Iowa Glass Depot, Inc. v. Jindrich

338 N.W.2d 376, 1983 Iowa Sup. LEXIS 1682
CourtSupreme Court of Iowa
DecidedSeptember 21, 1983
Docket69247
StatusPublished
Cited by55 cases

This text of 338 N.W.2d 376 (Iowa Glass Depot, Inc. v. Jindrich) is published on Counsel Stack Legal Research, covering Supreme Court of Iowa primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Iowa Glass Depot, Inc. v. Jindrich, 338 N.W.2d 376, 1983 Iowa Sup. LEXIS 1682 (iowa 1983).

Opinions

SCHULTZ, Justice.

This appeal presents issues concerning the enforceability of a covenant not to compete contained in an employment contract. At trial the district court denied the employer, Iowa Glass Depot, Inc., (Glass) the injunction it sought against its ex-employee, Robert Jindrich. We affirm.

Glass has been in the business of selling and installing automobile glass for more than 50 years. It has twelve retail outlets, including an Iowa City store that has been in operation since 1969.

In 1970 Jindrich, a high school student, began working part-time for Glass in its Iowa City outlet. After graduation he started working full-time as an installer-trainee. He was promoted to the position of manager of the Burlington outlet in 1973. He received further promotions when he became manager of the Iowa City outlet in 1975 and manager of the Davenport outlet in 1981.

As manager of an outlet Jindrich was responsible for sales, solicitation of business, inventory, bookkeeping and installation of glass. He was aided by two employees, a secretary and an installer.

In the later months of 1976, after a manager in Mason City left Glass and started a competing business, Glass decided that each manager would be asked to execute an em[379]*379ployment contract containing a covenant not to compete. Although he never previously had a written employment contract with Glass, Jindrich executed such a contract on November 18, 1976.

Following his last promotion, Jindrich began his duties in Davenport on January 1, 1981. He was not asked to sign another employment contract at that time. Because of marital difficulties he did not move to Davenport but commuted from Iowa City until September 17,1981, the day he voluntarily terminated his employment with the company.

After his termination Jindrich was unable to secure full-time employment and worked part-time in mobile home sales and service. In December 1981 Jindrich and a friend formed a partnership named Glass Services. This partnership commenced to sell, repair and install all types of glass in the Iowa City area. As a partner in the business, Jindrich occasionally contacted and sold auto glass to some of the same customers he had served while he was an employee of Glass.

On December 14, 1981, Iowa Glass brought a suit in equity seeking an injunction against Jindrich to enforce the covenant not to compete in the selling or installing of auto glass. The trial court held that the parties abandoned the employment contract and the covenant not to compete when Jindrich accepted employment in the Davenport outlet.

The initial issue on appeal is whether or not the employment contract was abandoned. If Glass is correct in its assertion that the contract was not abandoned, secondary issues arise concerning the validity of the covenant. The parties cannot agree whether there was adequate consideration for the covenant and whether in the circumstances the covenant was reasonable.

Each issue has its source in the written employment contract. The pertinent portions of this form contract are as follows:

1. First Party agrees to employ Second Party as a Salesman for the purpose of selling and installing auto glass which has been purchased by customers from First Party. The employment of Second Party shall also include the solicitation of orders for the sale and installation of auto glass. The place of employment of Second Party shall be the place of business of First Party in the City of Iowa City, the business address of which is 113 Stevens Road, in said city. The place of employment shall also include the county in which that city is located. The installation of the auto glass shall be made at the place of business of First Party in that city, or at such other place within the county which is necessary to secure the sale of the auto glass.
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4. The employment of Second Party shall continue so long as his services are satisfactory to First Party. However, both parties reserve the right to terminate the employment under this agreement by giving notice to the other as hereinafter provided.
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7. Both parties recognize that Second Party will be the key man who will be responsible for the development of the business of First Party in the city and county above named. Second Party will be the person who will be in direct contact with the customers of First Party in that area. Both parties expect that through the efforts of Second Party, for which he will be compensated in accordance with the terms of this agreement, a substantial patronage and good will should be developed within the area covered by this agreement. Both parties recognize that the nature of the services to be rendered by Second Party are such that it might be very detrimental to First Party if Second Party was privileged to terminate his employment under this agreement and enter into competition with First Party within the area covered by this agreement.
8. Second Party agrees that, upon the termination for any cause of his employment under this agreement, he will not for a period of three (3) years thereafter, [380]*380either directly or indirectly engage in the business of selling or installing auto glass or soliciting orders for the sale and installation of auto glass in the City of Iowa City, or the County in which that city is located. Second Party further agrees that he will not within that time, or within that area, in any manner, directly or indirectly, attempt to hire the employees of First Party engaged in the business of selling or installing auto glass, or attempt to take away any of the auto glass customers of First Party, within the City of Iowa City, or in the County in which that city is located, during the period of three (3) years from the date of the termination of his employment.

I. Abandonment. Abandonment of a contract is “the relinquishment, renunciation or surrender of a right. Its existence depends upon intention and acts evidencing intention to abandon.” Storck v. Pascoe, 247 Iowa 54, 64, 72 N.W.2d 467, 472-73 (1955). The act of relinquishment must be unequivocal and decisive. Id. 247 Iowa at 64, 72 N.W.2d at 473.

Abandonment of a valid contract may be accomplished by express agreement of the parties, or the parties, by conduct inconsistent with the continued existence of the original contract, may estop themselves from asserting any right thereunder. Severson v. Elberon Elevator, Inc., 250 N.W.2d 417, 421 (Iowa 1977). Since there is no express agreement to abandon this contract, we must examine both the acts of the parties and the contract itself to determine whether the parties unequivocally and decisively relinquished their rights under the covenant.

Jindrich claims that the contract of employment was abandoned or terminated by his transfer to Davenport. In his brief he cites no authority for his position and only reaches this contention as a part of his claim that he did not breach the employment contract. Neither party breached the terms of the contract of employment, since the transfer to Davenport was mutually acceptable. Nonetheless, the question of abandonment of the covenant remains.

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Cite This Page — Counsel Stack

Bluebook (online)
338 N.W.2d 376, 1983 Iowa Sup. LEXIS 1682, Counsel Stack Legal Research, https://law.counselstack.com/opinion/iowa-glass-depot-inc-v-jindrich-iowa-1983.