*1 A.E.P. Industries v. McClure INDUSTRIES, A.E.P. v. R. INC. BRUCE McCLURE
No. 445A82 (Filed 1983) May Appeal preliminary injunction appeal § Error 6.2— denial of 1. —immediate plaintiffs preliminary injunction The denial of motion for a to restrain deprived plaintiff breaching compete of a defendant from a covenant not to 1-277; immediately right appealable. 7A-27. and was G.S. G.S. substantial 21.8; compete —applicable § § 7.1— to 2. Courts Contracts covenants —validity law compete employment agreements governed not to were Covenants Jersey agreements provi- law of New where the contained a the substantive Jersey,” they “governed the laws of the State of New sion that would be question appear to be valid and enforceable under New and the covenants Jersey territory, they writing, time and law where are in are reasonable as to part employment, were based on were made a consideration, of the contracts of reasonable protect legitimate designed business interest of and »re to plaintiff employer. Injunctions preliminary injunction protection plaintiff’s rights § 3. 13.1— — issue, injunction determining preliminary the trial whether a should injury. question irreparable inquiry not limited to the court’s second court, Rather, if, injunction opinion in the issuance issue litiga- necessary protection plaintiffs rights during for the of a the course of tion. 7.1; 6; restraining § Injunctions § § 11.1— Contracts Master and Servant 4. injunction compete right preliminary to breach of covenant not to — preliminary in- plaintiffs for a have allowed motion The trial court should compete breaching in an junction a covenant not to to restrain defendant from that the cove- employment agreement where there was a reasonable likelihood merits; likely prevail plaintiff would was valid and that nant permanent injunction the cove- plaintiff sought to enforce was a ultimate injunction stage of preliminary compete; made at the nant not to the decision effect, became, merits because of a determination on the proceedings covenant; plaintiffs principal limitation of the duration of the time the brief nature; preliminary in- necessarily of a equitable in and the denial relief was plaintiff. effectively adequate relief to junction to foreclose would serve injunction Injunctions right preliminary § 13— remedy injunction; sought where the primary is an ultimate Where effectively adequate injunction to foreclose preliminary would serve of a denial (as remedy equitable) will suf- “legal” opposed plaintiff; where no relief fice; deny injunction in preliminary effect grant or the decision to and where merits, showing that the made a has in a determination on results rights necessary protection of its for the of a issuance during litigation. the course of IN THE SUPREME COURT v. McClure Industries *2 dissenting. Martin Justice Copeland join dissenting opinion. and Exum this
Justices
Appeals,
of the Court of
from decision
appeals
PLAINTIFF
(1982),
of
affirming
The Record discloses the of in the manufacture and distribution engaged Plaintiff States. On throughout the United products various polyethylene a sales hired the defendant October As office. out of North Carolina plaintiffs to work representative plaintiffs and consistent with employment, of this a condition information, proprietary its confidential and practice protecting agreement execute a written was required defendant alia, that: inter provided, a) me; continued your employment In consideration of b) you bonus which are a salesman’s your to me of payment c) my skills further development obligated pay; while my earnings potential increase anticipated
and an by your employed firm..... a) Industries, A.E.P. Inc. hereby acknowledge
I through- and sells them products and processes manufactures b) Industries, States; Inc. A.E.P. United continental out the solicitations ex- telephone mail and employ personal salesmen developing and tensively marketing products in the course of IN THE COURT SUPREME A.E.P. Industries v. McClure c) Industries, Inc.; the names of new customers for A.E.P. Industries, are not prospects Inc.’s customers and of the con- known the trade. As a generally consequence lists, and other prospect fidential nature the customer which has sales and financial information product, prices, my to me in employment been and be made available firm, not, my your I will the term of during the reason (regardless for a 18 months thereafter period my employment). for the termination of or indirectly, sole as a Directly proprietor, A. as a officer, stockholder, director, employee, partner, principal, *3 or become participate representative, engage, or other agent with, in, by or employed or be affiliated connected interested firm, association, to, or other any service corporation, render or or the same substantial- which shall market sell enterprise by or A.E.P. those marketed sold ly products similar Industries, my employ- of termination of Inc. at the time immediately period preceding within the 6 month ment or termination. such orders, any or service accept for orders
B. Solicit Industries, I whom or which contact Inc. of A.E.P. customer em- or while or serviced telegraph, mail personally, Industries, Inc. by A.E.P. ployed from, orders, any or service accept orders for Solicit C. whom or which was enterprise firm or other person, Industries, my term during Inc. of A.E.P. customer personally customer was or not such whether employment, or me. solicited serviced from, orders, any or service accept orders for D. Solicit Industries, I con- whom or which Inc. A.E.P. prospects of, during I learned names whose
tacted personally, Industries, Inc. of A.E.P. my employment term association, firm, individual, corpora- any Disclose E. benefit, any own my nor use enterprise, tion or other customer, trade, financial, informa- business, or sales product my in the course to me known shall become tion which Industries, being information Inc. such by A.E.P. in the generally not known to the extent confidential deemed trade.
A.E.P. Industries v. McClure F. I acknowledge the remedies at law for the any of the restrictive covenants contained in the breach immediately shall be deemed to be preceding paragraph Industries, and that A.E.P. Inc. shall entitled to adequate injunctive relief for such breach. having eight
After worked for the for approximately months, was promoted position manager. defendant of sales In this defendant was for the capacity responsible employment, training, supervision of all of sales plaintiffs personnel twelve southeastern states. Defendant had access to information concerning manufacturing requirements customers. 23 August
On defendant entered into a second written employment agreement the terms of which plaintiff, substantially were similar to the first agreement. The recited con- Furthermore, sideration in the 23 August agreement $100.00. was agreement the second limited expressly defendant’s activities to “the area of the continental United States located east of the River.” Mississippi 21 August
On and defendant entered into an alia, on Termination which Agreement provided, inter that: is, fact, manufacture, engaged WHEREAS, *4 and production distribution of various polyethylene plastic States, the products throughout directly United either or one or through more of its subsidiaries or affiliated com- panies; and the Employee employed has been for A.E.P.
WHEREAS, Matthews, in its primarily plant location at North Carolina time; significant for a period of and the by A.E.P. employment of the Employee WHEREAS, hereof; will terminate as of the date and Employee the will be by hired an affiliated WHEREAS, i.e., company, Poly Design Bag Corp., Jersey a New corpora- tion; and the Employee acknowledges that in his capaci- Whereas, A.E.P., ty employee as an of he was necessarily provided with a deal great of confidential and proprietory informa- v. McClure Industries A.E.P., customers of addresses of names and including tion of as all for same as well pricing needs and A.E.P. and product information and proprietory of confidential type the other entered into between agreement in a certain described by employment of his inception A.E.P. at the and Employee A.E.P.; and and agreed previously has Employee
WHEREAS, not to engage for such agreement consideration received to the ter- of time period subsequent activities for a certain A.E.P.; with and relationship mination of his into an additional wish to enter parties WHEREAS, herein to return for the consideration further agreement and (an Poly Corp. af- by Design Bag the hiring and expressed A.E.P.) of Employee. filiated corporation THEREFORE, NOW, acknowledge, hereto do parties as follows: agree understand and by acknowledges previous Employee 1. The vital, of Employee and as receipt acquisition
A.E.P. and his A.E.P. as information proprietory and confidential and Employee between Agreement in the described employment. of his beginning at the A.E.P. which commenced and val- of receipt good reacknowledges Employee The and reack- Agreement said earlier uable consideration viability continuing efficacy and reaffirms the nowledges of same. $20,000.00 in hand to receipt
2. In consideration of time period A.E.P. over such Employee paid receipt in consideration may agree, parties as the McClure, same, agrees Bruce Employee, any portion any pro- or disclose use any time hereafter he will not at acquired been A.E.P. which has information prietory employ- his previous a result of directly solely him lists that customer agrees Employee A.E.P. The ment with addresses together customers lists of prospective same, *5 same, information price acquired products and A.E.P. information of financial sales and and customers in- are information proprietory of confidential all items limitation, but by way Not Agreement. within this cluded IN THE SUPREME COURT A.E.P. Industries v. McClure way of hereto is a list of customers example, attached Industries, to names have been disclosed A.E.P. Inc. whose Poly Bag Corp. for the business of Employee. Except (an Design A.E.P.) not, affiliated corporation Employee circumstances, or with any any contact communicate under officer, or of the agent employee representative, principal, to customers of A.E.P. whose names have been made known on the and some of those names are set forth Employee attached list. all of the Employee reacknowledges
3. The reaffirms set forth representations acknowledgements previously Employee. between A.E.P. and the agreement an earlier included a to agreement compete This third covenant to in the two earlier agreements, geographic similar limitation areas “within a radius of 300 miles encompassing offices, otherwise, regional location at which of A.E.P.’s may be located.” to defendant’s respect subsequent
With includes a memo Poly Bag Corp., indicating the Record Design was to receive as follows: compensation that defendant Agreement Subject: Compensation year for 52 wks. commencing I. 1st 8/21/81 total Compensation $42,500 — A) —$20,000 to be in 52 paid equal A.E.P. for the attached con-
stallments consideration tract —no deduction. payroll B) weekly to for the paid draw Design $22,500 — yr. —no deduction. payroll 1st yr. only: 1st compensation Other C) company use of the continued provide
car. D) directly be billed Design telephone expense
Design. E) Design once in consideration of $100.00 to be paid
employment agreement. *6 399 IN THE SUPREME COURT McClure
A.E.P. Industries v. F) by Design and for provided paid to be space Office month. per $250.00
at net sales a rate of of total To be at 5% paid Commissions: $850,000 commencing after sales 8/21/81 monthly. paid 52 wks. to be subsequent year II. 2nd
A) on a of sales straight to be based 5% Commission monthly based subject change to be paid (Draw in selling price. on increases and decreases may be on a arranged commissions
against basis.) mutually agreeable B) space. office Design provide —to C) responsibility. All to be salesman’s expenses other Defendant, however, his termi- upon affidavit alleges pay months “severance” he was offered six plaintiff, nation with $42,000.00, in addition to a one salary of of one-half of his annual salary the same he was Poly at year Design Bag contract with seen the memo having He denied ever plaintiff. with the earning after he had executed the his new until concerning Termination. on August Agreement Poly Bag September on 18 Design from resigned Defendant August 1979 and the 21 the 23 August 1981. violation of immediately several of began contacting defendant agreements, formerly as a dealing he had been with which companies At least two of these plaintiff. sales manager salesman and (Chatham Elkin, C.,N. and Reeves Bros. Inc. of Manufacturing C.) Cornelius, list of customers attached to the N. on the appeared Termination. on August Agreement on grounds suit defendant brought against Plaintiff agreements covenants contained breaching was defendant conjunction 1981. In with this 21 August of 23 August suit, order to restraining stop a temporary motion for plaintiffs granted the covenants was October breaching defendant in effect until this order remained By parties, 1981. consent of the Snepp entered Judge 20 November 17 November On order. The court ruled restraining continuing an order A.E.P. Industries v. McClure motion for a pending the out- litigation come of the on 30 1981. Judge Snepp November denied *7 motion and dissolved the order temporary restraining 22 first entered October that there was conceding “probable cause to may believe that the at the but prevail hearing,” had “failed to establish through its evidence the any reasonable monetary likelihood of substantial Plain- damage.” tiff appealed denial of its motion for a preliminary injunction Appeals, affirmed to which opinion Judge Webb dissented.
Bell, Seltzer, Gibson, Park & by Myers James D. and Ronald T. Lindsay, plaintiff-appellant. for Elam, Stroud, Seaford, Stroud, McGinnis & Keith M.
defendant-appellee.
MEYER, Justice. [1] A preliminary injunction interlocutory nature, issued after notice and hearing, which restrains a party final pending 1A-1, determination on the merits. G.S. Rule 65. Pursuant § 7A-27, 1-277 G.S. and G.S. no lies to an appeal appellate court § § interlocutory from an order or ruling of a trial judge unless such order or ruling deprives of a appellant substantial right which he would lose absent a review prior to final determination. As we School, 351, 357-58, recently stated in State 908, 913, (1980): dismissed, 2d appeal U.S. The of a purpose preliminary injunction ordinarily preserve the status quo pending trial on the merits. Its is- suance ais matter of discretion to be exercised the hear- ing judge after a careful balancing of the equities. Its impact temporary and lasts no longer than the pendency of the action. Its decree bears no precedent guide the final deter- form, mination of the rights of the In parties. purpose, and ef- fect, Thus, it is purely interlocutory. the threshold question presented a purported appeal an order granting preliminary injunction is whether the appellant has been deprived substantial right which might be lost should the order escape appellate review before final judgment. If no such right is endangered, the appeal cannot be main- (Citations omitted.) tained.
A.E.P. Industries v. McClure Personnel, Inc., See Waters v. S.E. 2d 338 (1978); Williams, Pruitt v. S.E. 2d 348 The Court of Appeals did not consider the appealability of this interlocutory order. There is little doubt the denial of the motion for a preliminary injunction in this case deprived fact, plaintiff of a substantial right. as of the filing of this opin- ion, plaintiff has essentially lost its case because the eighteen month time limitation under the employment agreements expired Likewise, in March of 1983. order, as the trial judge noted in his had the preliminary injunction been granted, “the plaintiff would in effect have prevailed in the action no matter what the final Thus, determination might be.” it appears a case such as consideration, the one now under although involving a substan- essence, tive right appealing party, where time is of the *8 the appellate process is not the procedural mechanism best suited for resolving the dispute. The parties would be better advised to seek a final determination on the merits at the earliest possible Nevertheless, time. because this presents case an important ques- tion the affecting respective rights of employers and employees who choose to agreements execute involving covenants not compete, we have determined to address the issues. rule, general
As a a preliminary injunction is an extraordinary by measure taken a court preserve the status quo of the parties during It will litigation. be issued (1) only if plaintiff a is able to show likelihood of success on (2) the merits of his case and if a plaintiff likely is to sustain issued, if, irreparable loss unless the is or in the Court, opinion of the necessary issuance is protection the of a plaintiffs rights the course during litigation. Waff Bros., Bank, 198, 273; Inc. v. 289 221 S.E. N.C. 2d Pruitt v. Williams, 368, 348; 288 218 S.E. N.C. 2d v. Conference Creech, 128, 256 123 S.E. N.C. 2d Investors, 688, 701, 566, Inc. v. 293 Berry, 574 N.C. 2d is, therefore,
The first of the stage inquiry whether plaintiff is able to show likelihood of success on the merits. In the present case, the trial “that judge probable conceded there cause to plaintiff may believe the at the that prevail hearing” “plain- 402 v. McClure Industries an for issuance of a temporary
tiff out case apparent makes Thus the court equity.” some trial junction by recognized showing the agreements a likelihood that found that there was reasonable likely would prevail valid and that were reasonable and merits. the [2] granting We note that on denying appeal injunction, an order appellate superior court court evi may the findings, weigh but review and not bound 368, Williams, v. for itself. Pruitt dence and find facts 232, 348; Plastics, Inc., 287 Co. v. 218 S.E. 2d Telephone 357, (1975); 2d 116 S.E. Hospital, S.E. Huskins 2d court before questioned Plaintiff before trial the employment effect of a in Appeals provision the laws “governed that would agreements agreements 1) Thus, Jersey.” we must first State of New consider of the are, fact, Jersey agreements, governed New whether the 2) so, law, if whether there is a likelihood that Jersey New law. light on the merits prevail Co. v. Byrd, we stated Land question, As to the first (1980), “where to a parties 2d S.E. law substantive agreed given jurisdiction’s have contract contract, such a contractual interpretation shall govern a New effect.” We note that will be provision given Jersey in New and that with Jersey corporation headquarters contacts had numerous employment, his defendant during substan- Jersey office. We therefore hold New *9 Jersey applicable interpretation New is tive law of agreements. Jersey validity and New law the area of review of
Our enforceability compete not to indicates covenants are similar to those in North Carolina. governing principles and enforceable compete a covenant not valid this State it is: showing upon
1. In writing. of a contract of employment. 2. Made part Based on reasonable consideration. 3. IN THE SUPREME 403 COURT Industries v. McClure
4. Reasonable both as to time territory.
5. Not against public policy.
Jones,
284,
(1967);
U-Haul Co. v.
269
152 S.E.
2d 65
Exter-
Jones,
minating Co. v.
Co. v.
Exterminating
Griffin
179,
(1962);
sidered, as a prerequisite to the enforceability of noncompetitive employment agreements:
1. Whether
the covenant
is reasonable as to time and
Mailman, Ross,
Edelson,
territory.
etc. v.
183 N.J. Super.
404
McClure
Industries v.
fact,
has,
violated the terms
the employee
4. Whether
Edelson,
Mailman, Ross,
183
v.
N.J.
etc.
of the covenant.
434,
For North Carolina
Morrow,
(1970);
475,
272
Box
Jewel
Stores
173 S.E. 2d
659,
(1968);
Swartzberg,
Moskin Bros. v.
S.E. 2d 840
(1930);
539,
Assoc. v. Ingram,
The with the trial Appeals agreed in denying injunc- “the trial court did not abuse its discretion harm to showing irreparable tion based on inadequate McClure, . . . .” A.E.P. at App. Industries 2d at liminary injunction should
[3] We first
emphasize
issue,
the trial court’s second
determining
whether
inquiry
pre
injury.
injunction
The
question
irreparable
not limited to the
Court,
“if,
necessary
in the
of the
issuance is
opinion
issue
the course
rights during
litiga
protection
Investors,
at
It a basic contract principle is remedy money damages at for of a law determining adequacy difficulty the amount uncertainty determining is the IN THE SUPREME COURT Industries v. McClure to be awarded for defendant’s breach. 5A damages See Corbin Thus, where the “injury irreparable damages Contracts § only by conjecture, by any are estimable and not stand- accurate fact, Injunctions 42 Am. in holding ard.” Jur. 2d 49§ to injunctive that a was entitled relief for breach of a not to covenant this characterized as “untenable” compete, Court that a contract argument provision liquidated damages Jones, provided remedy at Co. v. adequate law. U-Haul 287, 152 This at S.E. 2d at 67. has further held that it not essential it be injury constitute irreparable “[t]o injury beyond repair shown that possibility pos- damages, injury but is one compensation sible should not or the complainant required submit inflict, other and is of such continuous and fre- party permitted recurrence no reasonable can be in a court quent redress had Troutman, 47, 50, Barrier v. 55 S.E. 2d law.” added). (1949) (emphasis *13 with of the agree implication We cannot the decisions below to entitled some measure although plaintiff legally that relief, no or in Those remedy equity. it has in law nevertheless to to plaintiff, unable a deter- imply assign decisions seem competitive to has no ade- practices, minable value defendant’s remedy “damage, at it has sustained no law. And because quate relief, too, or is foreclosed. Yet irreparable,” reparable equitable to reasonable given legally recognizable right has been protection against competition: all carefully contracts a man’s limiting scrutinize
‘Courts
any
anywhere
or
he
profession
to follow
trade
right
natural
just
important
manner. But it is
and
lawful
pleases
or
of an
enjoyment
pro-
to
fession,
establishment
trade
protect
by
has
his own honest
up
which
built
possessor
its
duty
to
every-day
performance
the faithful
and
application
day
ordinary
man.
every
imposes upon
tasks
his. Public
does
policy
one
his own
What
creates
labor
shall
reap
than the producer
not
intend that another
right
to him who labors the
of labor.
it gives
fruits
Rather
and
the fruits
his labor
protect
means
every legitimate
Freedom
con-
of them to himself.
enjoyment
secure
unreasonably
Neither must
abridged.
must
tract
McClure
A.E.P. Industries v.
which a man
restrictions
by reasonable
right
protect
be denied.’
up,
has built
judgment
and
by industry,
good
skill
315,
228,
223,
Gillis,
317-318
See
197 N.C.
v.
Scott
316;
475,
Heim,
Jewel
S.E. 2d
276 N.C.
Inc. v.
Enterprises,
659,
Morrow,
was
840. Plaintiff
158 S.E. 2d
v.
Box Stores
enforcement
relief—the
to ultimate
clearly
equitable
entitled
in competitive
engaging
defendant
prohibiting
the covenant
assuming
territory specified,
time and
within the
practices
legally binding:
was found to be valid
the agreement
restrictions
with
to enforceable
respect
rule
general
The
of the
that if the nature
Asheville
403-404,
man,
Inc.
Enterprises,
at
S.E. 2d at 595. See
316, 320;
Heim,
Moskin Bros. v.
173 S.E. 2d
The former was injunction proceedings in case of an to restrain as the equity, enforce an which could protect equity at law in order to and issued, course, in of upon coming of the not be and pleaded, bill, As soon as the defendant answered the without notice. for injunction, move to the and it was then he could dissolve discretion, court, say of its sound to the whether, the exercise answer, or, it is disclosed the on the facts confessed, termed, injunction the the technically upon equity If the facts hearing. or continued to the should be dissolved denied, fully fairly the the were and constituting equity some reason special was dissolved unless there was junction injunction, which is special it. Not so with a continuing for when the injury, prevention irreparable, for the granted only ultimate and court of is the equity aid of the preventive involved the suit. is the sought primary equity relief rule is not to dissolve injunctions the special In the case answer, may deny it though in of even the upon coming if hearing but to continue equity supposing cause probable there rea- and there is a maintain his primary equity
be able to
unless it remains
loss
irreparable
sonable apprehension
force,
reasonably
appears
of the court it
opinion
or if in the
controversy
until the
necessary
right
protect
It is gen-
can be determined.
him and the defendant
between
concerning
are at issue
erally
parties
when the
proper,
interlocutory injunction
right,
grant
equitable
legal
until the determination
quo
in statu
right
preserve
the prin-
the rule when
is this
controversy,
especially
because a dis-
an injunction,
is in
sought
cipal
itself
or the
injunction,
interlocutory
a pending
solution
refusal
instance, will
one,
in the
upon application
first
therefor
deprive
its merits
case upon
decide the
virtually
relief,
he should
though
even
remedy or
all
plaintiff of
a case.
good
show ever so
able to
afterwards
added). Pleaters,
158-59,
Inc. v.
82-83 (emphasis
49 S.E. at
Id. at
(1963);
131,
Finance
Kostakes,
Company
129 S.E. 2d
259 (1963);
College,
v.
Jordan,
Church
2d 882
259 N.C.
v.
Brotherhood,
(1961);
v.
Lines
Coach
[5] Because of the need for immediacy appropriate relief in dealing compete, example cases with covenants not to for not in a present engage case where defendant contracted to months, only eighteen business the law as stated competitive for We primary above is hold that where the particularly applicable. remedy injunction; is an where denial of a ultimate sought effectively serve to ade injunction would foreclose preliminary (as opposed equitable) where no plaintiff; “legal” relief to quate suffice; deny a grant where the remedy decision determination in effect in a on the injunction results preliminary merits, has of a showing made issuance necessary protection rights' for the of its preliminary course of during litigation.
Finally, we that our is in with the holding believe accordance in new tech” encourage growth “high State to policy of our dustry. North rapid technological accompanying “The advances employment oppor- industrial increased growth Carolina’s tunities, professional occupations, for technical and especially en- immediacy problem significance added gives forceability of covenants not to contained in compete H. Not Constangy, Employment Contract Covenants contracts.” Law, Enforceability 10 Wake Under North Carolina Compete: Forest L. Rev. has been the effective equitable While here denied (the injunction), which it since relief to was entitled completely has there elapsed, month restriction now eighteen a claim including other claims for still remains money damages. for substantial case is reversed and the Appeals The decision the Court Court, remand to the Superior
is remanded to court County, inconsistent proceedings for further Mecklenburg with this opinion. and remanded.
Reversed *16 v. McClure A.E.P. Industries dissenting. Justice Martin ap- are now moot and the by raised this appeal The questions 345, 132 260 Morganton, Fulton v. should be dismissed.
peal
(1963).
cannot restrain
687
“It is
obvious that a court
quite
S.E. 2d
Austin
already
which has been
consummated.”
of that
doing
662, 663,
702,
703
The
Dare
240
2d
County,
not com-
the defendant would
upon specified
contract sued
months after the date
period
eighteen
with
for a
pete
plaintiff
Industries,
by
employed
plaintiff.
which he ceased to be
on
4
1981.
non-
summarily
August
The
Inc.
fired defendant
the latest on 18
expired at
competitive eighteen-month period
injunction,
to an
March 1983.1 Even if
were entitled
not,
of discretion for
which I maintain it is
it would be an abuse
restraining defendant
preliminary injunction
court to issue a
The
agreement.
of the
in the
expiration
period specified
after the
is now
compete
of the covenant not to
eighteen-month period
fait
so,
the issuance
being
nothing
support
This
there is
accompli.
Brown,
at this time.
Com. v.
238 N.C.
Highway
of an
293,
A
Jones Co. v.
A.E.P. Industries consideration having pending 1977. That date July passed Court, relating pro questions this appeal this not before below are injunctive granted priety Parent-Teacher Assoc. Supreme us. As stated 675, 679, Education, 170 S.E. 2d v. Bd. (1969): Court, “When, develop- to this pending appeal occurs, questions originally *17 reason of the ment controversy the are no at parties longer in between issue, will be dismissed for the reason that appeal the proceed this will not entertain or a cause Court merely to determine abstract of law or to propositions in determine which should have won the party rightly court.” lower
Thus,
by
the in-
regarding
the
raised
defendants
questions
junctive relief
the trial court have been rendered
granted
Heim,
Inc. v.
Enterprises,
moot
of time. See
passage
(1970).
475,
276
S.E. 2d A preliminary injunction, here is an ex- sought, traordinary measure taken a court to preserve the status (1) parties of the It will quo during litigation. only be issued if a is able to show likelihood of success on the merits (2) if likely of his case and sustain irreparable if, issued, injunction unless the loss or in the opinion Court, necessary issuance is for the of a protection Bros., during the course of rights litigation. Inc. v. Waff Bank, 198, 273; Williams, 289 N.C. 2d Pruitt v. IN THE SUPREME COURT Industries v. McClure 348; Creech, 128, v. 218 S.E. 2d Conference S.E. 2d may A issue unless injunction not the movant carries E.g., each of these persuasion the burden of as to prerequisites. Williams, 218 S.E. 2d Pruitt v. Once this carried, burden in it still remains the trial court’s discretion Id. injunction. a preliminary whether the motion for grant Cf. (Cum. 1981). As 1-485 Ervin stated Supp. N.C. Gen. Stat. Justice § 357, 360, 119-20 S.E. 2d Hospital, Huskins (1953): interlocutory injunction issue an judge does not hearing The merely avowedly because as matter of course equitable writ on a recognized bases his for the application who judge While hears ground. equity permit does merits, does re- the cause on the it decide application in determining him to exercise a sound discretion quire interlocutory granted should be whether refused.
I a motion for a preliminary at outset emphasize *18 a enforce- junction request specific to be confused with for not valid in a which has been proven ment of a contract provision extraordinary equitable for request The former a enforceable. controversy litigants. resolution of between the pending relief or stipulated after a has been either The latter arises contract established the movant has his valid and enforceable and proven has Although contract defendant right to have the enforced. suit, validity suggests in this record that the yet filed answer dispute is a of be- enforceability of these contracts matter ultimately on and will be resolved at trial tween the parties course, this is concerned of Court present appeal, merits. In the is, only preliminary injunction, motion for a the mo- denying court abused its discretion in whether the trial for relief. tion equitable may be cause that probable there it conceded that
Although
controversy,
the trial
merits of the
prevail
would
per-
carried its burden
that A.E.P. had not
court determined
denying plaintiff’s
In its order
irreparable damage.
suasion as to
stated:
injunction,
court
preliminary
motion
for
Industries v. McClure
In this case
plaintiffs
evidence does not establish
prima facie a case of irreparable
All of
damage.
the state-
ments contained in the complaint and affidavit are conclusory
only
and the
inference which can be drawn is that
the dam-
any,
if
ages,
be sustained
the plaintiff are
speculative
conjectural.
In view of the evidence as to the
out,
manner
which the
polyethylene
sales of
are carried
I
cannot find that
the plaintiff would as the result of defend-
activity
ant’s
sustain
damage, reparable
irreparable.
Thus,
carry
because
failed to
its burden
persuasion
loss,
a fortiori it
irreparable
failed to establish a reasonable ap-
prehension
irreparable
loss
interlocutory
unless
relief was
granted. Although
reviewing
denial of a preliminary injunc-
court,
tion this
is not
bound
findings
the lower
Bank,
198,
(1976);
Bros. v.
An
applicant
injunction must do more than
allege that he is apprehensive that
loss will
irreparable
occur. He
to set out with
required
particularity the facts supporting his
allegations so that the court can decide for itself whether there is
apprehension
reasonable
irreparable
injury
unless
Plastics,
Inc.,
terlocutory
is granted.
Co. v.
Telephone
Garibaldi,
Pharr v.
supra;
S.E.
2d 18
A
injunction,
prohibitory preliminary
such as the one
sought
case, will
granted only
instant
irreparable injury
when
is real
Plastics, Inc.,
and immediate.
Co. v.
Telephone
supra; Membership
*19
Co.,
v.
Corp.
Light
ly with A.E.P.’s thus products, competitive affiant also stated: not Plaintiffs sole compete. covenants confiden- my utilizing that the It is honest belief defendant in ma- contacting information and such tial of of customers Such activities the defendant jor plaintiff. sales highly plaintiffs program, are damaging great of effort and through expenditure was established finances, leading confusion these damaging are also plain- in the defendant was employed customers that year, such con- August tiff until 21 of this so that customers him represent plaintiff. tacted no doubt consider to still activities, only ... If continues such the defendant suffer irreparable the sales program nature of information damage, but also the confidential seriously will be utilizing jeopardized. which the defendant affidavit, in his own defendant submitted addition to reply, managerial sales or associated employees the affidavits A.E.P.’s had after leav- six of customers defendant contacted These concurred employment. employees generally ing plaintiffs them left in that Mr. had contacted after he stating McClure had ceased Poly-Bag; that he informed them he had Design himself; for A.E.P. was in that neither working business nor customer lists were secret or product specifications lists in manufacturing polyethyl- the sales and market for confidential bid competitive ene and that the market products; operated which, from system or after the submission of bids quote who had the decision product specifications, salesmen studied factors, place with whom to an order was based on a number of service, of these reliability, Several including quality, price. they placed stated that had trial orders with McClure employees him; had stated that receiving after bids others McClure with their com- merely doing an interest business expressed panies. while con-
I with the court defendant’s agree superior contract, may has may not have been breach duct facts particularity allowing enough to set forth with failed reasonable apprehension irreparable conclusion that there is *20 416 IN THE SUPREME COURT
A.E.P.
Industries v. McClure
jury
preliminary injunction
granted.
unless a
is
To demonstrate a
one
apprehension
irreparable
injury,
reasonable
of
must show
injury
very likely
injunctive
that
is
if
is
irreparable
occur
relief
injury
not
In this
if
granted.
irreparable
context an
it cannot
money
compensated
damages. E.g.,
in
Frink v. Board
adequately
Further, there has been no credible demonstration defendant confidential exploited information in con- tacting various customers of plaintiff. Several af- defendant’s fiants, customers, employees sales of these stated that product specifications readily were anyone available to re- industry questing them and that of potential lists polyethylene customers Further, were published periodically. defendant had worked as salesman of polyethylene products the Southeast for eleven years becoming before employed plaintiff, and he stated that before joined he he identity was aware of the great majority of the industrial users of polyethylene upon whom he has leaving called since Design Finally, Poly-Bag. there is no evidence that defendant’s contacts with A.E.P. customers has damaged A.E.P. because such customers “no doubt consider to represent the plaintiff.” contrary, On the defend- [defendant] them, ant’s affiants stated that when he contacted defendant had clearly stated each that was he no longer working for A.E.P. and that he was in business for himself.
A.E.P. Industries v. McClure The majority states:
We hold that where the primary remedy ultimate sought injunction; where the denial of a preliminary injunction would serve effectively to foreclose adequate relief to plain- (as tiff; where no “legal” opposed to equitable) remedy will suffice; and where the decision grant deny to a prelim- inary injunction in effect in results a determination on the merits, plaintiff has made a showing that the issuance of a preliminary injunction necessary for the protection of its rights during course of litigation.
The statement
authority,
without citation of
and well it should
be, as there is no
basis
in
legal
for it
the laws of our state. This
“holding” removes the requirement of a showing of real and im-
mediate irreparable
injury before preliminary injunctive relief
can be allowed. It is a well
established rule North Carolina that
injunctive relief will
granted only
when irreparable injury is
Plastics,
Inc.,
both real and immediate.
Co. v.
Telephone
supra,
232,
(1975);
287
214
N.C.
S.E. 2d 49
Membership
Corp.
Light
Co.,
(1961) (and
56,
256
supra,
122 S.E.
N.C.
2d 761
cases cited
therein). The ultimate decision
injunctive
whether
to grant
remains within the discretion of the trial
after
judge
a party
establishes
prima
facie
to
showing
support such relief. Huskins
v. Hospital,
238
78
supra,
N.C.
S.E. 2d 116
In the
discretion,
absence of a
of abuse of
showing
such decision is bind-
Harmon,
ing
(1956).
us.
upon
Harmon v.
In addition apprehension injury, of proving irreparable burden reasonable trial its the issuance implicitly opinion court held necessary protect plaintiffs was When litigation. weighing the course of rights during parties, the court found: between equities his livelihood and sup- Since 1965 has earned [defendant] family himself and as a sales- ported through his skilled in field long man of He was polyethylene products. plaintiff. before he went work He used *22 of the he had ac- knowledge theretofore any of of names and addresses customers the quired of his for them performance the duties gained during secret, not nor information general concerning is trade is Britt, of Kadis plaintiff. supra the methods business v. 154, 29 (1954)]. S.E. 2d 543 in If the is restrained this engaging [defendant] to months the him period eighteen injury business for a of immediate, and he could not made whole be real and be ultimately he a determination of though prevails upon even the merits. hand, the has to establish
On the other failed likelihood substan- its evidence the reasonable of through plain- the is the monetary granted tial If damage. no in effect in the action matter prevailed tiff would have what final determination be. might the of in exercise the discretion based
Therefore the Court’s I to in this case a analysis, decline issue upon foregoing the of the mat- the determination temporary injunction pending ter. its majority rely upon the would statement
Whereas effectively to would serve preliminary injunction “the denial of a in whether determining relief to plaintiff’ foreclose adequate issue, the trial must also consider judge should the relief junctive is, his discretion. That the exercising of that coin in side opposite injunctive the of granting must also consider judge trial the validity defense to may effectively foreclose defendant’s relief adversely to him the case the effect decide contract Wedgewood Corp. Lamb v. South before he to opportunity has be heard the This upon merits. one of the reasons that the grant ultimate decision whether to is left equitable to the sound the discretion of trial judge. this, case such as no matter how judge the with to respect rules relief, request injunctive effectively he is deciding the respect issue the enforcement the covenant not to com- be; This as it pete. should judge trial is in the best position evidence, this exercise discretion. He hears observes the witnesses, counsel, considers arguments and weighs and balances the so equities. After his not doing, determination should be disturbed absence of abuse of discretion.
Plaintiff has failed show court abused its discre- tion in denying the motion for injunction. a preliminary Huskins supra, S.E. Hospital, 2d 116 dismissed,
If the appeal decision Appeals should affirmed. opinion.
Justices COPELAND and Exum join dissenting this LAMB, HOFFMAN GWENDOLYN Executrix Estate of Thomas Wade *23 CORPORATION, HILTON, INC., Lamb v. WEDGEWOODSOUTH STATLER INNS, INC., WEAVER, W. H. W. H. HILTON WEAVER CONSTRUCTION COMPANY, INC., DUDLEY, JR., Individually, HARRY R. LOUIS RIGHTMIER, Individually, MORRISETTE, Individually, H. B. THOMAS DUDLEY, RIGHTMIER, ASSOCIATES, MORRISETTE AND a Profes- TEAGUE, Association, DARRELL W. E. TED CRAD- GRIFFIN sional DOCK
No. 156A82 (Filed 1983) May Appeal § discretionary Error 20— review of denial for sum- motions mary judgment error reviewing Appeals The erred court’s denial some trial summary judgment plaintiffs since defendants’ motions claims against allegedly negligent the defendants rest their acts as well as their rarely responsibility agency principles, negligence under claims are summary adjudication ordinarily
susceptible of and should be resolved trial of the issues.