Opinion
2012-05-22
EPSTEIN ENGINEERING P.C., Plaintiff–Respondent, v. Thomas CATALDO, et al., Defendants–Appellants,Steven Gregorio, Defendant.
Jane M. Myers, P.C., Central Islip (James E. Robinson of counsel), for appellants. *888 Warshaw Burstein Cohen Schlesinger & Kuh, LLP, New York (Bruce H. Wiener of counsel), for respondent.
Jane M. Myers, P.C., Central Islip (James E. Robinson of counsel), for appellants. *888 Warshaw Burstein Cohen Schlesinger & Kuh, LLP, New York (Bruce H. Wiener of counsel), for respondent.
Orders, Supreme Court, New York County (Judith J. Gische, J.), entered February 28, June 1, and June 14, 2011, which, to the extent appealed from as limited by the briefs, decided defendants Thomas Cataldo and Cataldo Engineering, P.C.'s motion for a protective order upon a determination that plaintiff is entitled to damages incurred after the date of Thomas Cataldo's resignation from it arising from defendants' work for clients obtained before Cataldo's resignation, unanimously modified, on the law, to limit plaintiff's entitlement to lost profits after Cataldo's resignation to those arising from defendants' work for clients obtained before his resignation who had been clients of plaintiff, and otherwise affirmed, without costs.
The evidence of record establishes that plaintiff is entitled to recover the compensation Cataldo received from plaintiff during the period of Cataldo's disloyalty, i.e., from April 2007, when he formed Cataldo Engineering, to September 2, 2008, when he resigned from plaintiff ( see Maritime Fish Prods. v. World–Wide Fish Prods., 100 A.D.2d 81, 88, 91, 474 N.Y.S.2d 281 [1984], appeal dismissed 63 N.Y.2d 675 [1984] ). Additionally, plaintiff “is entitled to damages for the wrongful diversion of its business measured by the ‘opportunities for profit on the accounts diverted from it through defendants' conduct’ ” ( Maritime Fish Prods., 100 A.D.2d at 91, 474 N.Y.S.2d 281). Finally, if defendants poached plaintiff's clients, plaintiff may recover the profits that it would have made from those clients either through trial or judgment or for some reasonable period ( see e.g. Duane Jones Co. v. Burke, 306 N.Y. 172, 192, 117 N.E.2d 237 [1954]; E.W. Bruno Co. v. Friedberg, 21 A.D.2d 336, 339 & 341, 250 N.Y.S.2d 187 [1964]; McRoberts Protective Agency v. Lansdell Protective Agency, 61 A.D.2d 652, 655–656, 403 N.Y.S.2d 511 [1978] ). However, plaintiff is not entitled to lost profits after September 2, 2008 from individuals and entities who were never its clients ( see Town & Country House & Home Serv. v. Newbery, 3 N.Y.2d 554, 560, 170 N.Y.S.2d 328, 147 N.E.2d 724 [1958] ). The customers for Local Law 11 services were “readily ascertainable outside the employer's business as prospective users or consumers of the employer's services” ( see Leo Silfen, Inc. v. Cream, 29 N.Y.2d 387, 392–395, 328 N.Y.S.2d 423, 278 N.E.2d 636 [1972] ). Thus, trade secret protection will not attach.