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Central Bldg. & Cleaning Co. v. Vodnansky





APPEAL from the Circuit Court of Cook County; the Hon. GEORGE J. SCHALLER, Judge, presiding.


The plaintiff, Central Building & Cleaning Company, Inc. (Central), appeals from an order of the circuit court of Cook County which denied its petition for a preliminary injunction against the defendant, Thomas H. Vodnansky. The other defendant, Louis Kraml, was dismissed as a party during the proceeding below. The purpose of the injunction sought by Central was to enforce a covenant not to compete and to protect its trade secrets. On appeal Central argues (1) the trial court's finding that Central's employment agreement with Vodnansky was unreasonable and unenforceable, was manifest error and an abuse of discretion and (2) the trial court's order granting Vodnansky's motion for denial of a preliminary injunction was an abuse of discretion.

At the hearing below Central called three witnesses: Louis Kraml, Vodnansky, and Charles Rivkin, the president of Central. At the close of the plaintiff's case, Vodnansky moved for denial of the preliminary injunction under section 64(3) of the Civil Practice Act. (Ill. Rev. Stat. 1977, ch. 110, par. 64(3).) This motion was granted and Central's petition for a preliminary injunction was denied.

Central has been in the business of tuckpointing, weatherproofing and restoring buildings for 55 years. Its customers are primarily in Cook County, Illinois, but it has some accounts in Lake County, Indiana, and Du Page, Will and Lake Counties, Illinois. Central has several hundred competitors in the five county area. It has no exclusive customers.

On March 1, 1974, after two meetings with Central's president, Rivkin, Vodnansky accepted a job with Central. Vodnansky began working with Central on March 12, 1974. On that date, Rivkin asked Vodnansky to sign an employment contract. Vodnansky agreed to do so. This contract contained the following provision:

"In consideration of the employment by the Employer, Employee agrees that on the termination of his employment for any cause whatsoever he will not directly or indirectly, as an employee of another, or in business for himself, engage in the business of building cleaning, tuckpointing, maintenance or in any competitive business within Cook, Lake, Du Page and Will Counties, Illinois, and Lake County, Indiana, for a period of three (3) years from the date of the termination of such employment; Employee further agrees upon termination, as aforesaid, not to solicit any of the Employer's customers at any time after such termination, or to ever divulge or disclose any information relating to Employer's business, or any knowledge or secrets that he had or might, from time to time, have acquired pertaining to the business of the Employer."

There is conflicting testimony as to whether Vodnansky was told prior to March 12 that Central would require him to sign a covenant not to compete.

Vodnansky worked for Central until April 12, 1978. During his four-year employment there he estimated jobs, purchased materials and equipment, met with customers, supervised jobs and crews, and was privy to the formulas for various mixes and solutions for use on the jobs.

On April 12, 1978, Vodnansky left Central. He purchased a company known as Kraml's Continental Tuckpointing Building and Maintenance Company (Kraml), a competitor of Central. After purchasing Kraml, Vodnansky performed work for three companies which Central alleges were its customers. Two of these jobs were done for the Whiston group. The Whiston group had never been a customer of Central but one of its employees had previously worked for one of Central's customers. The third job was done for a company for which Central had previously done work.

The decision to grant or deny a preliminary injunction rests in the sound discretion of the trial judge and appellate review is restricted to a determination of whether the trial judge correctly exercised his broad discretionary powers. Image Supplies, Inc. v. Hilmert (1979), 71 Ill. App.3d 710, 390 N.E.2d 68; Armour & Co. v. United American Food Processors, Inc. (1976), 37 Ill. App.3d 132, 345 N.E.2d 795.

This appeal is from the denial of a preliminary injunction. The substantive issues of this cause have not yet been determined. We will therefore address the substantive issues only so far as is necessary to determine whether the court abused its broad discretion in denying the preliminary injunction.

• 1 For a preliminary injunction to issue, the movant must establish (1) possession of a right which needs protection; (2) immediate and irreparable injury if the injunction is denied; (3) no adequate remedy at law; and (4) probability of success on the merits. (Image.) Here, such a showing is dependent upon the enforceability of the restrictive covenant.

• 2 A basic reasonableness test is employed to determine the enforceability of a covenant not to compete. (Wessel Co. v. Busa (1975), 28 Ill. App.3d 686, 329 N.E.2d 414.) These covenants are enforced only if (1) a trade secret or confidential information is involved; (2) the time limits and geographic scope are reasonable; and (3) the restrictions imposed are reasonably necessary for the protection of a legitimate business interest. (Image.) Because Central was required to show a likelihood of success on all three of these issues, the failure to do so as to any one of them would require a denial of the preliminary injunction.

The trial court found that Central was not likely to succeed in showing that a trade secret or confidential information is involved. Central argues that its method of estimating is a trade secret and that this method and its methods of supervising jobs, servicing customers, and purchasing supplies ...

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