Battenkill Veterinary Equine P.C. v. Cangelosi, 93875.

• Decision Date: 26 November 2003
• Docket Number: 93875.
• Citation: 1 A.D.3d 856,2003 NY Slip Op 18966,768 N.Y.S.2d 504
• Parties: BATTENKILL VETERINARY EQUINE P.C., Respondent, v. AMY CANGELOSI, Appellant.
• Court: New York Supreme Court — Appellate Division

1 A.D.3d 856

768 N.Y.S.2d 504

2003 NY Slip Op 18966

BATTENKILL VETERINARY EQUINE P.C., Respondent, v. AMY CANGELOSI, Appellant.

93875.

Appellate Division of the Supreme Court of the State of New York, Third Department.

November 26, 2003.

Appeal from an order of the Supreme Court (Moynihan, Jr., J.), entered April 21, 2003 in Washington County, which granted plaintiff's motion for a preliminary injunction.

Kane, J.

In June 1998, plaintiff, an equine veterinary clinic, hired defendant as an equine veterinarian. The parties signed a one-year employment contract drafted by plaintiff's president containing a restrictive covenant, in which defendant agreed not to compete with plaintiff within 35 miles of plaintiff's clinic for three years following termination. Subsequent similar one-year agreements, each containing a restrictive covenant but adding that defendant was not to use plaintiff's client information without permission, were signed in 1999 and 2000.¹ Each annual contract also contained a salary increase. In June 2001, plaintiff presented another contract, which defendant did not sign. Defendant continued to work for plaintiff and was paid the increased salary quoted in the unsigned 2001 contract. In June 2002, plaintiff's president informed defendant that her contract was not being renewed, but extended her employment for a few months to discuss permitting defendant to buy out part of plaintiff's business or buy out of the restrictive covenant. No buy-out agreement was reached.

After defendant left plaintiff's employ, she established her own equine veterinary practice in which she drove to clients' homes but was based out of her own home, located five miles from plaintiff's clinic. Defendant is admittedly servicing clients she serviced while employed by plaintiff. Plaintiff commenced this action seeking, among other things, to enjoin defendant from violating the restrictive covenant. Supreme Court granted plaintiff's request for a preliminary injunction preventing defendant from practicing equine veterinary medicine within 35 miles of plaintiff's clinic, from providing services to any of plaintiff's former clients in any location, and from utilizing plaintiff's confidential client information for any purpose. Defendant appeals. We affirm the grant of a preliminary injunction, but modify its terms.

The party seeking a preliminary injunction must demonstrate a likelihood of success on the merits, irreparable injury if temporary relief is not granted, and that a balancing of the equities favors the movant (see Doe v Axelrod, 73 NY2d 748, 750 [1988]; Marietta Corp. v Fairhurst, 301 AD2d 734, 736 [2003]). Plaintiff has shown a likelihood of success on the merits. Covenants not to compete will be enforced if reasonably limited as to time, geographic area and scope, are necessary to protect the employer's interests, not harmful to the public, and not unduly burdensome (see Gelder Med. Group v Webber, 41 NY2d 680, 683 [1977]; Albany Med. Coll. v Lobel, 296 AD2d 701, 702 [2002]). Whether or not defendant is bound by the terms of the 2001 contract that she did not sign, she is unquestionably bound by the 2000 contract that contained the restrictive covenant. She signed that document and received consideration in exchange for abiding by its terms.² A three-year period is reasonable, as is the 35-mile restriction, which is narrower than plaintiff's service area (see Gelder Med. Group v Webber, supra [five years and 30 miles]; Karpinski v Ingrasci, 28 NY2d 45 [1971] [five counties forever]; Albany Med. Coll. v Lobel, supra [five years and 30 miles]). The scope is similarly reasonable as the covenant only prohibits the practice of equine veterinary medicine, not all veterinary medicine (see Karpinski v Ingrasci, supra at 49-52 [covenant modified to enjoin only oral surgery, not general dentistry]). The covenant is necessary to protect plaintiff's interests, as plaintiff will otherwise lose clients it gained after years of hard work. It is not unduly burdensome to defendant, as she can practice general veterinary medicine anywhere or her specialty outside the proscribed area.

"A covenant against competition must be construed strictly and should not be extended beyond the literal meaning of its terms" (DeCapua v Dine-A-Mate, 292 AD2d 489, 492 [2002] [citations omitted]). Ambiguous terms will be resolved against the contract drafter (see Matter of Saranac Cent. School Dist. [Sweet Assoc.], 253 AD2d 566, 567 [1998], lv denied 92 NY2d 820 [1999]). The covenant here mentions the potential damage if a terminated employee is permitted to provide services to plaintiff's clients. Although it appears that plaintiff intended to prevent defendant from servicing all of its former clients regardless of their location, construing the provision's language as expressly written, it does not prohibit defendant from providing services outside the 35-mile area, even to plaintiff's former clients. Thus, the preliminary injunction issued by Supreme Court should be modified by removing the prohibition on servicing plaintiff's clients outside the 35-mile area.

For the issuance of a preliminary injunction, plaintiff failed to adequately demonstrate that defendant improperly appropriated its customer list or used confidential client information. Such lists are generally not considered confidential unless information contained therein is not known in the trade and discoverable only through extraordinary efforts (see H. Meer Dental Supply Co. v Commisso...