Miller Paper Co. v. Roberts Paper Co.

• Decision Date: 25 April 1995
• Docket Number: No. 07-95-0030-CV,07-95-0030-CV
• Citation: 901 S.W.2d 593
• Parties: 1995-1 Trade Cases P 71,012 MILLER PAPER COMPANY, A Corporation, Barbara Miller, Individually and d/b/a Miller Paper Company, Mary Deane Clark, Duane H. Cudd, James C. Reams, Gregory D. Reams, Dale F. Schriber, Jr., Norman L. Burk, Richard M. Klotz, Jay E. Lile, Jeffery L. Pace, Sandra Smith, Foy R. Stone, Monica Wolden, Judy Jefferson, Marlene Grant and Liz Billington, Appellants, v. ROBERTS PAPER COMPANY, Appellee.
• Court: Texas Court of Appeals

Page 593

901 S.W.2d 593

1995-1 Trade Cases P 71,012

MILLER PAPER COMPANY, A Corporation, Barbara Miller Individually and d/b/a Miller Paper Company, Mary Deane Clark, Duane H. Cudd, James C. Reams, Gregory D. Reams, Dale F. Schriber, Jr., Norman L. Burk, Richard M. Klotz, Jay E Lile, Jeffery L. Pace, Sandra Smith, Foy R. Stone, Monica Wolden, Judy Jefferson, Marlene Grant and Liz Billington, Appellants, v. ROBERTS PAPER COMPANY, Appellee.

No. 07-95-0030-CV.

Court of Appeals of Texas Amarillo.

April 25, 1995.

Opinion Denying Rehearing June 30, 1995.

Gibson, Ochsner & Adkins, L.L.P., John Huffaker, Todd O. Lafferty, Amarillo, for appellants.

Law Offices of Nancy J. Stone, Nancy J. Stone, Garner, Lovell & Stein, P.C., Sam L. Stein, Amarillo, for appellee.

Before REYNOLDS, C.J., and DODSON and QUINN, JJ.

QUINN, Justice.

Through five points of error, the appellants, Miller Paper Company (Miller Paper), Barbara Miller, individually and d/b/a Miller Paper Company, Mary Deane Clark, Duane H. Cudd, James C. Reams, Gregory D. Reams, Dale F. Schriber, Jr., Norman L. Burk, Richard M. Klotz, Jay E. Lile, Jeffrey L. Pace, Sandra Smith, Foy R. Stone, Monica Wolden, Judy Jefferson, Marlene Grant, and Liz Billington ask whether the trial court abused its discretion in issuing a temporary injunction. The acts enjoined include prohibition against violating covenants not to compete executed with Roberts Paper Company (Roberts), uttering false statements about Roberts, using purportedly confidential information and trade secrets owned by Roberts, and filling orders of Roberts. We answer yes with regard to the covenants not to compete and no with regard to the remaining topics.

FACTS

Appellants Barbara Miller, Mary Deane Clark, Duane Cudd, James Reams, Gregory Reams, Dale Schriber, Jr., Norman Burk, Richard Klotz, Jay Lile, Jeffrey Pace, Sandra Smith, Foy Stone, Monica Wolden, Judy Jefferson, Marlene Grant, and Liz Billington were employed by Roberts. The latter sold and distributed paper, janitorial and chemical products throughout Amarillo and the surrounding area. On December 23, 1994, Barbara Miller, Roberts' president, turned in her letter of resignation, effective December 31, 1994.

Upon arriving at work on December 30th, Richard Roberts, appellee's chairman of the board, suggested to Miller that she should leave. She obliged him. Soon thereafter, the other individual appellants followed. Having decided they no longer cared to work with Richard Roberts during a meeting also conducted on the 30th, they left and joined Miller in an attempt to create a competing business. By January 2, 1995, the ex-Roberts employees were doing business as Miller Paper. In so endeavoring, they distributed over 1,600 letters to their previous clientele. Among other things, those letters characterized the recipients as customers of Miller Paper.

Additionally, several appellants also began soliciting Roberts' customers. They offered the customers the option of ceasing business with their old employer and placing orders with Miller Paper. Some accepted the offer and cancelled previously existing orders. Others were confused due to representations that Roberts was no longer in business, lost the bulk of its staff, or was acquired by Miller Paper.

Inspite of the exodus, the appellee continued its operation. Effort to retain new staff began. Customers were contacted and deliveries attempted, though some deliveries were refused because of better prices offered by Miller Paper. Moreover, Roberts discovered that a number of orders placed before December 30th were gone; they had been retained by one of the appellants.

The pending suit was initiated on January 6, 1995. Roberts hoped to use the action as a vehicle to collect damage, enforce covenants not to compete, and enjoin other acts deemed unlawful. The court granted a restraining order and the temporary injunction from which this appeal was taken.

STANDARD OF REVIEW

In reviewing the issuance of a preliminary injunction, we must decide whether the trial court correctly opted to preserve the status quo pending final hearing on the merits. Transport Co. v. Robertson Transports, Inc., 152 Tex. 551, 261 S.W.2d 549, 552 (1953) (holding that the sole question before the trial court is whether the status quo should be preserved); Inex Indus., Inc. v. Alpar Resources, Inc., 717 S.W.2d 685, 687 (Tex.App.--Amarillo 1986, no writ) (stating the same). A number of well-defined rules guide our determination. First, only a clear abuse of discretion permits reversal or modification of the mandate. Walling v. Metcalfe, 863 S.W.2d 56, 58 (Tex.1993).

Second, whether such an abuse occurred depends upon whether the court acted with reference to applicable guiding principles and rules. Sherrod v. Moore, 819 S.W.2d 201, 202-03 (Tex.App.--Amarillo 1991, no writ). Injunctions issued arbitrarily, Id.; Garth v. Staktek Corp., 876 S.W.2d 545, 548 (Tex.App.--Austin 1994), or founded upon a misinterpretation or misapplication of those guiding principles or the law constitute abused discretion. Id.; 2300, Inc. v. City of Arlington, Tex., 888 S.W.2d 123, 126 (Tex.App.--Fort Worth 1994, no writ).

Next, the foremost guiding principle to which we must adhere entails the existence of a probable right to the relief sought at trial and a probable injury during the interim. Walling v. Metcalfe, 863 S.W.2d at 57; Sun Oil Co. v. Whitaker, 424 S.W.2d 216, 218 (Tex.1968); Transport Co. v. Robertson Transp. Inc., 261 S.W.2d at 552. The presence of both is a condition to issuance of the extraordinary relief. Moreover, one proves the first element by simply alleging a cause of action and presenting evidence which tends to sustain it. Transport Co. v. Robertson Transp. Inc., 261 S.W.2d at 552. This does not require him to establish that he will ultimately prevail, however. Id.; Walling v. Metcalfe, 863 S.W.2d at 58. The second element is proven by tendering evidence of imminent harm, irreparable injury and inadequate legal remedy. Inex Indus., Inc. v. Alpar Resources, Inc., 717 S.W.2d at 687-88. Incidentally, legal remedy is inadequate if, among other things, damages are difficult to calculate or their award may come too late. Roland Mach. Co. v. Dresser Indus., Inc., 749 F.2d 380, 386 (7th Cir.1984), cited in, Walling v. Metcalfe, 863 S.W.2d at 58. Another guideline to be considered is that admonishing the court to forego attempt to resolve factual disputes. Ballenger v. Ballenger In sum, whether to grant an injunction is a matter of grave import. Yet, once issued, it receives the deference inherent in an abuse of discretion standard. We cannot vacate or modify it simply because we would have decided otherwise.

668 S.W.2d 467, 469 (Tex.App.--Corpus Christi 1984, no writ). We must further recognize that an injunction is not improper merely because the evidence presented below conflicted; it need only reasonably support the movant's complaints. Goldome Credit Corp. v. University Square Apartments, 828 S.W.2d 505, 511 (Tex.App.--Amarillo 1992, no writ); Seaborg Jackson Partners v. Beverly Hills Sav., 753 S.W.2d 242, 245 (Tex.App.--Dallas 1988, no writ). We are lastly compelled to draw all legitimate inferences from the evidence in a light most favorable to the trial court's decision. 2300, Inc. v. City of Arlington, 888 S.W.2d at 126; Bertotti v. C.E. Shepherd Co., 752 S.W.2d 648, 655 (Tex.App.--Houston [14th Dist.] 1988, no writ).

POINTS OF ERROR ONE AND TWO

Through the first two points, appellants Clark, Burk, Klotz, Lile, Reams, and Schriber contend that the trial court abused its discretion in enjoining them from breaching an invalid covenant against competition. The covenants, which were part of the employment agreements they signed with Roberts, state as follows:

It is recognized by both Salesman and Company that the success of both the Company and Salesman are dependent upon strong personal relationships between Salesman and the customers of Company. Company shall endeavor to foster these relationships. Salesman and Company agree that those relationships constitute the goodwill of company and that those relationships developed by Salesman during his tenure with the Company are for the benefit of Company. The development and exclusive use of those relationships are a part of the consideration furnished by Salesman to Company hereunder and in exchange for which Company has agreed to make the payments herein set forth.

Salesman recognizes that the use of those relationships developed hereunder, and for which the consideration to be paid hereunder is exchanged, to the detriment of Company or its competitive position, would be unfair. Salesman therefore agrees that for a period of two (2) years from and after the termination of Salesman's employment with the Company, Salesman shall not, directly or indirectly, as sole proprietor, member of a partnership, stockholder, investor, officer or director of a corporation, or as an employee, agent, associate or consultant of any person, firm or corporation:

(a) Solicit or accept "business."

(i) from any customers or prospects of the Company who were solicited directly by Salesman or where Salesman supervised, directly or indirectly, in whole or in part, the solicitation activities related to such customer or prospects or

(ii) from any former customer of Company who was such within two (2) years prior to such termination and who was solicited directly by Salesman or where Salesman supervised, directly or indirectly, in whole or in part, the solicitation activities related to such former customer.

(b) Solicit any employee of the Company to terminate his employment with Company.

The term "business" as used in Subparagraph (a) shall mean the purchase or sale of a product line consisting in whole or in part of a product or products of the same type as were included in the product line of Company during Salesman's employment by the Company. The covenants set forth in Subparagraph (a)...