Struever v. Monitor Coach Co., Inc.
| Decision Date | 09 April 1973 |
| Docket Number | No. 3--772A38,3--772A38 |
| Citation | 156 Ind.App. 6,294 N.E.2d 654 |
| Parties | William P. STRUEVER, Appellant (Defendant below), v. MONITOR COACH CO., INC., Appellee (Plaintiff below). |
| Court | Indiana Appellate Court |
Franklin A. Morse, II, and Roger W. Benko, Thornburg, McGill, Deahl, Harman, Carey & Murray, South Bend, for appellant.
Robert J. Konopa, Crumpacker, May, Levy & Searer, South Bend, for appellee.LYBROOK, Judge.
This is an appeal from an interlocutory order granting plaintiff-appellee's (Monitor's)application for a preliminary injunction against defendant-appellant(Struever).Monitor alleged a breach of a covenant not to compete contained in a contract between Struever and Monitor.
The evidence at the hearing showed that prior to August 28, 1970, Struever was President and a member of the board of directors of Action Industries, Inc. Action is primarily engaged in the manufacture and sale of recreational vehicles (travel trailers, truck campers and motor homes).Its home office is located in Elkhart, Indiana and its products are sold through 129 dealers in 29 States, primarily in the East and Midwest.
On August 28, 1970, Monitor contracted with the stockholders of Action, including Struever, to purchase all outstanding shares of Action stock.Included in the agreement was the following clause:
'Stockholders covenant and agree, that for a period of three (3) years subsequent to the closing date, they will not in any manner whatsoever, directly or indirectly, compete or engage in a business which is in competition with the business of Action, as Action's business is constituted on said closing date.'(Our emphasis.)
On March 15, 1971, Struever and others organized Utopia Coach, Inc. Utopia is also engaged in the manufacture and sale of recreational vehicles and based in Elkhart.Struever is the President and chief executive officer of Utopia, as well as a shareholder and director.
The evidence further showed that the product lines of the two companies were similar, that both had participated in some of the same trade shows and that they shared five or six common dealers.Monitor also presented some evidence that Struever had solicited employees, suppliers and dealers of Monitor and was copying Monitor's products.
Following the hearing the trial court issued a preliminary injunction which reads in part:
'After hearing, and upon due consideration it is the order of this Court that the defendant, William P. Struever be, and he is hereby restrained and enjoined from any and all participation, directly or indirectly, in the management of the business and affairs of Utopia Coach Co., Inc., its successors and assigns; provided however, that the defendant is not required to dispose of his stock in said corporation nor is he restrained from participating in, or voting at, stockholder meetings of said corporation.
'The defendant is further restrained and enjoined from contacting any retail dealers of recreational vehicles in the United States for the purpose of promoting sales of Utopia Coach Co., Inc. products and from attending any recreational vehicle shows for said purpose.
'The defendant is further restrained and enjoined from contacting any suppliers of materials to Utopia Coach Co., Inc. concerning the business or affairs of said Corporation and from taking any salary or other compensation for services from said Corporation after the date of this order.
'The defendant is further restrained, from directly or indirectly acting as a consultant to Utopia Coach Co., Inc., its successors and assigns, concerning any phase of the management or affairs of said Corporation; all until further order of this Court.'
The threshold issue here is the enforceability of the covenant not to compete.Struever maintains that the covenant is void because it contains no spatial limitations.Monitor contends that the spatial limitations are expressed by the phrase 'as Action's...
Get this document and AI-powered insights with a free trial of vLex and Vincent AI
Get Started for FreeStart Your 3-day Free Trial of vLex and Vincent AI, Your Precision-Engineered Legal Assistant
-
Access comprehensive legal content with no limitations across vLex's unparalleled global legal database
-
Build stronger arguments with verified citations and CERT citator that tracks case history and precedential strength
-
Transform your legal research from hours to minutes with Vincent AI's intelligent search and analysis capabilities
-
Elevate your practice by focusing your expertise where it matters most while Vincent handles the heavy lifting
Start Your 3-day Free Trial of vLex and Vincent AI, Your Precision-Engineered Legal Assistant
-
Access comprehensive legal content with no limitations across vLex's unparalleled global legal database
-
Build stronger arguments with verified citations and CERT citator that tracks case history and precedential strength
-
Transform your legal research from hours to minutes with Vincent AI's intelligent search and analysis capabilities
-
Elevate your practice by focusing your expertise where it matters most while Vincent handles the heavy lifting
Start Your 3-day Free Trial of vLex and Vincent AI, Your Precision-Engineered Legal Assistant
-
Access comprehensive legal content with no limitations across vLex's unparalleled global legal database
-
Build stronger arguments with verified citations and CERT citator that tracks case history and precedential strength
-
Transform your legal research from hours to minutes with Vincent AI's intelligent search and analysis capabilities
-
Elevate your practice by focusing your expertise where it matters most while Vincent handles the heavy lifting
Start Your 3-day Free Trial of vLex and Vincent AI, Your Precision-Engineered Legal Assistant
-
Access comprehensive legal content with no limitations across vLex's unparalleled global legal database
-
Build stronger arguments with verified citations and CERT citator that tracks case history and precedential strength
-
Transform your legal research from hours to minutes with Vincent AI's intelligent search and analysis capabilities
-
Elevate your practice by focusing your expertise where it matters most while Vincent handles the heavy lifting
Start Your 3-day Free Trial of vLex and Vincent AI, Your Precision-Engineered Legal Assistant
-
Access comprehensive legal content with no limitations across vLex's unparalleled global legal database
-
Build stronger arguments with verified citations and CERT citator that tracks case history and precedential strength
-
Transform your legal research from hours to minutes with Vincent AI's intelligent search and analysis capabilities
-
Elevate your practice by focusing your expertise where it matters most while Vincent handles the heavy lifting
Start Your 7-day Trial
-
4408, Inc. v. Losure
...the entire world. Absent special circumstances, such as the employee's possession of trade secrets, a covenant not to compete which is broader in scope than the area of the employee's work will be deemed unenforceable. Donahue, supra;
Struever, supra. See also Waterfield Mortg. Co., Inc. v. O'Connor (1977), Ind.App., 361 N.E.2d The covenant that Losure signed restricted him from competing in the coffee service business "only in the areas of his past, present, and futureemployer in the United States and Canada. Our Supreme Court ruled that the agreement was unreasonable because the employee's area of operation extended no further than northern Indiana. The covenant in Struever v. Monitor Coach Co., Inc. (1973), 156 Ind.App. 6, 294 N.E.2d 654, contained no geographic limits and could have applied to the entire world. Absent special circumstances, such as the employee's possession of trade secrets, a covenant not to compete which is broader in scope thanJanuary, 1976, and he remained in that position until his resignation in September, 1976. The concept of "reasonableness" has assumed increased importance in cases involving covenants not to compete. Struever v. Monitor Coach Co., Inc. (1973), 156 Ind.App. 6, 294 N.E.2d 654. Such covenants will be enforced if reasonable. Donahue v. Permacel Tape Corp. (1955), 234 Ind. 398, 127 N.E.2d 235; Waterfield Mortg. Co., Inc. v. O'Connor (1977), Ind.App., 361 N.E.2d 924. In... -
Vukovich v. Coleman
...states was reasonable. However, there was no evidence defining the specific territories of the dealers. Thus, we found the covenant unenforceable because it did not specifically limit its operation geographically. "As written it could apply to the entire world."
Id. at 10, 294 N.E.2d at 656. In Donahue v. Permacel Tape Corp., 234 Ind. 398, 411, 127 N.E.2d 235, 240-41, (1955), our supreme court held that a covenant that would limit one's employment with a competitor "beyondthe employer before the employer is entitled to the protection of a noncompetition covenant. Id. A covenant not to compete that contains no geographic limitation is presumptively void. See, e.g., Struever v. Monitor Coach Co., 156 Ind.App. 6, 8, 294 N.E.2d 654, 655 (1973)("It has long been the law in Indiana that a covenant not to compete containing no spatial limitations is void and unenforceable."). There, Monitor contended that confining the operation of the covenant toprohibit Vukovich from owning, managing, operating, or consulting with "a business substantially similar to or competitive with" IMI's business. Because the covenant before us as written "could apply to the entire world," Struever, 156 Ind.App. at 10, 294 N.E.2d at 656, and includes no provision otherwise limiting its scope, the covenant is invalid and the injunction enforcing it was improperly CONCLUSION The trial court abused its discretion when it enjoined Vukovich from competing... -
Glenn v. Dow Agrosciences, LLC
...as Pioneer's similar assurances, were to no avail. The hurdle erected by DAS was insurmountable. This is not surprising given the breadth of the non-competition clause. Not unlike the covenants at issue in Vukovich and
Struever, the covenant before us "could apply to the entire world[.]" See Vukovich, 789 N.E.2d at 526 (citing Struever, 156 Ind.App. at 10, 294 N.E.2d at 656). Indeed, that was exactly what DAS argued for in its pre-hearing brief in supportbreadth of the non-competition clause. Not unlike the covenants at issue in Vukovich and Struever, the covenant before us "could apply to the entire world[.]" See Vukovich, 789 N.E.2d at 526 (citing Struever, 156 Ind.App. at 10, 294 N.E.2d at 656). Indeed, that was exactly what DAS argued for in its pre-hearing brief in support of preliminary injunction. See Appellant's App. at 99 (focusing on DAS's "worldwide operations," the "global corn markets,"limitation and with the lack of customer-specific restriction. Over thirty years ago, a panel of this court stated, "a covenant not to compete containing no spatial limitations is void and unenforceable." Struever v. Monitor Coach Co., 156 Ind.App. 6, 8, 294 N.E.2d 654, 655 (1973). Since then, we have moderated the rule somewhat, stating, a "covenant without a geographic limitation may be reasonable if its reach is adequately limited by other means." Vukovich v. Coleman, 789 N.E.2d... -
Buffkin v. Group
...“[b]ecause the covenant before us as written ‘could apply to the entire world,’ and includes no provision otherwise limiting its scope, the covenant is invalid and the injunction enforcing it was improperly granted”) (citing
Struever v. Monitor Coach Co., Inc., 156 Ind.App. 6, 7–10, 294 N.E.2d 654, 655–656 (1973)(noting that Struever agreed that, for a period of three years, he would not “in any manner whatsoever, directly or indirectly, compete or engage in a business which is in competition...