" if it can show "that there is an absence of evidence to support the nonmoving party's case." Celotex Corp. v. Catrett, 477 U.S. 317, 325 (1986). The court will "draw all reasonable inferences in favor of the nonmoving party, and it may not make credibility determinations or weigh the evidence." Reeves v. Sanderson Plumbing Prods., Inc., 530 U.S. 133, 150(2000).

If the moving party is able to demonstrate an absence of disputed material facts, the nonmoving party then "must come forward with 'specific facts showing that there is a genuine issue for trial.'" Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 249 (1986); see also Matsushita, 475 U.S. at 587. The mere existence of some evidence in support of the nonmoving party, however, will not be sufficient for denial of a motion for summary judgment. Anderson, 477 U.S. at 249. Rather, the nonmoving party must present enough evidence to enable a jury to reasonably find for it on that issue. Id. If the nonmoving party fails to make a sufficient showing on an essential element of its case with respect to which it has the burden of proof, the moving party is entitled to judgment as a matter of law. See Celotex Corp., 477 U.S. at 322.

III. DISCUSSION

A. Count I - Breach of Contract

Porcelli claims that he and Mr. O'Neill entered into an oral contract wherein "Porcelli was to receive five percent of ONI, a reduced salary and reimbursement of expenses in exchange for his employment with ONI as Vice President of Retail Sales." (D.I. 189 at 8-9). Mr. O'Neill never gave Porcelli a 5% ownership interest in ONI, and that forms the basis for Porcelli's breach of ...


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