George S. May Intern. Co. v. King

• Decision Date: 21 February 1994
• Docket Number: No. 41A04-9309-CV-00356,41A04-9309-CV-00356
• Citation: 629 N.E.2d 257
• Parties: GEORGE S. MAY INTERNATIONAL COMPANY, Appellant-Plaintiff, v. Gary A. KING and Preston J. Hacker, Appellees-Defendants. 1 .
• Court: Indiana Appellate Court

Page 257

629 N.E.2d 257

GEORGE S. MAY INTERNATIONAL COMPANY, Appellant-Plaintiff, v. Gary A. KING and Preston J. Hacker, Appellees-Defendants.

No. 41A04-9309-CV-00356 ¹.

Court of Appeals of Indiana First District.

Feb. 21, 1994.

Robert K. Bellamy, Lester H. Cohen, John R. Maley, Barnes & Thornburg, Indianapolis, for appellant-plaintiff.

Steven K. Huffer, Mitchell Hurst Jacobs & Dick, Indianapolis, for appellees-defendants.

BAKER, Judge.

May an employer bring an action in Indiana to enjoin a former employee from breaching contract provisions when the employment contract provides that injunctive relief may be sought in any court of competent jurisdiction but another provision provides that any dispute arising under the contract must be tried in a particular Illinois court?

Appellant-Plaintiff George S. May International Company (May) challenges the trial court's dismissal of its actions for injunctive relief and damages against appellee-defendants Gary A. King and Preston J. Hacker based on a forum selection clause contained

in the contracts. May claims that the trial court erred in dismissing its actions for lack of jurisdiction because the contracts provide that it may seek an injunction in any court of competent jurisdiction.

FACTS

The facts relevant to this appeal are undisputed. May is an international management consultant firm with its principal place of business in Illinois. King and Hacker began working for May in 1989 as special representatives assigned to a territory covering a large portion of Illinois and all of Indiana, except Vanderburgh County. During their employment King and Hacker gained confidential information concerning May's business and clients.

On January 15, 1993, King and Hacker executed identical written employment agreements with May. Paragraph 11(b) provides that May may bring an action to restrain a former employee from breaching the confidentiality provision (Paragraph 9) and the non-competition provision (Paragraph 10) in any court of competent jurisdiction. Paragraph 15 provides that any dispute arising under the employment contract shall be brought in Illinois.

On March 7, 1993, both King and Hacker resigned from May and began working for International Profits Associates (IPA), a direct competitor of May's. At IPA, King and Hacker perform work substantially similar to that performed for May in substantially the same territory, using confidential information and materials belonging to May.

On May 21, 1993, May filed two identical complaints against King and Hacker in Johnson County, Indiana, where both King and Hacker reside. May sought damages, injunctive relief, and in addition to or in the alternative to injunctive relief, liquidated damages. King and Hacker filed motions to dismiss under Ind.Trial Rule 12(B)(3) on the ground that May could bring suit only in Illinois pursuant to Paragraph 15, the forum selection provision contained in their employment contracts. On July 6, 1993, the trial court dismissed May's actions without prejudice on this basis. In this consolidated appeal May argues that Indiana has jurisdiction over its actions against King and Hacker. Conversely, King and Hacker contend that we should dismiss this appeal based upon principles of mootness and comity. ²

DISCUSSION AND DECISION

I. Mootness

King and Hacker argue that we should dismiss this appeal as moot because May is now seeking injunctive relief as a counterclaim in their declaratory judgment action pending in the Circuit Court of Cook County, Illinois. After the Indiana trial court dismissed May's actions, King and Hacker initiated a declaratory judgment action in the Illinois court. After the Illinois court refused to dismiss the action, May moved for injunctive relief. ³ Thus, King and Hacker argue that there is no concrete controversy, and this appeal is moot. We disagree.

An appeal is moot and this court lacks jurisdiction when: (1) it is no longer live or when the parties lack a legally cognizable interest in the outcome, (2) the principal questions in issue are no longer matters of real controversy between the parties, or (3) the appeals court is unable to provide effective relief upon the issue. Ruppen v. Ruppen (1993), Ind.App., 614 N.E.2d 577, 583. In this case, the issue of whether the trial court erred when it dismissed May's actions against King and Hacker is not moot because if we find the Johnson Superior Court had jurisdiction, May will be able to pursue its two actions in that forum.

II. Comity

King and Hacker contend that even if this appeal is not moot, we should dismiss it based upon principles of comity. We decline this invitation.

Based upon principles of comity, Indiana courts may decline to interfere with proceedings in another state out of deference and goodwill. Hexter v. Hexter (1979), 179 Ind.App. 638, 640, 386 N.E.2d 1006, 1008. Comity is important in avoiding conflicting results and in discouraging repeated litigation of the same question. Ruppen, 614 N.E.2d at 582, n. 2. However, comity is not a mandatory rule of law, but is a rule of practice, convenience, and courtesy. Ventura County, State of California v. Neice (1982), Ind.App., 434 N.E.2d 907, 910. ⁴

Here, whether May can seek injunctive relief in Indiana is unlikely to be an issue in the pending action in Illinois; thus, the parties do not risk facing conflicting decisions. In addition, because King and Hacker instituted their action in Illinois after May initiated its actions against them in Indiana, we will not allow King and Hacker to assert the principles of comity as a possible defense. If we were to allow this, every litigant could seek to stymie proceedings in Indiana by filing subsequent actions in other states.

Having decided that this appeal should not be dismissed, we turn to the merits of May's appeal.

III. The Contract ⁵

May contends that the trial court erred in dismissing its actions seeking to enjoin King and Hacker from violations of Paragraph 9 (confidentiality) and 10 (non-competition) of their employment contracts based upon Paragraph 15. May contends that the trial court disregarded Paragraph 11(b), which clearly provides that May may seek injunctive relief against an employee who breaches Paragraph 9 or 10 of his contract in "any court of competent jurisdiction." May asserts actions for injunctive relief are not limited to the Illinois courts designated in Paragraph 15.

Construction of the terms of a written contract is a pure question of law for the court; thus, our standard of review is de novo. See A.A. Conte, Inc. v. Campbell-Lowrie-Lautermilch Corp., 132 Ill.App.3d 325, 87 Ill.Dec. 429, 432, 477 N.E.2d 30, 33 (1985). In construing a contract we may not rewrite it to suit one party, but must apply the plain and obvious meaning of the language of the entire contract. Quake Constr., Inc. v. American Airlines, Inc., 141 Ill.2d 281, 152 Ill.Dec. 308, 312, 565 N.E.2d 990, 994 (1990); Berutti v. Dierks Foods, Inc., 145 Ill.App.3d 931, 99 Ill.Dec. 775, 777-78, 496 N.E.2d 350, 352-53 (1986), appeal denied. If the terms of the contract are unclear, ambiguous, or capable of more than one interpretation, we will construe them to determine and give effect to the intent of the parties at the time they entered into the contract. Bunge Corp. v. Northern Trust Co., 252 Ill.App.3d 485, 191 Ill.Dec. 195, 201, 623 N.E.2d 785, 791 (1993); Harris Trust and Savings Bank v. Hirsch, 112 Ill.App.3d 895, 68 Ill.Dec. 383, 386, 445 N.E.2d 1236, 1239 (1983). We construe a contract against the drafter only if we cannot ascertain the parties' intent from all the ordinary interpretative guides. Bunge, 191 Ill.Dec. at 201, 623 N.E.2d at 791.

In the present case, Paragraph 15, which is designated the "Forum Selection" provision in the employment contracts, provides:

Any disputes arising under this Agreement shall be tried in the Courts sitting within the State of Illinois, and Employer and Employee hereby consent and submit his/her person to the jurisdiction of any such Court for this purpose. The Company and the Employee agree that venue for any action or proceeding brought in the State Record at 17-18. ⁶

of Illinois shall lie in the Northern District of Illinois or the First District of Illinois, as the case may be, and therefore agree that any legal suit, action, or proceeding brought by either party hereto against the other party hereto arising out of this Agreement of the related employment shall be brought exclusively in the United States District Court of the Northern District of Illinois or, if such Court lacks jurisdiction, the Circuit Court of Cook County in the State of Illinois.

Paragraph 11(b), which is listed under the "Remedies in Case of Violating" heading in the employment contract, provides:

In addition to any and all other remedies which may be provided by law, Employer shall have the right to restrain the breach of any provision of Paragraph 9 or 10 by injunction in any court of competent jurisdiction.

Record at 17. Paragraph 9 prohibits an employee from divulging any confidential information or using such information other than pursuant to the employee's employment on May's behalf. Paragraph 10 prohibits an employee from directly or indirectly competing with May in the territory in which he worked for May for six months after the termination of the employment agreement. Paragraph 11(b) allows May to seek injunctive relief against an employee for breaches of confidentiality and non-competition in "any court of competent jurisdiction."

In construing a contract, we presume that all provisions were included for a purpose, and if possible we reconcile seemingly conflicting provisions to give effect to all provisions. See Butler v. Economy Fire and Casualty Co., 199 Ill.App.3d 1015, 146 Ill.Dec. 94, 99, 557 N.E.2d 1281, 1286 (1990). We must accept an interpretation of the contract which harmonizes all the various parts so that no provision is deemed conflicting with,...