Franke v. Honeywell, Inc.

516 N.E.2d 1090, 1987 Ind. App. LEXIS 3349, 1987 WL 24644
CourtIndiana Court of Appeals
DecidedDecember 21, 1987
Docket02A04-8706-CV-192
StatusPublished
Cited by8 cases

This text of 516 N.E.2d 1090 (Franke v. Honeywell, Inc.) is published on Counsel Stack Legal Research, covering Indiana Court of Appeals primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Franke v. Honeywell, Inc., 516 N.E.2d 1090, 1987 Ind. App. LEXIS 3349, 1987 WL 24644 (Ind. Ct. App. 1987).

Opinions

HOFFMAN, Judge.

This interlocutory appeal was brought by the defendants, James Franke, Steven Method and Summit Control, Inc. The defendants are seeking review of a preliminary injunction entered against them at plaintiff's, Honeywell, Inc., request. Defendants, Franke and Method are former Honeywell employees and the injunction was aimed at interpreting and enforcing a noncompetition agreement. - On appeal they raise several issues, which are restated as follows:

(1) whether the trial court erred in its findings as to what constitutes Honeywell's proprietary information;
(2) whether the preliminary injunction is overly broad; and
(3) whether the preliminary injunction is erroneous as applied to Franke individually.

For a number of years before December 15, 1986, Franke and Method had been employees of Honeywell, Inc., at its Fort Wayne Building Services Division office. This division of Honeywell is in the business of installing and servicing heating, eooling and temperature control systems, fire alarm systems, building automation systems and energy management computers.

As part of their employment with Honeywell, Franke and Method were each required to execute non-competition agreements. Although these agreements were different in certain particulars, they were very similar in wording and intent. Initially the agreements prohibited each man [1092]*1092from using or disclosing any of Honey well's proprietary information. The doe-ument's preamble defined this information to include the identities of current and prospective customers, contract seope, expiration dates, services, prices and bidding and estimating practices.

Additionally, for one year after ending employment with Honeywell, the agreements prohibited the pair from competing with Honeywell by performing, soliciting or selling a variety of specified services related to Honeywell's building services business. Franke agreed to refrain from performing these services for anyone who was a "contract service customer" at the time he terminated employment. - Method's agreement was somewhat broader in that he agreed to refrain from servicing current contract service customers, and potential customers who had already received offers or potential customers for whom offers were then being prepared.

On December 15, 1986, both Franke and Method terminated their employment with Honeywell. Approximately two weeks earlier the two had incorporated Summit Control, Inc. Immediately upon leaving Honeywell, Method and Franke activated Summit Control and began seeking business, much of which duplicated Honey well's business. It is clear that at least two of Summit Control's new clients were "contract service customers" as of the date that Franke and Method terminated their employment.

On April 7, 1987, Honeywell filed its complaint seeking a preliminary injunction and damages. After a hearing, held on May 18, 1987, the court entered its Findings of Fact and Conclusions of Law. The court's judgment read as follows:

"Upon the above and foregoing Findings of Fact and Conclusions of Law, the Court now orders that the defendants James Franke, Steven P. Method, and Summit Control, be, and they are hereby preliminary [sic] enjoined: (1) From contacting any contract service customer of Honeywell; (2) From performing any services for any Honeywell contract service customer who was a contract service customer of Honeywell as of December 15, 1986; and (8) From making any use of Honeywell's proprietary information in an effort to compete with Honeywell, including the use of any proprietary information with respect to the service of Delta Computerized Programs."

On August 17, 1987, the court modified its judgment as follows:

"Court grants Defendants' Motion to Modify in part and therefore modifies the judgment of Preliminary Injunction as to Paragraph (1) and (2) as follows: Paragraph (1) shall be modified to read (1) From contacting any contract service customer of Honeywell as of December 15, 1986 that was a contract service customer of the Honeywell location from which Defendants' employment was terminated.', and (2) From performing any services for any Honeywell contract service customer who was a contract service customer of Honeywell as of December 15, 1986 at the Honeywell location from which Defendants' employment was terminated', and Paragraph (8) to remain as originally ordered."

In general, preliminary injunctions are extraordinary remedies whose sole purpose is to maintain the status quo until the matters at issue can be fully determined. Kozuch v. CRA-MAR Video Center, Inc. (1985), Ind.App., 478 N.E.2d 110. A preliminary injunction is not intended to enlarge the plaintiff's rights, nor to ajudicate the merits of the case. Rees et al. v. Panhandle E. Pipe Line, Co. (1978), 176 Ind.App. 597, 377 N.E.2d 640. For these reasons it is imperative that the order granting a preliminary injunction be carefully worded to avoid overbreadth or ambiguity.

This requirement of exactness and specificity is especially true when a non-competition agreement is being enforced. Non-competition agreements restrain free trade and are not favored by Indiana's courts. Harvest Ins. Agency v. Inter-Ocean Ins. Co. (1986), Ind., 492 N.E. 2d 686. Such agreements will be enforced to the extent their terms are reasonable as to time, place and scope; however, in any situation, non-competition agreements are [1093]*1093always strictly construed against the co-vententee, and will never be extended beyond the express terms of the agreement. Century Personnel, Inc. v. Brummett (1986), Ind.App., 499 N.E.2d 1160.

In the present case there is little question that Franke and Method violated the terms of their respective non-competition agreements by actually performing service-es for entities that were contract service customers as of December 15, 1986. It is also apparent that the two intended to continue further contacts with Honeywell's customers. On appeal Franke and Method do not seriously question these findings, nor do they seriously attack the trial court's fundamental finding that some form of injunctive relief was called for. Instead Franke and Method's dispute is with the terms of the injunction.

The first issue, on appeal, is directed at the third part of the trial court's judgment which enjoins the use of Honeywell's proprietary information. The trial court accepted, verbatim, Honeywell's definition of what information was proprietary. Accordingly the court enjoined the use of the names of Honeywell's customers, prices, the scope of each contract, and what the court termed as "proprietary information with respect to the service of Delta Computerized Programs." Franke and Method contend that this definition is over-broad, and not supported by sufficient evidence.

A review of the evidence leads to the conclusion that Franke and Method are correct. It is of little importance that Honeywell labeled certain information as proprietary, because the law is clear that what constitutes proprietary or trade secret information is a determination for the court to make as a matter of law.

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Franke v. Honeywell, Inc.
516 N.E.2d 1090 (Indiana Court of Appeals, 1987)

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Bluebook (online)
516 N.E.2d 1090, 1987 Ind. App. LEXIS 3349, 1987 WL 24644, Counsel Stack Legal Research, https://law.counselstack.com/opinion/franke-v-honeywell-inc-indctapp-1987.