Wyckoff v. Painter, 11097

• Decision Date: 14 June 1960
• Docket Number: No. 11097,11097
• Citation: 115 S.E.2d 80,145 W.Va. 310
• Court: West Virginia Supreme Court
• Parties: Dave L. WYCKOFF et al., etc. v. Walter L. PAINTER.

Page 80

115 S.E.2d 80

145 W.Va. 310

Dave L. WYCKOFF et al., etc. v. Walter L. PAINTER.

No. 11097.

Supreme Court of Appeals of West Virginia.

Submitted April 20, 1960.

Decided June 14, 1960.

Syllabus by the Court

1. In a suit to enforce by injunction the provisions of a restrictive covenant contained in a written contract of employment, wherein the lower court granted and subsequently dissolved a temporary injunction, on appeal to this Court from the judgment of the lower court by which the temporary injunction was dissolved and the plaintiffs' bill for injunction was dismissed, the case will not be regarded by this Court as moot, even though the one-year period of the restrictive covenant has expired, in view of the fact that potentially a cause of action exists on the injunction bond in favor of the person enjoined against the plaintiffs at whose instance the temporary injunction was granted.

2. An unambiguous written agreement entered into as the result of verbal negotiations will, in the absence of a showing of fraud or mistake, be conclusively presumed to represent the final agreement of the parties thereto, and parol evidence may not be admitted to prove that the agreement of the parties was different from that expressed in such writing.

3. 'A contractual covenant between employer and employee, restricting the employee from engaging in business similar to that of the employer within a designated time and territory after the employment should cease, will be enforced if the restriction is reasonably necessary for the protection of the employer and does not impose undue hardship on the employee.' O. Hommel Co. v. Fink, 115 W. Va. 686, Syllabus .

Jackson, Kelly, Holt & O'Farrell, F. Paul Chambers, John L. McClaugherty, Charleston, Campbell, McNeer, Woods & Bagley, S. S. McNeer, Huntington, for appellants.

William H. Hazlett, Langdon C. Morris, Charleston, for appellee.

CALHOUN, Judge.

In this suit in equity instituted in the Circuit Court of Kanawha County, the plaintiffs seek by injunction to enforce against the defendant a restrictive covenant contained in a contract of employment. The lower court granted a temporary injunction, but, after the taking of testimony, dissolved the temporary injunction and dismissed the plaintiffs' second amended bill of complaint. From such final decree the plaintiffs have appealed to this Court.

The defendant has moved the Court to dismiss the appeal granted herein to the plaintiffs on November 23, 1959, and plaintiffs' motion to reverse, which motion to reverse was made pursuant to leave granted on January 18, 1960. The grounds assigned for defendant's motion are: (1) That plaintiffs failed to comply with Rule IV, subd. 3, of the Rules of Practice of this Court in not designating, within twenty-one days after due notice of the granting of the appeal, the part or parts of the record which they desired to have printed; and (2) that no notice was served on the defendant or his counsel that the plaintiffs were applying to this Court for leave to file their motion to reverse in accordance with Rule IX, subd. 1, of this Court and Code, 58-5-25.

After permission was granted to the plaintiffs on January 18, 1960, to move to reverse, which required the case to be heard and considered on the whole original record filed with the Court, the requirement for designating the part or parts of the record to be printed under Rule IV, subd. 3, became inapplicable.

If the Court had refused to grant the permission to move to reverse, plaintiffs would still have had an opportunity under Rule IV, subd. 11, to move for an enlargement of the time to specify the record to be printed by showing good cause for failure to act within the twenty-one-day period. Plaintiffs have alleged in their petition for leave to file a motion to reverse and in their briefs certain matters, extraneous to the record, not denied by defendant, which might be deemed to account for their failure to act within the twenty-one-day time limit, but since the question of showing good cause for extending the time limit is not now before us, we do not pass upon the sufficiency of such allegations. No delay in the prosecution of the case has been occasioned by the procedure followed and the defendant does not allege any prejudice by reason thereof.

The plaintiffs did not give to the defendant any prior notice of the filing on January 13, 1960, of their motion for leave to file a motion to reverse, but after the leave was granted on January 18, 1960, to file the motion to reverse, the plaintiffs did give defendant the thirty-day notice, as required by Rule IX, subd. 1, and Code, 58-5-25, before making the motion to reverse, thus complying with the rule and the statute. Under all the circumstances the defendant's motion to dismiss the appeal and to dismiss plaintiffs' motion to reverse should be and is overruled.

Plaintiffs, Dave L. Wyckoff, Burton Borman, Jack Borman, Roy Markus and Eva Markus, are partners doing business at Charleston as United Associates of West Virginia and, during all times material herein, have been general agents in West Virginia for United Insurance Company of America, a corporation, plaintiff.

The defendant, Walter L. Painter, during the years 1956 and 1957 was employed by United Associates of West Virginia (sometimes referred to herein as the 'partners' or the 'partnership'), as an agent to sell insurance. In 1957 the defendant went to Ohio where he became associated with another insurance company.

After some preliminary negotiations the defendant called Dave L. Wyckoff by telephone and, as a consequence of the telephone conversation, the defendant came from Ohio and met Wyckoff at the latter's office in Charleston on February 21, 1958. It was then verbally agreed by them that the defendant would accept reemployment with the partnership as agency director, on a salary basis of $1,000 a month plus expenses, in lieu of commissions on insurance sold thereafter by the defendant, except that it was agreed that the defendant would receive commissions on premiums for renewals of policies sold by him while previously employed by the partnership during the years 1956 and 1957. As a part of the contract of employment, it was further agreed that the defendant would recruit new men as agents and train them as such by demonstrating sales methods by example in the field.

At the meeting held at Wyckoff's office on February 21, 1958, the defendant signed as 'Agent' a lengthy agreement containing twenty-six numbered paragraphs, including Paragraph (24) which contains the restrictive covenant in controversy herein. Wyckoff signed the contract as 'State Manager.' The first paragraph and the final paragraph of the form agreement were left blank as follows:

'This Agreement made this ___ day of _____, 19__, effective as of the ___ day of _____, 19__, by and between _____ General Agent, and designated State Manager for United Insurance Company of America within the state of _____, hereinafter referred to as the 'State Manager' and _____ hereinafter referred to as 'Agent', said United Insurance Company of America being referred to as 'Company'.'

'In Witness Whereof, the parties hereto have set their hands this ___ day of _____, 19__.'

On June 13, 1958, the defendant signed in triplicate a writing identical with the one previously signed, except that all blanks were properly filled, including a blank in Paragraph (24) which made the restrictive covenant operative throughout West Virginia, and also including a blank in the initial paragraph which made the agreement effective as of April 7, 1958, the date on which the defendant obtained his West Virginia license to sell insurance.

Paragraph (24) of the written agreement is as follows:

'While the Agent is soliciting applications for policies of insurance issued by the Company under the supervision of the State Manager and for a period of one year thereafter, Agent agrees that he will not directly or indirectly be connected with any other health and accident or life insurance company engaged in similar business to the business conducted by the State Manager in any territory within the State of West Virginia.

Agent further agrees that in the event of the termination of his association with the Company and the State Manager that he will not directly or indirectly induce or attempt to induce any Agents, Unit Managers, Collectors or employees of the State Manager to terminate their association with the State Manager of the Company; nor will the Agent induce or attempt to induce any policyholder of the Company to terminate his or her insurance with the Company. It is agreed by and between the State Manager, Company and the Agent that there is no adequate remedy at law in the event the Agent violates any of the aforesaid covenants and, therefore, it is agreed that injunction proceedings may be brought against the Agent in the event of any such violations; and it is further agreed that in the event Agent violates any of the aforesaid covenants contained in this Paragraph his rights to Service Fees on renewal premiums, if any, shall immediately cease and terminate.'

On October 15, 1958, the defendant terminated his employment with the partnership and began the organization of an agency to sell life, health, accident and hospital insurance in West Virginia for the World Insurance Company. At the time of the taking of testimony at the bar of the court on January 22, 1959, five agents previously employed by the partnership were employed by the defendant. In brief, it appears from the testimony that if the restrictive covenant contained in Paragraph (24) was binding upon the defendant, he had breached the provisions thereof prior to the date indicated immediately above.

The United Insurance Company of America (sometimes referred to herein as 'the insurance company') was first made a party plaintiff, in addition to the partnership, in the second amended bill of...