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Wayman Fire Protection, Inc. v. Premium Fire & Security, LLC

Court of Chancery of Delaware

March 5, 2014

WAYMAN FIRE PROTECTION, INC., Plaintiff.
v.
PREMIUM FIRE & SECURITY, LLC, ROBERT WEITZEL, and ROBERT WHITE, and PREMIUM POWER SERVICES, LLC, Defendants.

Submitted: October 17, 2013

William D. Johnston, Esq., Curtis J. Crowther, Esq., Margaret M. DiBianca, Esq., YOUNG CONAWAY STARGATT & TAYLOR, LLP, Wilmington, Delaware; Attorneys for Plaintiff.

A. Richard Winchester, Esq., Christopher A. Selzer, Esq., McCARTER & ENGLISH, LLP, Wilmington, Delaware; Peggy L. Ableman, Esq., Of Counsel, McCARTER & ENGLISH, LLP, Wilmington, Delaware; Attorneys for Defendants.

MEMORANDUM OPINION

PARSONS, Vice Chancellor

This action arises from the alleged possession and misuse of a fire alarm and fire protection system company's proprietary information by certain of its former employees. When the plaintiff company terminated one of its longtime employees, that former employee, a defendant in this action, began working for a local entrepreneur and an entity in the power generation business owned by the entrepreneur. Shortly thereafter, the entrepreneur created a new entity for the purpose of starting a fire alarm and fire protection system business that would be run by the former employee. In getting the new business off the ground, the former employee hired several individuals he had worked with while he was employed by the plaintiff.

The plaintiff alleges that the individuals hired by the former employee, also defendants in this case, without authorization, deleted files from the plaintiff company's computers, and copied the company's proprietary information and trade secrets for the purpose of bringing that information to the new fire alarm and fire protection system business. The plaintiff also alleges that the defendants have, in fact, used that information to compete with it. According to the plaintiff, both the new fire alarm and fire protection system business and the power generation entity were aware of and sanctioned the alleged misappropriation of its information. As a result of this alleged wrongdoing, the plaintiff company has sued the former employee, the individuals he hired, the new fire alarm and fire protection system business, and the power generation entity, asserting various claims for both monetary and equitable relief.

This Memorandum Opinion constitutes my post-trial findings of fact and conclusions of law on the plaintiff's claims. For the reasons that follow, I conclude that the plaintiff has failed to prove its claims for tortious interference and for misappropriation of trade secrets and has not established any basis for liability on the part of the defendant power company. I also find, however, that the plaintiff has proved its statutory computer misuse claim, as well as its claims for conversion, conspiracy, and breach of the duty of loyalty against certain defendants. Therefore, the plaintiff is entitled to the monetary and equitable remedies set out in Section III infra.

In addition, the plaintiff has proven that certain defendants repeatedly violated this Court's order granting the plaintiff a preliminary injunction. Therefore, I hold certain defendants in contempt, order them to pay the plaintiff's reasonable attorneys' fees and expenses it incurred in proving the defendants' failure to comply with the injunction, and impose a fine of $10, 000 payable to the State of Delaware.

I. BACKGROUND[1]

A. The Parties

Plaintiff, Wayman Fire Protection, Inc. ("Wayman"), is a corporation engaged in the business of providing sales, service, design, installation, and maintenance of fire alarm and fire protection systems.

Defendant Premium Fire & Security LLC ("Premium Fire") is an entity engaged in the same line of business as Wayman. Jeff Donnelly is the owner and CEO of Premium Fire.

Defendant Robert Weitzel was employed by Wayman from 2001 until he was terminated on August 18, 2011. At the time of his termination, Weitzel held the position of Vice President of Operations and Business Development at Wayman. Weitzel became President of Premium Fire on December 5, 2011, and has held that position continuously since that time.

Defendant Robert White was employed as a technician by Wayman from 2001 until his resignation in November 2011. White began work as a technician for Premium Fire on December 1, 2011, and has held that position continuously since that time.

Defendant Premium Power Services, LLC ("Premium Power" and, together with Premium Fire, Weitzel, and White, "Defendants") is an entity engaged in the business of providing power generation services. Donnelly also is the owner and founder of Premium Power.

Former defendant Craig Fox was employed as a salesman by Wayman until his employment was terminated on January 26, 2012. Fox worked in a sales capacity at Premium Fire from February 6, 2012 through February 15, 2013. Before trial, Wayman and Fox settled all of Wayman's claims against Fox.

Former defendant Ryan Williams was employed as a salesman by Wayman from 2010 until he resigned on December 9, 2011. Williams worked as a salesman for Premium Fire from December 12, 2011 until February 18, 2013, when he was terminated. As with Fox, Wayman and Williams reached a settlement before trial as to all of Wayman's claims against Williams.

B. Facts

1. Wayman terminates Weitzel

On August 18, 2011, Wayman abruptly terminated Weitzel's employment. In connection with his termination, Weitzel and Wayman negotiated a severance agreement. Pursuant to that agreement, Weitzel received $30, 000 in exchange for releasing Wayman from any claims he may have had against it for, among other things, wrongful termination or age discrimination.[2] The severance agreement did not contain either a noncompetition or a nonsolicitation provision.[3]

After a brief period of networking, Weitzel was introduced to Donnelly, who hired him to work in a business development role across Donnelly's various businesses.[4]When an anticipated opportunity in the security camera market failed to materialize, Donnelly and Weitzel decided instead to develop a fire and security business.[5] Although the record is unclear as to the exact timing, at some point Donnelly established Premium Fire as a standalone legal entity.[6] He installed Weitzel as its President on December 5, 2011.[7]

2. White agrees to join Premium Fire

Shortly after Weitzel left Wayman, White reached out to Weitzel and asked to be kept in mind if Weitzel became aware of any new job opportunities.[8] After some discussions with Weitzel, on October 8, 2011, White accepted a job with Premium Fire.[9]White, however, continued to work at Wayman and did not give notice of his intent to leave the company until November 16, 2011.[10] White left Wayman's employ two weeks later on November 30. The following day, December 1, White started working for Premium Fire.

Upon his departure from Wayman, White turned in all four company-issued laptops that he had in his possession.[11] White maintained possession, however, of at least one flash drive that he had used to back up the files on his Wayman-issued computers.[12]Although White was in possession of the laptops, he was not the only Wayman employee with access to them.[13] The evidence shows that on November 27 and 28, 2011, one of White's Wayman-issued laptops was used to access a Dropbox account.[14] The user who accessed the Dropbox account downloaded multiple files from the account onto a flash drive. In addition, two days later, on White's last day of employment at Wayman, 390 SDU files[15] were deleted from that same Wayman-issued laptop. For reasons discussed in greater detail infra, I find that Defendant White was responsible for copying and deleting the files from the Wayman laptop on those dates.

When White began working for Premium Fire, he uploaded all of the files he had stored on a flash drive, which included files from Wayman, onto his Premium Fire laptop.[16] He did so for the purpose of having the files on any of his flash drives available to him during the course of his job.[17]

3. Premium Fire becomes a strategic partner with Edwards System Technology

In an attempt to bolster its business opportunities, on January 4, 2012, Premium Fire became a strategic partner with Edwards System Technology ("EST"), [18] a manufacturer of fire alarm equipment.[19] As an EST strategic partner, Premium Fire is a non-exclusive representative for EST products in a specified geographic area.[20] Although Premium Fire had applied to become a strategic partner in EST areas PA4 and PA5, EST granted Premium Fire strategic partner status only in PA5.[21] Notably, Wayman is an EST strategic partner in PA4.[22]

The strategic partnership between Premium Fire and EST is governed by contract.[23] Premium Fire's main point of contact with EST regarding its strategic partner status and its obligations under its agreement is Brian Boyle, an EST Regional Manager. Pursuant to its contract, Premium Fire agreed not to "solicit orders for or sell, install or service [EST] Products" outside of PA5 without prior written authorization ("OOT authorization") from EST.[24] The only parties to the contract are Premium Fire and EST. EST's other strategic partners in PA5 and elsewhere, including Wayman, are not parties to Premium Fire's agreement with EST, and that contract contains no language indicating that a non-party may enforce the agreement or exercise any rights specified therein.[25]

4. The Doylestown Hospital upgrade project

a. Wayman's relationship with Doylestown Hospital

Wayman's first contact with Doylestown Hospital ("Doylestown") came through Weitzel sometime in 2008. Weitzel was introduced to Thomas Smith, Doylestown's Manager of Environmental Care, [26] through John Geffre, a longtime friend of Weitzel's.[27]The development of Smith's relationship with Weitzel led to Doylestown hiring Wayman to install a fire control system in the hospital's new addition and to manage the hospital's existing fire control system.[28]

At the time the fire control system was being installed in Doylestown's new addition, the "old building" at Doylestown used IRC3 fire control technology. The IRC3 system in the old building was approximately 30 years old, and Smith wanted to ensure that whatever system was installed in the new addition could be expanded to include upgrading the old building.[29] Thus, when Wayman installed EST3 technology in the new addition in 2010, it appears to have been understood that soon thereafter Doylestown would be looking to upgrade the old building's fire control system from IRC3 to something compatible with EST3 technology.

While he was employed at Wayman, Weitzel believed that the company would be awarded at least the first "phase" of the Doylestown upgrade if Wayman pursued it.[30]Even after he was terminated, on at least two separate occasions, Weitzel reached out to Trippe Wayman, a Wayman Vice President, to encourage him to follow through with Smith to ensure that Wayman secured any upgrade work at Doylestown.[31] The record is unclear as to what, if any, steps Wayman took to capitalize on the opportunity that Weitzel claimed existed. As discussed infra, however, by the time Doylestown officially requested bids for the upgrade project in March 2012, the scope of the project that Doylestown was bidding out appears to have changed from what Weitzel had told Wayman in July and August 2011.

b. Weitzel's solicitation of Doylestown on behalf of Premium Fire

Within a few days of his termination on August 18, 2011, Wietzel emailed Smith to inform him that he no longer was employed by Wayman.[32] Weitzel spoke with Smith again on October 5, 2011[33] and met with Smith in person on December 13, 2011.[34]Although Weitzel "didn't have any products" to sell at the time, Weitzel used the December 2011 meeting to inform Smith that he would be heading up a new fire and alarm venture named Premium Fire.[35]

On January 26, 2012, Weitzel emailed Smith and Werner on behalf of Premium Power to express an interest in applying to become a bidder for Doylestown's power needs.[36] In response, Smith wrote to Weitzel "I assume you [also] would be interested in discussing the fire system upgrade of old building? Just need to know right now."[37]Weitzel immediately confirmed Premium Fire's interest in the Doylestown upgrade project.[38] On February 3, 2012, Weitzel, White, Smith, and Werner met in person to discuss the upgrade project.[39] Approximately three weeks later, on February 24, Premium Fire received OOT authorization from Boyle to pursue the upgrade at Doylestown, [40] which is located in EST territory PA4.[41] Premium Fire and Doylestown met and discussed the upgrade project actively until Premium Fire submitted its bid for the project approximately one month later.

c. Wayman's interactions with Doylestown after Weitzel's termination

When Smith learned that Weitzel was no longer employed at Wayman, he was "concerned" both because he had "an excellent relationship" with Weitzel and because he was "uncomfortable" dealing with "unknown" people at Wayman who he had never seen before, and in whose performance he did not have confidence.[42] Fairly soon after Weitzel's termination from Wayman, Smith became dissatisfied with Wayman's service, [43] but by October 2011 Smith had decided to give Wayman a "second chance."[44]From Smith's perspective, however, serious issues arose from Wayman's performance in December 2011 in conjunction with Doylestown's annual fire system inspection.[45]

Smith continued to have problems with Wayman after the annual inspection was completed. For example, Smith did not receive Wayman's annual inspection report until mid-March 2012, even though he expected to receive it within four to five weeks of Wayman completing the inspection in late December 2011, and inquired persistently when the report was not delivered in that time frame.[46] When Smith actually received the report, he noticed that it contained deficiencies that needed to be addressed.[47] Smith advised Wayman, but was not satisfied with its response.[48]

d. Premium Fire is awarded the Doylestown upgrade project

In the end, only two vendors, Wayman and Premium Fire, bid for the Doylestown upgrade project. Before submitting their respective bids, both companies sent employees to walk through the building to get an understanding of its layout and where various relevant devices were located. Whereas Wayman did two walkthroughs at Doylestown, Premium Fire was onsite "more often taking a look around, " and conducted five or six walkthroughs.[49] In addition, during these walkthroughs, Smith and Premium Fire had "several discussions on concepts of panel layouts and so forth, " discussions that Smith and Doylestown "didn't get from Wayman."[50]

The bids that Premium Fire and Wayman eventually submitted to Doylestown differed significantly in scope and cost. Premium Fire's bid "included the new IRC system, the crossover, the main panel, the remote panels, complete rewiring, and complete component change, " while Wayman's bid consisted only of the "main panel, satellite panels, using existing wiring and existing components."[51] According to Smith, Premium Fire's bid was consistent with Doylestown's request for proposal for the upgrade project;[52] Wayman's bid was not.[53] Premium's bid, at approximately $619, 000, [54] also was materially higher than Wayman's bid of approximately $227, 000.[55]In addition, as part of its bid, Premium Fire sent Smith a document known as "Annex E." Annex E, which every EST vendor is required to provide to potential new clients regardless of whether that client is in the vendor's designated EST area, provides a customer notice that if they begin working with an EST strategic partner that did not install the original system (such as Premium Fire), they may incur additional costs if the new strategic partner has to reprogram the system because it cannot obtain access to the original program file.[56] On March 14, 2012, slightly more than a week before Premium Fire submitted its bid to Doylestown, Weitzel told Smith he was sending Annex E as a formality, and that there would be no additional charges for reprogramming the Doylestown system.[57]

After considering the bids, Smith awarded the upgrade project to Premium Fire. Smith said he chose Premium Fire because he was not comfortable with Wayman after its performance on the December 2011 annual fire inspection or with the logistics of the bid that Wayman had presented.[58]

5. Fox uploads files from Wayman onto his Premium Fire laptop

In early February 2012, Fox, another former Wayman employee, began working for Premium Fire.[59] While he was employed at Wayman, Fox used an external hard drive to back up the files on his Wayman laptop.[60] Although Fox was instructed by Donnelly not to bring any information from Wayman with him to Premium Fire, [61] within a week of starting at Premium Fire, Fox uploaded the contents of the external hard drive onto his Premium Fire laptop.[62] Williams actually witnessed the upload, [63] but he was unaware of what Fox was uploading.[64] Shortly after the upload was complete, Weitzel entered Fox's cubicle. Fox had placed the uploaded information in a folder labeled "Wayman" on his computer's desktop.[65] While it is unclear if Weitzel noticed the folder on Fox's computer screen, Fox also claims that he told Weitzel what he had just done, and that in response, Weitzel asked him if he had any documents related to Pitcairn, [66] a Wayman client for which Premium Fire was preparing an inspection bid. Although neither Williams[67] nor Weitzel[68] had any recollection of that exchange, I found this aspect of Fox's testimony credible.

Of the approximately 17, 000 documents that Fox copied while at Wayman and uploaded onto his Premium Fire laptop, two are of particular importance to this case: (1) a contacts report and (2) a sales opportunity report, both of which were generated by Salesforce. com ("Salesforce"). Salesforce is a "customer relations management tool" that Wayman uses to store data such as contact information, sales information, and proposal information for each of its customers.[69] Wayman pays approximately $15, 000 per year to use Salesforce and, in addition, has spent thousands of dollars customizing the database to meet its specific needs.[70] Trippe Wayman determines how the company's seventeen Salesforce licenses are allocated.[71] Although the record is not entirely clear, I infer from the facts available that the number of Salesforce licenses corresponds roughly to what Wayman is entitled to as part of its $15, 000 annual fee for the software.

Access to Salesforce is password protected, and Wayman Salesforce users are required to change their password every 30–60 days.[72] These security measures are a part of the Salesforce service itself and were not implemented specifically by Wayman.[73]It does not appear that Wayman takes any additional steps to protect the information it inputs into Salesforce beyond the security that is built into the software. Moreover, there is no evidence that Wayman monitors its authorized employees' use of Salesforce or restricts those employees' abilities to download, export, or otherwise transmit Wayman's Salesforce data.

It is undisputed that Fox, who was authorized to access Salesforce, uploaded Salesforce reports onto his Premium Fire laptop. According to Fox's unrefuted testimony, however, no one at Premium Fire ever asked him for the information contained in the reports or was aware that he possessed them.[74] There is no evidence in the record that Fox or anyone else at Premium Fire ever used the opportunities report. While Fox did admit to using some of the Wayman files he uploaded onto his Premium Laptop to get in touch with old clients, [75] he expressly denied ever using either of the Salesforce reports during the course of his employment at Premium Fire.[76]

C. Procedural History

After Premium Fire was awarded the Doylestown upgrade project, Wayman began to suspect that Premium Fire was in possession of, and using, Wayman's SDU program files. As a result, Wayman retained a forensic computer expert to determine if its former employees had copied files from Wayman's computers that they could have brought with them to Premium Fire. Based on the results of the investigation, on September 14, 2012, Wayman commenced this action by filing a complaint against Premium Fire and other defendants accusing them of tortious interference, misuse of computer system information, civil conspiracy, and conversion, among other things. Concurrent with filing its original complaint, Wayman moved, unopposed, to have this case expedited. On October 9, 2012, I granted Wayman's motion to expedite.

The next day, on October 10, Wayman moved for a preliminary injunction against Defendants. After conducting limited discovery, the parties agreed to a consensual preliminary injunction order (the "Preliminary Injunction"), which I granted on November 19, 2012.

In January 2013, Defendants sought leave to file a counterclaim in this action. After obtaining such leave, Defendants filed their counterclaim on January 25, 2013. Wayman then moved both to dismiss the counterclaim and for summary judgment on it. On May 6, 2013, I dismissed Defendants' counterclaim pursuant to a joint stipulation of the parties.

Between January and May 2013, Wayman filed both an amended complaint and a second amended complaint, the latter of which constitutes the operative complaint in this action. From June 18 through June 21, 2013, I presided over a three-and-a-half-day trial. Based on the facts developed at trial and certain assurances made by Defendants, on August 2, 2013, I vacated the Preliminary Injunction. After extensive post-trial briefing, counsel presented their final arguments on October 17, 2013. This Memorandum Opinion constitutes my post-trial findings of fact and conclusions of law in this matter.

D. Parties' Contentions

In post-trial briefing, Wayman narrowed to six the number of claims it is pursuing against various combinations of Defendants. Wayman's first claim accuses all Defendants of tortious interference with Wayman's prospective business relationship regarding the Doylestown upgrade project. Second, Wayman argues that Premium Fire and Premium Power misappropriated the Salesforce reports that Fox uploaded onto his computer in violation of Delaware's Uniform Trade Secrets Act. In its third claim, Wayman contends that all Defendants are liable for computer misuse under the Delaware Misuse of Computer System Information Act based on, at a minimum, White's and Fox's uploads of Wayman computer files onto their Premium Fire laptops. In its next claim, Wayman alleges that White breached his duty of loyalty to the company by misappropriating Wayman's computer files for the purpose of using them, as an employee of Premium Fire, to compete with Wayman. Fifth, Wayman avers that all Defendants are liable for White's conversion of its computer files. Wayman also alleges that Premium Fire and Premium Power are liable for conversion of the files Fox uploaded to his Premium Fire laptop because they maintained possession of that laptop and did not return the files to Wayman. Finally, Wayman asserts that all Defendants conspired with White to steal computer files from Wayman and to retain and use improperly those files for the purpose of engaging in unfair competition with Wayman. In addition, although it is not a separate claim per se, Wayman renewed its efforts to have Defendants held in contempt based on their repeated violations of the Preliminary Injunction.

In response, Defendants argue that Wayman has failed to prove its tortious interference claim because Wayman had no reasonable expectancy of being awarded the upgrade project based on its poor performance at Doylestown, and that regardless, Premium Fire had not used any improper means to compete with Wayman in securing that contract. As to the second claim, according to Defendants, the information in the Salesforce reports does not meet the statutory definition of a "trade secret, " and even if it did, Wayman has not proved any use or disclosure of Wayman's purported trade secret information. Next, Defendants acknowledge that they were in possession of Wayman's information in violation of the Delaware Misuse of Computer System Information Act. Nevertheless, they assert that Wayman has not proved that Defendants used that information or that Wayman has been harmed by Premium Fire's possession of its files, and, therefore, any damages for this claim should be minimal. Fourth, Defendants assert that White was not a Wayman corporate fiduciary, and, thus, he did not owe the company any fiduciary duties. Moreover, Defendants contend that even if he had such a duty, the computer files White is alleged to have copied were neither confidential nor Wayman's property. Defendants also deny any liability for conversion because Wayman never demanded that its property be returned and, in any event, Wayman retained its own copy of the electronic files that White and Fox copied. Finally, regarding Wayman's claim for civil conspiracy, Defendants argue that there is no evidence of an agreement among Defendants to steal or use Wayman's computer files.

Separate from their arguments with respect to Wayman's claims, Defendants also devoted a significant portion of their post-trial briefing to their view that Wayman should be required to reimburse Defendants for the attorneys' fees and expenses they have incurred in this action. In that regard, Defendants base their contention on Wayman's failure to comply with the verification requirement of Court of Chancery Rule 3(aa) and on Wayman's alleged bad faith conduct in relation to this litigation.

With that framework in mind, I turn to my analysis of the issues presented in this case.

II. ANALYSIS

Before discussing the substance of Wayman's claims, I address first the liability of Defendant Premium Power for the various causes of action that Wayman has asserted against it in this case. As stated previously, although Premium Power and Premium Fire share a common owner, they are distinct legal entities. It is undisputed that the different companies share an office and some administrative personnel. The evidence also shows that Premium Fire employees at times attempt to "cross-sell" Premium Power's services to potential customers, [77] and that one Premium Power employee, Jeff Lucas, occasionally performed work for Premium Fire.[78] None of this, however, warrants holding Premium Power liable for the claims Wayman is asserting in this case. To the extent Wayman argues that the distinct corporate forms of Premium Power and Premium Fire should be disregarded, it has not offered any evidence whatsoever that would support a veil-piercing or alter-ego type theory. Nor has Wayman presented evidence that any of the individual Defendants were acting as employees of Premium Power when they committed their alleged wrongdoing. Moreover, Wayman has not pointed to anything in the record that indicates that anyone actually employed by Premium Power ever possessed Wayman's computer files, let alone used them.[79] In sum, based on the record in this case, Wayman has failed to satisfy its burden of proving its claims against Premium Power by a preponderance of the evidence. Therefore, I find in favor of Premium Power on each of the claims that Wayman has asserted against it in this action, and will dismiss those claims with prejudice.[80]

A. Tortious Interference [81]

1. Legal standard

Wayman's tortious interference claim is predicated on an expectancy, rather than the existence, of a contractual relationship with Doylestown regarding the upgrade project. Under Delaware law, an action for tortious interference with prospective contractual relations requires: (1) a reasonable probability of a business opportunity or prospective contractual relationship; (2) intentional interference by a defendant with that opportunity; (3) proximate cause; and (4) damages.[82] Furthermore, all of these requirements must be considered in light of a defendant's privilege to compete or protect his business interests in a lawful manner.[83] I reject Wayman's claim for tortious interference, because I find that Wayman has failed to prove either: (1) that it had a reasonable probability of a business opportunity or prospective contractual relationship; or (2) the existence of proximate cause.

2. Reasonable probability of a business opportunity or prospective contractual relationship

Wayman avers that it had a reasonable expectancy of being awarded the Doylestown upgrade based on Weitzel's representations to Wayman that they would be engaged for the project and Smith's deposition testimony that he allowed Wayman to bid for the project. Neither of these arguments is sufficient to meet Wayman's burden of proof regarding a reasonable expectancy.

Before his termination by Wayman, Weitzel emailed his colleagues at Wayman on more than one occasion to express his confidence that Wayman would be hired to conduct the first phase of Doylestown's upgrade.[84] In the month following his firing, Weitzel continued to communicate to Trippe Wayman that Wayman had an excellent opportunity to secure the $200, 000–$300, 000 first phase of the Doylestown upgrade project if he followed through with Smith.[85] All of Weitzel's emails on this subject were sent between June and September 2011. Until March 2012, however, Smith apparently had to focus his efforts on addressing Wayman's failure to provide him with an annual report for the hospital's fire system, and, therefore, he was unable to get into "the real nitty-gritties of the upgrade" until that time.[86] Thus, Weitzel's representations from June to September of 2011 do not provide a reliable indication of Wayman's probability of procuring the Doylestown upgrade nearly six months later in March 2012.

Weitzel's representations also fail to persuade me that Wayman had a reasonable expectation of being awarded the Doylestown upgrade for the separate reason that the project he was claiming Wayman was likely to win was not the upgrade project that Doylestown actually bid out and awarded. Each of Weitzel's emails contemplates Wayman being given a contract to complete an initial or preliminary phase of upgrading Doylestown for between $200, 000 and $300, 000. That, however, was not consistent with the scope of the bids that Smith instructed both Wayman and Premium Fire to submit in March 2012. Regardless of whether Weitzel misunderstood the nature of the Doylestown upgrade while he was at Wayman or Smith elected to change the scope of the project at some point after he had talked with Weitzel in the summer of 2011, the contract that Weitzel's 2011 emails expressed confidence that Wayman would be awarded never actually came to fruition.[87] Therefore, Weitzel's emails and beliefs[88] in mid-2011 are not persuasive evidence that Wayman had a reasonable expectancy of winning the Doylestown upgrade project in March 2012.

Smith's deposition testimony about Wayman being permitted to bid on the upgrade project is not sufficient to show the existence of such an expectancy either. Despite its missteps with Doylestown's 2011 annual inspection, Smith had not eliminated Wayman entirely from consideration for the upgrade project.[89] The facts that Wayman was permitted to bid and that its bid was considered, however, did not, in and of themselves, give Wayman a reasonable expectancy of securing the upgrade contract. Based on my review of the evidence submitted at trial, including Smith's deposition testimony, I find that Wayman's chances of procuring the Doylestown upgrade were significantly below 50%, even though it was only one of two bidders for the project. The record shows that Smith, consistent with several other former Wayman customers, had become disenchanted with Wayman as a result of its poor performance.[90] Although Smith did not foreclose the possibility of continuing to work with Wayman, I find that by the time Wayman and Premium Fire submitted their bids in March 2012, Wayman's odds of being awarded the upgrade project were diminished materially by its poor performance in the aftermath of ...


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