Court Opinion

ID: 3721355
Source: CourtListenerOpinion
Date Created: 2016-07-06 06:52:17.659179+00
Date Added: 2024-06-11T18:01:19.357581
License: Public Domain

I agree that the judgment of the trial court should be affirmed. Ronald Cook was an independent *Page 237 
distributor of Standard Oil Company rather than an employee. However, as ancillary to his distributorship contract and as a part thereof, Ronald Cook convenanted not to compete with Standard Oil Company for a period of one year in his trade area from the date of the termination of his agreement. Such a covenant ancillary to a business franchise is valid and not an unlawful restraint of trade if it is reasonable under the facts and circumstances of the particular case. See annotation, 50 A.L.R. 3d 746; 54 American Jurisprudence 2d 959 and 965, Monopolies, Sections 512 and 518. The trial court did not err in its factual finding that the covenant not to compete was reasonable, even though covenants not to compete are more strictly construed in conjunction with a business franchise than with a sale of property.
Ronald Cook was properly found by the trial court to have breached his covenant not to compete, as it is clear that on behalf of Landmark and in association with an employee of Landmark Ronald Cook attempted to divert customers from Standard Oil Company to Landmark. The more troublesome area of this case is whether damages can be assessed against Landmark as a result of its involvement with Ronald Cook in the breach of his covenant not to compete.
Competition in business, even though carried to the extent of ruining a rival, constitutes justifiable interference in other business relationships, and is not actionable so long as it is carried on by means that are lawful. See 45 American Jurisprudence 2d 308, Interference, Section 31. The better holding, however, is that the right of competition does not justify a person to knowingly procure a breach of a valid contract. Thus, tortious interference with a contract constitutes an act of unfair competition that is wrongful if the party seeking damages shows the existence of a valid contract, the wrong-doer's knowledge thereof, an intentional procurement of the breach and damages resulting therefrom. See 45 American Jurisprudence 2d 314, Interference, Section 39. The trial court was within its prerogative under the evidence in this case in finding that *Page 238 
those elements were proved and that Landmark, through its employee, Dan Cook, who was acting in the scope of his employment, induced Ronald Cook to breach his contract with Standard Oil Company. Thus, Standard Oil was properly found to be entitled to a judgment against Landmark.
The final issue concerns the measure of damages recoverable. Generally, damages allowable in a case of this nature are the loss of profits resulting from the tortious act of a defendant. However, in this case, proving damages is extremely difficult for plaintiff, if not impossible. If proof of money damages is so difficult or speculative that there is no adequate remedy at law, in accordance with the general rules of equity, an injunction can be granted in an appropriate case. The trial court found that plaintiff did not have an adequate remedy at law. That finding is supported by sufficient evidence.
In considering whether to issue an injunction as well as the terms and circumstances thereof, the trial court must balance many factors. The court must consider factors such as the effects of an injunction upon the competitive balance in the area served. In considering this fact the court can of course consider the size of the respective entities (Standard Oil Company and Landmark) and the possibility of creating a monopoly in the event an injunction is granted. In this particular case, there is no indication that Standard Oil will have a monopoly in the affected area during the one-year period when the injunction is in effect. Balancing the equities of the parties is a prerogative of the trial court within the equitable discretion of the trial court. Considering the tortious activity of the defendants, the extreme difficulty of proving actual damages, the difficulty of remedying the wrongful conduct of defendants by money damages and the relatively small effect upon the competitive market, this court cannot say that the trial court wrongfully weighed the equities in deciding within its equitable jurisdiction to issue the injunction. We might disagree with the injunction and might have issued no injunction or a more narrow injunction *Page 239 
had we been the trial court. However, I do not believe that we can find that the trial court exceeded its equitable jurisdiction in rendering its judgment.
The judgment of the trial court should be affirmed.