United States District Court, D. Hawaii
FINDINGS OF FACT, CONCLUSIONS OF LAW, AND ORDER
DENYING PLAINTIFF'S MOTION FOR PRELIMINARY
Oki Mollway United States District Judge
Admor HVAC Products, Inc. (“Admor”), seeks a
preliminary injunction against its former employee Defendant
Robert Sonny Lessary and his company, Defendant Hicoustix LLC
“Defendants”). ECF No. 10. While working as a
salesperson for Admor, Lessary allegedly began soliciting
business for his own company, Hicoustix, which was in
competition with Admor. Admor asserts nine causes of action
against Defendants: (1) violation of the Defend Trade Secrets
Act, 18 U.S.C. § 1836; (2) violation of the Racketeer
Influenced and Corrupt Organizations Act, 18 U.S.C. §
1962; (3) breach of the duty of loyalty; (4) unfair
competition under 15 U.S.C. § 1125(a); (5) unfair
competition under § 480-2 of Hawaii Revised Statutes;
(6) tortious interference with prospective business
advantage; (7) tortious interference with business relations;
(8) conversion; and (9) unjust enrichment. ECF No. 1.
motion seeks an injunction:
1. Preserving the status quo preventing Defendants from
servicing any [and] all entities and individuals who were
Admor customers and vendors  as of April 1, 2018.
2. Ordering the in camera production of the customer and
vendor lists for Admor as of April 1, 2018 and Defendants as
of December 1, 2018 to assist the Court in determining
customers and vendors covered by the preliminary injunction.
3. Prohibiting Defendants and anyone acting in concert with
them from (i) possessing, using, and/or disclosing
Admor's confidential/proprietary/trade secret
information; (ii) accounting for and returning any and all
confidential/proprietary/trade secret information to Admor;
and (iii) otherwise unfairly competing with Admor.
ECF No. 10, PageID # 83.
court held an evidentiary hearing on the motion on April 16,
2019. Prior to the hearing, the parties submitted Proposed
Findings of Facts and Conclusions of Law (“Proposed
FoF/CoL”). ECF Nos. 28, 29. In its Proposed FoF/CoL,
Admor appeared to amend the relief sought in its motion,
requesting an injunction:
(1) that prevents Defendants from servicing any and all
entities and individuals who were Admor customers and vendors
as [of] December 19, 201, the date of Lessary's
termination of employment from Admor;
(2) ordering the in camera production of the customer and
vendor lists for Admor from January 1, 2018 to December 19,
2018, and Defendants as of January 1, 2018, to assist the
Court in determining customers and vendors covered by the
(3) prohibiting Defendants and anyone acting in concert with
them from (i) possessing, using, and/or disclosing
Admor's confidential/proprietary/trade secret
information; (ii) using Admor's name, symbols, and logos;
and (iii) otherwise unfairly competing with Admor; and
(4) requiring Defendants to account for and return any and
all confidential/proprietary/trade secret information to
ECF No. 29, PageID # 498 (emphases and spacing
does not show entitlement to either version of requested
relief. The court denies Admor's motion for preliminary
injunction and enters the following Findings of Fact,
Conclusions of Law, and Order.
FINDINGS OF FACT.
in the following discussion, this court has mistakenly
designated as conclusions of law what are really findings of
fact, and vice versa, the court's statements shall have
the effect they would have had if properly designated. For
ease of reference to particular findings and conclusions in
later proceedings, the findings and conclusions are presented
in numbered paragraphs. The court does not recite all
evidence presented during the evidentiary hearing on April
16, 2019, rather discussing evidence relevant to the
court's ruling on Admor's motion for preliminary
evidentiary hearing was conducted in accordance with this
court's procedures for civil nonjury trials, which are
reproduced, in substantially the same form followed here, in
Appendix A to this court's decision in Kuntz v. Sea
Eagle Diving Adventures Corp., 199 F.R.D. 665 (D. Haw.
2001). Direct testimony was presented by written
declarations, with witnesses then subject to live
cross-examination and redirect examination unless waived.
hearing, Admor presented testimony by Andrew Santos, Georgina
Fuerte, and Rogen Gaspar. Lessary presented testimony by
himself, Anthony Ornellas, Michael Goodnight, Steven Allende,
and Mario Geronimo. The parties also submitted
“Stipulated Facts For Evidentiary Hearing.” ECF
No. 30 (“Stip. Facts”).
on the testimony presented at the hearing, the Stip. Facts,
and the exhibits received into evidence, the court finds that
the following facts have been established by a preponderance
of the evidence.
Business in Heating, Ventilation, and Air Conditioning
Admor is a Hawaii corporation that has been doing business in
Hawaii since at least 1995. Stip. Facts ¶ 1. Admor is a
wholesale distributor of HVAC products and accessories.
Through its approximately 30 employees, it provides quality
HVAC and insulation products, training, and support to
contractors, architects, and engineers. Id.
all relevant times, Admor was involved in interstate
commerce; its business regularly required the shipment of
products across state lines. Indeed, most of Admor's
regular vendors were and are located outside of Hawaii.
Id. ¶¶ 11, 50.
Admor's revenue is driven by two groups: the contractors
and subcontractors that make up most of its customers, and
its vendors. Id. ¶¶ 5, 9.
Admor's salespeople meet with customers, discuss product
lines required for customers' projects, and provide
customers with quotes for those products. The salespeople
then coordinate with Admor's vendors and execute sales
orders for the customers' requested products. The
products are shipped to a customer's job site, either
from the vendor directly or from Admor's warehouse, where
it keeps “stock” equipment and products.
Id. ¶ 10.
sell products, salespeople need extensive training so that
they know how the products work and can explain to customers
why certain products should be used on certain projects. Some
vendors impose minimum training requirements on salespeople
who sell their products. Id. ¶¶ 12-13.
Employment as an Admor Salesperson.
Lessary is a resident of and domiciled in Hawaii.
Id. ¶ 2. From 2005 until May 2009, he worked as
a sales representative for G.W. Killebrew Co., Inc.
(“Killebrew”), where he sold drywall products and
acoustical paneling and ceilings to drywall contractors. ECF
No. 49: Amended Declaration of Robert Sonny Lessary
(“Lessary Decl.”) ¶¶ 19, 21, 22.
Lessary was employed by Admor as a salesperson from February
2010 until December 2018. Stip. Facts ¶ 7.
Several contractors who worked with Lessary at Killebrew
followed him to Admor because of the relationships they had
with him. See ECF No. 47: Amended Declaration of Anthony
Ornellas (“Ornellas Decl.”) ¶¶ 1-5; ECF
No. 41: Declaration of Michael Goodnight (“Goodnight
Decl.”) ¶¶ 1-4; ECF No. 48: Amended
Declaration of Steven Allende (“Allende Decl.”)
¶¶ 1-5; ECF No. 39: Declaration of Mario C.
Geronimo (“Geronomio Decl.”) ¶¶ 1-5;
Lessary Decl. ¶¶ 25-26.
Lessary had no noncompete agreement, nonsolicitation
agreement, confidentiality contract, or
nonacceptance-of-business agreement with Admor. Stip. Facts
While employed by Admor, Lessary received a salary plus
commissions and was reimbursed for his cellphone and
car-related expenses. Id. ¶¶ 7, 8. Admor
also provided Lessary with training in several product lines.
Id. ¶ 15; ECF No. 63: Amended Declaration of
Andrew Santos (“Santos Decl.”) ¶ 39; Exhibit
Nos. P-51, P-53, P-53, P-54.
a period of time during his employment with Admor, Lessary
paid the salary of his two administrative assistants, Raena
and Moi. Stip. Facts ¶ 21. In addition, Lessary relied
on the support staff in several Admor departments, including
the accounting, warehouse, credit, collections, order
processing, and delivery departments. Santos Decl. ¶ 47.
Lessary was Admor's primary “insulation guy,
” managing the customer and vendor sides of Admor's
insulation business. He was trusted and given discretion in
his job responsibilities. Stip. Facts ¶¶ 20, 35,
36. He managed two separate divisions at Admor: one in which
he sold insulation and acoustical ceilings to drywall
subcontractors, and another in which he sold insulation and
sheet metal products and accessories to HVAC sheet metal and
mechanical contractors. Lessary Decl. ¶ 28.
Rockfon, F-Sorb, and Service Partners became Admor vendors
during Lessary's employment. Lessary was the principal
and only contact at Admor for these vendors. Stip. Facts
¶¶ 32, 54. Rockfon, F-Sorb, and Service Partners
generated $2, 105.799.13 in gross sales for Admor in 2018.
Santos Decl. ¶ 45. Lessary was the only Admor
salesperson with the requisite training to sell Rockfon, and
he knew the Rockfon product better than Admor's other
salespeople. Stip. Facts ¶ 33. He was also the
salesperson at Admor who knew the F-Sorb product best.
Id. ¶ 34.
Lessary was also the salesperson at Admor closest to CD
Builders, BEK, PMJ Builders, JDH, Protech Roofing, and Haas
Insulation, all of which were contractors who were among
Admor's customers. He was the primary contact at Admor
for these contractors, though in some cases they also
communicated with his administrative assistants and
Admor's accounting department. ECF No. 31-1: Deposition
of Andrew Santos taken March 12, 2019 (“Santos
Depo.”) at 64:22-65:4, 70:5-11, 75:24-76:4, 87:12-88:4,
Protection of Customer and Vendor Information.
Admor's Employee Handbook refers to information about
customers as protected information. Stip. Facts ¶ 25. On
December 14, 2010, Lessary signed a “Receipt and
Acknowledgment of Admor Group, Inc's Employee Handbook,
” which states, “I have received and read a copy
of Admor Group, Inc's Employee Handbook. I understand
that the policies and benefits described in it are subject to
change at the sole discretion of Admor Group Inc. at any
time.” Id. ¶ 26; Exhibit No. P-1 at 1.
Lessary received a copy of the 2015 version of the Admor
Employee Handbook. Stip. Facts ¶ 27. That version
includes a clause stating:
NON-DISCLOSURE OF CONFIDENTIAL INFORMATION
Employees are expected not to disclose to persons outside the
Company any business information which is confidential or
proprietary in nature. Employees must maintain the
confidentiality of the Company's business information,
including but not limited to, business plans and strategies,
business opportunities, company financial information (e.g.,
profit and loss statement, investment returns, accounts
receivable), information regarding company purchases and
sales, customer lists, customer contact information, and
manufacturing methods and processes. If you are in doubt as
to whether particular internal business information is
confidential or proprietary, you should consult with your
supervisor before disclosing such information to third
No. P-2 at 40.
Admor has a customer and vendor database that includes
information such as names, phone numbers, email addresses,
payment history, purchase orders, and history of purchase
orders. Stip. Facts ¶ 22. It has taken Admor 25 years to
compile this information. Santos Decl. ¶ 53.
all of the information in the database is kept confidential.
Admor advertises vendor product lines on its business line
card. ECF No. 53, PageID # 807 (Santos testimony during cross
examination). However, the combination of all information in
the database is not publicly available. Id. at # 847
(Santos testimony during re-direct).
the database, Admor employees and salespeople can create
sales orders and access certain information about customers,
including order history and trends. The only people at Admor
who can change customer information are Georgina Fuerte
(Admor's Finance Manager, Secretary, Treasurer, and
Director) and Admor's accountants. Only Andrew Santos,
Admor's President, and the accountants can open or close
a customer account. ECF No. 35: Declaration of Georgina
Fuerte (“Fuerte Decl.”) ¶ 6. The database is
secured with a 4-digit security password. Stip. Facts ¶
23. Only current employees have access to the database.
Fuerte Decl. ¶ 7. The database includes 2, 042 customers
and 423 vendors. Stip. Facts ¶¶ 28, 30. That number
includes past or inactive customers and vendors, but
Admor's active customers number 211, and its active
vendors number 199. Fuerte Decl. ¶ 4; ECF No. 53, PageID
#s 803-04 (Santos testimony during cross examination).
Admor has security cameras in its warehouse and
administrative business space. Stip. Facts ¶ 24.
Lessary had access to the customer and vendor database while
employed at Admor. Fuerte Decl. ¶¶ 7, 10, 13.
Admor's best estimate is that Lessary worked with
approximately 100 customers and 23 vendors while employed by
Admor. Stip. Facts ¶¶ 29, 31.
Admor has no evidence that Lessary has lists of Admor's
customers or vendors, or that he took such lists with him
when he left Admor. Santos Depo. at 20:19-21:13. Nor does
Admor have evidence that Lessary took pricing or costing
information when he left Admor. Id. at 43:6-44:25.
Formation and Running of Hicoustix While Employed by
or possibly before April 2018, while employed by Admor,
Lessary began a business called Hicoustix that competed with
Admor. Stip. Facts ¶ 37.
Hicoustix is a Hawaii limited liability company that provides
insulation and other product lines to consumers/contractors.
Such products are regularly shipped across state lines to
Hawaii. Id. ¶¶ 3, 39, 51.
August 2, 2018, Hicoustix was registered to do business in
Hawaii as a member-managed company with Lessary as the sole
member. Hicoustix acts through Lessary. Id.
¶¶ 38, 49.
While employed by Admor, Lessary sent carbon copies of emails
to his Admor email address when doing business from his
Hicoustix email address, and vice versa. Id. ¶
52; see, e.g., Exhibit Nos. P-3, P-4, P-6, P-7,
P-10, P-11, P-22. In some of his emails, Lessary included
pricing information for certain products. Exhibit No. P-20 at
128-29; Exhibit No. P-30; see also ECF No. 53,
PageID #s 949-50, 957 (Lessary testimony during cross
examination). When communicating with clients and vendors
from his Admor email address, Lessary referred to a
partnership between Admor and Hicoustix and/or to an
arrangement in which Hicoustix received a commission for
Admor sales. See Exhibit P-9 at 77 (email
correspondence with Bill Devin of Regupol America dated
February 20, 2018, in which Lessary stated that
“you'd just have to collect from ADMOR and pay out
a commission check to HICOUSTIX”); Exhibit No. P-12
(email correspondence with Dennis Wakaluk of Rockfon dated
May 2, 2018, in which Lessary stated that “I feel the
ADMORᲀ蹑Ⓢ partnership has helped to keep a
project”); Exhibit No. P-23 (email correspondence with
Kerrie Duncan of Soundseal ...