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...
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...the provision as written “ ‘could apply to the entire world[.]’ ” Vukovich, 789 N.E.2d at 526 (quoting Struever v. Monitor Coach Co., 156 Ind.App. 6, 294 N.E.2d 654, 656 (1973)). 18 Although Swanel does have legitimate interests to protect, the court concludes that the covenant as written i......
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