Court Opinion

ID: 9588738
Source: CourtListenerOpinion
Date Created: 2023-08-21 23:37:51.535158+00
Date Added: 2024-06-11T09:42:38.386358
License: Public Domain

*411Justice Martin
dissenting.
The questions raised by this appeal are now moot and the appeal should be dismissed. Fulton v. Morganton, 260 N.C. 345, 132 S.E. 2d 687 (1963). “It is quite obvious that a court cannot restrain the doing of that which has been already consummated.” Austin v. Dare County, 240 N.C. 662, 663, 83 S.E. 2d 702, 703 (1954). The contract sued upon specified that the defendant would not compete with plaintiff for a period of eighteen months after the date on which he ceased to be employed by plaintiff. A.E.P. Industries, Inc. summarily fired defendant on 4 August 1981. The noncompetitive eighteen-month period expired at the latest on 18 March 1983.1 Even if plaintiff were entitled to an injunction, which I maintain it is not, it would be an abuse of discretion for any court to issue a preliminary injunction restraining defendant after the expiration of the period specified in the agreement. The eighteen-month period of the covenant not to compete is now fait accompli. This being so, there is nothing to support the issuance of an injunction at this time. Highway Com. v. Brown, 238 N.C. 293, 77 S.E. 2d 780 (1953). A similar case is Herff Jones Co. v. Allegood, 35 N.C. App. 475, 241 S.E. 2d 700 (1978), in which Judge Morris, with Judge (now Justice) Mitchell concurring, held for the court that when a covenant not to compete for twelve months expired while the case was on appeal, the issue became moot and was no longer before the court for decision:
The covenant not to compete which is the subject of this action was expressly limited in duration to one year following the termination of the employment relationship between plaintiff and defendants. Plaintiff’s evidence shows that notice of termination of representation was mailed to defendants and dated 28 July 1976. Defendant Allegood testified that he began working for Hunter Publishing Company, a competitor of plaintiff, as early as April 1976. Thus, assuming that defendants’ employment ended no later than 28 July 1976, the latest date through which defendants could be restrained from competing with plaintiff would have been 28 *412July 1977. That date having passed pending consideration of this appeal by this Court, the questions relating to the propriety of the injunctive relief granted below are not before us. As stated by the Supreme Court in Parent-Teacher Assoc. v. Bd. of Education, 275 N.C. 675, 679, 170 S.E. 2d 473, 476 (1969):
“When, pending an appeal to this Court, a development occurs, by reason of which the questions originally in controversy between the parties are no longer at issue, the appeal will be dismissed for the reason that this Court will not entertain or proceed with a cause merely to determine abstract propositions of law or to determine which party should rightly have won in the lower court.”
Thus, the questions raised by defendants regarding the injunctive relief granted by the trial court have been rendered moot by the passage of time. See Enterprises, Inc. v. Heim, 276 N.C. 475, 173 S.E. 2d 316 (1970).
Id. at 478-79, 241 S.E. 2d at 702. See also 42 Am. Jur. 2d Injunctions §§ 6, 7 (1969). The appeal should be dismissed.
However, the majority has seen fit to examine the moot issue, which is whether the Court of Appeals erred in affirming the superior court’s denial of A.E.P.’s motion for a preliminary injunction restraining Bruce McClure from breaching certain covenants contained in agreements between the two parties. For the following reasons, I dissent from the majority’s resolution of the issue.
As stated in Investors, Inc. v. Berry, 293 N.C. 688, 701, 239 S.E. 2d 566, 574 (1977):
A preliminary injunction, the relief here sought, is an extraordinary measure taken by a court to preserve the status quo of the parties during litigation. It will be issued only (1) if a plaintiff is able to show likelihood of success on the merits of his case and (2) if a plaintiff is likely to sustain irreparable loss unless the injunction is issued, or if, in the opinion of the Court, issuance is necessary for the protection of a plaintiff’s rights during the course of litigation. Waff Bros., Inc. v. Bank, 289 N.C. 198, 221 S.E. 2d 273; Pruitt v. Williams, 288 *413N.C. 368, 218 S.E. 2d 348; Conference v. Creech, 256 N.C. 128, 123 S.E. 2d 619.
A preliminary injunction may not issue unless the movant carries the burden of persuasion as to each of these prerequisites. E.g., Pruitt v. Williams, 288 N.C. 368, 218 S.E. 2d 348 (1975). Once this burden in carried, it still remains in the trial court’s discretion whether to grant the motion for a preliminary injunction. Id. Cf. N.C. Gen. Stat. § 1-485 (Cum. Supp. 1981). As Justice Ervin stated in Huskins v. Hospital, 238 N.C. 357, 360, 78 S.E. 2d 116, 119-20 (1953):
The hearing judge does not issue an interlocutory injunction as a matter of course merely because the plaintiff avowedly bases his application for the writ on a recognized equitable ground. While equity does not permit the judge who hears the application to decide the cause on the merits, it does require him to exercise a sound discretion in determining whether an interlocutory injunction should be granted or refused.
I emphasize at the outset that a motion for a preliminary injunction is not to be confused with a request for specific enforcement of a provision in a contract which has been proven valid and enforceable. The former is a request for extraordinary equitable relief pending resolution of the controversy between the litigants. The latter arises after a contract has been either stipulated or proven valid and enforceable and the movant has established his right to have the contract enforced. Although defendant has not yet filed answer in this suit, the record suggests that the validity and enforceability of these contracts is a matter of dispute between the parties and will ultimately be resolved at trial on the merits. In the present appeal, of course, this Court is concerned only with plaintiff’s motion for a preliminary injunction, that is, whether the trial court abused its discretion in denying the motion for equitable relief.
Although it conceded that there may be probable cause that plaintiff would prevail on the merits of the controversy, the trial court determined that A.E.P. had not carried its burden of persuasion as to irreparable damage. In its order denying plaintiff’s motion for a preliminary injunction, the court stated:
*414In this case the plaintiffs evidence does not establish prima facie a case of irreparable damage. All of the statements contained in the complaint and affidavit are conclusory and the only inference which can be drawn is that the damages, if any, which will be sustained by the plaintiff are speculative and conjectural. In view of the evidence as to the manner in which the sales of polyethylene are carried out, I cannot find that the plaintiff would as the result of defendant’s activity sustain any damage, reparable or irreparable.
Thus, because plaintiff failed to carry its burden of persuasion as to irreparable loss, a fortiori it failed to establish a reasonable apprehension of irreparable loss unless interlocutory relief was granted. Although in reviewing the denial of a preliminary injunction this Court is not bound by the findings of the lower court, Waff Bros. v. Bank, 289 N.C. 198, 221 S.E. 2d 273 (1976); Telephone Co. v. Plastics, Inc., 287 N.C. 232, 214 S.E. 2d 49 (1975), there is a presumption that the lower court’s decision was correct, and the burden is on the appellant to show error. Conference v. Creech, 256 N.C. 128, 123 S.E. 2d 619 (1962). For the following reasons, I agree with the lower court’s finding that plaintiff failed to establish a reasonable apprehension of irreparable loss unless its motion was granted.
An applicant for a preliminary injunction must do more than allege that he is apprehensive that irreparable loss will occur. He is required to set out with particularity the facts supporting his allegations so that the court can decide for itself whether there is reasonable apprehension of irreparable injury unless interlocutory relief is granted. Telephone Co. v. Plastics, Inc., supra; Pharr v. Garibaldi, 252 N.C. 803, 115 S.E. 2d 18 (1960). A prohibitory preliminary injunction, such as the one sought in the instant case, will be granted only when irreparable injury is real and immediate. Telephone Co. v. Plastics, Inc., supra; Membership Corp. v. Light Co., 256 N.C. 56, 122 S.E. 2d 761 (1961).
In its motion for a preliminary injunction, plaintiff stated that its customer lists and order specifications were confidential and proprietary information; that defendant was using this information in breach of contractual covenants; that defendant has contacted a number of plaintiff’s customers, which customers accounted for ten to fifteen percent of A.E.P.’s annual sales within *415the southeastern region; and that defendant had solicited sales and orders of products not produced by A.E.P. which were direct; ly competitive with A.E.P.’s products, thus breaching contractual covenants not to compete. Plaintiffs sole affiant also stated:
It is my honest belief that the defendant is utilizing confidential information of the plaintiff by and in contacting such major customers of the plaintiff. Such activities of the defendant are highly damaging to the plaintiffs sales program, which was established through the expenditure of great effort and finances, and are also leading to damaging confusion by these customers in that the defendant was employed by the plaintiff until August 21 of this year, so that such customers contacted no doubt consider him to still represent the plaintiff.
... If the defendant continues such activities, not only will the sales program of the plaintiff suffer irreparable damage, but also the confidential nature of the information which the defendant is utilizing will be seriously jeopardized.
In reply, in addition to his own affidavit, defendant submitted the affidavits of sales or managerial employees associated with six of A.E.P.’s customers that defendant had contacted after leaving plaintiffs employment. These employees generally concurred in stating that Mr. McClure had contacted them after he left Design Poly-Bag; that he had informed them that he had ceased working for A.E.P. and was in business for himself; that neither lists of product specifications nor customer lists were secret or confidential in the sales and manufacturing market for polyethylene products; and that the market operated on a competitive bid or quote system in which, after the submission of bids from salesmen who had studied product specifications, the decision of with whom to place an order was based on a number of factors, including reliability, service, quality, and price. Several of these employees stated that they had placed trial orders with McClure after receiving bids from him; others stated that McClure had merely expressed an interest in doing business with their companies.
I agree with the superior court that while defendant’s conduct may or may not have been in breach of contract, plaintiff has failed to set forth with enough particularity facts allowing the conclusion that there is reasonable apprehension of irreparable in*416jury unless a preliminary injunction is granted. To demonstrate a reasonable apprehension of irreparable injury, one must show that irreparable injury is very likely to occur if injunctive relief is not granted. In this context an injury is irreparable if it cannot be adequately compensated in money damages. E.g., Frink v. Board of Transportation, 27 N.C. App. 207, 218 S.E. 2d 713 (1975). An injury which has an adequate remedy at law is not irreparable and therefore equitable relief pending outcome of litigation between the parties is not required. Gause v. Perkins, 56 N.C. 177 (1857); Light and Water Comrs. v. Sanitary District, 49 N.C. App. 421, 271 S.E. 2d 402 (1980), disc. rev. denied, 301 N.C. 721 (1981). In the present case plaintiff has not shown that any injury it might suffer by virtue of defendant’s activities cannot be compensated by an award of money damages. In fact, the record fails to disclose evidence of any actual damage to plaintiff. Mere contact of A.EJP.’s customers and solicitation of orders from them by defendant does not show that plaintiff has suffered or will suffer an injury that is not compensable in money damages. No injury is shown, much less irreparable injury, until plaintiff demonstrates that defendant’s contact and solicitation in fact diverted orders for polyethylene products away from A.E.P. This has not been established in the record before us.
Further, there has been no credible demonstration that defendant exploited confidential information of plaintiff in contacting various customers of plaintiff. Several of defendant’s affiants, sales employees of these customers, stated that product specifications were readily available to anyone in the industry requesting them and that lists of potential polyethylene customers were published periodically. Further, defendant had worked as a salesman of polyethylene products in the Southeast for eleven years before becoming employed by plaintiff, and he stated that before he joined A.E.P. he was aware of the identity of the great majority of the industrial users of polyethylene upon whom he has called since leaving Design Poly-Bag. Finally, there is no evidence that defendant’s contacts with A.E.P. customers has damaged A.E.P. because such customers “no doubt consider [defendant] to represent the plaintiff.” On the contrary, defendant’s affiants stated that when he contacted them, defendant had clearly stated to each that he was no longer working for A.E.P. and that he was in business for himself.
*417The majority states:
We hold that where the primary ultimate remedy sought is an injunction; where the denial of a preliminary injunction would serve effectively to foreclose adequate relief to plaintiff; where no “legal” (as opposed to equitable) remedy will suffice; and where the decision to grant or deny a preliminary injunction in effect results in a determination on the merits, plaintiff has made a showing that the issuance of a preliminary injunction is necessary for the protection of its rights during the course of litigation.
The statement is without citation of authority, and well it should be, as there is no legal basis for it in the laws of our state. This “holding” removes the requirement of a showing of real and immediate irreparable injury before preliminary injunctive relief can be allowed. It is a well established rule in North Carolina that injunctive relief will be granted only when irreparable injury is both real and immediate. Telephone Co. v. Plastics, Inc., supra, 287 N.C. 232, 214 S.E. 2d 49 (1975); Membership Corp. v. Light Co., supra, 256 N.C. 56, 122 S.E. 2d 761 (1961) (and cases cited therein). The ultimate decision whether to grant injunctive relief remains within the discretion of the trial judge after a party establishes a prima facie showing to support such relief. Huskins v. Hospital, supra, 238 N.C. 357, 78 S.E. 2d 116 (1953). In the absence of a showing of abuse of discretion, such decision is binding upon us. Harmon v. Harmon, 245 N.C. 83, 95 S.E. 2d 355 (1956).
The majority’s “holding” is an abstract statement not applicable to this case. Here, plaintiffs complaint requests over a million dollars in money damages. Again, where money can compensate for the injury, it is not irreparable. Gause v. Perkins, supra, 56 N.C. 177 (1857); Light and Water Comrs. v. Sanitary District, supra, 49 N.C. App. 421, 271 S.E. 2d 402 (1980), disc. rev. denied, 301 N.C. 721 (1981). Surely, the denial of the preliminary injunction did not serve to effectively deny all relief to plaintiff. The majority itself states that the case is to be remanded for consideration of “plaintiffs other claims for relief including a claim for substantial money damages.” Under these facts, how can it be seriously argued that plaintiff does not have an adequate remedy at law?
*418In addition to determining that plaintiff had not carried its burden of proving reasonable apprehension of irreparable injury, the trial court implicitly held that in its opinion the issuance of a preliminary injunction was not necessary to protect plaintiffs rights during the course of the litigation. When weighing the equities between the parties, the court found:
Since 1965 [defendant] has earned his livelihood and supported himself and his family through employment as a salesman of polyethylene products. He was skilled in the field long before he went to work for the plaintiff. He used in the employment of plaintiff the knowledge he had theretofore acquired and any names and addresses of customers of the plaintiff gained during the performance of his duties for them is not a trade secret, nor is general information concerning the methods of business of the plaintiff. Kadis v. Britt, supra [224 N.C. 154, 29 S.E. 2d 543 (1954)].
If the [defendant] is restrained from engaging in this business for a period of eighteen months the injury to him will be real and immediate, and he could not be made whole even though he ultimately prevails upon a determination of the merits.
On the other hand, the plaintiff has failed to establish through its evidence the reasonable likelihood of any substantial monetary damage. If the injunction is granted the plaintiff would in effect have prevailed in the action no matter what the final determination might be.
Therefore in the exercise of the Court’s discretion based upon the foregoing analysis, I decline to issue in this case a temporary injunction pending the determination of the matter.
Whereas the majority would rely upon its statement that “the denial of a preliminary injunction would serve effectively to foreclose adequate relief to plaintiff’ in determining whether injunctive relief should issue, the trial judge must also consider the opposite side of that coin in exercising his discretion. That is, the trial judge must also consider that the granting of injunctive relief may effectively foreclose defendant’s defense to the validity of the contract and in effect decide the case adversely to him *419before he has an opportunity to be heard upon the merits. This is one of the reasons that the ultimate decision whether to grant equitable relief is left to the sound discretion of the trial judge. In a case such as this, no matter how the judge rules with respect to the request for injunctive relief, he is effectively deciding the issue with respect to the enforcement of the covenant not to compete. This is as it should be; the trial judge is in the best position to exercise this discretion. He hears the evidence, observes the witnesses, considers the arguments of counsel, and weighs and balances the equities. After so doing, his determination should not be disturbed in the absence of abuse of discretion.
Plaintiff has failed to show that the court abused its discretion in denying the motion for a preliminary injunction. Huskins v. Hospital, supra, 238 N.C. 357, 78 S.E. 2d 116 (1953).
If the appeal is not dismissed, the decision of the Court of Appeals should be affirmed.
Justices COPELAND and Exum join in this dissenting opinion.

. Defendant left the employment of Design Poly-Bag Corp., an affiliated company of plaintiff, on 18 September 1981. Assuming for the sake of argument that defendant’s termination agreement with A.E.P. applied to his employment with Design Poly-Bag, the eighteen-month period would have expired 18 March 1983.