Hannum Wagle & Cline Engineering, Inc. d/b/a HWC Engineering, Inc., Marlin A. Knowles, Jr., Jonathan A. Day, Tom Mobley, and David Lancet v. American Consulting, Inc.

64 N.E.3d 863, 2016 WL 6994195
CourtIndiana Court of Appeals
DecidedNovember 30, 2016
Docket49A05-1601-PL-33
StatusPublished
Cited by14 cases

This text of 64 N.E.3d 863 (Hannum Wagle & Cline Engineering, Inc. d/b/a HWC Engineering, Inc., Marlin A. Knowles, Jr., Jonathan A. Day, Tom Mobley, and David Lancet v. American Consulting, 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
Hannum Wagle & Cline Engineering, Inc. d/b/a HWC Engineering, Inc., Marlin A. Knowles, Jr., Jonathan A. Day, Tom Mobley, and David Lancet v. American Consulting, Inc., 64 N.E.3d 863, 2016 WL 6994195 (Ind. Ct. App. 2016).

Opinions

KIRSCH, Judge.

[1] Civil engineering firm American Consulting, Inc., d/b/a American Struc-turepoint, Inc. (“ASI”) filed a lawsuit for, among other things, breach of contract, against its competitor Hannum Wagle & Cline Engineering, Inc., d/b/a HWC Engineering, Inc. (“HWC”) and four of ASI’s former employees, namely Marlin A. Knowles, Jr. (“Knowles”), Jonathan A. Day (“Day”), David Lancet (“Lancet”) (together, “the Defendants”), and Tom Mobley (“Mobley”), after Knowles, and later Day, Mobley, and Lancet, left ASI’s employment and began employment with HWC. The trial court issued amended findings of fact and conclusions thereon that granted a preliminary injunction in favor of ASI [868]*868against HWC, Knowles, Day, and Lancet3 pursuant to non-compete and non-solicitation agreements that Knowles, Day, and Lancet each had executed with ASI. Defendants appeal the injunction and raise the following restated and consolidated issues:

I. Whether the trial court abused its discretion when it entered a preliminary injunction enforcing non-competition restrictions contained within Knowles’s employment agreement with ASI; and
II. Whether the trial court abused its discretion when it entered a preliminary injunction enforcing non-solicitation restrictions contained within the Knowles, Day, and Lancet employment agreements.

[2] Several months after issuing the injunction, the trial court granted Knowles’s motion to partially dissolve the preliminary injunction as to Knowles. ASI appeals that decision and raises two issues that we consolidate and restate as:

III. Whether the trial court abused its discretion when it granted Knowles’s motion and dissolved the injunction as it pertained to him.

[3] We affirm.4

Facts and Procedural History5

The Parties

[4] ASI and HWC are civil engineering, architecture, planning and design firms in Indiana. ASI’s and HWC’s clients include public bodies, such as municipal governments and entities in Indiana, including Indiana Department of Transportation (“INDOT”), Hamilton County, Hancock County, Boone County, Indianapolis, Carmel, and Franklin.6 Public bodies typically award their engineering and transportation projects through a qualification-based selection (“QBS”) system designed to allow them to select engineers and professional consultants for projects based on qualifications rather than price. After the public entity selects the engineering firm, the parties then negotiate the project’s fee, the project’s scope, and other contract terms.

[5] Knowles is a former employee and former owner of ASI. Knowles began his employment with ASP in 1994 as an hourly construction inspector, working his way up the ranks in the company, and in 2004 or 2005, Knowles was promoted to Vice President of Sales Administration. Knowles held this position until he resigned from ASI in May 2014. Among other responsibilities, Knowles was responsible for overseeing ASI’s sales and was actively involved in the sales process, including “making the pitch” for clients to select ASI in the QBS process. HWC Appellants’ App. at 30.7 As part of his sales duties, Knowles was involved in building business relationships and goodwill on behalf of [869]*869ASI. Knowles was the assigned “principal in charge” for many ASI clients, including Cicero, Delaware County, Fishers, Grant County, Greendale, Hamilton County, Hancock County, INDOT, LaGrange County, Lawrenceburg, Morgan County, Noblesville, Orange County, and Putnam County. Id. at 17, 71. To help obtain business for ASI and to build relationships with clients, Knowles attended business development activities, such as breakfasts, lunches, dinners, charitable functions, golf outings, trips, sporting events, industry conferences, networking events, receptions, and political functions. ASI paid for his attendance at these activities.

[6] In 2008,‘Knowles was offered and accepted ownership in ASI. On December 29, 2008, Knowles and ASI entered into an Employment, Non-Disclosure and Non-competition Agreement (“the Knowles Agreement”), which contained non-competition and non-solicitation restrictive covenants, whereby Knowles agreed to not do the following, directly or indirectly:

(1) sell, provide, attempt to sell or provide, or assist any person or entity in the sale or provision of, any Competing Products/Services to any of the Company’s Customers or Active Prospects;
(2) solicit or communicate with any such customers .for the purpose of selling, providing, attempting to sell or provide, or assisting any person or entity in the sale or provision of, any Competing Products/Services; and
(3) solicit, recruit, hire, employ, attempt to hire or employ, or assist any person or entity in the recruitment or hiring of any person who is an employee of ASI, or otherwise urge, induce or seek to induce any person to terminate his/her employment with ASI.

Id. at 135-37; Joint Ex. 235.

[7] Like Knowles, Day and Lancet formerly worked at ASI. Each worked as a resident project representative. On Day’s first day of employment at ASI, January 3, 2005, he signed a “Terms and Conditions of Employment” agreement with ASI (“the Day Agreement”), which included terms restricting him from soliciting or recruiting his former coworkers. Joint Ex. 8; HWC Appellants’ App. at 23. Lancet began working for ASI in 1998; later, in January 2007, Lancet signed a “Terms and Conditions of Employment” agreement with ASI (“the Lancet Agreement”), which contained a non-solicitation provision identical to the one in the Day Agreement. Joint Ex. 234; HWC Appellants’ App. at 24.

[8] Eventually, Knowles became unhappy at ASI, and in the winter of 2013 and spring of 2014, he met with the President of HWC, Ed Jolliffe (“Jolliffe”), and its Vice President, Terry Baker (“Baker”). At that time, HWC desired to make improvements to its transportation department, and it was familiar with Knowles because of his experience and reputation in the industry. Knowles told Jolliffe and Baker that he had an employment agreement with ASI and that he intended to abide by his contract. Jolliffe and Baker advised Knowles that HWC would position Knowles in an operations role at HWC to comply with the restrictive covenants in the Knowles Agreement.

[9] On May 5, 2014, Knowles submitted a resignation letter to ASI, and in it, he stated that he would comply with the Knowles Agreement. Joint Ex. 90; HWC Appellants’ App. at 26. The letter did not mention that Knowles was joining HWC as its Vice President of Operations. On May 7, ASPs President Rick Conner circulated an announcement to ASI employees. that Knowles had resigned, Knowles’s last day at ASI was May 14, 2014, On May 19, 2014, HWC issued a press release announcing Knowles had joined HWC, and it [870]*870circulated the press release to, among others, people and entities Knowles had identified on a list of “Key Clients.” Joint Exs. 44, 48, 52; HWC Appellants’ App. at 84.

[10] As HWC’s Vice President of Operations, Knowles headed up four divisions, including HWC’s transportation division.

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