Court Opinion

ID: 6710064
Source: CourtListenerOpinion
Date Created: 2022-07-20 22:35:12.437872+00
Date Added: 2024-06-11T12:43:34.844113
License: Public Domain

Justice Meyer
dissenting in part.
I agree completely with the Court that the contract in question is enforceable. However, I must dissent from that portion of the opinion which overturns the injunctive restraint on the McMahons from employment with or other participation in Wilmington Auto Rental, Inc. The majority would prohibit the defendants McMahons from directly or indirectly soliciting the customers or accounts of Triangle Leasing Company, Inc. (hereinafter “Triangle”). Yet, it permits the McMahons to engage in the same business of auto leasing under the employ of the very party with whom the McMahons earlier conspired to pirate customers and accounts from Triangle. Because the majority affirms a right yet denies the only effective remedy, I must dissent.
It is human nature to tell what one knows arid to share that information which one has with a close business associate. There is little doubt that the McMahons can divulge • Triangle account *231and customer information to their business associate in the privacy of Wilmington Auto Rental offices without ever approaching a Triangle customer, even though doing so could and probably would result in a violation of the injunction not to indirectly solicit Triangle customers or otherwise reveal account information if the associate were to use that information. That they could do so with impunity is manifest; that there is a proclivity to do so is borne out by the facts.
The relevant part of the employment agreement states:
Employee will not, for a period of two (2) years from the date of termination of this Agreement . . . and within the State of North Carolina . . . , directly or indirectly, solicit or attempt to procure the customers, accounts, or business of [Triangle], or directly or indirectly make or attempt to make car of [sic] truck-van rental sales to the customers of [Triangle]. . . . Employee further agrees not to divulge the names, addresses, or other information concerning the customers and accounts of the Company or any other confidential information acquired during employment by the Company to any person, firm, corporation, association or other entity for any purpose whatsoever.
The employment contract unequivocally prohibits revealing customer and account information to other parties, particularly competitors such as Wilmington Auto Rental. Thus, covenants lying within the four corners of the document make clear that an injunction prohibiting employment with a competitor already shown to solicit and use confidential account information is one within the contemplation of the parties to the agreement.-
More importantly, however, and contrary to the notion of the majority, the four corners of the contract do not limit the injunctive relief available to Triangle. “[A] motion for a preliminary injunction is not to be confused with a request for specific enforcement of a provision jn a contract which has been proven valid and enforceable.” A.E.P. Industries v. McClure, 308 N.C. 393, 413, 302 S.E.2d 754, 766 (1983) (Martin, J., dissenting). “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.” Id. In the case currently before us, we are deciding *232the propriety of a preliminary injunction rather than the remedy of specific enforcement of a contract.
It is axiomatic that a court of equity may tailor the remedy necessary to preserve the rights of the complainant and that “a properly tailored injunction may sometimes contain terms that go beyond the plaintiffs rightful position to avoid falling short of it.” Schoenbrod, The Measure of an Injunction: A Principle to Replace Balancing the Equities and Tailoring the Remedy, 72 Minn. L. Rev. 627, 671 (1988). “The injunction’s aim must be the plaintiff’s rightful position, but to achieve that aim, its terms may impose conditions on the defendant that require actions going beyond the plaintiff’s rightful position.” Id. at 678. See, e.g., Hutto v. Finney, 437 U.S. 678, 687, 57 L. Ed. 2d 522, 532. (1978), reh’g denied, 439 U.S. 1122, 59 L. Ed. 2d 83 (1979) (where the Court stated that in fashioning a broad injunctive remedy, the lower court “had ample authority ... to address each element contributing to the violation . . . [and] was justified in entering a comprehensive order to insure against the risk of inadequate compliance” (emphasis added)). Assuming the majority is correct in characterizing the injunction prohibiting employment of the McMahons by Wilmington Auto Rental as a condition going beyond the rights of plaintiff, I conclude that such a condition was a reasonable and necessary one designed to ensure against noncompliance with that part of the prohibitory injunction upheld by the majority.
Nonetheless, it appears to me that the narrow prohibition against employment here was a proper one enforcing Triangle’s explicit rights. Here, the trial court determined that plaintiff was likely to show that the McMahons conspired to violate the employment agreement. Injunction is a proper remedy where a stranger attempts to induce another to break a contract which will result in irreparable injury to the rights of the complaining party. Sineath v. Katzis, 218 N.C. 740, 755, 12 S.E.2d 671, 681 (1941); see also Annot. “Liability for procuring breach of contract,” 26 A.L.R.2d 1227 § 46, at 1275 (1952). Moreover, “[injunction is an appropriate and available remedy to prevent irreparable injury to property rights or business from illegal conspiracies or confederations of persons for the purpose of destroying or injuring or doing violence to such business or property rights.” 42 Am. Jur. 2d Injunctions § 73, at 818 (1969). “[S]uch relief is available notwithstanding the fact that the plaintiff may not be entitled to specific performance of the [employment] contract, either positively or negatively.” Id. *233§ 98, at 847. In this case, the trial court did not issue an injunction against Wilmington Auto Rental or Joseph G. Priest barring them from further soliciting the breach of the employment agreement, only because “the legitimate business interests of [Triangle] are protected if . . . [the McMahons] are enjoined from employment and other participation in the operation of Defendant Wilmington Auto Rental, Inc.” Yet, the majority would permit the McMahons, as 20% shareholders, to rejoin the 80% shareholder, Mr. Priest, in a business confederation formed as a conspiracy to breach the very covenant which the majority claims it is upholding.
“Although in reviewing the denial of a preliminary injunction this Court is not bound by the findings of the lower court, there is a presumption that the lower court’s decision was correct, and the burden is on the appellant to show error.” A.E.P. Industries v. McClure, 308 N.C. at 414, 302 S.E.2d at 766 (Martin, J., dissenting) (citations omitted). A preliminary injunction is issued for the purpose of preserving the status quo pending the action and will issue to prevent injury being committed or seriously threatened. Conference v. Creech, 256 N.C. 128, 142, 123 S.E.2d 619, 628 (1962); R.R. v. R.R., 237 N.C. 88, 93, 74 S.E.2d 430, 434 (1953). The injunction will issue “ ‘if, in the opinion of the Court, issuance is necessary for the protection of a plaintiffs rights during the course of litigation.' ” A.E.P. Industries v. McClure, 308 N.C. at 405, 302 S.E.2d at 761 (quoting Investors, Inc. v. Berry, 293 N.C. 688, 701, 239 S.E.2d 566, 574 (1977)). Plaintiff should not be required to submit to, or defendant permitted to, inflict continuous or frequent violations of the plaintiff’s rights. Where, as in this case, there is evidence of past wrongdoing by the parties enjoined and there would be grave difficulty in detecting future particular instances of the same type of disclosure, the trial court’s injunction barring the McMahons’ employment by Wilmington Auto Rental is a proper means to assure Triangle’s interest in preserving the confidentiality of its customer and accounts information. See, e.g., Philadelphia Record Co. v. Leopold, 40 F. Supp. 346 (S.D.N.Y. 1941) (injunction is appropriate where damages would be difficult to compute and particular instances of contract breach would be difficult to detect); see also 42 Am. Jur. 2d Injunctions § 23, at 756 (1969) (a court is not obliged to shut its eyes to the demands of justice; the rules of equity are less strict in issuing an injunctive order where a defendant threatens repeated perpetration of a wrong).
*234The preliminary injunction that issued from the trial court is not an overbroad one. The injunction does not prohibit defendants McMahons from engaging in the auto rental and sales business. Rather, all that is prohibited is that they do not • do so with a co-conspirator who knowingly induced the breach of an employment contract. Consequently, I conclude that the injunction in its entirety is both necessary and reasonable under the circumstances of this case.
Chief Justice EXUM joins in this dissenting opinion.