Court Opinion

ID: 9611775
Source: CourtListenerOpinion
Date Created: 2023-08-22 04:00:06.105629+00
Date Added: 2024-06-11T09:39:50.648578
License: Public Domain

Pearson, J.
(dissenting) — I must dissent from the majority opinion, for the following reasons.
(1) Under the guise of interpretation, the majority has broadened a noncompetition covenant beyond its specific terms, contrary to the express public policy of this state. See Wood v. May, 73 Wn.2d 307, 438 P.2d 587 (1968). There is nothing ambiguous in the covenant. The “City of Vancouver” is a well-defined geographical area. For the majority to say that 78th Street in Hazel Dell (some 2 miles north of the Vancouver city limits) is “well within the Vancouver metropolitan area” and consequently conclude that it is within the “City of Vancouver” is to ignore plain geography.
Economics as well as geography indicates that this covenant not to compete should be construed strictly. At least since the passage of the Sherman Act, the policy of the law has favored competition on the theory that under the stimulus of the open market place, producers of goods and services will produce more products at a lower price. Some justification has been advanced for restrictions such 'as the one at issue here. They allow, it is thought, ventures which would be thought to carry too much risk of failure without protections like covenants not to compete. However, these private protections must be weighed against the public in*960terest in lower prices and better services. Thus it is that courts write of reasonable restrictions. Restrictions on limited geographic areas and for limited amounts of time may be tolerable if they foster new business enterprise and remove some risk from ventures. However, such restrictions must be carefully weighed and strictly construed if the more basic economic policy of protection to the larger consumer group is to be advanced.
(2) The majority say that “Rippe’s business was competitive with the business he had previously sold to Doran.” This is an incorrect statement, not supported by any substantial evidence. In fact, the trial court excluded testimony which was offered to show the competition factor on the theory that such testimony was only relevant to the damage issue, which was precluded from proof requirements by virtue of the $10,000 penalty clause. It would be my view that such testimony was not only relevant, but absolutely essential to show a breach of the covenant where appellant located his business outside the city of Vancouver. Application of the theory discussed in 6A A. Corbin, Contracts § 1386 (1962), and cited in the majority opinion, is predicated upon damages flowing from the competing business, which is located just beyond the territorial limits of the noncompetition covenant. Where actual damages are not shown, there is no proper basis for applying the Corbin theory.
It is my view that the trial court was in error in sustaining appellant’s objection to the evidence offered by respondent, purportedly intending to show that a car wash near 78th Street in Hazel Dell would compete with a car wash in downtown Vancouver. If such evidence was available, it should have been allowed in order to see if recovery of damages should be allowed as per 6A A. Corbin, Contracts § 1386 (1962). It is somewhat difficult to perceive that two car washes located some 3 miles apart actually do compete for business with one another. My skepticism, however, should not preclude respondent the opportunity to show such competition, if he can.
*961I think a new trial would also enable the trial court to take testimony in support of its decision to grant a reasonable rental value to appellant, who was precluded from occupancy of the premises for some 11 months by a defaulting contract purchaser. The record in its present state does not support the award.