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Haag Brothers, Inc. v. Artex Internat'l





APPEAL from the Circuit Court of Cook County; the Hon. LYLE E. LIPE, Judge, presiding.


Rehearing denied May 22, 1978.

Haag Brothers, Inc. (plaintiff), brought action against Artex International, Inc. (defendant), for wrongful interference with contracts of employment between plaintiff and two of its former employees. A jury returned a verdict for defendant. Plaintiff appeals.

In this court, plaintiff contends the trial court erred in striking certain portions of plaintiff's complaint and in granting a motion in limine to exclude reference to the stricken portions at trial; in refusing certain instructions; in giving the jury an improper special interrogatory and in denying its motion for judgment n.o.v.

Plaintiff is engaged in selling supplies to hospitals and other health care facilities. Defendant had been a supplier of plaintiff until 1969. In that year, defendant took over the business of a competitor of plaintiff. Beginning in 1971, a number of plaintiff's personnel left its employ to work for defendant in its new business. At least two of these employees had been under contract with plaintiff. It is plaintiff's theory that defendant induced these employees to breach their contracts with plaintiff.

Clifford LaPlaunt was hired by plaintiff as a salesman in late 1961. Since 1963 he had been under written contract with plaintiff on a year-to-year basis. The contract provided for automatic renewal on the first of each year unless either party gave notice of termination within 60 days prior to the renewal date. In this agreement, LaPlaunt covenanted that for two years after the termination of employment, regardless of manner or cause, he would not compete with plaintiff or represent any business in competition with plaintiff's business and would not attempt to divert any of plaintiff's business or the patronage "of any customers who shall have dealt with [plaintiff]." The contract specified the State of Iowa as LaPlaunt's territory.

William Morgan was hired by plaintiff as a salesman in 1970. His employment contract was similar to that of LaPlaunt's. Morgan's renewal date was February 2 of each year. He was assigned to the State of Michigan.

Milton Libman had been employed by plaintiff as its sales manager until he resigned in June 1971. At that time he took a position with defendant as general manager of its business competing with plaintiff. As part of this new job, Libman was required to increase the size of defendant's sales staff.

Called by plaintiff as an adverse witness, LaPlaunt testified he was looking for a new job in February and March 1972. He had become dissatisfied with his job with plaintiff. His sales had been dropping off, and he wanted to find something better. In February or March 1972, he telephoned the Libman residence to ask Libman about the prospects of employment in defendant's selling activities. Libman was not at home and LaPlaunt left a message for Libman to return his call. Libman did so. When informed of LaPlaunt's desire to find a new job, he told LaPlaunt he would like to talk to him further. Libman did not offer LaPlaunt a job at that time.

LaPlaunt further testified that he was unable to get to Chicago to talk to Libman. Instead, on March 10, 1972, Libman went to Waterloo, Iowa, to meet with LaPlaunt. They discussed the possibility of LaPlaunt working for defendant but Libman did not offer him a job. Libman, who was aware of the contract between LaPlaunt and plaintiff, told LaPlaunt to think about what he was doing and to give Libman another call.

LaPlaunt stated that he resigned from plaintiff's employ on April 14, 1972. He notified Libman of his resignation. Libman then hired him to work for defendant. LaPlaunt stated that he "knew it was a sure thing" that he had a job with defendant upon resigning from plaintiff.

Libman, who had not been employed by defendant for two years prior to trial, was called as a witness by plaintiff. In general, he corroborated LaPlaunt's testimony. Libman stated that it was LaPlaunt who made the first contact in March 1972. He also testified about a telephone call that had been placed from his home to LaPlaunt's home in August 1971. The cost of this call was listed as a business expense on Libman's expense report to defendant. Libman did not remember making the call, or its purpose. LaPlaunt testified that he did not speak to Libman on the day of this August 1971 call. He testified that his children were friends of Libman's son and possibly the call was placed by Libman's son.

William Morgan, called as a witness by plaintiff, testified that in 1971 he was dissatisfied with his job and had been seeking employment through some local employment agencies. During early September 1971, Morgan contacted Darrel Everett, who was then currently employed by defendant, to arrange a meeting. Everett was a former employee of plaintiff. He commenced working for defendant on August 27, 1971. Morgan described Everett as his friend. Morgan testified that he did not mention to Everett that he was looking for a job. He described the purpose of the meeting as social. Morgan stated that when he came to visit Everett the two of them had lunch with Libman. At lunch they discussed the aspects of working for defendant. Morgan testified it was he who initiated the subject of employment to Everett and Libman. He also testified that this was the last conversation he had with anyone connected with defendant prior to his resignation from plaintiff, which occurred in September 1971. Libman testified that he knew Morgan was under contract and he told Morgan that defendant would not consider hiring him until he severed his relationship with plaintiff. After resigning from plaintiff, Morgan began working for defendant.

In Count I of its amended complaint, plaintiff alleged that LaPlaunt had misused confidential information and had breached the covenant not to compete. LaPlaunt and defendant moved the court to strike those allegations of Count I which related to the misuse of confidential information and breach of covenant. (Paragraphs 3-6, 8 and 9.) The motion urged that the covenant was void as a matter of law. The trial court granted the motion to strike. Plaintiff elected to stand on the remaining counts of its complaint. These alleged that defendant, through its agent Libman, wrongfully induced LaPlaunt and Morgan to breach their contracts of employment. All the allegations as to LaPlaunt were stricken. ...

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