Jasco Tools, Inc. v Rogers

[*1] Jasco Tools, Inc. v Rogers 2006 NY Slip Op 51949(U) [13 Misc 3d 1222(A)] Decided on July 31, 2006 Supreme Court, Monroe County Fisher, J. Published by New York State Law Reporting Bureau pursuant to Judiciary Law § 431. This opinion is uncorrected and will not be published in the printed Official Reports.

Decided on July 31, 2006
Supreme Court, Monroe County

Jasco Tools, Inc., Plaintiff, .

against

Gary W. Rogers, CHARLES D. ZICARI, NATIONWIDE PRECISION PRODUCTS CORP., and SPICER HEAVY AXLE & BRAKE DIVISION OF DANA CORPORATION, Defendant.



2001/04948

Kenneth R. Fisher, J.

When the Appellate Division on March 21, 2003, reversed the order granting summary judgment to Gary Rogers, it relied almost exclusively on the third Convertino affidavit, in which for the first time he admitted that he and co-defendant Zicari engaged in a concerted effort to subvert plaintiff's confidential information for the purpose of permitting either Zicari's own company to be formed, or their new employer, to undercut plaintiff's prices, prevent a substantial contract with Dana from being renewed with plaintiff, and to subvert it to the company to be formed or Nationwide Precision Products Corp., another defendant and the new employer. The Appellate Division stated: "According to Convertino, Rogers aided the efforts of Convertino and Zicari by providing them with documents while he was still employed by plaintiff." 303 AD2d 944 (4th Dept. March 21, 2003). The Appellate Division held: "The Convertino affidavit submitted by plaintiff on renewal, however suspect, nonetheless raises issues of fact whether defendants breached their fiduciary duty to plaintiffs; whether they misappropriated plaintiff's confidential business information; whether Rogers breached the non-compete provision in his termination agreement by helping' Zicari while still employed by plaintiff or acting as its consultant and, if so, whether that breach triggered a forfeiture of plaintiff's duty to pay monthly separation' benefits to Rogers; . . . and whether defendants tortuously interfered with plaintiff's business relationship with the contract vendee at issue." Ultimately, the Appellate Division held that, "[b]ecause only minimal discovery had been conducted prior to the motions, [*2]summary judgment . . . should have been denied with leave to renew after the completion of discovery."

The third Convertino affidavit, which detailed the machinations of Zicari and Convertino, stated with respect to Rogers only the following:

¶ 14. In approximately April of 1999, while all three of us were still employees of Jasco, Chuck Zicari approached me, told me that he was thinking of starting his own business in Kentucky, in competition with Jasco, and asked me whether I was interested in joining him. Eventually, he discussed with me a formal business plan that someone had helped him prepare for his new business. He described to me his plans in greater detail, made me a formal offer to join him in his new business as the Vice President of Operations, and he made other promises to me. He also told me that Gary Rogers was helping him.

¶15. One of the most shocking things that Chuck told me was that while Gary was still at Jasco, he went into Chuck's personnel file and removed from it Chuck's signed Non-Compete Agreement and that he believed it was destroyed, thus enabling Chuck to carry forward with this plan.

Record on Appeal, at 432 (emphasis supplied).

Accordingly, on the motion to renew/reargue Judge Stander's original grant of summary judgment to Rogers, the only intimation of Rogers' involvement in Zicari's scheme were these two hearsay allegations. The only other suggestion presented on the motion to renew/reargue of Rogers' involvement came in an affidavit of Eugene Clyde, who spoke at length about Zicari's personnel file. He indicated that such "files are kept under lock and key and only a couple of people have direct access to these files[,]" one of which, during the period of May-August, 1999, was Gary Rogers. Clyde affidavit at ¶7; Record on Appeal, at 438.

Now, over three years after the Appellate Division granted plaintiff the right to discovery, Rogers moves again for summary judgment pursuant to the court's leave to renew. In support of his motion, Rogers submits the deposition testimony of Convertino, Zicari, Rogers himself, Baldino (Jasco's President), and others attesting to the fact that, with the exception of Rogers' alleged removal of Zicari's confidentiality agreement from Zicari's personnel file,[FN1] Rogers did not participate in any [*3]wrongdoing against Jasco. Baldino made some unsupported claims to the contrary in his deposition testimony, recounted in his affidavit in opposition, but it is clear that he had no personal knowledge of the facts surrounding his allegations, and he conceded that he "d[id] not have at this point in time absolute proof" that Rogers misappropriated confidential information of Jasco.

In opposition to the current motion, plaintiff does no better than it had in connection with the first motion for summary judgment and therefore has failed to present any evidence sufficient to raise a question of fact for the jury on the claims in the complaint interposed against Rogers. Urbanski v. County of Monroe, 134 AD2d 925 (4th Dept. 1987). In other words, Rogers "submitted evidence showing that . . . [he] did not participate in any wrongful acts against plaintiff and plaintiff has not submitted any evidence to the contrary," id. 134 AD2d at 926, except with respect to the alleged destruction of Zicari's confidentiality agreement.

I agree that the evidence of telephone calls, also presented in opposition to the first motion for summary judgement, does not (even giving every available inference that might justifiably be drawn in favor of the plaintiff) salvage plaintiff's position and otherwise justify denying Rogers' motion for summary judgment after the considerable opportunity for discovery afforded so far. This is not a case in which the testimony of a witness, Convertino, is inconsistent with his affidavits or contradicted by the same. Cf. Krampen v. Foster, 242 AD2d 913, 915 (4th Dept. 1997). Here, Convertino merely clarified in his deposition that what he meant in his third affidavit about Zicari's statement about Rogers "aid[ing]" him ; i.e., that it concerned the removal of the confidentiality agreement from the personnel file, nothing else. Thus, Convertino testified in deposition without materially contradicting himself on the point of what he had been told by Zicari about Rogers' conduct, and Rogers otherwise establishes in support of his motion that the discovery engaged in during the last three years wholly fails to implicate him any further in Zicari's scheme, and almost certainly exonerates him with respect to the Dana matter. Urbanski v. County of Monroe, supra.

That leaves as the sole source of support for plaintiff's claims against Rogers the allegation (made through the hearsay statement of Zicari to Convertino) that Rogers made an [*4]unauthorized visit to Zicari's personnel file and destroyed a confidentiality agreement which bound Zicari to no more than what the common law required of him. Rogers rightly questions how this one event, even if true (and it has been denied), damaged plaintiff or otherwise aided Zicari's presumed (for purposes of this motion) nefarious scheme to divert Jasco business to either himself in a new company he planned to set up or to co-defendant Nationwide. Convertino's allegation was described by the Appellate Division over three years ago to be "however suspect," and I find that it alone, even if admissible as a co-conspirator declaration (as plaintiff maintained at oral argument), cannot defeat Rogers' motion.

The foregoing assumes the merit of plaintiff's contention (made at oral argument) that Zicari's statements about Rogers, as related to Convertino, are admissible as a co-conspirator declaration. But on this record it is clear that Zicari's declarations are not admissible against Rogers, and the conclusion that Rogers is entitled to summary judgment is even more compelling. Originally under federal law, the rule was that "such declarations are admissible over the objection of an alleged co-conspirator, who was not present when they were made, only if there is proof aliunde that he is connected with the conspiracy." Glasser v. United States, 315 U.S. 60, 74, 62 S. Ct. 457, 467 (adding that, "[o]therwise hearsay would lift itself by it own bootstraps to the level of competent evidence"). New York law followed suit, People v. Salko, 47 NY2d 230, 238 (1979)(quoting Glasser), but the New York cases had always followed the rule that a precondition to admissibility of co-conspirator declarations was independent proof of the conspiracy and the participation in it of the person against whom the declaration is sought to be introduced quite without reference to the declaration itself. Lent v. Shear, 160 NY 462, 471 (1899); People v. Evangelista, 88 AD2d 804 (1st Dept. 1982)("prima facie showing of the existence of a conspiracy in which appellant was involved"); Matter of Sabatini v. Kirwan, 42 AD2d 1022, 1024 (3d Dept. 1973). See also, Benjamin v. Benjamin, 65 NY2d 756 (1985), affing for the reasons stated at 106 AD2d 599, 601 (2d Dept. 1984)("independent proof was insufficient to establish a prima facie case of conspiracy and the declaration of an alleged co-conspirator cannot be admitted against an alleged con-conspirator for the purpose of proving the conspiracy itself"); People v. L.B. Smith, 108 Misc 2d 261, 263-64 (Sup. Ct. Onondaga Co. 1981)(L.H. Smith, J.)("these factors must be preliminarily established without resort to the statement itself"). Although the federal rule in this regard now permits consideration of the declaration itself on the issue of the existence of the conspiracy and a defendant's participation in it, Bourjaily v. United States, 483 U.S. 171, 181, 107 S. Ct. 2775, 2782 (1987), [*5]the New York Court of Appeals still adheres to the "proof aliunde" rule of Glasser. People v. Caban, 5 NY3d 143, 148 (2005); People v. Wolf, 98 NY2d 105, 118 (2002). See Robert A. Barker & Vincent C. Alexander, 5 New York Practice Series - Evidence in New York and Federal Courts §8:26 (recognizing the divergence of federal and state law on the point); 6 NY Practice Series, New York Criminal Law §4:11 at n.3 (recognizing that the federal rule is different - - "in considering whether that burden has been met, the court may consider (although a New York Court may not) the hearsay statements of the alleged co-conspirators").

To be sure, New York law allows the "testimony of an admitted co-conspirator regarding defendant's involvement [in] establish[ing] a prima facie case" of conspiracy, People v. Wolf, 98 NY2d at 118 (citing People v. Sledge, 223 AD2d 922, 925-26 (3d Dept. 1996)). But in this case Zicari, and even Convertino himself, deny Rogers' involvement in any scheme of conversion, either of Jasco documents or in diversion of the Dana account. There is simply no independent evidence of Rogers' involvement in this conspiracy to justify admission of Zicari's declaration to Convertino about Rogers' role in the matter of Zicari's personnel file, or anything else.

Inasmuch as plaintiff fails to connect Rogers with the claimed conspiracy between Zicari and Convertino with anything other than the inadmissible hearsay declarations of Zicari to Convertino, the court is bound by the rule that "inadmissible hearsay . . . by itself is insufficient to defeat a motion for summary judgment." Gier v. CGF Health System, Inc., 307 AD2d 729, 730 (4th Dept. 2003). See Sunfirst Federal Credit Union v. Empire Ins. Co., 239 AD2d 894, 894-95 (4th Dept. 1997); Forest Medical Professional Condominium v. Tiburzi, 214 AD2d 962, 962-63 (4th Dept. 1995); Callari v. Pellitieri, 130 AD2d 935, 936 (4th Dept. 1987).

Rogers successfully refutes Jasco's spoilation claim by presenting evidence that spoilation was impossible by virtue of the timing of his dealings with his personal computer. In any event, the claim of spoilation should not be considered because Jasco never sought sanctions by reason of the alleged spoilation, pursuant to CPLR 3126 or otherwise. As Rogers' contends in his attorney's reply affirmation, Jasco's claim of spoilation is too clever by half. See Woodhouse v. Lombardia Motor Corp., 5 AD3d 1029, 1030 (4th Dept. 2004).

Moreover, Jasco's claim that discovery is not yet complete rings hollow in view of the three years afforded it before Rogers' renewal of this motion by leave of the Appellate Division. Meath v. Mishrick, 68 NY2d 992, 994-95 (1986); Forest Medical Professional Condominium v. Taburzi, 214 AD2d 962, 963 (4th Dept. 1995)("Plaintiff had a year in which to conduct that discovery"). Jasco offers nothing but "mere hope and speculation [*6]that additional discovery might uncover evidence" that Rogers did something which every witness who had any knowledge on the subject disavowed. Sasson v. Satina Manufacturing Co., 26 AD3d 487, 488 (2d Dept. 2006). The claim that Jasco needs to conduct the depositions of in excess of a dozen Nationwide employees and representatives rings hollow in view of the Nationwide employees and representatives actually deposed who were in the know and insisted that they never spoke with Rogers and that Rogers had nothing to do with Nationwide obtaining the Dana contract. Franklin v. Dormitory Authority, State of New York, 291 AD2d 854 (4th Dept. 2002). The desire to conduct depositions of Rogers' wife and girlfriend is expressed almost in explicit terms as a hope, or fishing expedition, for unspecified evidence favorable to plaintiff. The desire to depose Zicari's wife and father-in-law, the latter of which is alleged to have provided the financial backing for Zicari's failed and abandoned scheme to divert Jasco business to a company to be owned by him, does not explain how or why these two individuals have any more information about Rogers' alleged role in the scheme than Zicari himself has (which presumably has been exhausted during the last three years of discovery).

Accordingly, Rogers is entitled to summary judgment. The matter of the release was not pleaded, has not been considered, and is not necessary to this decision.

Rogers' motion for summary judgment on his counterclaim is granted to the extent that partial summary judgment on liability may be entered against Jasco. Rogers' failed in his initial moving papers to include a measure of damages to which he was entitled, and his reply papers cannot remedy the defect. Inasmuch as the only defenses to the counterclaim were the items contained in Jasco's complaint, which has now been dismissed, Rogers established as a matter of law that Jasco is liable to pay him for amounts due and owing under the agreement which have been withheld by Jasco. Justice Stander granted the same relief once he dismissed the complaint, albeit stating that there was to be no acceleration of the payments (his judgment provided a measure of damages theretofore sustained). There was no claim then that payments in excess of the amounts due and owing had been made to Rogers. But there is now, and therefore an inquest is necessary.

Schedule one on notice if agreement cannot be reached.

SO ORDERED.

______________________

KENNETH R. FISHER

JUSTICE SUPREME COURT [*7]

DATED:July 31, 2006

Rochester, New York Footnotes

Footnote 1: Deposition testimony and other evidence has established that Zicari did not execute a non-compete agreement, but instead executed, if anything, a confidentiality agreement. Even Jasco's opposition papers on this motion refer to it as a confidentiality agreement, not a non-compete. Rogers maintains that the confidentiality agreement imposed no more obligations on Zicari than the common law otherwise would require of a faithful employee. It is not contended otherwise.