Court Opinion

ID: 9520066
Source: CourtListenerOpinion
Date Created: 2023-08-07 01:30:42.669651+00
Date Added: 2024-06-11T12:45:30.080978
License: Public Domain

CRONE, Judge,
dissenting.
The majority correctly observes that "Indiana law recognizes a protectable interest in the goodwill generated between a customer and a business" and that "[olne element of goodwill is the advantage acquired through representative contact." Slip op. at 8 (citing Liberty Mut. Ins. Co., 870 N.E.2d at 549). The majority agrees with the trial court's conclusion that Coff-man " 'had acquired an advantage through representative contact with [Olson's] clients. Clearly, Olson has established a legitimate interest that may be protected by a covenant not to compete." Id. (quoting Appellants' App. at 14). I respectfully disagree with my colleagues on this crucial point.
Here, the former clients of Olson who appeared at trial testified without exception that they sought Coffman's services only after they had discharged Olson and that they did not intend to return to Olson under any cireumstances. Indeed, some clients testified that they hired other accountants before they returned to Coff-man. In my view, onee the clients voluntarily ceased doing business with Olson, any goodwill that Olson enjoyed with respect to those clients ceased to exist. As such, any protectable interest that Olson had with respect to those clients also ceased to exist.
It is important to distinguish this case from one in which an employee leaves his employer and breaches a covenant not to compete by soliciting or inducing the employer's current clients to patronize his business. In that case, the employer's goodwill with respect to its clients-that is, the interest protected by the covenant-was still in existence at the time the employee breached the covenant. Here, by the time Coffman breached the Agreement by performing accounting services for Olson's former clients ut their request without notifying and compensating Olson, Olson's protectable interest had ceased to exist.3 Absent a legitimate protectable interest, the Agreement is unenforceable as *212an unreasonable restraint of trade. Pathfinder Commc'ns Corp., 795 N.E.2d at 1109.
Reasonableness aside, I further observe that absent a legitimate protectable interest, Olson cannot prove that it was actually damaged by Coffman's breach of the Agreement. As Coffman rhetorically asks, what "revenue or continued client relationship could reasonably be expected by O1-son after the clients had terminated its services?" Appellants' Br. at 17 (quotation marks omitted). Absent actual damages, there can be no claim for breach of the Agreement. See Holloway v. Bob Evans Farms, Inc., 695 N.E.2d 991, 995 (Ind.Ct.App.1998) ("[The essential elements of any breach of contract claim are the existence of a contract, the defendant's breach thereof, and damages."). Moreover, absent actual damages, there is no basis for awarding liquidated damages, to which Olson claims it is entitled in its cross-appeal. Based on the foregoing, I would reverse and remand with instructions to enter judgment in favor of Appellants. Therefore, I respectfully dissent.

. Olson might well have had a legitimate pro-tectable interest in its current clients when Coffman terminated his employment, but, as stated above, that interest ceased to exist when the clients voluntarily ceased doing business with Olson.