Ace Techs. Inc. v. PMCS Inc.

The trial court erroneously premised its ruling on hearsay in a bench trial on a contract dispute.

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Following a bench trial, the trial court entered judgment in favor of PMCS, Inc., one of the parties to a contract dispute. Because that judgment appears to have been based on hearsay, we are constrained to reverse and remand this case to the trial court for proceedings consistent with this opinion. The evidence presented during the trial of this case shows that Ace Technologies, Inc. is a temporary staffing business that provides software development programming and other information technology IT services to companies. PMCS Inc. is a management consulting firm that also provides IT services on a temporary basis to companies in need of those services. The president and CEO of PMCS is Allena Kendrick. PMCS and Ace entered into a contract under which Krishna Mande, an Ace employee, was supplied to PMCS for a technology project with Sprint. PMCS supplied Mande to a company called Berean Group International BGI, who worked on the project. As described by the trial court, “under the contractual scheme, PMCS contracted with BGI who in turn contracted with other companies and ultimately with Sprint. PMCS’ profit was based on the difference between the hourly wage they were paying to Ace and the hourly wage they were paid by BGI.” The agreement between Ace and PMCS contained covenants restricting Ace from entering into contracts with other entities involved in the project, as well as a confidentiality clause prohibiting Mande from disclosing any “financial arrangement.”

Kendrick testified that in April or May 2002, PMCS contacted BGI, and BGI had another entity involved with the project “discuss with Mande who he actually worked for and what his rates were.” At that time, BGI was paying $65 per hour to PMCS for Mande’s services. She testified that BGI then “reduced our rates to $55 an hour since they found out our rates were too high.” According to Kendrick, “we were told by BGI either we accept the rates or we lose the contract totally.”

Ace Techs. Inc. v. PMCS Inc.

The trial court erroneously premised its ruling on hearsay in a bench trial on a contract dispute.

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