2016 IL App (1st) 160042
THIRD DIVISION February 17, 2016
No. 1-16-0042
BRIDGEVIEW BANK GROUP, ) Appeal from the ) Circuit Court of Plaintiff-Appellant, ) Cook County ) v. ) No. 15 CH 17786 ) THOMAS MEYER, ) ) Honorable Defendant-Appellee. ) Thomas R. Allen ) Judge Presiding.
PRESIDING JUSTICE MASON delivered the judgment of the court, with opinion. Justice Lavin and Justice Pucinski concurred in the judgment and opinion.
OPINION
¶1 Plaintiff-appellant, Bridgeview Bank Group appeals from an order denying its motion for
a temporary restraining order against its former employee, defendant-appellee Thomas Meyer.
After a hearing on Bridgeview's motion, the circuit court denied relief based primarily on its
finding that Bridgeview failed to establish a likelihood of success on the merits. Finding no
abuse of discretion, we affirm.
¶2 Meyer was employed as a senior vice president at Bridgeview from April 2013 until he
was terminated on July 28, 2015. Meyer's duties primarily focused on originating, assigning or
selling Small Business Administration (SBA) loans. Meyer entered into an employment
agreement with Bridgeview that contained, among other provisions, a restrictive covenant that
prohibited Meyer from competing with Bridgeview in the area of SBA lending for six months 1-16-0042
following termination of his employment. The agreement also contained provisions requiring
Meyer to (i) maintain the confidentiality of Bridgeview's information, broadly defined to include
virtually all nonpublic information relating to Bridgeview's business, (ii) refrain, for a period of
one year, from soliciting Bridgeview's customers or encouraging those customers not to do
business with Bridgeview and (iii) refrain for the same period of time from soliciting
Bridgeview's employees to leave the bank. In connection with the termination of his
employment, Meyer entered into a severance agreement. The severance agreement eliminated
the six-month noncompete provision of Meyer's employment agreement, but required Meyer to
maintain the confidentiality of Bridgeview's information, again broadly defined, and left intact
the nonsolicitation provisions. The severance agreement also provided that Meyer would not
make any disparaging comments about Bridgeview following his termination. On September 1,
2015, Meyer began working for CenTrust Bank.
¶3 On December 8, 2015, more than four months after Meyer's termination, Bridgeview
commenced this action alleging that Meyer had violated the provisions of both the severance
agreement and his employment agreement. Bridgeview asserted claims for breach of contract,
breach of fiduciary duty, tortious interference with business relationships and under the Illinois
Trade Secrets Act (765 ILCS 1065/2(b) (West 2014)). In its verified complaint, Bridgeview
alleged that "in the course of reviewing its files," it discovered that Meyer had "contacted
customers of [Bridgeview], divulged confidential information, and made disparaging remarks
about" Bridgeview. Bridgeview's complaint alleged that Meyer had interfered with "one or more
of the contractual or prospective contractual relationships that [Bridgeview] has with its
customers and prospective customers" and that Meyer's conduct had "caused and will continue to
cause irreparable harm to [Bridgeview] by damaging its contractual and prospective contractual
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relationships with its employees and customers; harming its goodwill, [and] disclosing its trade
secret, confidential, and proprietary business information." No particular customer, confidential
information, or disparaging comment was identified in the complaint.
¶4 After its complaint was filed, Bridgeview waited two weeks, until December 23, 2015, to
file its motion for a temporary restraining order. Bridgeview's motion provided no more detail
than its complaint regarding the identity of any customer allegedly solicited by Meyer or the
nature of any confidential information disclosed by him. Bridgeview attached certain e-mails
sent by Meyer to himself on the last day of his employment, but did not file any affidavit
attesting to the source of the e-mails, revealing when Bridgeview discovered them or describing
the information Meyer attached to them. Further, Bridgeview did not notice its motion as an
emergency, but waited to present the motion on the circuit court's regular motion call on January
4, 2016.
¶5 On December 21, 2015, Meyer filed a verified counterclaim alleging that Bridgeview had
breached the severance agreement by failing to pay Meyer certain earned commissions on loans
generated prior to his termination, but which closed after he left. Meyer's counterclaim also
contained allegations regarding his relationship with Paul Manzano, identified by Bridgeview in
a presuit letter as a customer Meyer solicited. Meyer claimed his relationship with Manzano
preceded his employment with Bridgeview and that he did not solicit Manzano following his
termination. Meyer did not file an answer to Bridgeview's complaint.
¶6 At the initial hearing on Bridgeview's motion for a temporary restraining order,
Bridgeview provided the court with copies of the e-mails and their attachments. Two e-mails
attached, respectively, the SBA division's June 2015 income statement and a number of
passwords, including internal bank passwords for Wi-Fi and Meyer's employee payroll account
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as well as passwords for certain websites for which Meyer registered under his Bridgeview e-
mail account. The third e-mail attached a list of contacts compiled by Meyer consisting of
personal (family members, relatives and friends), Bridgeview personnel and third-party business
contacts. The list was 176 pages long with 2,197 contacts. With respect to outside business
contacts, the list contained brief notes about how Meyer knew the contact and, in some cases,
current and prospective deals the contacts wished to pursue. The court expressed concern about
the "customer list," observing that it did not appear that Meyer had any right to retain that
information. The hearing was continued until January 8 and the court encouraged the parties to
attempt to settle the matter.
¶7 Between the hearing on January 4 and the resumed hearing, the parties engaged in
settlement discussions. One topic of discussion was the customer list and other information
Meyer had e-mailed himself. Meyer's counsel offered to have Meyer delete the information on
the contact list relating to Bridgeview customers. Although the parties did not settle, Meyer's
counsel later represented that Meyer had deleted the emails and any Bridgeview customer
information from his computer and that his counsel had retained copies of the e-mails and
attachments pending the outcome of the litigation. At the resumed hearing on January 8,
Bridgeview criticized Meyer's conduct, labeling it an effort to destroy relevant evidence.
¶8 The court heard extensive argument during the hearing on January 8. The court inquired
of counsel for Bridgeview as to how many of the entries on the contact list were Bridgeview
customers. Of the nearly 3,000 contacts, counsel for Bridgeview variously represented that
"dozens," "scores" and "over a hundred" were Bridgeview customers. (Apparently, included in
that estimate was contact information for Bridgeview's own employees.) Counsel for Meyer
argued that Bridgeview had not provided any information, either in its complaint or in the
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materials submitted in support of its request for a temporary restraining order, as to the nature
and length of Bridgeview's relationship with any of the customers on the list, what resources had
been invested to develop and retain those relationships or what Meyer's role in those
relationships was. Meyer's counsel also faulted Bridgeview for failing to provide the court with
information regarding how the customer list was compiled, what Bridgeview employees had
access to it and what steps Bridgeview took to maintain its confidentiality.
¶9 Ultimately, the court concluded that "this case needs some evidence because there's a lot
of inference, innuendo, [and] guesswork." Bridgeview's motion for a temporary restraining order
was denied and the court set the matter for an evidentiary hearing on Bridgeview's motion for a
preliminary injunction. Bridgeview timely filed this interlocutory appeal pursuant to Illinois
Supreme Court Rule 307(a) (eff. Feb. 26, 2010).
¶ 10 A trial court's decision to grant or deny injunctive relief is discretionary and its
determination will not be disturbed absent an abuse of discretion. Mohanty v. St. John Heart
Clinic, S.C., 225 Ill. 2d 52, 62-63 (2006). We are concerned here not with the enforceability, per
se, of the restrictions on Meyer's postemployment conduct, 1 but with the sufficiency of the
allegations of Bridgeview's verified complaint to establish its entitlement to temporary injunctive
relief on the assumption that the postemployment restrictions are valid.
¶ 11 On this topic, we note that in response to Bridgeview's verified complaint, Meyer did not
file a verified answer, but instead purported to controvert Bridgeview's allegations in his verified
counterclaim and affidavits submitted in opposition to the motion. For example, although
1 Meyer indicated his intent to raise that issue via a motion to dismiss, but nevertheless the parties debated whether Meyer's length of employment could support the restrictive covenants. See Fifield v. Premier Dealer Services, Inc., 2013 IL App (1st) 120327, ¶ 19 (generally at-will employment for two years or more sufficient to support postemployment restrictive covenant). Although the trial court resolved this latter factual issue against Meyer, we do not reach it for reasons we discuss below. Infra ¶ 13. 5 1-16-0042
Bridgeview's complaint alleged that Meyer entered into the restrictive covenant at the outset of
his employment in April 2013, Meyer disputed that assertion and claimed in an affidavit that he
did not sign an agreement containing the restrictive covenant until August 2013. Meyer also
asserted that Manzano, the one customer alluded to by Bridgeview (although not in its
complaint), was a long time referral source known to him prior his employment at Bridgeview.
This is procedurally improper. On a motion for a temporary restraining order, it has long been
held that in the absence of a verified answer, the court should not receive or consider evidence or
affidavits from the opposing party. Russell v. Howe, 293 Ill. App. 3d 293, 296 (1997); Carriage
Way Apartments v. Pojman, 172 Ill. App. 3d 827, 836 (1988); Kurle v. Evangelical Hospital
Ass'n, 89 Ill. App. 3d 45, 48 (1980). Bridgeview complained to the trial court that this maneuver
allowed Meyer to indirectly contest the allegations of the complaint without filing a verified
answer. We agree and thus will not consider evidence or arguments presented by Meyer
regarding the date he executed his employment agreement, his alleged preexisting relationship
with Manzano, his postemployment dealings with Manzano or Bridgeview's claimed breach of
the severance agreement, as these matters are all beyond the allegations of the verified
complaint.
¶ 12 The elements an applicant must establish to warrant the extraordinary remedy of a
temporary restraining order are well-established. As variously stated, the movant must
demonstrate (i) an ascertainable right in need of protection, (ii) a likelihood of success on the
merits, (iii) irreparable harm in the absence of injunctive relief, and (iv) the lack of an adequate
remedy at law. Mohanty, 225 Ill. 2d at 62 (citing People ex rel. Klaeren v. Village of Lisle, 202
Ill. 2d 164 (2002), and Callis, Papa, Jackstadt & Halloran, P.C. v. Norfolk & Western Ry. Co.,
195 Ill. 2d 356, 365 (2001)). In addition, if the movant establishes a prima facie case, the court
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may also consider whether the balance of harms favors the grant or denial of injunctive relief.
Lumbermen's Mutual Casualty Co. v. Sykes, 384 Ill. App. 3d 207, 230 (2008).
¶ 13 Here, in its oral ruling denying Bridgeview's motion, the trial court focused on
Bridgeview's failure to demonstrate a likelihood of success on the merits based largely on the
evidence presented regarding the sole customer identified by the bank prior to filing its
complaint—Manzano—and Meyer's allegations regarding Bridgeview's claimed breach of the
severance agreement. As we have noted, these were factual matters improperly raised by Meyer
in opposition to the bank's motion and while the trial court will have the opportunity to resolve
these and other issues in connection with the preliminary injunction hearing, they should not
have been considered on Bridgeview's motion for a temporary restraining order. But because we
may affirm on any basis appearing in the record (Alpha School Bus Co. Inc. v. Wagner, 391 Ill.
App. 3d 722, 734 (2009)) we will instead examine the allegations of Bridgeview's verified
complaint and attachments together with the parties' legal arguments to determine whether the
court properly exercised its discretion in denying a temporary restraining order.
¶ 14 At the outset, we note that there are virtually no well-pled facts in Bridgeview's
complaint regarding information Meyer allegedly took with him or customers he solicited after
he left. Rather, the complaint is replete with nonspecific and conclusory allegations. For
example, Bridgeview alleged that it had developed "unique marketing strategies, processes and
information" without ever describing, even generally, the nature of those strategies, processes or
information or what made them "unique" in the banking industry. Further, as defined in Meyer's
employment and severance agreements, "confidential information" encompassed virtually the
entirety of Bridgeview's business operations. Customer relationships were "initiated, created,
cultivated, nurtured and solidified at great expense" to Bridgeview and from this broad, factually
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unsupported allegation, Bridgeview drew the conclusion that those relationships were "legitimate
business interests worthy of protection." Although the complaint alleged that "Meyer's breach of
his post-employment obligations [was] open, blatant, and without justification," not a single fact
supporting the conclusion that Meyer breached either his employment or severance agreement
was alleged. Instead, Bridgeview claimed that Meyer solicited "one or more" of its customers,
"used and disclosed" its confidential information and made disparaging comments about
Bridgeview "in the course of so doing."
¶ 15 Such broad, conclusory allegations are insufficient to establish a plaintiff's entitlement to
temporary injunctive relief. See Capstone Financial Advisors, Inc. v. Plywaczynski, 2015 IL
App (2d) 150957, ¶ 11 (plaintiff's failure to identify single client whom defendant solicited, or
whose confidential information defendant used, fatal to motion for temporary restraining order);
Office Electronics, Inc. v. Adell, 228 Ill. App. 3d 814, 820 (1992) (conclusory allegations
regarding plaintiff's irreparable injury and lack of adequate legal remedy do not support issuance
of preliminary injunction); Schlicksup Drug Co. v. Schlicksup, 129 Ill. App. 2d 181, 188 (1970)
(finding allegation that defendant's conduct had and "will continue to cause irreparable injury to
the plaintiff for which plaintiff has no adequate remedy at law" was a conclusion and not an
allegation of fact (internal quotation marks omitted)). Months after it terminated Meyer,
Bridgeview should have been able to identify specific customers it had lost and with which
Meyer interacted during his tenure, if there were any. While, without the benefit of discovery,
Bridgeview certainly could not be expected to prove the relationship between the lost business
and Meyer's claimed breach of contract, Bridgeview's failure to identify in its complaint even
one customer or describe with any specificity the confidential information used or disclosed is
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inexplicable and, hence, insufficient. We consider next whether the additional materials
submitted by Bridgeview to the trial court satisfied its burden.
¶ 16 As noted, at the hearing on Bridgeview's motion, it presented the trial court with emails
and attachments it claimed contained confidential information and that Meyer had sent to himself
on the last day of his employment. Yet, these materials were nowhere referenced in Bridgeview's
complaint and Bridgeview failed to supply any affidavits in support of its motion in an attempt to
flesh out the complaint's nonspecific allegations. While a party seeking a temporary restraining
order may properly support its request with affidavits containing details of the complaint's
broader allegations, e.g., which customers the bank believed Meyer solicited and how the bank
cultivated its SBA customer base, simply handing up documents at a hearing cannot satisfy the
movant's burden. For example, Bridgeview's counsel tendered to the trial judge a copy of the
contacts list "highlighted" to indicate which of the nearly 3,000 contacts were Bridgeview
customers, but Bridgeview never produced an affidavit from a bank officer to attest to that
representation. Consequently, these materials amounted to unverified allegations of wrongdoing
on Meyer's part and the trial court could properly have refused to consider them. Nonetheless,
since Meyer responded to this information, we will analyze it as well.
¶ 17 The primary focus of the trial court's analysis and Bridgeview's arguments on appeal
concern the so-called customer list. Bridgeview did not argue that the other information attached
to the e-mails, some of which was internal to the bank, was "used or disclosed" by Meyer in
violation of the confidentiality provisions of his employment and severance agreements. Further,
because (i) the bank had the ability to change its own passwords or otherwise disable Meyer's
access to its internal accounts, (ii) Meyer's username and password for third-party websites was
not confidential information belonging to Bridgeview, and (iii) by January 2016, the data in a
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June 2015 income statement for the SBA division would undeniably have become stale, it does
not appear that Meyer's continued possession of that information posed any threat of irreparable
harm so as to warrant a temporary restraining order.
¶ 18 As to the list of contacts, Meyer conceded that it contained, in part, information regarding
bank customers compiled during his employment. But, as Meyer argued to the trial court and
contends on appeal, Bridgeview never alleged any facts to support its claim that those customer
relationships were "initiated, created, cultivated, nurtured and solidified at great expense" or
described how the brief notations in the contact list could be used by Meyer to Bridgeview's
detriment. In this context, it is important to note that the severance agreement specifically waived
the six-month noncompete provision in Meyer's employment agreement. Thus, when he was
terminated, Meyer was free to compete with Bridgeview in the SBA lending industry. We have
examined the unredacted list that we allowed to be filed under seal. With respect to business
contacts, it contains such notations as who those individuals were referred by and, in some
instances, generic descriptions of transactions they were interested in pursuing. Typical of these
entries are: "he called me about a business on 5/30/13 that does medical oxygen sales price about
$2.2mm and cash flow of $750.0m"; "he has two guys starting up a body shop and buying the
real estate"; and "owns an Applebees and need a debt refinance." Many of the entries are undated
and none contain any details of transactions that could be used by a competitor. Thus, while
certain information on the list may be "confidential" in the sense that it was unknown outside the
bank, Bridgeview made no preliminary showing that the information was of any particular value
to Meyer or his current employer.
¶ 19 Bridgeview also made no showing that it had a protectable interest in its SBA customer
base. Other than a newsletter describing its "loyal" customers, Bridgeview provided no evidence
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as to the resources devoted to acquiring and retaining customers or the longevity of their
relationships with the bank. And while, under appropriate circumstances, a customer list can
qualify as a trade secret, there is no per se rule affording it such status. Compare Stampede Tool
Warehouse, Inc. v. May, 272 Ill. App. 3d 580, 589 (1995) (describing "laborious method" by
which customer list was compiled); Elmer Miller, Inc. v. Landis, 253 Ill. App. 3d 129, 134
(1993) (list of over 500 active, repeat customers for custom tailoring deemed a trade secret), with
System Development Services, Inc. v. Haarmann, 389 Ill. App. 3d 561, 572 (2009) (customer list
not protectable where employer failed to establish that names, addresses and contact information
was not generally known by others or otherwise readily available); Liebert Corp. v. Mazur, 357
Ill. App. 3d 265, 279 (2005) (finding that although customer list would have required significant
time, effort and expense to duplicate, it was not a trade secret due to lack of efforts to restrict
access to the information).
¶ 20 Moreover, the only claimed violation of the confidentiality agreement cited by
Bridgeview concerned Meyer's communications with Manzano that occurred in the past.
Because injunctive relief is forward-looking, it "'cannot remedy misconduct, such as the
improper acquisition of trade secrets, that occurred in the past.'" Liebert, 357 Ill. App. 3d at 284
(quoting LeJeune v. Coin Acceptors, Inc., 849 A.2d 451, 467 (Md. 2004)). Bridgeview did not
provide the trial court with any indication that the threat of Meyer's use or disclosure of
confidential information was ongoing. While Bridgeview may yet develop such evidence that
may be presented at the preliminary injunction hearing, its absence on this record supports the
denial of the extraordinary remedy of a temporary restraining order.
¶ 21 Meyer also argued to the trial court and asserts on appeal that Bridgeview's delay in
seeking a temporary restraining order bears on the availability of that remedy. Noticeably absent
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from the materials presented to the trial court was any representation as to when Bridgeview
discovered the e-mails that play such a prominent role in its claims. Because the bank obtained
those e-mails from its internal e-mail system after Meyer was terminated, it is reasonable to
assume they were available since the late summer of 2015. Bridgeview has never claimed
otherwise. Meyer did not attempt to conceal his e-mails or cover his tracks (see Liebert, 357 Ill.
App. 3d at 272-73 (former employee downloaded large volume of confidential information and
later attempted to delete information and erase computer hard drive)) and Bridgeview has not
claimed it was thwarted in its efforts to discover his conduct. If, as Bridgeview now contends,
Meyer's possession of the contact list, standing alone, is an obvious breach of his confidentiality
agreement, we can conceive of no reason why Bridgeview would take such a leisurely approach
to protecting that information. While we do not agree that Bridgeview's delay, standing alone,
warranted denial of a temporary restraining order, we agree with Meyer that it was a relevant
consideration. Makindu v. Illinois High School Ass'n, 2015 IL App (2d) 141201, ¶ 43 ("[D]elay
is only one among several factors to be considered in the issuance of a preliminary injunction.");
Schlicksup Drug Co., 129 Ill. App. 2d at 187-88 (plaintiff's delay in seeking injunction "raises a
question as to the need for the preliminary injunction").
¶ 22 Our supreme court has disavowed the paramount importance of any one factor in the
context of a restrictive covenant. Reliable Fire Equipment Co. v. Arredondo, 2011 IL 111871, ¶
33. But all of the foregoing factors are among those a court may consider in evaluating the
enforceability of such covenants and, in particular, whether a former employee's violation
warrants entry of an injunction. See Northwest Podiatry Center, Ltd. v. Ochwat, 2013 IL App
(1st) 120458, ¶¶ 39, 46; Gastroenterology Consultants of the North Shore, S.C. v. Meiselman,
2013 IL App (1st) 123692, ¶ 10.
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¶ 23 Given the paucity of facts alleged by Bridgeview in its complaint, the same failing in its
motion for a temporary restraining order and the debatable status of the information in Meyer's
possession, the trial court correctly found that Bridgeview had failed to establish a likelihood of
success on the merits sufficient to support a temporary restraining order. This same lack of
specificity, coupled with the lack of any claim that the violation is ongoing and the delay in
seeking relief, renders Bridgeview unable to demonstrate that it will sustain irreparable harm in
the absence of a temporary restraining order. As these elements are essential to the award of a
temporary restraining order, the order denying Bridgeview's motion must be affirmed.
¶ 24 For the foregoing reasons, we affirm the order denying Bridgeview's motion for a
temporary restraining order.
¶ 25 Affirmed.