Allen Indus., Inc. v. Kluttz, 248 N.C. App. 124

Allen Industries sued former employee Jody Kluttz alleging breach of a non-compete and misuse of customer/confidential information after she took a sales role with a direct competitor.
Plaintiff obtained a preliminary injunction (with a $20,000 bond) barring Kluttz from working for Atlas Sign Industries through March 14, 2014.
Kluttz appealed the preliminary injunction; the Court of Appeals dismissed that appeal as moot after the covenant expired.
Plaintiff voluntarily dismissed the underlying action after remand. Kluttz moved to recover the $20,000 injunction bond, arguing the injunction was wrongfully entered.
The trial court denied recovery, finding the covenant reasonably protected plaintiff’s legitimate business interests and that the injunction was not wrongfully issued.
Kluttz appealed the denial of damages on the preliminary injunction bond; the Court of Appeals affirmed.

Issue	Plaintiff's Argument	Defendant's Argument	Held
Whether Kluttz is entitled to recover damages on the preliminary injunction bond	Plaintiff argued its preliminary injunction was justified by the covenant protecting confidential customer/sales information	Kluttz argued voluntary dismissal of the suit equates to a determination that she was wrongfully enjoined and thus entitled to the bond	The court held Kluttz was not entitled to recovery because the injunction was not wrongfully issued under the facts and contract; voluntary dismissal alone does not automatically entitle recovery

Indus. Innovators, Inc. v. 99 N.C. App. 42 (discusses standards for when a defendant is "wrongfully enjoined" and recovery on injunction bonds)
Blatt Co. v. Southwell, 259 N.C. 468 (voluntary dismissal may be treated as a confession that injunction was wrongful unless dismissal is by agreement of the parties)