Genuine Parts Co. v. Autoparts International, Inc.

26 Mass. L. Rptr. 21
CourtMassachusetts Superior Court
DecidedAugust 6, 2009
DocketNo. 052259
StatusPublished
Cited by1 cases

This text of 26 Mass. L. Rptr. 21 (Genuine Parts Co. v. Autoparts International, Inc.) is published on Counsel Stack Legal Research, covering Massachusetts Superior Court primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Genuine Parts Co. v. Autoparts International, Inc., 26 Mass. L. Rptr. 21 (Mass. Ct. App. 2009).

Opinion

McCann, John S., J.

INTRODUCTION

The case at bar arises out of a covenant not to compete that the plaintiff, Genuine Parts Company (“GPC”), and the individual defendant Edward Allard (“Allard”), entered into upon the sale of Allard’s motor vehicle parts business to GPC, subsequent to which sale Allard was employed by GPC. Allard and Autopart International, Inc. (“Autopart”), Allard’s employer (collectively “the defendants”), represented by Owen Gallagher, now move for summary judgment, requesting declaratory judgment with respect to the enforceability of the covenant not to compete and judgment in their favor on all four counts of GPC’s complaint. GPC, represented by C. Alexa Abowitz, moves for summary judgment on the defendants’ abuse of process counterclaim. For the reasons stated below, the covenant not to compete "will be modified and both motions for summary judgment will be ALLOWED.

BACKGROUND

The undisputed material facts and the genuinely disputed material facts in the light most favorable to the non-moving party are as follows.

In 1993, Allard began doing business as Brakemas-ter, Inc. (“Brakemaster”). For the next twelve years, Allard owned and operated Brakemaster, a motor vehicle parts distributor. By 2005, Brakemaster had two locations in the Worcester area, one at 97 Temple Street, Worcester, Massachusetts, 01604, and one at 184-186 West Boylston Street, West Boylston, Massachusetts, 01583 (“the Brakemaster stores”).

Allard approached GPC in the fall of 2004 expressing interest in selling the Brakemaster stores. During that same time period Allard was approached by another party interested in purchasing the Brakemaster stores. After negotiations, the nature of which is disputed, on May 26, 2005, Allard and GPC entered into the asset purchase agreement and the covenant not to compete, attached to the complaint as exhibits one and two. GPC drafted the asset purchase agreement and the covenant not to compete. At the time of the contract negotiations and closing, GPC was represented by counsel and had entered into contracts for the purchase of privately owned motor vehicle parts distribution stores before. It was GPC’s practice to require the seller of a business to enter into a covenant not to compete at the time of the sale. It was not GPC’s practice to require all sales persons to enter into a covenant not to compete. During the course of the contract negotiations and at the time of the closing, Allard was not represented by counsel, although he had consulted with an attorney with respect to some aspects of these contracts.

Pursuant to the asset purchase agreement, GPC took control of the Brakemaster stores on June 1, 2005. The purchase price was based on a calculation of the value of the non-obsolete and saleable NAPA (National Automotive Parts Association) inventory, the usable furniture fixtures, equipment and other items of property, the vehicles used in the Brakemaster stores, the usable shop equipment, and the undisputed, reconciled, and collectable current to sixty days accounts receivable. The agreement provided: if “accounts receivable purchased and collected by [GPC] [22]*22by September 1, 2005, are less than the 75% of the amount of the current accounts receivable paid by [GPC] at the Closing, then [Allard] shall pay to [GPC] . . . the amount of the deficiency, and [GPC] shall then assign to [Allard] those accounts receivable which remain open, outstanding and uncollected. After September 1, 2005, any payments received by [GPC] that are clearly payment of accounts receivable generated before June 1, 2005, shall be promptly forwarded to [Allard].” The asset purchase agreement did not mention the sale of the Brakemaster stores’ good will.

The covenant not to compete was effective June 1, 2005. The covenant stated that it became effective in contemplation of the closing of the asset purchase agreement. At some point prior to entering into the covenant not to compete, Allard and GPC discussed GPC paying Allard in consideration of his signing the covenant not to compete or in consideration of the transfer of the Brakemaster stores’ good will. Just before May 26, 2005, GPC told Allard that in return for his entering into the covenant not to compete Allard would receive guaranteed employment with GPC. In summary, the covenant not to compete provided that for a period of ten years Allard would not, within Brakemaster’s May 2005 customer base or within a twenly-mile radius of the Brakemaster stores, engage in or have any ownership interest in a business that engages in the sale of motor vehicle parts; solicit business relating to the retail sale of motor vehicle parts; divulge or disclose trade secrets, customer lists, or other information regarding the Brakemaster stores; divert, diminish, or prejudice GPC’s good will; or urge any person or entity to discontinue business with GPC.

After the closing of the asset purchase agreement, Allard was employed by GPC as a sales person. In the fall of 2005, Todd Patkin, an employee of Autopart, contacted Allard to discuss the possibility of Allard coming to work for Autopart. Patkin had heard from Allard’s son that Allard was unhappy at GPC. In or around October 2005, Allard discussed with Patkin the possibility of his leaving GPC for employment with Autopart. At this time, Allard informed Autopart that he had entered into a covenant not to compete. Allard also disclosed that he was unhappy with GPC because he believed that GPC had not paid him enough for the Brakemaster stores and that he did not believe GPC to be an honorable company.

On October 14, 2005, Allard left GPC for a position with Autopart. Autopart assigned Allard to work with Mike Costello, the “key accounts manager” and a sales person in the Worcester region. Allard worked with Costello in his role as key accounts manager and their task was to grow Autopart’s share of the domestic automobile parts market. Autopart was aware of the nature of Allard’s covenant not to compete and Allard was not assigned to be a sales person in the Worcester region. In the course of Allard’s training with Costello, however, Allard was with Costello as Costello did business in the Worcester area, including one visit to a GPC customer, Sainsbuiy & O’Connell (“S&O”), discussed in further detail below.

Between October 14, 2005, and December 8, 2005, Allard had contact with former customers of the Brakemaster stores, who were at that time GPC’s customers, including, but not limited to, L&L Certified Auto Service (“L&L”), S&O, and David Ramstrom Service, also known as Jerry’s Auto Service (“Jerry’s Auto Service”).

On one occasion, Allard patronized L&L for a tire repair on a vehicle owned by Autopart. There were, however, no markers on the vehicle identifying it as being owned by Autopart. In an affidavit signed on December 14, 2005, Keith Leo, the owner of L&L, testified:

Over the last two months Mr. Allard has visited my shop three or four times, either concerning work on his car or simply to say hello. Although I am aware that Mr. Allard is now a salesman for Autopart International, none of these visits have involved the sale of Autopart International parts, and Mr. Allard has not solicited or attempted to solicit business from L&L on behalf of Autopart International, nor has he said or done anything to urge me to buy parts or not buy parts from any vendor.

Allard visited S&O several times in the fall of 2005.

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Related

Genuine Parts Co. v. Autopart International, Inc.
27 Mass. L. Rptr. 144 (Massachusetts Superior Court, 2010)

Cite This Page — Counsel Stack

Bluebook (online)
26 Mass. L. Rptr. 21, Counsel Stack Legal Research, https://law.counselstack.com/opinion/genuine-parts-co-v-autoparts-international-inc-masssuperct-2009.