Hagerty, Lockenvitz, Ginzkey and Associates v. Ginzkey

• Citation: 85 Ill.App.3d 640,40 Ill.Dec. 778,406 N.E.2d 1145
• Decision Date: 25 June 1980
• Docket Number: No. 15856,15856
• Parties: , 40 Ill.Dec. 778 HAGERTY, LOCKENVITZ, GINZKEY AND ASSOCIATES, a corporation, Plaintiff-Appellee, v. Robert E. GINZKEY, Defendant-Appellant.
• Court: United States Appellate Court of Illinois

Page 1145

406 N.E.2d 1145

85 Ill.App.3d 640, 40 Ill.Dec. 778

HAGERTY, LOCKENVITZ, GINZKEY AND ASSOCIATES, a corporation Plaintiff-Appellee, v. Robert E. GINZKEY, Defendant-Appellant.

No. 15856.

Appellate Court of Illinois, Fourth District.

June 25, 1980.

Merrick Hayes & Associates, Ltd., Bloomington, for defendant-appellant.

Pratt, Larkin, Sternberg & Finegan, P. C., Bloomington, for plaintiff-appellee.

MILLS, Presiding Justice:

A covenant not to "compete."

Enforced below; $7,313.72 in damages.

We reverse.

Robert Ginzkey (the defendant) was found to have breached a covenant not to compete which was contained in an agreement he entered into with the plaintiff corporation upon the conclusion of his relationship with that corporation. Prior to the agreement, defendant was a co-founder, officer, director, shareholder, and employee of the plaintiff corporation. He was ordered to pay $7,313.72 in damages, such sum representing the corporation's lost profits.

The decisive portion of the agreement was a provision which stated:

" * * * Shareholder (defendant) agrees that for a period of one (1) year from the date hereof as to any clients of Corporation as of the date hereof, Shareholder will not directly or indirectly compete with Corporation in the advertising business, * * *."

The corporation's complaint asserted and the trial court found that defendant breached this provision by obtaining the entire advertising business of Mortell, Inc., in contravention of the terms of the agreement.

Defendant now argues on appeal that the decision of the trial court was against the manifest weight of the evidence, that the corporation did not have a protectable property interest in the Mortell account, and that the trial court applied an improper measure of damages. We do not address the second and third arguments because we find that there has been no breach of the agreement.

At the outset, we should note that the validity of the agreement has not been questioned nor has the sufficiency of the consideration. Additionally, there is no dispute that Mortell was a client of the plaintiff corporation on the date of the agreement or that defendant did business with Mortell within the one-year period. The narrow question involved, as we perceive it, is whether defendant competed with the plaintiff corporation.

The trial court's order, while declaring a result, provides no legal analysis for the conclusion which is drawn. This is unfortunate, since we are therefore forced to speculate as to the basis for the decision.

In determining whether defendant breached the contract, it was incumbent upon the trial court to determine what action or inaction was mandated by the contract terms. In general, the meaning to be given to the plain words of a written instrument is a question of law for the court's determination where the parties have attached no unusual or peculiar meaning to the words. (Ahlvers v. Terminal R. R. Association of St. Louis (1975), 31 Ill.App.3d 166, 334 N.E.2d 329.) Where, however, the language leaves the true intent of the writer in doubt so that it is necessary to receive extrinsic evidence, the question becomes one of fact for the trier of fact, in this case the trial court. Standard Steel & Wire Corp. v. Chicago Capital Corp. (1975), 26 Ill.App.3d 915, 326 N.E.2d 33.

While we cannot say with certainty that the trial court felt that the contract was ambiguous, we hold that it was not, and that given the facts presented defendant did not breach the contract.

An ambiguous writing is one capable of being understood in more than one sense. (State Security Insurance Co. v. Linton (1978), 67 Ill.App.3d 480, 23 Ill.Dec. 811, 384 N.E.2d 718.) But a contract is not rendered ambiguous simply because the parties do not agree on its meaning. Harris v. American General Finance Corp. (1977), 54 Ill.App.3d 835, 11 Ill.Dec. 491, 368 N.E.2d 1099.

The defendant testified that he interpreted the term "compete " to refer to active, aggressive solicitation of business. John Hagerty, the president of the plaintiff corporation, stated that he understood the provision to prohibit defendant from soliciting or doing business with any of plaintiff's customers. This differing understanding does not, however, lead to an ambiguity. Harris.

The word "compete " is a common word which is not easily susceptible to peculiar interpretations. "Compete " means to seek or strive for something for which others are contending or to vie with another for a prize. (Webster's Third New International Dictionary 463 (1959).) Similarly, it means to contend emulously; to strive for a position, reward, profit or goal for which another is striving; to contend in rivalry. Black's Law Dictionary 257 (5th ed. 1979).

The critical feature of the above definitions is that they all require a volitional act by the competitor. A person must seek, strive, vie, or contend. As applied to a covenant not to compete, a covenantor, who is merely present and available but has not actively solicited business, has not competed.

Having determined the meaning of the term, let us now review the facts. Defendant testified that his first contact with the client Mortell after his departure from the plaintiff corporation was at the National Hardware Show in Chicago in mid August of 1978. At this time, he spoke with Don Mortell (president of the client corporation), Ray Rivard (manager of the weatherstripping division), and Willard Huff (the sales manager). Defendant did not discuss his future plans at that time. In mid September, defendant received a call from Rivard, who inquired as to defendant's job prospects. Defendant told Rivard that he was considering opening his own agency and Rivard asked the defendant to let him know "how you're coming along."

The next contact came around November 16, 1978, when Rivard phoned and told defendant that he was terminating his relationship with the plaintiff corporation. Defendant advised Rivard that he was still considering opening his own agency and that he could not work for Mortell. On November 20, defendant met with Rivard in the latter's office. This meeting was a social call and no advertising business was discussed. Sometime around November 28, 1978, defendant received a copy of a letter sent by Mortell, Inc., to the plaintiff corporation, in which Mortell informed the plaintiff corporation that it would no longer be using its services. Defendant then met with Rivard and they discussed advertising for the following year.

Defendant's testimony was substantially corroborated by Rivard. Rivard further added that defendant informed him in November that he could do no business for Mortell until they terminated their relationship with the plaintiff corporation. Rivard also stated that he decided to cease using the plaintiff corporation's...