BR Paulsen & Co., Inc. v. Lee

237 N.E.2d 793, 95 Ill. App. 2d 146, 1968 Ill. App. LEXIS 1105
CourtAppellate Court of Illinois
DecidedApril 24, 1968
DocketGen. 51,420
StatusPublished
Cited by22 cases

This text of 237 N.E.2d 793 (BR Paulsen & Co., Inc. v. Lee) is published on Counsel Stack Legal Research, covering Appellate Court of Illinois primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
BR Paulsen & Co., Inc. v. Lee, 237 N.E.2d 793, 95 Ill. App. 2d 146, 1968 Ill. App. LEXIS 1105 (Ill. Ct. App. 1968).

Opinion

GOLDENHERSH, J.

Plaintiff appeals from the judgment of the Circuit Court of Cook County entered in favor of all defendants upon allowance of defendants’ motion to strike its complaint and dismiss the cause of action.

In Count I of its complaint plaintiff alleges that for approximately 39 years it had engaged in the business of selling mill supplies at wholesale, that it enjoyed a good reputation and the goodwill of many customers who constantly and continually purchased its goods, that defendants, Leonard M. Lee, LeRoy L. Lee and Clara Lee, copartners, doing business as Lee Supply & Tool Company, were for a long period of time engaged in a business similar to that of plaintiff, that in July 1965, these defendants attempted to institute preliminary negotiations to purchase all of plaintiff’s assets including its goodwill, but that the negotiations were not further pursued because plaintiff expressed no interest in a sale, that plaintiff on January 11, 1966, employed 15 persons among whom were defendant, Frank R. Garapolo, who served as its sales manager and also engaged in selling plaintiff’s merchandise, defendant, George A. Stadler, its chief purchasing agent, defendants, John L. Jach and Lee V. Cunningham, employed as salesmen, and defendant, Viola A. Henderson, its assistant purchasing agent, that each of these defendants performed duties “which were the very essence of plaintiff’s business,” each was a key employee and thus, in the course of his duties had acquired confidential information important to the operation of plaintiff’s business such as its list of customers, its policy with respect to quotation of prices, its costs, and its sources of merchandise, disclosure of which information to a competitor would be damaging to plaintiff’s business, that each of such employee defendants, by virtue of their respective key positions owed plaintiff a fiduciary duty of good faith and fair dealing, that defendants, Frank R. Garapolo, John L. Jach and Lee V. Cunningham, in the course of the performance of their duties for plaintiff acquired the goodwill of a large number of plaintiff’s customers “wholly as a result of the plaintiff’s good reputation and long course of business.”

Plaintiff also alleges:

“9. That the defendants, Leonard M. Lee, LeRoy L. Lee and Clara Lee, d/b/a Lee Supply & Tool Company, did encourage and conspire with the defendants, Frank R. Garapolo, George A. Stadler, John L. Jach, Lee V. Cunningham and Viola A. Henderson for the purpose of inducing them to leave the employment of the plaintiff and to instead enter employment with them and that they did such for the purpose of unlawfully and wrongfully benefiting themselves and for obtaining the confidential business secrets of the plaintiff and thus and thereby obtaining the advantage of the plaintiff’s long experience and acumen and particularly converting the goodwill of the plaintiff by way of acquiring its customers and key employees and for the unlawful and wrongful and malicious purpose of injuring the business of the plaintiff for their own benefit and competitive advantage.
“10. That the defendants, Frank R. Garapolo, George A. Stadler, John L. Jach, Lee V. Cunningham and Viola A. Henderson did conspire with the defendants, Leonard M. Lee, LeRoy L. Lee and Clara Lee, d/b/a Lee Supply & Tool Company, and with one another for the purpose of unlawfully and wrongfully aiding and abetting the defendants, Leonard M. Lee, LeRoy L. Lee and Clara Lee, d/b/a Lee Supply & Tool Company, in the realization of their objectives as set forth in paragraph 9 hereof and for the purpose of benefiting themselves thereby; and furthermore, that they did in furtherance of such objectives enter into the employment of the defendants, Leonard M. Lee, LeRoy L. Lee and Clara Lee, d/b/a Lee Supply & Tool Company, and have or intend to disclose to them the confidential information referred to in paragraph 7 hereof.”

Plaintiff further alleges that the defendants who are its former employees “have threatened to and in fact intend to disclose” the confidential information to the defendants Lee, and intend to convert plaintiff’s long experience, acumen and goodwill and transfer same to the defendants Lee by depriving plaintiff of all or a great part of its principal customers and key employees, that the defendants who are its former employees, at the behest of defendants Lee, in furtherance of their unlawful, wrongful and malicious purposes caused another salesman-employee to terminate his employment with plaintiff without notice; that by reason of the “aforesaid conspiracy among and between the defendants and their aforesaid overt acts” plaintiff has been deprived of virtually all its key employees, will be deprived of its goodwill, the greater part of its customers and will be competitively damaged and its business destroyed.

In Count II plaintiff repeats and realleges many of the allegations of Count I, alleges that it will sustain great and irreparable damage unless its former employees are restrained from revealing the confidential information above described and prays the issuance of a writ of injunction.

Defendants, jointly moved to strike the complaint, deny the writ of injunction and dismiss the action on the grounds that the complaint did not allege (a) a contractual arrangement or other understanding, oral or written, between plaintiff and its former employees, defendants here, which would prevent their leaving plaintiff’s employ, restrict their seeking other employment, limit their conduct with regard to confidential matters, require notice of termination of their employment or create a fiduciary relationship; (b) a restriction on the defendants Lee to refrain from competing with plaintiff or hiring the defendants, formerly plaintiff’s employees, or any of them; (c) that the employee-defendants had “knowledge or notice of any secrecy or confidential status of any of the policies, prices or customers of plaintiff.” In their motion defendants state that the allegations of conspiracy, that the employee-defendants are key employees, and the existence of a “fiduciary duty,” are mere conclusions.

The motion was argued and allowed, plaintiff elected to stand on its complaint, the complaint was stricken and the case dismissed, and this appeal followed.

Defendants contend before this court that the complaint does not (a) state a cause of action for the reason that it does not contain such information as reasonably informs the defendants of the nature of the claim which they are called upon to meet (b) charge defendants with an actionable conspiracy to injure plaintiff’s business (c) state a cause of action for unjustifiable interference with the relationship of employer and employee (d) contain allegations which establish a breach of the duty of good faith and fair dealing owed by an employee to his employer.

The purpose of a complaint, and the test of its sufficiency, is that it inform the defendant of a valid claim under a general class of cases. Irving v. Rodriquez, 27 Ill App2d 75, 169 NE2d 145.

“In a civil case the wrongful acts alleged to have been done in pursuance of a conspiracy, and not the fact of the conspiracy itself, is the gist of the action for damages. Hardy v. Bankers Life & Cas. Co., 19 Ill App2d 75, 153 NE2d 269; Seno v. Franke, 16 Ill App2d 39, 147 NE2d 469.

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Bluebook (online)
237 N.E.2d 793, 95 Ill. App. 2d 146, 1968 Ill. App. LEXIS 1105, Counsel Stack Legal Research, https://law.counselstack.com/opinion/br-paulsen-co-inc-v-lee-illappct-1968.