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Viad Corp. v. Houghton

June 22, 2010

VIAD CORP D/B/A EXHIBIT/GILTSPUR, A DELAWARE CORPORATION, PLAINTIFF,
v.
ANNE HOUGHTON, DEFENDANT.



The opinion of the court was delivered by: District Judge Robert M. Dow, Jr.

MEMORANDUM OPINION AND ORDER

On November 21, 2008, Plaintiff Viad Corp ("Viad") filed a one-count complaint alleging that Defendant Anne Houghton ("Houghton") breached a provision contained within Viad's Management Incentive Plan when she left Viad's employment and took a job with a competitor. Both parties moved for summary judgment [26, 38]. On February 26, 2010, the Court granted Plaintiff Viad's motion for summary judgment [26] and denied Defendant Houghton's motion [38]. On March 26, 2010, Defendant Houghton filed a motion for reconsideration [53] of the Court's February 26, 2010 order. For the reasons stated below, Defendant's motion [53] is respectfully denied.

I. Background

The facts in this case were chronicled in the Court's Memorandum Opinion and Order of February 26, 2010 [48]. Therefore, the Court only briefly recites them here. On July 21, 1997, Plaintiff Viad Corp hired Defendant Anne Houghton as a senior designer for one of its business segments, Exhibitgroup. Viad provides services to exhibition organizers and exhibitors, and Exhibitgroup's business ranges from servicing exhibitors at a trade show (or entities that have a private function in relation to a trade show) to providing design services for private corporate functions.

Exhibitgroup promoted Houghton several times, from Senior Designer to Creative Director of the Chicago division and eventually to Senior Vice President of Design and Creative, a role that she performed for the last three years of her employment with Exhibitgroup. In that role, Houghton supervised the company's team of creative directors and designers and, among other things, had budget responsibilities. She worked primarily in providing design services for "Exhibit Services," as opposed to working in "Exposition Management."

Exhibitgroup paid Houghton a base salary of $175,000. In addition to her base salary, Houghton participated in Viad's voluntary Management Incentive Plan (the "Plan"). The 2007 Plan's stated purpose was to provide key senior executives with an incentive to achieve goals set forth under the Plan. Under the terms of the Plan, if Houghton went to work for a competitor and provided services to the competitor that were "directly concerned" with the services that she performed during her last two years of employment or about which she had confidential information, she was required to return any payout she received under the Plan. In March 2008, Houghton received a payout of $102,000 under the 2007 Plan. Six months later, Houghton resigned from Viad and began working for The Freeman Companies ("Freeman").

Exhibitgroup and Freeman compete in the exhibit and events design industry. Like Viad, Freeman divides its business into segments, including Exposition Management Services and Exhibit Services. Houghton testified that Exhibitgroup and Freeman are competitors, that they both sell design services to their clients, and that her current job with Freeman, as with her job at Exhibitgroup, involved the sale of design services to clients. Houghton Dep. at 45:13-46:10.

On October 3, 2008, Viad demanded repayment of the $102,000 payout made to Houghton under the 2007 Plan. Houghton refused, and Viad filed a one-count complaint in an attempt to recover the payout. On February 26, 2010, the Court entered summary judgment in favor of Viad and against Houghton and ordered Houghton was required to return any payout she received under the Plan. The Court concluded that (i) the services that Houghton provides to Freeman are "directly concerned" with the services that she performed for Viad and (ii) the clause in the Plan requiring Houghton to forfeit her payout is not an unreasonable restraint on competition.

II. Legal Standard on Motion for Reconsideration

A court may alter or amend a judgment when the movant "clearly establish[es]" that "there is newly discovered evidence or there has been a manifest error of law or fact." Harrington v. City of Chicago, 433 F.3d 542, 546 (7th Cir. 2006). In regard to the "manifest error" prong, the Seventh Circuit has elaborated that a motion to reconsider is proper only when "the Court has patently misunderstood a party, or has made a decision outside the adversarial issues presented to the Court by the parties, or has made an error not of reasoning but of apprehension." Bank of Waunakee v. Rochester Cheese Sales, Inc., 906 F.2d 1185, 1191 (7th Cir. 1990).

While the Federal Rules of Civil Procedure allow a movant to bring to a court's attention a manifest error of law, it "does not provide a vehicle for a party to undo its own procedural failures, and it certainly does not allow a party to introduce new evidence or advance arguments that could and should have been presented to the district court prior to the judgment." Bordelon v. Chicago School Reform Bd. of Trustees, 233 F.3d 524, 529 (7th Cir. 2000). And because the standards for reconsideration are exacting, our court of appeals has stressed that issues appropriate for reconsideration "rarely arise and the motion to reconsider should be equally rare." Bank of Waunakee, 906 F.2d at 1191.

III. Analysis

Houghton's motion for reconsideration challenges the Court's ruling in two respects: (i) Houghton argues that the Court erred in concluding that her new job is "directly concerned" with the services she provided to Viad; and (ii) she contends that the ...


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