Atlas Ready-Mix of Minot, Inc. v. White Properties, Inc.

306 N.W.2d 212, 1981 N.D. LEXIS 287
CourtNorth Dakota Supreme Court
DecidedMay 29, 1981
DocketCiv. 9879
StatusPublished
Cited by19 cases

This text of 306 N.W.2d 212 (Atlas Ready-Mix of Minot, Inc. v. White Properties, Inc.) is published on Counsel Stack Legal Research, covering North Dakota Supreme Court primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Atlas Ready-Mix of Minot, Inc. v. White Properties, Inc., 306 N.W.2d 212, 1981 N.D. LEXIS 287 (N.D. 1981).

Opinion

SAND, Justice.

The defendants, White Properties, Inc. [White], Minot Paving Company, Inc. [Minot Paving], and Steve D. and Thomas D. McCormick [the McCormicks] appealed from a judgment awarding the plaintiff, Atlas Ready-Mix of Minot, Inc. [Atlas], damages from Minot Paving in the sum of $44,666.37, plus costs, and enjoining all the defendants from engaging in the sand and gravel retail business in Ward County, North Dakota, for a period of five years from 9 April 1976. The defendants were also enjoined from purchasing washed material, asphalt aggregate or concrete aggregate from any party other than Atlas and from using their own washed material, asphalt aggregate or concrete aggregate for their own projects for the same period.

Sometime in 1975 or 1976, White purchased the outstanding capital stock of Minot Sand and Gravel. Minot Sand and Gravel had previously conducted the following three separate divisions of the construction business: a sand and gravel business, a ready-mix business, and a paving business. The Minot Sand and Gravel stock was liquidated by White and its assets were transferred to White. The record reflects that prior to the purchase of the stock by White, Atlas was also considering purchasing all three divisions of Minot Sand and Gravel.

On 9 April 1976, Atlas and White executed a sales agreement whereby White sold Atlas equipment for both the sand and gravel business and the ready-mix business plus real property consisting of gravel deposits. The McCormicks personally guaranteed White’s performance of the sales agreement between White and Atlas. White sold Minot Paving the equipment for the paving business plus real property consisting of gravel deposits on the same day. Since 9 April 1976 Minot Paving has dealt with Atlas ¡n Ward County, under the terms of the sales agreement as an assign 0f White, and counsel stipulated at trial that Minot Paving was bound by the terms and conditions of the sales agreement between Atlas and White.

The sales agreement contained the following language pertinent to this appeal:

“. .. [Atlas] as an additional consideration for the purchase of the property described herein agrees to sell washed material or concrete aggregate to ... [Minot Paving] or their assigns at a 5% greater discount than that allowed to any other persons. If ... [Minot Paving] or their assigns produce the material themselves then they shall purchase material at the following rates: for all material produced by ... [Minot Paving] on the property described in subparagraph 1 . .. [Minot Paving] shall pay 15<p per ton for all material removed; for all material produced by .. . [Minot Paving] on the property described in subparagraphs 2, 3 and 4 they shall pay to . . . [Atlas] the sum of 30$ per ton for all material removed; for material produced by ... [Minot Paving] on the property described in subparagraph 5 they shall pay to ... [Atlas] the sum of 10$ per ton for all material removed. The above prices for material produced by .. . [Minot Paving] shall not apply to materials in excess of that used by ... [Minot Paving] in the Minot paving operation. All materials which are purchased by ... [Minot Paving] in the Minot area shall be purchased from ... [Atlas] as specified in this paragraph. As additional compensation for the agreement of ... [Minot Paving] to purchase this material, ... [Atlas] agrees not to compete in the asphalt paving business in Ward County, North Dakota, for a period of five (5) years.
“... [Minot Paving] hereby covenants that he will not compete in the concrete *216 ready mix business or the sand and gravel retail business in Ward County, North Dakota for a period of five (5) years with ... [Atlas].”

A separate agreement not to compete [noncompetition agreement] was also executed on the same day whereby White and the McCormicks agreed not to participate in any business which engaged in the concrete ready-mix business or sand and gravel retail business, and Atlas and its president, Alvin J. Braun, agreed not to participate in any business which engaged in the asphalt paving business.

Atlas initiated this action based on the sales agreement and the separate noncom-petition agreement. Its complaint in substance alleged that Minot Paving, as an assign of White, obtained certain materials for construction in the Ward County area from sources other than Atlas and that these actions violated the terms of the previously set out sales agreement. Specifically, Atlas alleged that Minot Paving used gravel from its own gravel deposits for work in the Minot area; that Minot Paving obtained quantities of concrete for use in the Minot area from third parties; that Minot Paving obtained aggregate chips for use in the Minot area from third parties; and that Minot Paving used gravel or aggregate which was not purchased from Atlas for asphalt paving.

The defendants’ answer in substance admitted that Minot Paving used some of its own gravel for a construction project; that Minot Paving purchased concrete ready-mix from third parties; and that Minot Paving purchased aggregate chips from third parties. However, the defendants denied that these transactions were a violation of the sales agreement between Atlas and White.

Atlas’ complaint also alleged in substance that the defendants sold aggregate base (class V aggregate base) and quality control aggregate (quality control bituminous pavement) to Northern Improvement Co. [Northern Improvement] 1 for use by Northern Improvement in Ward County and that the sale of the material was a violation of provisions in the sales agreement and the noncompetition agreement.

The defendants’ answer in substance admitted that Minot Paving allowed Northern Improvement to go on land owned by Minot Paving and produce material for a highway project. However, the defendants denied that this action was a violation of the non-competition portion of the sales agreement or the noncompetition agreement.

After a trial without a jury, the district court entered findings of fact, 2 conclusions of law, order for judgment and judgment in which it determined that Atlas was entitled to damages from Minot Paving in the sum of $6,193.91 for the failure to purchase certain materials under the sales agreement and $38,432.41 for breach of the noncompet-ition agreement. The defendants were also enjoined from engaging in the sand and gravel retail business in Ward County and from purchasing washed material, asphalt aggregate, or concrete aggregate from any party other than Atlas, or from using its own washed material, asphalt aggregate or concrete aggregate for its own projects for a period of five years from 9 April 1976. The defendants appealed from that judgment.

The first issue raised by the defendants relates to the interpretation of the covenant not to compete.

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Bluebook (online)
306 N.W.2d 212, 1981 N.D. LEXIS 287, Counsel Stack Legal Research, https://law.counselstack.com/opinion/atlas-ready-mix-of-minot-inc-v-white-properties-inc-nd-1981.