2017 IL App (3d) 160761
Ill. App. Ct.2018Background
- QTS (broker) and MTT (carrier) entered a July 26, 2011 transportation brokerage agreement; paragraph 19 contained a nonsolicitation covenant forbidding carrier solicitation of broker’s customers in certain circumstances and providing a commission remedy if breached.
- Under the agreement, MTT hauled routes for US Silica Company (USS) that QTS brokered (Ottawa/Utica to Rochelle, etc.).
- In early 2015 USS transportation coordinator Janice Casey contacted MTT about available trucks; MTT and Casey exchanged meetings and multiple rate proposals; MTT ultimately lowered a bid and began hauling directly for USS in June 2015.
- QTS sued, alleging MTT solicited USS in violation of the covenant; MTT moved for summary judgment asserting USS initiated contact (so MTT accepted unsolicited business) and alternatively that the clause is unenforceable.
- The trial court granted summary judgment for MTT; the appellate court reversed and remanded, finding factual disputes about whether MTT’s subsequent contacts constituted solicitation and holding the nonsolicitation clause was reasonable and enforceable.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether MTT solicited QTS’s customer in violation of the nonsolicitation clause | MTT’s repeated contacts, bids, and meetings after initial contact amounted to solicitation that diverted QTS’s customer | USS/Casey initiated contact; agreement permits acceptance of unsolicited business, so no solicitation | Reversed: factual dispute exists whether MTT’s conduct constituted solicitation; remanded for factfinder |
| Whether mere initial contact by customer bars finding solicitation | Solicitation can occur even if customer first called; subsequent affirmative efforts matter | Initial customer call is outcome-determinative and MTT merely accepted unsolicited work | Court: identity of initial contact is not dispositive; intent and method matter, creating triable issues |
| Enforceability of the nonsolicitation provision | Clause is a reasonable, narrowly tailored protection of QTS’s customer relationships and thus enforceable | Clause is an unreasonable restraint on trade and unenforceable | Clause is reasonable and enforceable (limited scope, one-year restriction, allows unsolicited business) |
| Whether summary judgment was appropriate | QTS: disputed facts and competing inferences preclude summary judgment | MTT: undisputed facts show acceptance of unsolicited business; entitled to judgment | Summary judgment improper; issues of intent and solicitation reserved for trial |
Key Cases Cited
- Tomei v. Tomei, 235 Ill. App. 3d 166 (1992) (whether contact is solicitation depends on method and intent toward a client in need)
- Williams v. Manchester, 228 Ill. 2d 404 (2008) (triable issue exists where reasonable persons might draw different inferences from undisputed facts)
- Reliable Fire Equipment Co. v. Arredondo, 2011 IL 111871 (2011) (restrictive covenants upheld if reasonable and supported by consideration; inquiry is totality of circumstances)
- DeSaga v. West Bend Mut. Ins. Co., 391 Ill. App. 3d 1062 (2009) (summary judgment reviewed de novo)
- Woods v. Pence, 303 Ill. App. 3d 573 (1999) (summary judgment is drastic and appropriate only when moving party’s right is clear)