Court Opinion

ID: 9657889
Source: CourtListenerOpinion
Date Created: 2023-08-23 20:40:23.486804+00
Date Added: 2024-06-11T18:13:49.172001
License: Public Domain

BIEGELMEIER, Presiding Judge
(dissenting).
The North Dakota Supreme Court has had four cases before it involving restraint of trade contracts:
(1) Bessel v. Bethke, 56 N.D. 1, 215 N.W. 868, where in a sale of a business the vendor agreed not to engage in a com*486peting business in "the city of Harvey, nor at any other place within a radius of 15 miles";
(2) Olson v. Swendiman, 62 N.D. 649, 244 N.W. 870, where a dentist agreed not to practice in the "city of Grand Forks, N.D., or the city of East Grand Forks, Minn.";
(3) Igoe v. Atlas Ready-Mix, Inc., N.D., 134 N.W.2d 511, where the restraint was "within the City of Bismarck or the City of Mandan"; and
(4) Mandan-Bismarck Livestock Auction v. Kist, N.D., 84 N.W.2d 297, where seller agreed not to engage in business in the Counties of "Morton and Burleigh".
While it denied specific performance in (4) for the reason the contract was void, it enforced the contracts in (1), (2) and (3) by following the "blue pencil rule" mentioned in the Igoe opinion by blue pencilling or striking out the illegal part and enforcing the legal remainder in each case, thus striking out the divisible and separable "15 miles" in (1); "East Grand Forks" in (2) and "Mandan" in (3) as they were in violation of its similar statute, N.D. Century Code, § 9-08-06.
We are not confronted with the approval of that rule as the court here goes further and enforces the agreement, not by reference to or application of the blue pencil rule, but by changing the contract of the parties in striking out all the provisions and words of restraint relative to its larger territorial area and 10 years after termination of the contract and inserts a restraint to the City of Spearfish and that part of Lawrence County located within 25 miles of his former employer's place of business therein for 10 years from the date of the contract.
Because contracts in unreasonable restraint of trade are invalid against public policy, 17 C.J.S. Contracts § 238, and the contract at bar exceeds both in territory and time the standard of reasonableness fixed in SDCL, 1967, § 53-9-8 and § 53-9-11, it should not be enforced.