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Eichmann v. National Hospital and Health Care Services

October 18, 1999


Appeal from the Circuit Court of Cook County No. 97 CH 13460 Honorable John K. Madden, Judge Presiding.

The opinion of the court was delivered by: Justice Gallagher


Plaintiff, John Eichmann, filed a verified complaint against defendant, National Hospital and Health Care Services, Inc. Count I sought a declaration that restrictive covenants contained in an independent contractor agreement between plaintiff and defendant are unenforceable. Count II sought damages for breach of that agreement. The circuit court granted summary judgment in favor of plaintiff as to count I and subsequently denied defendant's motion for reconsideration. Defendant filed a timely notice of appeal. This court has jurisdiction of this appeal pursuant to Supreme Court Rule 304(a) (155 Ill. 2d R. 304(a)). For the reasons stated below, we affirm the trial court's judgment.

Our review of the trial court's grant of summary judgment is de novo. In re Estate of Hoover, 155 Ill. 2d 402, 615 N.E.2d 736 (1993)). The reasonableness of a restrictive covenant is a question of law. Corroon & Black of Illinois, Inc. v. Magner, 145 Ill. App. 3d 151, 162, 494 N.E.2d 785 (1986); Hamer Holding Group, Inc. v. Elmore, 244 Ill. App. 3d 1069, 1078, 613 N.E.2d 1190 (1993); Lawrence & Allen, Inc. v. Cambridge Human Resource Group, Inc., 292 Ill. App. 3d 131, 137, 685 N.E.2d 434, 440 (1997). Although the question of whether a restrictive covenant is enforceable is one of law and depends upon the reasonableness of its terms, the determination of reasonableness necessarily depends on the unique facts and circumstances of each case. Hamer Holding Group, Inc. v. Elmore, 202 Ill. App. 3d 994, 1009, 560 N.E.2d 907, 917 (1990); McRand, Inc., v. Van Beelen, 138 Ill. App. 3d 1045, 486 N.E.2d 1306 (1985). The relevant undisputed facts and circumstances of this case follow.

Defendant markets and sells group health and life insurance products to small industrial and commercial employers. Plaintiff was employed by defendant from January 9, 1992, through October 31, 1994, as an insurance sales account executive. Plaintiff voluntarily resigned in October 1994. In January 1995, plaintiff began working as an independent contractor for defendant. As an independent contractor, plaintiff performed the same duties he had as an employee. On September 5, 1995, the parties executed a written agreement (the Agreement) which among other things identified the 32 customers, hereinafter referred to as "Exhibit B customers," that plaintiff was to serve as an independent contractor. The Agreement also contained, under separate headings, the two restrictive covenants *fn1 that are now the subject of this appeal.

The first of the two restrictive covenants at issue states as follows:

"8. Ownership of Business.

*** b. Eichmann hereby covenants and agrees not to compete, directly or indirectly, with any existing or future customer of NHC. This covenant shall apply to all lines of insurance coverage from and after the date of execution of this Agreement. Notwithstanding this covenant, the parties shall not be precluded from competing with each other for new customers as to which said customers are not clients of NHC."

The other covenant states in pertinent part:

"17. Covenant Not to Compete. The parties hereto acknowledge that this Agreement is based on the premise that this covenant not to compete is essential and fully upheld as follows:


d. Eichmann hereby agrees not to directly or indirectly, solicit, accept, service or contact for the purposes of soliciting any insurance product(s), any customer either group or individual insured through NHC. Each party agrees that his/its obligations under this Agreement shall continue for so long as NHC and/or Eichmann continue to service an Exhibit B customer."

Under the same paragraph 17 is another clause which states as follows:

"e. If any portion of the foregoing provisions of this covenant not to compete shall be, for any reason, declared invalid or unenforceable, the remaining portion or portions shall nevertheless be valid and enforceable and carried into effect to the fullest extent permitted, and the invalid or ...

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