Hart, Nininger and Campbell Associates, Inc. v. Rogers, 5436

• Decision Date: 04 October 1988
• Docket Number: No. 5436,5436
• Citation: 548 A.2d 758,16 Conn.App. 619
• Court: Connecticut Court of Appeals
• Parties: HART, NININGER AND CAMPBELL ASSOCIATES, INC. v. Stephen L. ROGERS et al.

Page 758

548 A.2d 758

16 Conn.App. 619

HART, NININGER AND CAMPBELL ASSOCIATES, INC. v. Stephen L. ROGERS et al.

No. 5436.

Appellate Court of Connecticut.

Argued April 21, 1988.

Decided Oct. 4, 1988.

Paul P. DeLuca, with whom, on the brief, was Peter N. Buzaid, Danbury, for appellants (defendants).

James K. Robertson, Jr., Waterbury, for appellee (plaintiff).

Before BIELUCH, STOUGHTON and NORCOTT, JJ.

NORCOTT, Judge.

The defendants appeal from the trial court's award of monetary damages and injunctive relief arising from the defendants' breach of contract. The defendants claim that the trial court erred (1) in concluding that the court had personal jurisdiction over each defendant, (2) in ruling that the defendant Timothy B. Leonard breached his individual agreement with the plaintiff, (3) in holding each defendant jointly and severally liable for the damages, (4) in both finding and assessing monetary damages and in imposing an injunction as relief for the same injury, (5) in finding monetary damages in the amount of $60,000, (6) in finding that the noncompetitive postemployment restrictive covenant set forth in the employment agreements was reasonable and enforceable, and (7) in rendering a default judgment against the defendant Stephen L. Rogers. We find no error.

The trial court found the following facts. Since 1967, the plaintiff, Hart, Nininger and Campbell Associates, Inc. (HNC), has been a manufacturer's representative. HNC, a Connecticut corporation with its principal office in Woodbury, represented eleven "principals" including Quick Plastics (QP), Plainfield Tool and Engineering, Inc. (PTE), Plainfield Molding, Inc. (PMI), MidAmerican Rubber (MAR) and Johnson Brass and Machine Foundry, Inc. (JBM). HNC operated within the defined geographical area of New England and portions of New York and New Jersey. As representative of these principals, HNC contacted customers to purchase certain specialized products manufactured by the principals. The selling process involved (1) obtaining quotes on prices, (2) bidding on pieces, parts and prices, (3) obtaining orders from the customers, (4) submitting samples to the principals, (5) processing changes in orders, (6) placing orders, and (7) finalizing orders.

The products sold through HNC's efforts were specialized and were designed according to the unique needs of the particular customer. HNC was paid on a commission basis only when an actual shipment of products was made. A customer was at liberty to cancel any order prior to the actual shipment in which case the plaintiff received no commission for its efforts. There was often a substantial time lag between the initial placement of an order and the production and shipment of the resulting product.

HNC operated through a sales force which in July, 1985, consisted of four full-time sales representatives: HNC president, John Campbell, and the defendants Rogers, Leonard and Teresa Murray. The plaintiff had hired Rogers, then and now a resident of Maine, on August 31, 1981; Murray, presently a resident of New York and then a resident of New Jersey, on September 19, 1981; and Leonard, then and now a resident of New York, on September 7, 1982. None of the defendants has ever been a resident of Connecticut. Each of the defendants operated in different areas of the HNC territory. Each had been trained by Campbell and provided with HNC's confidential information regarding the principals and lists of existing and potential customers whom Campbell and others had developed since 1967.

The confidential information disclosed to the defendants was regarded as such a valuable business asset that the plaintiff required some protection from postemployment competition by HNC sales representatives. Accordingly, as a condition of employment, each defendant entered into a written restrictive non-competitive agreement with HNC protecting HNC from his or her postemployment competition.

During 1984 and 1985, HNC lost money. The court found that in July, 1985, Campbell tried to meet with the defendants to review HNC's economic status and problems and to discuss possible solutions. The court also found that while Campbell was attempting to arrange a meeting of all the parties, the defendants were avoiding such a meeting because they were seeking their own representation of HNC's clients. As evidence of these plans, the court found that certain taped telephone messages, taken from defendant Leonard's answering machine, were most damning. These taped messages tracked the progress of the defendants' efforts to solicit HNC clients and to form their own new business as manufacturers' representatives.

Subsequent to an unproductive meeting with Campbell on July 31, 1985, the defendants terminated their employment with HNC. Immediately thereafter, three HNC principals, PMI, MAR and QP, terminated their business relationships with HNC as a result of the solicitation and inducement by the defendants. The defendants Murray and Rogers, pursuant to their plan, quickly formed Northeast Sales Associates, Inc. (Northeast), which then began to represent PMI, MAR and QP, all former HNC clients. The court also found that Murray, as a Northeast employee, continued to cover the same northern New Jersey and metropolitan New York area that she had covered for HNC.

The trial court found that the defendants breached their individual agreements with HNC and, more particularly, that "the defendants combined, cooperated and consulted with each other in their efforts to solicit and induce HNC's clients to allow the defendants individually, instead of HNC, to be their sales representatives." The court rendered judgment against each defendant "individually and jointly" for $60,000 for the loss of commissions caused by the defendants' breach and also granted injunctive relief to protect HNC from the defendants' violation of the restrictive postemployment noncompetitive agreements. From this judgment, the defendants now appeal.

I

The defendants, nonresidents of Connecticut, first claim that the trial court erred in finding in personam jurisdiction over them under General Statutes § 52-59b. ¹ The analysis of the defendants' challenge to personal jurisdiction involves a two-part inquiry. The first inquiry is whether the applicable state long arm statute authorizes the assertion of jurisdiction over the defendants; and, if the statutory requirements are met, whether the exercise of in personam jurisdiction would violate constitutional principles of due process. Frazer v. McGowan, 198 Conn. 243, 246, 502 A.2d 905 (1986); United States Trust Co. v. Bohart, 197 Conn. 34, 38-39, 495 A.2d 1034 (1985); Zartolas v. Nisenfield, 184 Conn. 471, 473-78, 440 A.2d 179 (1981). The plaintiff must show that the defendants' purposeful Connecticut related activity demonstrates "certain minimum contacts with it such that the maintenance of the suit does not offend 'traditional notions of fair play and substantial justice.' " International Shoe Co. v. Washington, 326 U.S. 310, 316, 66 S.Ct. 154, 158, 90 L.Ed. 95 (1945). Furthermore, the plaintiff bears the burden of establishing an adequate factual basis for personal jurisdiction over the defendants. Standard Tallow Corporation v. Jowdy, 190 Conn. 48, 53-54, 459 A.2d 503 (1983).

Under General Statutes § 52-59b, in personam jurisdiction over a defendant may be maintained as long as he "transacts any business" in this state. Although that section does not define the term "transacts any business," our Supreme Court, in Zartolas v. Nisenfeld, supra, 184 Conn. at 474, 440 A.2d 179 construed the term "to embrace a single purposeful business transaction." In Zartolas, the Supreme Court "eschewed 'resort to a rigid formula' in resolving the transaction of business in Connecticut but rather determine[s] it upon a balance of 'consideration of public policy, common sense, and the chronology and geography of the relevant factors.' Id., 477 ." Rosenblit v. Danaher, 206 Conn. 125, 140, 537 A.2d 145 (1988).

Measured against these standards, we conclude that the trial court did not err in finding in personam jurisdiction. Our review first reveals that the court properly found that there was a statutory basis under § 52-59b for the assertion of personal jurisdiction over the defendants. The plaintiff's principal office was located in Connecticut, and each defendant came to Connecticut to negotiate and sign his individual employment contract. Thereafter, the defendants came to Connecticut to attend quarterly business meetings pertaining to their employment with HNC. It was also undisputed that they kept in telephone contact regularly with the HNC Connecticut office. Furthermore, the defendants filed with HNC weekly activity report sheets which documented the business transacted on behalf of this Connecticut corporation. Additionally, all of the defendants' business account expenses were sent to the Connecticut office for payment, and the defendants' payroll checks were drawn on a Connecticut bank and were mailed to the defendants from this state. Finally, the HNC automobiles, of which the defendants Rogers and Murray had use, were registered in Connecticut. From these facts, the trial court concluded that the defendants' purposeful Connecticut related activity demonstrated certain minimum contacts with this state. See Computer Assistance, Inc. v. Morris, 564 F.Supp. 1054 (D.Conn.1983); see also Rosenblit v. Danaher, supra. We agree.

The next inquiry focuses on whether the exercise of personal jurisdiction violated principles of constitutional due process. The trial court concluded that "the maintenance of the suit does not offend traditional notions of fair play and substantial justice." We take this to mean that the court found that the exercise of personal jurisdiction met with the constitutional requirements of due process. We again agree with the trial court.

"The twin touchstones of due process analysis under the minimal...