Decision not expected for weeks in PowerHouse non-compete suit

Founder opened sub shop after relationship with owners soured

It will be several weeks before a federal judge decides whether the founder of PowerHouse Subs violated a non-compete clause with the new owners who purchased the company's assets in 2018.

Senior U.S. District Judge Kim R. Gibson heard testimony and received copies of multiple depositions, text messages and other communications concerning the asset purchase agreement between the new owners and the company's founder, Hollidaysburg businessman Michael McDonnell.

The trial was before Gibson and did not include a jury.

According to an order issued Thursday by Gibson, he will take several weeks before issuing a decision in the case.

The judge has ordered a transcript of the proceedings be prepared.

He then indicated that the parties have 30 days from completion of the transcript to file legal briefs that focus on the testimony and conclusions of law.

Those briefs are to be no longer than 25 pages.

He stated that each side could then seek court approval to respond to the other side's legal brief.

He also ordered that the costs of the transcript are to be shared equally by the parties.

McDonnell in 2017 founded PowerHouse Subs, which now has shops in Altoona, Duncansville and Tyrone.

In 2018, according to court documents, Ryan DelBaggio of Tyrone, who McDonnell alleges was supplying apple dumplings to his business, approached him and stated John Russell, a Tyrone businessman, was interested in investing in PowerHouse.

In late 2018, McDonnell agreed to an Asset Purchase Agreement "in hopes of franchising the business nationwide with the help of (Russell's) resources."

McDonnell received a 15% share of the new corporation and asserted that members of his family who worked for PowerHouse could keep their jobs and that he too would work for the purchasers, receiving a salary of $100,000 annually.

The relationship between McDonnell, DelBaggio, Russell and Brice Mertiff of REVZIP LLC, who eventually gained control of PowerHouse, soured and McDonnell broke his relationship with PowerHouse.

According to the lawsuit brought by PowerHouse Subs LLC and REVZIP LLC. McDonnell and his family members, who no longer worked for PowerHouse, opened a new sub business in violation of a non-compete clause that was part of the various sale agreements.

McDonnell, in his defense, argued that the new owners violated the original deal by "leveraging" him and his family members out of the business.

PowerHouse and REVZIP were represented in the trial by attorney Briar Siljander of Highland, Michigan.

McDonnell served as his own attorney.