College Life Ins. Co. of America v. Austin

• Decision Date: 30 July 1984
• Docket Number: No. 1-284A56,1-284A56
• Citation: 466 N.E.2d 738
• Parties: The COLLEGE LIFE INSURANCE COMPANY OF AMERICA, Plaintiff-Appellant, v. Jack V. AUSTIN, Defendant-Appellee.
• Court: Indiana Appellate Court

Page 738

466 N.E.2d 738

The COLLEGE LIFE INSURANCE COMPANY OF AMERICA, Plaintiff-Appellant, v. Jack V. AUSTIN, Defendant-Appellee.

No. 1-284A56.

Court of Appeals of Indiana First District.

July 30, 1984.

James H. Ham, III, Paula F. Cardoza, Baker & Daniels, Indianapolis, for plaintiff-appellant.

David T. Kasper, Locke Reynolds Boyd & Weisell, Indianapolis, Ronald R. Pritzke, Lineback & Lewis, Greenfield, for defendant-appellee.

ROBERTSON, Judge.

College Life Insurance Company (College Life) appeals an order from the Hancock Circuit Court denying a preliminary injunction against one of its former employees, Jack V. Austin (Austin). College Life sought to enjoin Austin from inducing College Life policyholders from replacing their policies with those issued by another company.

We affirm.

College Life is in the business of issuing life insurance policies and annuities. Austin was an agent for College Life for over twenty years beginning in February, 1961. During his years with College Life, Austin developed a substantial insurance clientele.

On September 9, 1983, College Life terminated Austin's employment for cause pursuant to his employment contract. The contract in effect at that time was executed on January 20, 1983. This new contract did not prevent Austin from representing other insurance companies. Both the 1961 and 1983 contract provided that Austin was an independent contractor.

In September, 1982, knowing that his employment contract with College Life was going to be changed, Austin signed an agency agreement with Banker's Life of Des Moines, Iowa. Austin continued to review the insurance policies of his College Life clientele. In doing so, he usually determined that it was in the individual's best interest to replace their College Life policies with Banker's Life policies.

College Life was aware of Austin's replacement activities from October, 1982 through 1983. In fact, Wayne Griffith, president of College Life, called a meeting to discuss Austin's replacement activities. The testimony concerning what occurred at that meeting is in dispute, however, Austin consistently takes the position that he was only doing what was in the policy-owner's best interest.

Austin continued his replacement activities through 1983. It is alleged that by the time this action was filed, Austin had replaced at least 180 College Life policies. At the time of his dismissal, College Life requested Austin to return all confidential information gained during his employment. Austin returned one of three sets of policyowner cards he had in his possession. Austin told College Life that he had made notes on the cards he retained and that there was nothing on these cards that was not on the insurance policies themselves.

College Life maintains that they have sustained significant losses largely due to Austin's actions. Austin admits that he will continue his replacement activities unless enjoined from doing so, whenever he determines that it is in the best interest of his client. On November 23, 1983, College Life filed a motion for preliminary injunction against Austin. The trial court held an evidentiary hearing and on January 26, 1984, entered findings of fact and conclusions of law and an order denying all preliminary relief requested by College Life.

On appeal, College Life contends that the trial court wrongly denied its request for a preliminary injunction because the decision was based on inadequate findings of fact and erroneous conclusions of law. The scope of our review of a preliminary injunction, the granting or denial of which rests in the sound discretion of the trial court, is limited to the determination of whether the trial court's action constituted a clear abuse of discretion. Unishops, Inc. v. May's Family Centers, Inc., (1980) Ind.App., 399 N.E.2d 760. Discretion to grant or deny a preliminary injunction is measured by several factors: (1) whether the plaintiff's remedies at law are inadequate thus causing irreparable harm pending the resolution of the substantive action if the injunction does not issue; (2) whether the plaintiff has demonstrated at least a reasonable likelihood of success at trial by establishing a prima facie case; (3) whether the threatened injury to the plaintiff outweighs the threatened harm the grant of the injunction may inflict on the defendant; (4) whether, by the granting of the preliminary injunction, the public interest would be disserved. Rees v. Panhandle Eastern Pipe Line Co., (1978) 176 Ind.App., 597, 377 N.E.2d 640.

In determining whether an abuse of discretion exists in the grant or denial of a preliminary injunction we are involved with a review of the trial court's findings of fact. Whether such findings of fact are adequate depends upon whether they are sufficient to disclose a valid basis under the issues for the legal result reached in the judgment and whether they are supported by evidence of probative value. Such findings may not be set aside unless they are clearly erroneous. Negley v. Lebanon Community School Corp., (1977) 173 Ind.App. 17, 362 N.E.2d 178, trans. denied. If the findings are clearly erroneous, we must conclude that the lower court abused its discretion in denying the preliminary injunction.

The trial court found that Austin's contract did not prohibit him from using information he acquired during his employment with College Life. College Life maintains that this is a direct violation of section 4(f) of Austin's employment contract which reads as follows:

....

(f) hold all policyowner lists, rate books, rate cards, materials, forms, supplies and advertising furnished by Company as confidential information and the exclusive property of Company and immediately return the same to Company upon termination of this Contract or upon Company's request.

This court has recently considered another case involving a former College Life agent and a similar provision requiring the agent to return materials to College Life upon termination. In Steenhoven v. College Life Insurance Company, (1984) Ind.App., 458 N.E.2d 661, (trans. denied), we reversed the granting of a preliminary injunction to the extent that it prohibited Steenhoven's use of information he acquired during his employment with College Life. In so holding, we focused on the provision of Steenhoven's contract that addressed the return of the company's property upon the agent's termination.

College Life attempts to distinguish this case on the grounds that the contract provisions in Steenhoven are entirely different. There is no dispute that the contract provisions are, in fact, different. Section 4(f) specifically sets forth policyowner lists, rate books, rate cards, forms, supplies and advertising as material that is confidential and the exclusive property of the company. The contract provision in Steenhoven spoke only to 'books, manuals, records, supplies, and miscellaneous materials furnished agent by company ....' However, both contracts are the same in that the pertinent language in each case is "furnished by company". Both require the return of only those records furnished by the company and not those which the agent had developed himself during his employment.

Here, the information on the service cards was lifted from the application which Austin submitted to the company. Austin often placed additional information on the cards by handwritten notes, however, there is nothing on the printed part of the card that is not in the policy itself. Because this information was readily available from the policyholder, we uphold the trial court's finding of no prohibition on the use of information that Austin acquired during the course of his employment.

Such a determination also precludes College Life's argument about "trade secrets". The Uniform Trade Secrets Act, IND.CODE 24-2-3-2, as added by Acts 1982, Pub.L. 148 Sec. 1, states:

"Trade secret" means information including a formula, pattern, compilation, program, device, method, technique, or process, that:

(1) drives independent economic value, actual or potential, from not being generally known to and not being readily ascertainable by proper means by, other persons who can obtain economic value from its disclosure or use; and (2) is the subject of efforts that are reasonable under the circumstances to maintain its secrecy. (emphasis added).

The emphasized language is dispositive of the issue. There is evidence showing that the information on the service cards held by Austin, except his handwritten notes, is nothing that an agent from another company could not obtain from the policyholder's file. Because the information was also available from the policyholder himself, from the actual policy, and information given the policyholder from the Company, the Uniform Trade Secret's Act is inapplicable. Consequently, neither the employment contract nor the Uniform Trade Secrets Act precludes Austin's use of information gained during his employment with College Life.

...