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12/24/97 ROYAL'S RECONDITIONING CORPORATION v.

December 24, 1997

ROYAL'S RECONDITIONING CORPORATION, INC., PLAINTIFF-APPELLEE,
v.
GARRY ROYAL, DEFENDANT-APPELLANT.



Appeal from the Circuit Court of Cook County. Honorable Albert Green, Judge Presiding.

Presiding Justice Cerda delivered the opinion of the court. Wolfson and Burke, JJ., concur.

The opinion of the court was delivered by: Cerda

PRESIDING JUSTICE CERDA delivered the opinion of the court:

Defendant, Garry Royal, appeals from the lost-profits damages award entered in favor of plaintiff, Royal's Reconditioning Corporation, Inc., on plaintiff's breach-of-contract claim that was based on defendant employee's failure to give a 30-day notice of termination of employment. The main issue is whether the trial court erred in awarding profits lost for a period of years after the termination of employment when the contract provided for only 30 days' notice of termination.

FACTS

Plaintiff is in the business of repairing and restoring the interior and portions of the exterior of vehicles for used automobile dealers throughout the Chicago area. Defendant was employed by plaintiff doing such repair work, but defendant quit in February 1990 without giving the 30-day notice of termination required by a written employment agreement:

"This Agreement *** may be terminated at any time by either party upon giving the other thirty (30) days advance written notice of such termination."

The agreement further stated:

"[Defendant] recognizes and acknowledges the list of Royal's customers and/or clients *** is a valuable, special and unique asset of Royal's business. [Defendant] will not, during or after the term of this Agreement, disclose the list *** or otherwise exploit such list."

Plaintiff filed a complaint seeking in part damages for breach of contract based on defendant's failure to give notice of termination and based on defendant's exploitation of plaintiff's customer list through seeking to do work for plaintiff's customers after termination of employment. The damages sought by plaintiff included (1) loss of future income from plaintiff's near-permanent customers and (2) damage to good will and to customer relationships.

On February 28, 1990, the trial court granted plaintiff's motion for a temporary restraining order enjoining defendant from soliciting 25 of plaintiff's existing customers and from using the word "Royal's" or "Royal" in any business providing service to automobile dealerships. The trial court found that plaintiff had demonstrated that defendant had succeeded in taking business from several of plaintiff's customers while employed by plaintiff or within a few days of resignation and that plaintiff had sufficiently alleged unfair competition.

Shortly thereafter, on March 7, 1990, the trial court dissolved the temporary restraining order and denied plaintiff's motion for a preliminary injunction. The trial court found that there was no protectable interest in the customer list. Defendant was ordered to state on all material containing his trade style or name: "Not associated or affiliated with Royal's Reconditioning Corp."

At the bench trial held in 1996, defendant testified that, after he terminated his employment with plaintiff, he contacted the same customers that he had been servicing as plaintiff's employee. He now was self-employed in the business of reconditioning the interiors of automobiles.

Kenneth Royal testified at the trial that the purpose of the 30-day-notice provision was to have plaintiff's customers timely serviced. Because defendant did not give the required notice, plaintiff was not able to timely service its customers. He did not have someone to take over defendant's work. He would train new employees, and the training took on average four to six weeks. But he ...


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