Insurance Associates Corp. v. Hansen

723 P.2d 190, 111 Idaho 206, 1986 Ida. App. LEXIS 442
CourtIdaho Court of Appeals
DecidedJuly 30, 1986
Docket16020
StatusPublished
Cited by7 cases

This text of 723 P.2d 190 (Insurance Associates Corp. v. Hansen) is published on Counsel Stack Legal Research, covering Idaho Court of Appeals primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Insurance Associates Corp. v. Hansen, 723 P.2d 190, 111 Idaho 206, 1986 Ida. App. LEXIS 442 (Idaho Ct. App. 1986).

Opinions

WALTERS, Chief Judge.

Insurance Associates Corporation filed suit against Craig Hansen and Jess W. Swan Insurance Agency, Inc., seeking damages for the alleged breach by Hansen of a covenant not to compete in a written employment agreement between Insurance Associates and Hansen. After a bench trial, the district court entered judgment in favor of the defendants, holding that Hansen did not breach the agreement. Insurance Associates appeals. We reverse.

Insurance Associates designates the following as issues on appeal. Are the trial court’s findings of fact and conclusions of law erroneous and not supported by the evidence? Did the trial court err in failing to ascertain and consider the intent of the parties to the employment agreement? Did the trial court err in its interpretation of the agreement? Did the trial court err in failing to find that the defendants solicited and acquired customers of Insurance Associates, in violation of the defendants’ common-law duty, the employment contract and the Idaho Trade Secrets Act (I.C. §§ 48-801 through 48-807)? Is Insurance Associates entitled to punitive damages? And finally, is Insurance Associates entitled to attorney fees on appeal?

Additionally, but not by way of cross-appeal, the defendants contend the employment agreement lacked consideration. They also claim entitlement to an award of attorney fees on appeal.

From our review of the record in this case, we conclude that the findings of fact [207]*207made by the district court are supported by the evidence, are not clearly erroneous and should not be set aside. I.R.C.P. 52(a). However, we believe the district court erred in its interpretation of the agreement between Insurance Associates and Hansen, thereby arriving at an erroneous legal conclusion that Hansen had not breached the agreement.

The district court found that Hansen became employed as an insurance salesman by Insurance Associates in June, 1980. On February 2, 1982, Hansen and Insurance Associates entered into a written employment agreement. On October 6, 1982, Hansen was fired by Insurance Associates and within ten days became employed by the defendant Jess Swan Insurance Agency, a competitor of Insurance Associates. Thereafter, twenty-two customers who had purchased insurance from Hansen while he was employed by Insurance Associates transferred their business to the Swan Agency. Alleging violation of the employment agreement, Insurance Associates filed suit to collect damages equivalent to one year’s commission or fee for each of the accounts, pursuant to a provision in the agreement.

Hansen’s agreement with Insurance Associates prohibited Hansen from soliciting insurance business from any customers of Insurance Associates with whom Hansen had business or personal relations during the term of the written agreement, for a period of two years following termination of his employment. The duration of the agreement was indefinite — by its terms the agreement could be cancelled by either Hansen or Insurance Associates upon fifteen days notice to the other party.1 The agreement also precluded Hansen from using, without the written consent of Insurance Associates, any confidential information relating to customers or accounts of Insurance Associates — such as names of customers; policy expiration dates; policy terms, conditions and rates; familiarity with customers’ risk characteristics; and information concerning the insurance markets for large or unusual commercial risks.

After considering the provisions in the employment contract, the district court concluded that the agreement did not limit Hansen’s right to deal with customers and use information he had developed prior to execution of the contract, but only that he would not engage in competitive practices as to the use of customer information acquired by Insurance Associates following the execution of the agreement. The court then analyzed the history of each of the twenty-two accounts in question. The court found the evidence insufficient to establish the history or status of two of the accounts. The court held that each of the remaining twenty accounts was developed as a result of Hansen’s efforts which had begun, and from information which he had obtained, before February 2,1982, the date of the employment agreement. The court therefore held for the defendants, determining there was no liability resulting from the transfer of the twenty-two customers to the Swan Agency.

Before turning to the particular provisions of the contract which are in issue, we shall dispose of the defendants’ threshold argument that the written employment agreement lacked consideration. The district court disagreed with that contention at trial. On appeal, the defendants continue to assert that, in exchange for his covenant not to compete following termination of his employment, Hansen did not receive anything he did not already have before the agreement was entered into with Insurance Associates. We agree with the district court that there was consideration for the agreement. The court found, from the evidence, that if Hansen had not signed the agreement, his employment would have been terminated by Insurance Associates. The court also found that, upon executing the agreement, Hansen did keep his job “for an additional eight or nine months.” Under these circumstances we hold the [208]*208agreement was supported by consideration. See Annot., 51 A.L.R.3d 825, § 4[b] (1973).

We now turn to the merits of the appeal. In contract disputes, it is the duty of the court to attempt to determine the parties’ intent. Wood v. Simonson, 108 Idaho 699, 701 P.2d 319 (Ct.App.1985). It is axiomatic that, in order to ascertain the intention of the parties to a contract, the first resort is to the contract itself, which is dispositive if complete and unambiguous. The contract must be construed as a whole and considered in its entirety. Canyon View Irrigation Co. v. Twin Falls Canal Co., 101 Idaho 604, 619 P.2d 122, cert. denied, 451 U.S. 912, 101 S.Ct. 1983, 68 L.Ed.2d 301 (1981). Moreover, a contract must be construed so as to give effect to every part of it, if at all possible. Ace Realty, Inc. v. Anderson, 106 Idaho 742, 682 P.2d 1289 (Ct.App.1984). Here, the employment agreement contained a number of interrelated provisions. It commenced with a recital that:

Insurance Associates Corporation is the owner of the Insurance Associates Corporation business relating to the Customers as these terms are used below, and that these customers comprise a substantial part of the good will of Insurance Associates. To protect the business and good will of Insurance Associates and the confidential information belonging to Insurance Associates, the parties have agreed to a limited period of noncompetition and to nondisclosure of confidential information following termination of employment. Such limitations relate solely to Insurance Associates Corporation business and customers, however, and are intended to permit Employee to remain in the insurance and brokerage business, if he so desires.

The agreement next provided (paragraph 1) for payment of compensation to Hansen as the parties may agree upon, from time to time.

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Bluebook (online)
723 P.2d 190, 111 Idaho 206, 1986 Ida. App. LEXIS 442, Counsel Stack Legal Research, https://law.counselstack.com/opinion/insurance-associates-corp-v-hansen-idahoctapp-1986.