Red D Freight v. Steven a Sexton
330834
| Mich. Ct. App. | Oct 24, 2017Background
- Plaintiff Redd Freight sought an ex parte temporary restraining order (TRO) against former independent contractor Steven Sexton and related defendants, alleging breach of a non‑solicit/back‑solicitation clause and misappropriation of trade secrets after Sexton contacted plaintiff’s customers.
- The parties had two written agreements: a 2011 contract containing a back‑solicitation addendum and a 2013 contract that omitted that addendum but included an integration clause and material changes (compensation timing, expense allocations, submission schedules).
- The trial court granted a TRO without notice; defendants moved to dissolve after a hearing, but the court continued the TRO.
- Judge Servitto dissented from the majority, arguing the TRO was improperly issued and should be vacated, or at minimum the matter remanded for discovery rather than declaring the 2011 contract unenforceable as a matter of law.
- Servitto reasoned (1) economic harm alleged is typically reparable at law; (2) the 2013 contract’s integration clause and material differences likely supersede the 2011 agreement (including the back‑solicitation clause); and (3) the plaintiff failed to show immediate and irreparable harm from a delay in giving notice as required by MCR 3.310(B)(1)(a).
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Standard for issuing a TRO | Minimal showing under MCR 3.310(B)(1)(a): specific facts showing immediate and irreparable injury from delay | TRO should be subject to the same four‑factor injunction analysis (likelihood of success, irreparable harm, balance of harms, public interest) | Servitto: TRO should be evaluated with the four‑factor injunction framework in addition to MCR 3.310(B)(1)(a); trial court abused discretion in issuing TRO |
| Irreparable harm | Plaintiff claimed ongoing harm from Sexton soliciting customers that requires immediate relief | Defendants argued harm is economic and thus reparable at law; plaintiff did not show injury would result specifically from delay in giving notice | Servitto: Economic harms are reparable; plaintiff failed to show immediate irreparable harm from delay — weighs against TRO |
| Likelihood of success on the merits | Plaintiff asserted the 2011 back‑solicitation clause remained enforceable and Sexton breached it | Defendants argued the 2013 contract superseded the 2011 agreement (integration clause and inconsistent terms) so the back‑solicitation clause is not enforceable | Servitto: Differences and integration clause in 2013 make success unlikely for plaintiff; factor weighs against TRO |
| Continuation of TRO after hearing (burden to justify) | Plaintiff maintained the parties intended 2011 terms to survive 2013 changes | Defendants argued plaintiff did not justify continuation because 2013 supersedes 2011 | Servitto: At hearing plaintiff bore burden and failed to justify continuation; trial court abused discretion and TRO should be vacated or remanded for discovery |
Key Cases Cited
- Granny Goose Foods, Inc. v. Teamsters, 415 U.S. 423 (limiting ex parte TROs to preserving the status quo and preventing irreparable harm only until a hearing)
- Thermatool Corp v. Borzym, 227 Mich. App. 366 (economic injuries are generally reparable and not irreparable for injunction purposes)
- Omnicom of Michigan v. Giannetti Inv. Co., 221 Mich. App. 341 (a later contract with inconsistent terms can supersede an earlier one)
- UAW‑GM Human Res. Ctr. v. KSL Recreation Corp., 228 Mich. App. 486 (integration clause evidence that later contract supersedes earlier contract)
- Archambo v. Lawyers Title Ins. Corp., 466 Mich. 402 (integration clause may be dispositive as to which contract controls)
- Michigan AFSCME Council 25 v. Woodhaven‑Brownstown Sch. Dist., 293 Mich. App. 143 (four‑factor preliminary injunction framework referenced)
- AFT Michigan, AFT, AFL‑CIO v. State, 493 Mich. 884 (dissent articulating TRO consideration factors consistent with injunction analysis)