Renpak, Inc. v. Oppenheimer

• Decision Date: 01 August 1958
• Docket Number: No. 63,63
• Citation: 104 So.2d 642
• Parties: RENPAK, INC., a Florida corporation, Appellant, v. Herbert OPPENHEIMER, Albert Alson, Moe Feingold and Wares, Inc., a Florida corporation, Appellees.
• Court: Florida District Court of Appeals

Page 642

104 So.2d 642

RENPAK, INC., a Florida corporation, Appellant, v.Herbert OPPENHEIMER, Albert Alson, Moe Feingold and Wares, Inc., a Florida corporation, Appellees.

No. 63.

District Court of Appeal of Florida, Second District.

Aug. 1, 1958.

H. Irwin Levy, West Palm Beach, for appellant.

Burnett Roth, Miami Beach, for appellees.

KANNER, Chief Judge.

Appellant filed suit in chancery seeking injunctive relief against appellees.It was the ruling of the chancellor, in dismissing the amended complaint on motion of appellees, that the appellant was not entitled to injunctive relief under the allegations as framed.This appeal has emerged from that order.

The amended complaint, with the parties referred to in the manner in which they were designated in the court below, is here summarized.

The plaintiff is a corporation with its principal place of business in the City of West Palm Beach, Florida.The nature of the business is that of wholesaler of hotel supplies and variety stores merchandise.The corporation employs salesmen who travel throughout the state selling merchandise wholesaled by the plaintiff.

The defendant, Oppenheimer, was an organizer and an officer, director, stockholder, and managing employee of the plaintiff corporation up to March 2, 1956.The defendant, Alson, was a salesman for plaintiff in the greater Miami area.

The complaint sets forth that defendants Oppenheimer, Alson, and Feingold entered into an agreement and conspired to form a competing business known as Wares, Inc., for the purpose of taking over the business of the plaintiff corporation.Oppenheimer did not disclose to the plaintiff the plans that had been agreed upon by himself and defendants Alson and Feingold to establish a competing business, but continued his employment with plaintiff until March 10, 1956.Oppenheimer was acting in a fiduciary capacity and all the defendants knew this, the complaint continues.Further, it is set forth the defendant Oppenheimer had obtained the names of plaintiff's customers over the state during the time he was associated with plaintiff; while the defendant Alson, who had served as salesman for plaintiff in the Miami area, called upon plaintiff's customers in that section and was successful in taking some of these customers to the new business.

The complaint further states that the defendant, Oppenheimer, arranged for the new company to handle the Libbey Glass Company and the Buffalo Pottery Company products, when theretofore plaintiff had been their sole distributor; that these negotiations took place over a period of several months, as did the planning between the defendants Oppenheimer and Alson to abandon their connections with the plaintiff corporation and set up a competing business.It is also complained that the defendant, Oppenheimer, assisted with and participated in plaintiff's procurement of a lease for warehouse expansion in West Palm Beach; that he helped plan business expansion throughout the state for the plaintiff corporation; that plaintiff was later forced to lease warehouse space in Miami in order to combat the competition set up by defendants in this area where the greater portion of plaintiff's sales had been made.

The complaint concludes before the prayer with allegations that as a result of the scheme of defendants, plaintiff has lost many valuable customers and much good will.

The prayer is that plaintiff be awarded damages; that defendants be enjoined from engaging in business competition with the plaintiff and from soliciting business from plaintiff's customers; that a trust be impressed upon all the profits realized by defendants; and that the defendants be enjoined for a reasonable time from entering into a business wherein there is the wholesale distributorship of Libbey Glass Company and Buffalo Pottery Company products.

It is a recognized and accepted principle that an officer of a corporation occupies a fiduciary or quasi-fiduciary relation to the organization, requiring loyalty and good faith on his part; and he cannot assume positions contrary to the interests of the corporation.Managing officers partake of the nature and have duties like those of a trustee or quasi-trustee.In this sense, they are rigidly accountable for any breaches of trust.A mere employee of a corporation ordinarily does not occupy a position of trust unless he also serves as its agent.19 C.J.S.Corporations§ 761 b, pp. 107, 108;13 Am.Jur., Corporations, section 997, pp. 948,949;andLe Mire v. Galloway, 1937, 130 Fla. 101, 177 So. 283.In general it is held, however, that corporate officers or directors are not precluded, because of the fiduciary nature of their position, from entering into and engaging in another business enterprise similar to but separate from the corporation if they act in good faith and refrain from interference with the business of the corporation.13 Am.Jur., Corporations, section 999, p. 953, andAnnotation, 64 A.L.R. 784.After there has been a severance of official relationship, either because of resignation or removal, generally a director or officer occupies no relation to the corporation of trust or confidence and deals with it thereafter like any other stranger; and he is not precluded from engaging in a competing business.Annotation, 64 A.L.R. 789, and 3Fletcher Cyc.Corporations, section 860, p. 220.

There is no dispute that appellees knew that in entering into the new business they would be competing with the appellant corporation, nor is there any dispute that planning and negotiations were under way before the appellees Oppenheimer and Alson had severed their connections with the appellant.We are here solely considering injunctive relief.The appellees did not begin the operation of the new business until after the severance of their relationship with appellant.Neither of the appellees at the time of the severance had any interest in the appellant corporation.The appellee, Feingold, never had any connection with the appellant corporation.The complaint does not charge that Oppenheimer or Alson had entered into an agreement not to engage in a competing business, not to entice away any employee, or not to solicit customers of the appellant; nor does it charge that any trade secrets, trademarks or confidential matter was obtained.

The Florida case of Pure Foods v. Sir Sirloin, Inc., Fla.1955, 84 So.2d 51, is one where the appellee corporation engaged in preparing and selling frozen and fresh meats named as 'specialty products'.Appellee compiled through his agents a list of customers with all employees cautioned not to disclose the names on the list.Among the confidants were three salesmen and the officer manager.Appellee charged that one of the salesmen started a campaign to persuade other employees to leave appellee's service and work for appellant, Pure Foods, Inc., and that he was successful in inducing the other salesmen and the office manager to do so.The one who had been the office manager began to win customers and persuade them to trade with the competitor, Pure Foods, Inc.All of the individuals, when they left the employ of the appellee, became owners of an interest in appellant, Pure Foods, Inc.Appellee was granted certain injunctive relief by the chancellor, including injunction against the appropriating of the list of customers' names.The...