Jim Daws Trucking, LLC v. Daws, Inc.
4:24-cv-03177
| D. Neb. | Apr 8, 2025Background
- This case stems from the sale of a trucking business, Daws Trucking, by Jim Daws and Daws, Inc. to Jim Daws Trucking, LLC (JDT) under a May 2022 Asset Purchase Agreement (APA), including a broad non-compete.
- $4.5 million of the $12 million purchase price was explicitly allocated to goodwill. The APA barred Jim Daws, Lana Daws, and Daws, Inc. from engaging in the "business of trucking" nationwide for five years.
- After the sale, relationships soured, and Jim Daws allegedly began collaborating with others (including former JDT employees and his own entities) to compete in trucking, particularly through Loyal Trucking LLC, despite the non-compete.
- Following mass resignations, JDT lost key personnel and significant operations. JDT then sued for breach of the non-compete, breach of fiduciary duty, and other claims, seeking a preliminary injunction and contempt sanctions for alleged TRO violations.
- A hearing was held. The court found sufficient evidence that Jim Daws was involved in efforts to relaunch a competing trucking operation in violation of the APA's non-compete.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Enforceability of Non-Compete | Reasonable, necessary to protect goodwill and national in scope | Unenforceable: Overbroad industry/geography, excessive duration | Valid and enforceable |
| Breach of Non-Compete | Jim engaged in competing trucking efforts post-sale | No violation; only leasing/selling trucks, not competitor | Sufficient evidence of breach |
| Threat of Irreparable Harm | Goodwill/reputation cannot be remedied by damages | Injunction harms employees/contractors; speculative harm | Threat of irreparable harm shown |
| Contempt Sanctions for TRO Violations | Jim omitted/misrepresented ongoing competing efforts | Any omissions inadvertent; no clear violations | Denied (but warned re: compliance) |
| Turnover of Bank Funds | Funds belong to JDT, not Jim; needed for ongoing ops | Jim claims entitlement due to buyer’s default | Funds to be turned over to JDT |
| Preliminary Injunction | Needed to bar ongoing competition and protect assets | Overbroad; harms unrelated parties/companies | Granted, with specified scope |
Key Cases Cited
- Aon Consulting, Inc. v. Midlands Fin. Benefits, Inc., 275 Neb. 642 (standards for enforceability of non-compete agreements)
- Chambers-Dobson, Inc. v. Squier, 238 Neb. 748 (covenants not to compete in connection with sale of business)
- H & R Block Tax Servs. v. Circle A Enters., 269 Neb. 411 (reasonableness and necessity of non-compete provisions)
- Presto–X–Co. v. Beller, 253 Neb. 55 (scope and duration of non-compete must be reasonable)
- Med Shoppe Int’l, Inc. v. S.B.S. Pill Dr., Inc., 336 F.3d 801 (loss of goodwill/reputation constitutes irreparable injury)
- Johnson v. Minneapolis Park & Recreation Bd., 729 F.3d 1094 (Dataphase preliminary injunction factors)