*1 CASES Argued and Determined in the COURT OF APPEALS
OF North Carolina
AT Raleigh R. JEFFREY P.A. v. K. CARROLL KENNEDY and JERRE KENNEDY
No. COA02-1198 (Filed August 2003) Appeal 1. appealability and Error— preliminary —denial rights affected — substantial
The a preliminary injunction denial of to enforce a covenant compete interlocutory was but reviewable appeal on rights because substantial were affected.
2. Parties— dental of covenant not to — enforcement standing corporate entity — correctly The trial court refused to find that profes- corporation sional was proper party not the interest standing lacked purchase to enforce a agreement for a dental practice which compete. included a covenant not to evi- dence of an assignment rights plaintiff-cor- and obligations to poration sufficient, nothing in the record contradicts evidence plaintiff-corporation rights had and obligations the agreement. under Moreover, shown has a likelihood of success in establishing estopped that defendants are from denying validity assignment employment because ben- accepted plaintiff. efits were OF APPEALS IN THE COURT D.D.S., KENNEDY, v. KENNEDY P.A. *2 grounds appellate review novo Injunctions—
3. —de only if is preliminary injunction will be issued A plain- and if of success on the merits able to show the likelihood injunction if irreparable or likely loss without the tiff is to sustain necessary protection plaintiff’s rights of for Appellate review is de novo and litigation. during the course of by findings of appellate not the trial court’s court is bound findings enter its own may weigh the evidence anew and fact but conclusions. and Employee— compete— not to Employer
4. covenants and elements compete not restrain trade and are scrutinized
Covenants to enforceable, they strictly. writing, must based be be To necessary reasonably protec- consideration, valuable interests, as to time and business reasonable legitimate tion policy. At time territory, against public and not otherwise entered, par- are containing the covenants both the contracts as reasonable and apparently regard the restrictions ties must desirable. to Employer Employee— not
5. and covenant — den- tistry place and —time — reasonable compete restricting practice den- only A to covenant not place tistry to where it covered reasonable as time only years flowing den- applied mile three a 15 radius and for departure practice. from the tist’s Employee— compete— not Employer
6. employees— patients dentistry or solicitation — no reasonable leaving a compete restricting dentist A covenant not to soliciting practice employing employees and from does not cause substan- patients was reasonable. The restriction merely public health; most, it inconveniences harm to the tial hiring plain- patients. Prohibiting the solicitation dental public three-year period does violate employees for a tiff’s relationships goodwill protection policy customer protectable interest of the recognized legitimate as a is well employer.
JEFFREY R. 7. purchase agreement Contracts— for dental novation — practice agreement clear intent substitute new — no
There was no agreement evidence of clear intent that new purchase be agreement practice. substituted for dental parties simply they The agreed that longer no would work together, option specifically contemplated the agreement. purchase agreement 8. Dentists— breached — not repudiated trial court erred finding professional corpora- that a tion for practicing dentistry purchase breached a failing pay they defendants what due, unilaterally chang- *3 ing the compensation, method of and terminating one of the defendants. by The trial finding court also erred repudiated the agreement. Injunctions—
9. preliminary by novo review Court —de Appeals for issuance not sufficient — evidence preliminary
The evidence on a motion for a to enforce a covenant not to among dentists was not suffi- injunction. cient for issuance by The issue was not reached the trial court and was reviewed de novo Appeals. the Court of
Judge part Tyson concurring in dissenting part. in Appeal by plaintiff Judge order entered June 2002 Wade County in Orange Superior Barber in Court. Heard the Court of Appeals 11 June 2003.
TuggleDuggins Meschan, P.A., & Johnston, Reéd Jr., J. Denis E. Fields, Jacobson and Amanda L. plaintiff-appellant. for Law Stark, by Thomas H. Stark, Thomas H. Offices of for defendant-appellees. MARTIN,Judge.
Jeffrey Kennedy, D.D.S., R. (“plaintiff”) appeals RA. from order denying preliminary injunction. its motion for Wereverse and remand entry preliminary for of an order granting injunction. practice Chapel
Plaintiff is a dental Hill, located in North by Jeffrey Kennedy, Carolina and R. owned (“Jeff’). D.D.S. Defend- Kennedy, ant K. Carroll (“Carroll”) practice D.D.S. formed the In 1984, 1967. Jeff, nephew. Carroll hired In sold Carroll Jeff OF APPEALS IN THE COURT KENNEDY P.A. v. $250,000. and Jeff there- practice for Carroll interest in the a one-half time, years. partners During for five together after worked Kennedy, dentist, Jerre D.D.S. defendant practice hired associate July 1996, On 31 first cousin. Carroll’s niece and Jeff’s (“Jerre”), $250,000 practice to Jeff remaining sold his interest Carroll Purchase Agreement. The Asset an Asset Purchase through agreement, includ- incorporated into the several exhibits Agreement not agreement, which included covenant ing a restrictive pro- agreement, governed which Carroll’s compete, provider and a to practice (collectively, “the within the vision of services dental provided for an ini- Agreement The Purchase Agreement”). Purchase period employment five-year wherein Carroll’s tial non-termination only five-year period, Carroll terminated for cause. After could be prior any days with written notice. reason could be terminated continue in full force and agreement would The restrictive covenant provider terminated without agreement effect the event five-year period. non-termination following the initial cause agreed Carroll part the restrictive covenant As prac- dentistry mile radius of the open practice within fifteen period Street, Chapel for a com- 123 W. Hill tice located at Franklin July ending 1996and three on 31 mencing with the sale employment plaintiff. with years after ceased Carroll professional assign cor- Agreement allowed Jeff to guaranty provided assignee executed poration partnership, *4 jointly severally liable with under and Jeff the effect that it would be Agreement. the Purchase five-year expiration shortly of the non- August 2001, after
In informed him that he period, approached Carroll and termination Jeff employee regimented a more schedule as Carroll to work wanted mutually so, and the two practice. Carroll did not desire to do of the provided 2001, plaintiff Carroll agreed to disassociate. In October prac- parties’ leave the intent that Carroll written confirmation orally agreed affidavit, that he and Jeff tice. In his Carroll stated despite open practice Hillsborough being in its a new Carroll could practice, plaintiff’s of in contra- within a fifteen mile radius located to the terms of the restrictive covenant vention February 2002, through August that from 2001 Plaintiff contends actively patients employees follow him to to Carroll solicited February, practice. early Jeff learned of Hillsborough In his new February join Hillsborough. plans On Carroll Jerre’s vacate its office. provided two weeks notice to plaintiff Carroll JEFFREY R. P.A. KENNEDY Carroll and Jerre moved out February office on 22 opened Hillsborough dental 2002. March April 2002, plaintiff complaint On 15 filed a against Carroll and alleging contract, Jerre misappropriation breach of confidential information, prospective and tortious interference with advantage. Defendants plaintiff answered and asserted against counterclaims anticipatory repudiation of the Agreement, Purchase breach of that agreement, fraud, fiduciary duty, breach of deceptive unfair and practices. Defendants equitable also asserted estoppel defenses of and the doctrine of unclean hands. May 2002, plaintiff
7On preliminary injunction moved for a compete enforce the covenant not to alleging irrepara- immediate and plaintiffs ble harm. In denying motion on June trial court (1) plaintiff found: had repudiated breached and the contract docu- equitable ments and could not them legal prin- enforce under ciples; (2) compete enforcement of the covenant not to would on infringe rights patients dentists; (3) choose their own the covenant not to place; overbroad as to time and (4) identity patients of dental and contact information was secret; and, plaintiff trade (5) had not demonstrated a likelihood success on the irreparable merits the existence of harm. The trial preserved parties’ court trial money claims to damages. appeals. Plaintiff (1) interlocutory
The issues are: whether the order affects a sub- right properly stantial Court; that is (2) reviewable this whether plaintiff standing has to enforce the terms of the Purchase Agreement; (3) whether the restrictive
enforceable; (4) whether there was a novation Purchase Agreement; (5) repudiated whether or breached the Agreement; (6) misappropriated whether defendants trade secrets; equitable and whether is entitled to relief. Interlocutory
I. Anneal Plaintiff asserts this interlocutory appeal affects substantial *5 right and is though dispo reviewable even issues for other remain agree. sition. We involving alleged “In cases breach of a non- competition agreement agreement and an prohibiting disclosure of information, confidential appellate North Carolina courts have rou tinely interlocutory reviewed granting denying court orders both and preliminary injunctions, holding that substantial rights have been OF APPEALS IN THE COURT
6
D.D.S.,
KENNEDY,
v. KENNEDY
P.A.
App.
1
N.C.
851,
174, 175, 566 S.E.2d
QSP,
Hair,
App.
v.
Inc.
affected.”
McClure,
393,
N.C.
Industries,
308
(citing A.E.P.
Inc.
852
Clinic, P.A. v.
Digestive Disease
(1983);
754
Iredell
302 S.E.2d
affirmed, 324 N.C.
App. 21,
(1988),
Petrozza, 92 N.C.
Dine-A-Mate, Inc.,
Cox v.
(1989);
S.E.2d 750
Carolina, Inc. v.
(1998); Masterclean North
II. Defendants cross-assign as error the trial court’s failure to find party in plaintiff proper standing is interest and lacks to not the that including the restrictive covenant Agreement, enforce the Purchase injunction. denying as basis for agreement, an alternative Agreement executed between the Purchase argue Defendants attempted assign rights Carroll, even if Jeff his and and that Jeff plaintiff, any assignment such agreement to obligations and under the required assignment be agreement was invalid because the assignee providing that it accompanied guaranty executed plain severally jointly liable under the and would be and any guaranty. disagree. executed We tiff never to show First, we the evidence of record sufficient believe assigned showing that Jeff plaintiffs likelihood of success plaintiff. Plaintiff rights obligations under the occurred; complaint assignment Jeff testified alleges in its that the complaint, including that he allegations reviewed the that he plaintiff, and that all statements assigned Agreement the Purchase accurate; plaintiff became owner of further testified that Jeff plaintiff acquired Agreement, and it was in the Purchase the asset purchase price payments who made on the loan obtained agreement; answer asserts counterclaims under the defendants’ plaintiff anticipatory against repudiation and breach of contract effectively Agreement, conced- based the terms of the Purchase brief occurred; defendants concede their ing assignment that an entity, corporate Jeff plaintiff as a both that after Jeff established corporate entity parties ... all “employed Carroll became [plain- doing employees] or contractors went forward business individually; and shows tiff],” rather than Jeff the evidence obligations owed Carroll under the Purchase performed the Nothing this years. in the record contradicts Agreement several rights obligations had tending to evidence show under the *6 THE
IN COURT OF APPEALS 7 KENNEDY, D.D.S., R. JEFFREY App. (2003)] N.C. 1
[160 Moreover, any required even if guaranty failed to execute concurrently assignment, plaintiff with the has shown likelihood of in establishing estopped success that defendants denying are from validity of Agreement the the terms the of as between plaintiff. Supreme Carroll noted, As our Court has the courts of this State recognize quasi-estoppel, the doctrine of also termed “estoppel by acceptance Hackney, of v. benefits.” Brooks 329 N.C. 166, 404 S.E.2d (1991). 854 The court stated: upon
“The estoppel principles equity doctrine of rests of and is designed justice law aid the in the administration of when with- injustice Thompson out its Soles, intervention would result.” v. 484, 486, 299 599, Equity 263 S.E.2d 602 serves to unjust moderate the results would that follow from the unbend- ing application of common law rules and It is well statutes. set- party tled “a accept will not be allowed to benefits which arise from certain terms of a contract deny the same time the of effect other terms of the same agreement.” Advertising, Harper, 505, Inc. v. 501, 793, 7 N.C. 172 (1970) S.E.2d (lessee estopped deny validity of a lease because of insuf- description premises paid ficient where he had the rent for nine-year seven lease). months of 859; e.g., Godley
Id. at 404 S.E.2d at see also, County Pitt, v. 357, 361, ‘quasi’ 306 N.C. (1982) estoppel, 293 S.E.2d (“ which require per anyone,... directly does detrimental se reliance grounded upon acquiescence party’s acceptance instead or payment benefits, party pre- or virtue of which that is thereafter maintaining position vented from acts.”); inconsistent with those Tomlinson, App. 217, 226, Shell Island Homeowners Ass’n v. (quasi-estoppel principle based “ ‘ reject having accept “where one the right to a transaction or thereunder, it, instrument takes and retains benefits he ratifies obligation position cannot its taking avoid or effect inconsistent ’ ” (citations omitted)). with it.” Applying principles, those the Brooks court determined that although parties technically agreement between was invalid estopped definiteness, for want of denying validity, holding, and the contract was In so enforceable. the court years parties obligations observed that several fulfilled the required including making payments, and reasonably validity the defendants had relied on the the agreement through parties’ fulfillment of its terms. Id. OF APPEALS IN THE COURT P.A. KENNEDY present case shows that
Likewise, the evidence forecast *7 plaintiff pursuant accepted from and benefits Carroll received years plaintiffs and following formation Agreement in the Purchase concede in their plaintiff. Defendants prior to his disassociation entity, corporate Carroll formed as brief that once Jeff entity;” thus, it follows that “employed corporate that became performed terms of party who plaintiff was the other terms of compensation for his services and to Carroll’s patients Jeff testified that employment provider agreement. under any patients practice, of indi- of the not treatment were who received plaintiff, the dentist. Carroll dentist, patients paid vidual and plaintiff in the manner employed through enjoyed being benefit of accepted performance plaintiffs of agreement, and forth in the set receipt compensation. of Defendants can- as the deficiency bars any assignment in the technical not now assert and Agreement, of right enforce the terms plaintiffs concurrently plaintiff repu- assert that since defendants particularly very argument This breached the terms of diated and is overruled. of Review
III. Standard [3] “A preliminary injunction is extraordinary measure taken parties litigation. It preserve quo during court to status only able show likelihood of (1) be if a is will issued likely plaintiff is (2) and if a to sus the merits of his case success on injunction issued, if, is or in the irreparable loss unless the tain necessary protection Court, of is opinion of the issuance Redlee/SCS, v. during litigation.” of Inc. plaintiff’s rights the course 423, 8, Pieper, App. 421, (2002) (emphasis 571 S.E.2d 11 153 N.C. preliminary injunction, an reviewing the denial of a original). In findings fact, of but appellate not bound the trial court’s court is fact may findings of the evidence anew enter own weigh “De novo review law; our review de novo. Id. and conclusions of anew, previously question as if not con requires us to consider the decided,” Soc’y the Pres. Historic Oakwood In re sidered App. 737, 740, Raleigh, 153 Adjustment N.C. v. Bd. preliminary of the denial of a 588, (2002), and such review 590 particu the facts circumstances of is “based App. 383, 106 Contracting Fayetteville, Kinsey Co. lar case.” denied, 332 N.C. 421 607, 609, S.E.2d S.E.2d disc. review (1992). JEFFREY R. Enforceability
IV. of Restrictive Covenants The trial court concluded that the covenant not to compete overly broad, place time, unreasonable as to and unenforceable. dentistry any practicing The covenants restricted Carroll from plaintiffs period within a location fifteen mile radius of office for starting closing ending time with the date of the sale to Jeff and three years plaintiff. from the date Carroll discontinued work with professional soliciting covenants also restricted Carroll from referral services, patients, employees plaintiff.
Covenants not to restrain trade and are scrutinized strictly. Laboratories, Kuykendall, United Inc. v. enforceable,
S.E.2d 375
To be
covenants must be
in writ-
*8
reasonably necessary
ing, (2)
consideration, (3)
based
valuable
protection
legitimate
interests, (4)
business
reasonable as
territory,
(5)
against public policy.
to time and
not otherwise
Industries,
McClure,
393,
A.E.P.
Inc. v.
308 N.C.
A. Time and Place
ing competition
[5]
Our
Supreme
Court has
seven
years
upheld the
within Durham and
validity
of a covenant restrict
Orange
Counties,
finding
Bicycle
the covenant reasonable as a matter of law.
Transit
Authority,
Bell,
219, 226,
299,
314 N.C.
333 S.E.2d
303-04
Inc. v.
Morrow,
662-63,
B. Public The covenant not to also prohibited Carroll from solicit soliciting employment or prior patients, and from ing referrals practice. plaintiff’s employees at his new The trial court employing public policy restrict violated concluded this restrictive covenant particular dentist; patient public’s right to choose a ing the any agree subject patient’s control and contractual records are void; records is and that patient’s limit the control of such ment to ability to hire former any purporting to limit Carroll’s contract had been terminated was unenforceable. employees of who *9 conclusion. Wereach a different Clinic, Petrozza, App. N.C. Digestive P.A. v. 92
In Iredell
Disease
affirmed,
327,
Clinic v.
253 Iowa
112
2d
(1962);
N.W.
Neurological Associates,
Cohen,
Middlesex
Inc. v.
Mass.
126, N.E.
(1975);
Taylor,
389,
2d 911
Odess v.
282 Ala.
211 So.
(1968). ordering
2d 805
If
the covenantor to honor his contractual
obligation
question
potential
would
create
substantial
harm
public
public
health,
outweighs
then the
interests
the con-
covenantee,
tract interests of
court will
and the
refuse to
See,
Geist,
e.g.,
enforce the covenant.
Dick v.
Idaho Ct.
P.
(1985);
Reynolds,
693 2d 1133
75 A.D.
Lowe v.
2d
ordering
N.Y.S.2d358
But if
covenantor
to honor
merely
public
will
inconvenience the
without caus-
ing
harm,
substantial
then the covenantee is entitled to have his
See, e.g.,
Covington,
contract enforced.
Marshall v.
81 Idaho
Id.
Likewise, conclude, stage, we based the record this prohibiting soliciting hiring the covenant Carroll from employees three-year period public not violate former does *10 policy. recognized “protection This Court that of customer has rela- tionships against misappropriation and goodwill departing protectable employees recognized legitimate is well as a interest of APPEALS 12 IN THE COURT OF N.C. 1 opportunity in employer. greater employee’s engage the to the The customer, employer’s the need personal greater contact with the protect relationships.” United employer to these customer (citations omitted). 381 Laboratories, N.C. at 370 S.E.2d at many plaintiff’s employees, that of whom The evidence demonstrates years, were a employed practice in for several had been part employees had plaintiff, asset owned that the valuable developed personal relationships plaintiff’s patients, that the with experience plain- employees part patient’s with integral of a employees join tiff, that those to his new Carroll’s solicitation of patients practice. to losing Carroll’s resulted circumstances, plaintiff these has the likelihood Under demonstrated showing it was Carroll to of its success in entitled to contract with relationships protect goodwill that maintaining interest practice’s patients had with the time. See its staff fostered over 638-39, Inc., at- Walls, Precision 152 N.C. 568 S.E.2d scope activity prohibited by (upholding reasonable as provision prohibiting to which included former employee employing company’s employees, soliciting com- employees pany’s employees employment, inducing company’s employment company). with to leave
V. Novation Defendants cross-assign as error the trial court’s failure to find parties agreed denying as an alternative basis for relief that had they Agreement Purchase were re to novation of the that base obligations lieved of all under the Defendants this contention statements Jeff’s October 2001 letter ending to the that “there alternative to our asso Carroll ciation,” extent is no parties testimony all he agreed well as Carroll’s practice. leave would occur, parties contracting
For a must demon novation agreement a clear intent substitute a new strate and definite existing agreement. Kirby Building Systems, McNiel, 327 Inc. v. (1990), reh’g denied, S.E.2d 827 may presumed. McClenny, never (1991). Novation be Wilson 121, 136 Although undisputed it is S.E.2d practice, parties agreed Carroll would leave the there is no evidence parties among a clear that a new be substi intent Agreement. parties simply agreed tuted for specifically they together, option would work contem- longer no *11 JEFFREY R. (2003)]
[160 plated by provider agreement. support The record does not argument. defendants’ Agreement
VI. Breach Plaintiff bv The trial court found plaintiff breached the Purchase Agreement by failing “pay they due, unilaterally Defendants what changing] compensation the method of which had been in effect for years, several terminating] ninety with less than [Carroll] days notice.” The trial plaintiff repudiated court also found agree ment when Jeff August communicated to Carroll in 2001 his desire employee plaintiff Carroll continue as an rather in than an dependent contractor. prevent plaintiff
In order injunctive obtaining from relief on grounds repudiation agreement, or breach of the defendants must alleged show the breach was “substantial and goes material and to the heart agreement. party Where the breach seeking by injunctive enforcement of a contract ever, material, relief is not how- prevent it will equitable not him from obtaining such relief.” Combined McDonald, App. 179, Ins. Co. v.
Defendants have failed to direct this Court to evidence which support would a finding plaintiff pay money failed to defendants owed them under the Agreement. While Carroll’s affidavit bookkeeper indicates that his shortage account, discovered a in his absent substantive evidence compen- that Carroll did not receive the sation to which he was entitled agreement, under the this bare asser- prove plaintiff tion is insufficient to agreement. breached the The sole basis argument of defendants’ breached the agreement by changing compensation the method of is Jeff’s testi- mony plaintiff paid that at certain times defendants more than that to they which agreement. were entitled under the simply This evidence they indicates that defendants fact received what were entitled to under the stage support the record at this does not finding receipt that their compensation additional from amounted to a breach of a material term of provider agreement also established that Carroll could be ter- minated expiration years without cause after the of the first five days prior with 90 written notice of the termination February date. In 2002, plaintiff informed Carroll he had two weeks practice. However, to leave the Carroll received written notice as THE COURT APPEALS IN OF KENNEDY, D.D.S., P.A. v.
JEFFREY R. KENNEDY early employment in a letter Jeff that with as October 2001 plaintiff would in the near While the October letter did cease future. employ notice,” put Carroll on phrase “termination letter impending Plaintiff demonstrated a notice of disassociation. has *12 showing failure to an additional give likelihood success that its days express material breach written termination notice not a repudiation Agreement. of the Purchase at id. See employer (“mere give at 820 failure of an to the notice of termination employment employment with provided its contract its employee, not as a of law consti- nothing appearing, else does matter prevent employer’s which the seeking tute a material breach will equitable prevent prohibiting remedies to breach of covenant the employee employer with competing the within a reasonable time.”). area and
Finally, with disagree finding we the trial court’s that Jeff’s pro- August communication that he desired Carroll to continue viding plaintiff employee services as an rather a contractor to than the repudiation Agreement. amounted to The Purchase Agreement specifically require provide did that Carroll services thus, independent contractor; as suggestion to the that independent something Carroll alter his status to other than contrac- repudiation does not to a or breach terms of tor amount suggest further that Defendants Jeff’s statements provider agreement, amounted termination of the and part that was a agreement because non-severable of the Purchase repudiate agree- evinced an entire Agreement, intent parties. However, ment between even if Jeff’s statements evinced provider specif- agreement an intent to terminate the that ically provider agreement event stated that in the were termi- five-year following without nated cause the initial non-termination period, in full restrictive would continue arguments force effect. These are overruled.
VIL Trade Secrets patient in concluding Plaintiff contends the trial court erred identity and contact information did not constitute a trade secret and However, misappropriate did not trade secrets. we defendants reach this as the argument, need not the merits of issue does not bear deny equitable relief, trial because on the court’s decision on this will not be determinative of the court’s conclusions issue any damages. issue at trial on P.A. KENNEDY App. Equitable
VIII.
Relief
“Our courts
have
long
recognized
that a
party
seeking equitable
relief,
injunctive relief,
such as
must come
with
before
court
equitable
‘clean hands.’ Those who seek
remedies
do equity,
must
precept
this maxim is not a
observance,
for moral
but
enforceable
Co.,
rule.” Combined Ins.
In has shown a likelihood of success on case, upon merits based stage record evidence at this in the proceedings, through showing a that the restrictive covenants rea- are against Carroll, sonable enforceable Carroll’s establish- ment in Hillsborough violates the covenants. Plaintiff irreparable also through showing established harm that a substan- portion patients tial of its have followed Carroll and Jerre to the new practice. We misappropriation decline address claim for stage support of trade secrets. The at evidence this does not a con- plaintiff repudiated clusion breached or agreement, or that THE COURT OF APPEALS IN D.D.S., KENNEDY, v. KENNEDY P.A. any preserve arguments have failed to Defendants novation occurred. equitable injunction premised their against issuance of below, review of the record reveals and our de novo defenses asserted why injunction issue. The trial equitable should not reason no preliminary is plaintiffs motion for a denial of court’s hereby with instructions that matter remanded reversed compliance 1A-1, Rule in with G.S. trial court enter order injunction enforcing the non- preliminary 65, granting See, e.g., QSP,Inc., 152N.C. competition agreement.
S.E.2d at 854. with instructions.
Reversed and remanded concurs. Judge LEVINSON part part. TYSONconcurs in and dissents
Judge dissenting part. concurring part, TYSON,Judge, except VIII, majority’s opinion for section I with the concur case to the trial court hear- Equitable Relief. I would remand this equi- entitled to findings regarding fact whether ing and VIII. respectfully I dissent from section table relief. preliminary of a in- to review the denial
This Court’s standard deny injunctive grant or relief junction The decision to is de novo. comply 65(d). with discretionary, its terms must Rule remains deny provide grant does not basis The limited record before us equitable relief. *14 preliminary injunction rule,
As a a general preserve extraordinary a court the sta- is an measure taken only (1) will if parties during litigation. It be issued quo tus merits of plaintiff is of success on the a able show likelihood likely irreparable sustain loss plaintiff if is case if, opinion Court, injunction issued, or in the the the is unless necessary rights dur- protection for the issuance is ing litigation. the course 566, 688, 701, 239 S.E.2d
Investors, Berry, Inc. v. prong met first for issuance omitted). Plaintiff (1977) (citations prevailing at showing likelihood of preliminary aof enforceable, are and Carroll’s establish- legally covenants trial. The D.D.S., KENNEDY, place Hillsborough ment of a violates the time and re- breach, repudiate, or novate strictions the covenants. Jeff did not requires irreparable harm. “In prong showing The second every the covenant not to is found to be reason- case where however, remedy; valid, plaintiff is entitled to a either the able plaintiff agreement must be enforced or the court must find that has adequate remedy money Industries, law A.E.P. damages.” at McClure, 393, 404, 754, Inc. v. 308 N.C. 302 S.E.2d consideration, The focus in cases such as the one now under however, only plaintiff irreparable is not whether has sustained injury, but, important, injunc- more whether the issuance of the necessary protection plaintiffs rights during tion is is, adequate litigation; course of that whether has an rem- edy law. at 406,
Id. at
A
not issue unless
persuasion
prerequisites. E.g.,
ries the burden of
as to each of the
Williams,
(1975). Once this
Pruitt v.
288 N.C.
matter of course because equitable application recognized ground. for the writ on While application *15 equity permit judge does not who hears APPEALS IN THE COURT OF KENNEDY, D.D.S., P.A. v. KENNEDY JEFFREY R. merits, require him to exercise it does
decide the cause on interlocutory injunc- an determining whether sound discretion granted be or refused. tion should Melnik, equity.” Creech v. equity must do
“One who seeks alleged Plaintiff has 520, 529, alleged equitable relief. Defendants have must show entitlement equitable prove defenses. Defendants’ their burden to their and it is gen- raise a against and unclean hands allegations of fraud allega- equitable relief. These plaintiffs entitlement to uine issue of majority’s opinion court. The addressed the trial tions were never address them here. does not invalid, public against to be trial court held the contract
The
injunctive relief on those
and denied
policy, and unenforceable
plaintiff’s eligibil-
the issue of
The trial court never reached
grounds.
equitable
defendant’s
ity
injunction under a valid contract nor
for an
us to
evidence in the record before
There is insufficient
defenses.
injunction.
equity warrants the issuance of
whether
determine
position to exercise this discretion.
judge is in the best
trial
“[T]he
evidence,
witnesses,
argu-
considers the
observes the
He hears the
equities.” A.E.P.
counsel,
weighs and balances the
ments of
Martin dissent-
Industries,
(Justice