Court Opinion

ID: 9701461
Source: CourtListenerOpinion
Date Created: 2023-08-25 22:20:10.716854+00
Date Added: 2024-06-11T18:21:23.848070
License: Public Domain

DUNN, Justice
(dissenting).
I would reverse the trial court’s granting of a summary judgment and remand the case for a plenary trial.
The contract not to compete stated among other things that:
Terminating partner shall refrain from carrying on a similar business including but not limited to the trade or business of accountancy, general ledger bookeeping [sic] services, tax planning, tax return preparation or audits or from directly soliciting present clientele of the partnership within Walworth County, South Dakota, from April 18, 1979, to and including April 18, 1981, or so long as the continuing partners or some of them and not as individuals, carry on a like business in Walworth County, South Dakota, whichever is shorter. (Emphasis supplied.)
It is my belief that there is a question of fact as to whether appellant is carrying on a similar business in Walworth County when he: (1) Set up a CPA office in Corson County just across the river from Mobridge within a week after the contract was executed; (2) advertised in a Mobridge phone directory “Cahill Neil D CPA West of City Res East of City”; (3) had a form letter drawn by his attorney whereby former clients could demand files from the appellants; and (4) advertised that he had terminated his association with Cahill and “would continue to provide all services that were previously available.”
The following notice was placed in the Faith, Aberdeen and other area newspapers:
NOTICE
Effective as of April 18, 1979 I have terminated my association with the accounting firm of Cahill, Kohlman, and Guhin, Mobridge, South Dakota. I am establishing an office at the A. C. (Art) Smith Residence which is located just west of Mobridge in Corson County across the Missouri River Bridge on the Sitting Bull Monument Road. To avoid delay later in the year, it would be advisable to establish files with this office as soon as possible.
The mailing address will be Route 2, Mobridge, South Dakota 57601 and the office telephone number will be 605-845-2484 until May 17 then the permanent number will be 605-845-2927.
I will continue to provide all services previously available.
Neil D. Cahill, C.P.A.
This would seem to raise a question of facts as to whether the language used in this notice fulfills his obligations under the advertising section of the contract, where it said he could put a notice in the papers regarding his termination with the continu*668ing partners and as to his “new line of business so long as it is not the same as continuing partners’ business.”
Finally, there is a question of fact as to whether appellee violated the entire spirit and intent of the contract. He accepted $85,000 from the appellants to refrain from competing with the continuing partners in Walworth County for a period of two years. In what I am sure he thought to be a skillful and shrewd manipulation of the contract he immediately set up shop and proceeded to carry on the same business in the same community in violation of the spirit and intent of the contract. “[P]arties to such contracts must not only comply with the letter but with the spirit thereof as well.” Siegel v. Marcus, 18 N.D. 214, 218, 119 N.W. 358, 359 (1909). See Johnson v. Stumbo, 277 Ky. 301, 126 S.W.2d 165 (1939). The majority would condone this “loophole justice.” I cannot. I would reverse and remand the case for a trial on the merits.