Com-Co Insurance Agency, Inc. v. Service Insurance Agency, Inc.
Case Date: 04/16/2001
Court: 1st District Appellate
Docket No: 1-00-1643 Rel
FIRST DIVISION
No. 1-00-1643
PRESIDING JUSTICE McNULTY delivered the opinion of the court: Com-Co Insurance Agency sued its former employee, William Abplanalp, and hisnew employer, Service Insurance Agency, for breaching a restrictive covenant bysoliciting business from Abplanalp's friends. The court granted defendantssummary judgment because Com-Co had no protectible interest in the customers atissue. We affirm. Com-Co hired Abplanalp as an insurance agent in 1986. Abplanalp signed anemployment agreement, which included the following provision:
Abplanalp resigned in 1991 and joined Service. He consulted an attorney forService for advice about the covenant. Service sent a letter to Com-Co admittingthat most of Abplanalp's book of business with Com-Co received full protectionunder the employment agreement, but Service argued that Com-Co had noprotectible interest in clients who were Abplanalp's relatives and friends.Abplanalp thereafter sold insurance to a number of relatives and friends he hadknown before he began working for Com-Co. He refused to sell insurance toseveral persons who sought to purchase insurance from him, because he met themwhile he was working for Com-Co, and therefore he considered them Com-Co'sprotected clients. He met his wife while working at Com-Co, so he refused tosell her insurance. Com-Co sued Abplanalp for breach of the restrictive covenant and Service forinducing the breach. Com-Co claimed about $36,000 in actual damages and sought$100,000 in punitive damages. The court referred the case to arbitrators, whoawarded Com-Co a net of $1,232.86. Com-Co rejected the award. The parties moved for summary judgment, supporting their motions withtranscripts of testimony from various witnesses. Com-Co's president swore thatmore than 80% of Com-Co's customers renewed their policies each year, and thecustomers stayed with the agency for an average of five years and seven months.Abplanalp identified each of the Com-Co clients to whom he had sold newinsurance through Service. He explained how and when he came to know each personlisted, testifying that he knew each one before he began working for Com-Co. Hepresented largely corroborative testimony from the clients. Com-Co presented nocontradictory evidence, and it conceded that Abplanalp had the right to sellinsurance through Service to members of his family. Abplanalp admitted that hehad never sold his friends insurance before he worked for Com-Co. The trial court found that the testimony of one of the clients, AntoniaAddante, showed that she met Abplanalp while he worked for Com-Co. The courtfound that Com-Co had a protectible interest in retaining her as a client, so itcontinued the case with respect to her for proof of damages. But the court heldthat Com-Co had no protectible interest in those customers who bought insurancethrough Com-Co because they were friends of Abplanalp who knew Abplanalp beforehe began working for Com-Co. Accordingly, the court granted summary judgment infavor of defendants with respect to all clients at issue other than Addante. Thecourt added that the partial summary judgment was final and appealable. Com-Copromptly appealed. The trial court's declaration of finality and appealability is not enough,standing alone, to make an order appealable. DeLuna v. St. Elizabeth'sHospital, 147 Ill. 2d 57, 76, 588 N.E.2d 1139 (1992). If the order finallydisposed of the rights of the parties on some definite and separate branch ofthe controversy, then the court's statement of enforceability or appealabilitymakes the order immediately appealable under Supreme Court Rule 304(a). 155 Ill.2d R. 304(a); see In re Marriage of Schweihs, 272 Ill. App. 3d 653, 662,650 N.E.2d 569 (1995). The court's language need not match the wording in Rule 304(a) precisely."[W]here appeal is sought pursuant to Rule 304(a) from a judgment whichdefeats a claim or is in the nature of a dismissal, the written finding issufficient only if it refers to appealability." In re Application of theDu Page County Collector, 152 Ill. 2d 545, 551, 605 N.E.2d 567 (1992). Here, the court appropriately referred to appealability. We agree with thetrial court's implicit holding that the claim regarding Addante is sufficientlyseparable from the claims concerning the other clients for immediate appeal ofthe partial summary judgment. We find that we have jurisdiction to consider Com-Co'sappeal pursuant to Supreme Court Rule 304(a). Com-Co argues that it had a protectible interest in keeping Abplanalp'sfriends as its customers. We note that Com-Co effectively conceded that therestrictive covenant could not be enforced as written: the covenant made noexception for Abplanalp's relatives, yet Com-Co did not contest his right toretain them as his clients in his new employment. Because the trial courtexpressly excepted Addante from the summary judgment ruling, the only clients atissue are Abplanalp's friends whom he knew before he began working for Com-Co.
An employer has no protectible interest in an employee's customer unless theemployer can show the employee would not "have had contact with thecustomers absent [his] association with the employer." LSBZ, Inc. v.Brokis, 237 Ill. App. 3d 415, 430, 603 N.E.2d 1240 (1992). In LSBZ the plaintiff, a hairstyling salon, sought an injunction toprevent a former employee from styling the hair of the plaintiff's customers.The court noted that the employee initially worked for these customers
Therefore, the court found no protectible near-permanent relationship withthe customers. In Rapp Insurance Agency, Inc. v. Baldree, 231 Ill. App. 3d 1038, 597N.E.2d 936 (1992), an insurance agency sought to enjoin a former agent fromsoliciting his former clients. The court held:
Here, the uncontested evidence established that Abplanalp would have hadcontact with all of the clients at issue even if he never worked for Com-Co. Hiscontact with these persons permitted him to sell them insurance, first throughCom-Co and then through Service. His work for Com-Co did not help him establishthe contacts with these friends, nor did the work for Com-Co in any waycontribute to his ability to sell insurance through Service to these clients. AsCom-Co cannot show that Abplanalp would not have been able to sell insurance tothese customers through Service absent his association with Com-Co, Com-Co hasno protectible interest in these customers. Com-Co claims that the appellate court overturned the principles enunciatedin LSBZ and Boris in Lyle R. Jager Agency, Inc. v. Steward,253 Ill. App. 3d 631, 625 N.E.2d 397 (1993). In that case, as here, theinsurance agency included a restrictive covenant in its employment agreementwith its agent, but that case presented a kind of inverse of the situation here.In Steward, 253 Ill. App. 3d at 634, the agency did not contest theagent's right to sell insurance to all clients he brought to the agency from hisprevious employment; the only clients at issue were those he first contacted asthe plaintiff's agent. Here, defendants conceded to Com-Co all those clientsAbplanalp met while working for Com-Co; the only clients at issue are those hebrought to Com-Co through his prior friendships. Thus, the court in Stewarddid not address the issue presented here, of whether the plaintiff had aprotectible interest in clients the defendant brought to the agency as hisfriends. Despite the difference in the factual situations, Com-Co asks us to interpretthe holding of Steward as mandating a finding of a protectible interestin the clients at issue here. The court in Steward said:
Com-Co rests its argument on the appellate court's inclusion of the phrase"in the context of selling them insurance," in Steward. But thecourt's citation shows that the decision did not overturn LSBZ; insteadit reaffirmed the principles restated in LSBZ. The plaintiff agency has aprotectible interest in its clients only to the extent that the former agent isable to serve the clients for the new agency "because of [his]association with" the plaintiff agency. (Emphasis in original.) LSBZ,237 Ill. App. 3d at 429. The decision in Steward involved only commercialinsurance clients. The court apparently sought to distinguish prior contacts asa customer of the commercial enterprise from the contacts which gave the agentthe opportunity to sell insurance to the commercial enterprise. Abplanalp hadthe opportunity to sell insurance to all the contested customers because theywere his friends before he came to Com-Co, and nothing about his associationwith Com-Co helped him later sell them insurance through Service. Under Steward,as well as LSBZ, Boris and Rapp, Com-Co has no protectibleinterest in the friends to whom Abplanalp sold insurance through Com-Co. Com-Co notes that the court in Steward expressly disagreed with the Rappdecision on the issue of whether the agency had a protectible interest inclients the defendant met through cold calls made to phone numbers available inpublic directories. Abplanalp here, like the agents in Steward and Rapp,helped Com-Co acquire significant numbers of clients in this way. Abplanalp andService, on the advice of their attorney, conceded to Com-Co all such clients.The record shows that several such persons contacted Abplanalp at Service,seeking to change their insurance agency so they could continue to work withAbplanalp. Abplanalp told them he could not help them due to the restrictivecovenant in his employment agreement. Because Abplanalp has not sought to sellinsurance to these customers through Service, we need not decide the issue onwhich the Steward and Rapp courts disagreed. Com-Co cannot provethat the customers at issue here would not be Service's clients but forAbplanalp's association with Com-Co. Therefore, under the reasoning of either Stewardor Rapp, Com-Co has no protectible interest in the clients at issue. The uncontested evidence shows that Abplanalp knew each of the clients atissue personally before he began work for Com-Co. He knew them well enough to bethe cause for them to purchase insurance first through Com-Co, and later throughService. Because Abplanalp would have been able to sell them insurance throughService, even if he had never worked for Com-Co, Com-Co has no protectibleinterest in any of the clients at issue. Accordingly, we affirm the judgment infavor of defendants. Affirmed. FROSSARD and COHEN, JJ., concur. |