Court Opinion

ID: 9656433
Source: CourtListenerOpinion
Date Created: 2023-08-23 19:48:04.236056+00
Date Added: 2024-06-11T18:13:32.295771
License: Public Domain

VANDE WALLE, Justice,
concurring in part and dissenting in part.
I agree with the majority opinion that Hawkins has an obligation to pay Saunders under the contract. However, I do so on the basis determined by the district court, i.e., that notwithstanding the unenforceability of the agreement not to compete, “the true consideration for the promise to pay any sum over asset value was the seller’s good will which encompassed customer lists, customer relations, knowledgeable company employees and all those other considerations that have traditionally given a going business a value greater than the mere sum of its hard assets.” Not only do I believe the findings are not clearly erroneous, I believe they set forth the true reason the parties entered into the separate agreement not to compete, i.e., “for the plaintiff’s [Hawkins] tax advantage.” Under Rule 52(a), N.D.R. Civ.P., these findings should be set aside only if determined to be clearly erroneous. I would therefore affirm the judgment of the district court without the attempt on the part of this court to reform the contract to meet the requirements of Section 9-08-06, N.D.C.C., i.e., that an agreement not to compete must be limited to a specified county or city or a part of either.
*921If, however, the court is to reform the contract so that it applies in only one county as required by the statute in order to be valid, I would suggest that it be applied in McLean County. We are informed that Hawkins presently has no business in Ward County but has moved its business to McLean County. Therefore, following the decision in Mahlstedt v. Fugit, 79 Cal.App.2d 562, 180 P.2d 777 (1949), the contract should be made applicable in McLean County, where the Hawkins business is now located, not in Ward County. However, if we are going to reform the contract, the matter should be returned to the district court to determine in which county the agreement should be applicable.