Insure New Mexico, LLC v. McGonigle

Citation995 P.2d 1053,128 N.M. 611
Decision Date11 February 2000
Docket NumberNo. 19,626.,19,626.
PartiesINSURE NEW MEXICO, LLC, Plaintiff-Appellant/Cross-Appellee, v. Robert McGONIGLE, Defendant-Appellee/Cross-Appellant.
CourtCourt of Appeals of New Mexico

Philip Craig Snyder, Albuquerque, for Appellant.

William L. Lutz, Martin, Lutz, Roggow & Brower, P.C., Las Cruces, for Appellee.

OPINION

APODACA, J.

{1} Plaintiff appeals the denial of its request for a permanent injunction prohibiting Defendant from directly soliciting certain of Plaintiff's clients. Defendant cross-appeals, contending first, that the trial court erred in granting the preliminary injunction and, second, that the employment contract between Defendant and Plaintiff's predecessor-in-interest was nonassignable. On his second issue, Defendant argues that, because the contract was not assignable, the provision prohibiting Defendant from using trade secrets or confidential information was not enforceable. Defendant also requests that we preserve in our mandate "a right of independent action for malicious prosecution." We affirm the trial court's denial of the permanent injunction. We decline to reach the issues raised by Defendant in his cross-appeal because those issues are moot or require an advisory opinion. We decline to preserve in our mandate an independent action for malicious prosecution because the issue is not properly before us and again we decline to issue an advisory opinion.

I. FACTUAL AND PROCEDURAL BACKGROUND

{2} Defendant was employed on August 21, 1991, as a salesperson by Insure New Mexico, a general partnership and Plaintiff's predecessor-in-interest. Plaintiff's primary business was the brokerage of insurance. Defendant and Plaintiff's predecessor-in-interest entered into an employment contract. The contract provision relevant to this appeal reads as follows:

It shall be understood that in the event of termination of this agreement for any cause whatsoever, the use, control and ownership of expirations and all records of expirations of business produced by the employee shall remain the property of the employer and left in his undisputed possession. Employee further agrees that he will not use any confidential information or trade secrets in the solicitation of any customer of the employer for the sale of insurance.

{3} On July 11, 1995, Defendant tendered a letter of resignation effective July 25, 1995, informing Plaintiff's predecessor-in-interest that he had accepted a position of employment with Insurance Services of Southern New Mexico (Insurance Services) in that company's newly-opened Deming office. Insurance Services' primary business was also the brokerage of insurance. Defendant and Plaintiff terminated their relationship on July 11, 1995. On July 28, 1995, Plaintiff, as Insure New Mexico, LLC was formed. Plaintiff, a corporation, was the successor to all of the assets of Insure New Mexico, the partnership.

{4} On June 20, 1996, Defendant, as an employee of Insurance Services, met with Larry Adcock of Border Foods, Inc., one of Plaintiff's customers. Accompanying him were two representatives of AFLAC, an insurance company. The purpose of the visit was to sell insurance. While employed by Plaintiff, Defendant serviced the Border Foods account. As a result, he had a previous relationship with Adcock and was aware of the insurance coverage Border Foods carried. Adcock agreed to meet with Defendant because of this prior relationship. Adcock testified that he received "cold calls" from other insurance agents but usually turned them down. Defendant was unsuccessful in selling any insurance to Border Foods. After Defendant met with Adcock, Adcock contacted and informed Plaintiff that Defendant had spoken with him and attempted to sell insurance to Border Foods. At Plaintiff's request, Jim Glynn of Border Foods wrote a letter to Plaintiff "advising" Plaintiff that Defendant had contacted Border Foods in an attempt to sell insurance to Border Foods. That letter was also signed by Adcock.

{5} These events led to Plaintiff's application for a temporary restraining order and its complaint for a preliminary injunction, as well as a permanent injunction. A temporary restraining order was entered on July 2, 1996. After a hearing on Plaintiff's request for a preliminary injunction, the trial court issued a preliminary injunction prohibiting Defendant from directly soliciting particular customers of Plaintiff. After a final hearing on the merits of Plaintiff's complaint, the trial court dissolved the preliminary injunction and denied the permanent injunction.

II. DISCUSSION
A. Standard of Review

{6} In determining whether to grant injunctive relief, a trial court must consider a number of factors and "balance the equities and hardships." Key v. Chrysler Motors Corp., 119 N.M. 267, 274, 889 P.2d 875, 882 (Ct.App.1995) reversed on other grounds, 1996-NMSC-038, 121 N.M. 764, 918 P.2d 350

. Some of these factors include: (1) the character of the interest to be protected; (2) the relative adequacy to the plaintiff of an injunction, when compared to other remedies; (3) the interests of third parties; (4) the practicability of granting and enforcing the order; and (5) the relative hardship likely to result to the defendant if granted and to the plaintiff if denied. Wilcox v. Timberon Protective Ass'n, 111 N.M. 478, 485-86, 806 P.2d 1068, 1075-76 (Ct.App.1990).

{7} "`Injunctions are harsh and drastic remedies [that] should issue only in extreme cases of pressing necessity and only where there is no adequate ... remedy at law.'" Hill v. Community of Damien of Molokai, 1996-NMSC-008, ¶ 51, 121 N.M. 353, 911 P.2d 861 (quoting Padilla v. Lawrence, 101 N.M. 556, 562, 685 P.2d 964, 970 (Ct.App.1984) (alteration in original)). The granting of an injunction is an equitable remedy, and whether to grant equitable relief lies within the sound discretion of the trial court. Moody v. Stribling, 1999-NMCA-094, ¶ 30, 127 N.M. 630, 985 P.2d 1210. The trial court's discretion will not be disturbed unless there is an abuse of discretion. Id. "An abuse of discretion occurs when a ruling is clearly contrary to the logical conclusions demanded by the facts and circumstances of the case." Sims v. Sims, 1996-NMSC-078, ¶ 65, 122 N.M. 618, 930 P.2d 153.

{8} If there is substantial evidence to support the trial court's decision, we will not disturb that decision on appeal. "Substantial evidence is such relevant evidence that a reasonable mind would find adequate to support a conclusion." Landavazo v. Sanchez, 111 N.M. 137, 138, 802 P.2d 1283, 1284 (1990). In reviewing a claim that the trial court's decision was not supported by substantial evidence, the appellate court views the evidence "in the light most favorable to the decision below, resolving all conflicts in the evidence in favor of that decision and disregarding evidence to the contrary." Powers v. Miller, 1999-NMCA-080, ¶ 14, 127 N.M. 496, 984 P.2d 177. We will reverse only when the evidence, or reasonable inferences from the evidence, cannot support the trial court's findings and conclusions. McCurry v. McCurry, 117 N.M. 564, 567, 874 P.2d 25, 28 (Ct.App.1994).

B. The Direct Appeal

{9} Plaintiff relies heavily on the trial court's findings of fact and conclusions of law that the trial court entered when granting the preliminary injunction. Such reliance, we believe, is misplaced. There is a significant difference between a preliminary and a permanent injunction that may warrant different considerations by a trial court. "The object of the preliminary injunction is to preserve the status quo pending the litigation of the merits. This is quite different from finally determining the cause itself." Penn v. San Juan Hosp. Inc., 528 F.2d 1181, 1185 (10th Cir.1975). A preliminary injunction does not determine the merits of the case, nor does it determine controverted facts. See 43 C.J.S. Injunctions § 5, at 745-46 (1978). The trial court may reconsider the facts upon which the preliminary decree was issued in deciding whether to issue a permanent injunction. Cf. Economy Roofing & Insulating Co. v. Zumaris, 538 N.W.2d 641, 648 (Iowa 1995)

(holding that denial of a preliminary injunction does not foreclose a trial on the merits for a permanent injunction).

{10} Plaintiff nonetheless relies on Rule 1-066(A)(2) NMRA 1999, which states that "evidence received upon an application for a preliminary injunction [that] would be admissible upon the trial on the merits becomes part of the record on the trial and need not be repeated upon the trial." The trial court, however, is not bound by its previous findings based on that evidence, and may decide, after further deliberation, and the presentation of further evidence, that its prior findings and conclusions were incorrect. See San Juan Hosp. Inc.,528 F.2d at 1185 (stating that a preliminary injunction is to preserve the status quo and has no bearing on the merits of a case); 43 C.J.S. Injunctions § 5, at 745-46 (stating that a preliminary injunction does not have any bearing on the merits of a case). We believe, therefore, that the entry of a preliminary injunction in this case did not prevent the trial court from denying entry of a permanent injunction after considering additional evidence at a final hearing.

{11} Plaintiff maintains that, if potential harm is shown, an injunction should issue. As a subpart to this argument, Plaintiff contends that the trial court's determination not to enter a permanent injunction was based largely on the trial court's finding that Plaintiff had not suffered any harm. Although the trial court found that Plaintiff had suffered no damages, that finding, as we note below, was only one of a number of factors considered by the trial court in determining whether to grant or deny the permanent injunction. Nevertheless, it was an appropriate factor for the trial court to consider. See Wilcox, 111 N.M. at 486,

806 P.2d at 1076 ("In New Mexico, injunctions are granted to...

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