Hammons v. Big Sandy Claims Service, Inc.

• Court: Kentucky Court of Appeals
• Writing for the Court: HOWARD
• Citation: Hammons v. Big Sandy Claims Service, Inc., 567 S.W.2d 313 (Ky. Ct. App. 1978)
• Decision Date: 09 June 1978
• Parties: Jack H. HAMMONS, d/b/a South Eastern Adjustment Company, Appellant, v. BIG SANDY CLAIMS SERVICE, INC., Appellee.

Page 313

567 S.W.2d 313

Jack H. HAMMONS, d/b/a South Eastern Adjustment Company, Appellant, v. BIG SANDY CLAIMS SERVICE, INC., Appellee.

Court of Appeals of Kentucky.

June 9, 1978.

Robert L. Milby, Hamm, Taylor, Milby & Farmer, London, for appellant.

Edward R. Hays, Lexington, for appellee.

Before COOPER, HOWARD and WILHOIT, JJ.

HOWARD, Judge.

The appellant, Jack H. Hammons, d/b/a South Eastern Adjustment Company (hereinafter referred to as Hammons), is an insurance or claims adjuster who worked for appellee, Big Sandy Claims Service, Inc. (hereinafter referred to as Big Sandy). Big Sandy is a claim service that commenced its operations in Pikeville but has since opened offices in several other Kentucky towns. Hammons and Big Sandy entered into an employment contract which included a "noncompetition clause." This controversy revolves around this clause and the pertinent parts read as follows:

Employee agrees and binds himself that upon termination of his employment with Employer for any reason that he will not, under any circumstances, engage in the adjustment of claims or services rendered in connection therewith, either property damage, fire, personal injury or otherwise, for himself or anyone else, within a radius of 200 miles of any territory being serviced by the Employer at the time of Employee's termination of service with the Employer. This limitation shall be binding for one year next after the Employee's termination of service with Employer.

It is agreed and understood that the purpose of this limitation is for the protection of the Employer in that the Employee will have access to all Employer's clients and connections in relation to its business and, therefore, competition would be detrimental to the Employer. This employment limitation, however, is limited to Employee's own business or that of competitive business, such as but not limited to, independent adjustment or corporate service but is not meant to intend that Employee cannot be employed as a salaried adjuster for a given company as staff adjuster. Employee recognizes this restriction and agrees to be bound thereby.

After working for Big Sandy in Middlesboro and in Barbourville, Hammons was discharged on January 6, 1975. Within two weeks Hammons had opened a claims service in Barbourville and actively solicited business from Big Sandy's clientele. He was notified by Big Sandy's attorney to cease and desist but he refused. Suit was brought asking for a temporary and permanent injunction to prohibit Hammons from operating the business and to further enjoin him from operating a claims business within a radius of two hundred miles of the City of Middlesboro, Kentucky for the duration of one (1) year after January 6, 1975, and for other relief.

Trial was had on the injunction part of the case and the trial court found for Big Sandy and permanently enjoined Hammons from operating and engaging in the business of adjusting and servicing insurance claims for insurance companies within the territory and time period referred to in the preceding paragraphs; all other questions being reserved for determination at a later date.

Hammons appeals contending that the contract...