701 F.2d 985 (1st Cir. 1983), 82-1597, Emery v. Merrimack Valley Wood Products, Inc.

Docket Nº:82-1597.
Citation:701 F.2d 985
Party Name:Leslie EMERY, Plaintiff, Appellant, v. MERRIMACK VALLEY WOOD PRODUCTS, INC., et al., Defendants, Appellees.
Case Date:March 02, 1983
Court:United States Courts of Appeals, Court of Appeals for the First Circuit

Page 985

701 F.2d 985 (1st Cir. 1983)

Leslie EMERY, Plaintiff, Appellant,


MERRIMACK VALLEY WOOD PRODUCTS, INC., et al., Defendants, Appellees.

No. 82-1597.

United States Court of Appeals, First Circuit

March 2, 1983

        Argued Jan. 4, 1983.

        As Modified on Denial of Rehearing

        March 28, 1983.

Page 986

        Mark S. Gearreald, Exeter, N.H., with whom Shute, Engel & Morse, P.A., Exeter, N.H., was on brief, for plaintiff, appellant.

        Robert W. Pillsbury, Nashua, N.H., with whom Winer, Pillsbury & Bennett, Nashua, N.H., was on brief, for defendants, appellees.

        Before COFFIN, Chief Judge, BOWNES, Circuit Judge, and PETTINE, [*] Senior District Judge.

        BOWNES, Circuit Judge.

        Plaintiff-appellant Leslie Emery brought this diversity action against his former employers, Merrimack Valley Wood Products, Inc., and American Cabinet Corp. (jointly referred to as "Merrimack"), alleging tortious interference with his contractual relationship with Building Material Distributors (BMD). The United States District Court for the District of New Hampshire granted Merrimack's motion for summary judgment. In determining whether summary judgment is appropriate, we must "look at the record ... in the light most favorable to ... the party opposing the motion," Poller v. Columbia Broadcasting System, Inc., 368 U.S. 464, 473, 82 S.Ct. 486, 491, 7 L.Ed.2d 458 (1962), indulging in all inferences favorable to this party. United States v. Diebold, Inc., 369 U.S. 654, 655, 82 S.Ct. 993, 994, 8 L.Ed.2d 176 (1962) (per curiam); Santoni v. Federal Deposit Insurance Corp., 677 F.2d 174, 177 (1st Cir.1982); Hahn v. Sargent, 523 F.2d 461, 464 (1st Cir.1975), cert. denied, 425 U.S. 904, 96 S.Ct. 1495, 47 L.Ed.2d 754 (1976). Reversal of a grant of summary judgment is required when issues of fact which were adequately raised before the district court need to be resolved before the legal issues in the case may be decided. First National Bank of Arizona v. Cities Service Co., 391 U.S. 253, 288-90, 88 S.Ct. 1575, 1592-93, 20 L.Ed.2d 569 (1968); Over The Road Drivers, Inc. v. Transport Insurance Co., 637 F.2d 816, 818 (1st Cir.1980). Because we find that this case contains "no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law," Fed.R.Civ.P. 56(c), we affirm.

Page 987

        Emery was hired by Merrimack to sell cabinets and millwork on May 9, 1977. Three days later, he signed a comprehensive Employment Agreement, containing the following restrictive covenant which gave rise to this litigation.

10. The Salesman agrees not to be or become engaged in any competing company or industry during the term of this Agreement, except with the written consent of the Employer. If for any reason his employment or relations with the Employer shall be terminated, then he shall not, through employment with any competitive concern or industry sell to directly or indirectly, or cause to be sold, any materials to customers which the Employer has sold to within the twelve (12) months prior [to] the date of termination, for a period of one (1) year from the date of termination.

        According to James V. Derderian, vice-president of Merrimack Valley Wood Products and president of American Cabinet Corp., this covenant was required only of those employees, like Emery, who required training in Merrimack's product line. The Agreement could be terminated by either party upon fourteen days written notice, and was to be governed and construed in accordance with Massachusetts law.

        After two years with Merrimack, Emery was terminated because of his unsatisfactory sales performance. Within a few months of his termination, Emery was hired by BMD a division of Woodmaster, Inc. BMD, like Merrimack, sold millwork in New Hampshire, and was thus in competition with Merrimack. Emery was initially compensated at the rate of $175 per week, but plans were being developed whereby Emery would manage an expanded millwork division of BMD, and be paid a yearly salary of approximately $20,000.

        Shortly after starting work with BMD, Emery met by chance Everett Shea, foreman of Chauncy Construction, at a Friendly's restaurant. Emery told Shea that he could not sell millwork to Chauncy Construction because this firm was a customer of Merrimack. Shea, however, indicated that he had not bought from Merrimack for a few months, that he was feuding with Merrimack over certain items, and that if Emery would not sell to him, Shea would buy from Diamond Lumber, another competitor of Merrimack. Emery then sold millwork, totalling approximately $4,000 to Chauncy Construction. Another customer of Merrimack, Art Vickers of A & F Construction, called Emery, not knowing that he was employed by BMD. Vickers indicated that A & F could no longer buy millwork from Merrimack because of credit problems. Emery attempted to have one of A & F's owners call Merrimack's credit manager, but eventually sold about $8,000 worth of BMD millwork to A & F.

        During September and October of 1979, Derderian received information from one of Merrimack's sales representatives, Steven Bogosian, that there had been contact between Emery and certain customers of Merrimack whom Emery had serviced while employed by Merrimack. Derderian consulted with Merrimack's counsel, John A. James, Jr., who on October 23, 1979, sent a letter (the "James" letter) to the President of BMD's parent company. This letter stated in pertinent part:

        It has come to our attention that you have employed one Leslie R. Emery of Freemont, New Hampshire as a salesman. It has also come to our attention that Mr. Emery has been contacting and selling building products to customers of my clients.

        Mr. Emery is presently under an employment agreement which prohibits him from soliciting business from customers of Merrimack Valley Wood Products, Inc. and American Cabinet Corporation for one year after the date of the termination of his employment.

        You are hereby advised that it is my present intention to take all necessary stemps [sic] to prevent your intentional interference with the contractual relationship between Mr. Emery and my clients.

        Please have your representative call me as soon as possible.

Page 988

        Upon receiving this letter, BMD gave Emery two weeks to try to resolve his problem, and suggested contacting Merrimack. Emery called Derderian, asking if some arrangement could be made so that Emery could return to work with BMD. According to Emery, Derderian responded, "No, that's tough. You signed the contract, and that's got to be the way." 1 Emery then contacted Attorney James, who said that he would contact Derderian. Emery again contacted Derderian and was told that James had not spoken with Derderian and that "things would definitely not change." Because Emery had not been able to come to an agreement with Merrimack, BMD terminated Emery, informing him, however, that "[a]s soon as you clarify it [the effect of the covenant not to compete], call us and we will resume where we left off, but until then we can't do anything." 2

        Emery filed a diversity action in April 1980, alleging that Merrimack had intentionally and maliciously interfered with his existing and prospective contractual relations. Such a tort action is recognized in New Hampshire, 3...

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