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Sheehy v. Sheehy

October 06, 1998


The opinion of the court was delivered by: Justice Cousins


No. 94-CH-1278


Plaintiff filed an emergency motion to enforce a covenant not to compete ancillary to the contract sale of John Sheehy & Sons Funeral Home, Ltd. The trial court denied the motion. On appeal, plaintiff contends that: (1) the trial court misconstrued the covenant not to compete; (2) the trial court's denial of injunctive relief by refusing to enforce the covenant not to compete was contrary to applicable law and contrary to the manifest weight of the evidence; and (3) the trial court's denial of noninjunctive relief was contrary to applicable law.


This action initially arose out of a verified complaint for accounting, injunction, dissolution and appointment of a custodian or receiver filed on February 9, 1994, by plaintiff, John R. Sheehy, against John Sheehy & Sons Funeral Home, Ltd. (Funeral Home), defendant James R. Sheehy, and Michael Sheehy. On September 11, 1995, pursuant to the provisions of section 12.56 of the Illinois Business Corporation Act of 1983 (805 ILCS 5/12.56 (West Supp. 1995)), the trial court conducted an open bidding process that resulted in the court's acceptance of plaintiff's election to purchase defendant's shares in the Funeral Home along with the beneficial interest in land trust 88-434, which held title to the real property on which the Funeral Home operated its business.

On November 3, 1995, the purchase was memorialized in a definitive agreement (agreement) that was executed by the parties. Per the terms of the Agreement, the purchase price would be payable in four annual installments in consideration of a four-year covenant not to compete (covenant) found in section F of the agreement. The covenant reads, in pertinent part:

"For a period of four years from the date of this Agreement, in consideration of this Agreement, [defendant] shall not:

a) Directly or indirectly own, manage, operate, join, control, or participate in, or be connected as an officer, employee, partner, or otherwise with any funeral home business, or otherwise compete with the current business of the Company within a ten (10) mile radius of 7020 W. 127th Street, Palos Heights, Illinois (the 'Property').

b) Canvass or solicit any business, individually or for any other funeral home, from any of the Company's prepaid clients or any member of the immediate family of any decedent for whom the Company has provided funeral services prior to the date hereof (collectively, 'Protected Clients') or from any potential clients within a 10 mile radius of the Property, provided however that nothing contained in this Section F shall preclude [defendant] from servicing clients who approach [defendant] of their own free will and accord provided further that such services are not provided in a funeral home within a ten mile radius of the Property."

Following the purchase, the original complaint was dismissed, with prejudice; however, the court retained jurisdiction to enforce the terms of the agreement.

On or about May 20, 1996, defendant became the managing funeral director of a branch of the SCI/Blake-Lamb Funeral Home. *fn1 The branch was located at 544 W. 31st Street, Bridgeport, Chicago, Illinois (Bridgeport location). SCI/Blake-Lamb has various branch locations within the 10-mile restricted zone; however, defendant's employment was limited to working at the Bridgeport location, which is outside the 10-mile restricted zone.

Since beginning employment at the Bridgeport location, defendant attended continuing education classes and two business meetings with a superior at SCI/Blake-Lamb's Oak Lawn location, which is within the 10-mile restricted zone. He also appeared in his capacity as an employee of SCI/Blake-Lamb for funeral services at cemeteries located within the 10-mile restricted zone.

On November 4, 1996, plaintiff filed an emergency motion, which sought to enforce the covenant and impose sanctions and injunctive relief, naming his identical twin brother as defendant. Plaintiff's motion alleged that defendant breached the covenant by participating in certain activities within 10 miles of the Funeral Home located at 7020 W. 127th Street in Palos Heights, Illinois. Additionally, plaintiff requested that the first installment then due under the covenant be forfeited, along with all future installments, until compliance with the covenant was ensured.

A hearing on the emergency motion was held on December 11, 1996, and continued to July 15, 1997. Following the hearing on July 15, 1997, the trial court denied ...

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