Lessner Dental Laboratories, Inc. v. Kidney

492 P.2d 39, 16 Ariz. App. 159, 1971 Ariz. App. LEXIS 893
CourtCourt of Appeals of Arizona
DecidedDecember 30, 1971
Docket2 CA-CIV 1018
StatusPublished
Cited by22 cases

This text of 492 P.2d 39 (Lessner Dental Laboratories, Inc. v. Kidney) is published on Counsel Stack Legal Research, covering Court of Appeals of Arizona primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Lessner Dental Laboratories, Inc. v. Kidney, 492 P.2d 39, 16 Ariz. App. 159, 1971 Ariz. App. LEXIS 893 (Ark. Ct. App. 1971).

Opinion

HATHAWAY, Judge.

This is an action by the plaintiff-appellant to restrain the defendants-appeliees from violating the restrictive covenant against competition of an employment contract entered into between defendant Judith Kidney and the plaintiff. The Superior Court, Honorable Judge Robert O. Royl *160 ston, considered the contract and the testimony taken at the hearing on the Order to Show Cause. Defendants’ motion for dismissal, objected to by plaintiff, was granted on the finding of law that the contract was unenforceable for the following reasons:

“1. The contract is unreasonably restrictive on the rights of the employee.
2. The contract is unreasonably limited in time.
3. The contract does not show sufficient consideration on its face.
4. Employment as ‘dental technician’ in the ‘repair, adjustment, creation, manufacturing and/or sale of dental prosthetics and related devices’ in Pima County is not within the nature of business intended by the courts to be protected in noncom-petition agreements by injunctive relief.”

On June 1, 1968, the contract in question was entered into by plaintiff Lessner Dental Laboratories, Inc. (hereinafter Lessner) and defendant Judith Kidney (hereinafter Kidney). Under the contract, employee Kidney agreed that for a two-year period after termination of her employment she would not directly engage in the repair, adjustment, creation, manufacture or sale of dental prosthetics and related ■devices, nor act in any such business within Pima County. And during such two-year period the employee would not divulge any of the knowledge disclosed by the employer regarding techniques or formulas nor disclose names of customers or client lists. The contract further specified that in the event of a breach by the employee, the employer would be entitled to an injunction in addition to the right to recover damages. In consideration for the employee’s so agreeing, the employer agreed to continue the employee in his employ ■“so long as the Employee [shall] faithfully and properly perform all the duties and tasks of [her] position as a Dental Technician [and abide by terms of this agreement.]” The employee was to he paid $110 per week “and such further increases as may be mutually agreed to by the Employer and the Employee.” The contract further provides that nothing requires the employee to remain in the employ of the Employer or the Employer to “retain the Employee if, in his sole judgment, conditions or circumstances do not warrant or require the continued employment of the employee.”

Our job of review has been made easier by the trial court’s clear delineation of its reasons for finding the contract unenforceable. Two basic issues are raised: (1) The sufficiency of consideration for the contract, and (2) the reasonableness of the restrictive covenants.

CONSIDERATION

With regard to the finding that “the contract does not show sufficient consideration on its face” we disagree for the following reasons. A.R.S. § 44 — 121 states that “Every contract in writing imports a consideration.” Dunlap v. Fort Mohave Farms, Inc., 89 Ariz. 387, 363 P.2d 194 (1961). The burden of showing a lack or failure of consideration is upon the party attacking it. Hitching Post Lodge, Inc. v. Kerwin, 101 Ariz. 402, 420 P.2d 273 (1966) ; Brand v. Elledge, 101 Ariz. 352, 419 P.2d 531 (1966); Dunlap, supra; Chernov v. Sandell, 68 Ariz. 327, 206 P.2d 348 (1949). See Rule 8(d), Rules of Civil Procedure, 16 A.R.S., providing for failure of consideration as an affirmative defense. It is also a general rule that a promise for a promise is adequate consideration. Tucson Federal Savings and Loan Ass’n v. Aetna Investment Corp., 74 Ariz. 163, 245 P.2d 423 (1952); Gertz v. Selin, 11 Ariz.App. 495, 466 P.2d 46 (1970); 17 C.J.S. Contracts § 97; 17 Am.jur.2d, Contracts § 104. Because the contract here in question contains mutual promises and is in writing, we have no difficulty in finding adequate consideration on its face.

RESTRICTIVE COVENANTS

The test of validity of restrictive covenants is one of reasonableness. A contract wherein the employee agrees that following termination of employment he *161 will not engage in a competitive business within a reasonably limited time and space is valid and enforceable if the restraint is not: (1) beyond that reasonably necessary for the protection of the employer’s business; (2) unreasonably restrictive upon the rights of the employee; and (3) in contravention of public policy. Titus v. Superior Court, Maricopa County, 91 Ariz. 18, 368 P.2d 874 (1962) ; Lassen v. Benton, 86 Ariz. 323, 346 P.2d 137 (1959), opinion modified at 87 Ariz. 72, 347 P.2d 1012 (1959); Wright v. Palmer, 11 Ariz.App. 292, 464 P.2d 363 (1970) ; American Credit Bureau, Inc. v. Carter, 11 Ariz.App. 145, 462 P.2d 838 (1969). See also, Restatement of Contracts §§ 513-515 (1932).

In support of the reasonableness of the restrictive covenants here in question, appellant directs the court’s attention to three Arizona cases and a Colorado case, all of which we find enough different in their circumstances as to be of little persuasion here. The key to each of these cases is the unfair competition prohibited.

Titus v. Superior Court, Maricopa County, supra, upheld a covenant by the employee disc jockey not to become employed by or associated with, in any capacity, any radio station within 50 miles of Phoenix for the period of one (1) year from the date of termination of employment.

Lassen v. Benton, supra, held that a restrictive covenant whereby employee veterinarian would not practice veterinary medicine or work in a small animal hospital within 12 miles of the Mesa city limits for five years was not contrary to public policy and would not unreasonably restrict employee’s rights.

Henderson v. Jacobs, 73 Ariz. 195, 239 P.2d 1082 (1952), upheld a covenant not to compete by the seller of a plumbing business who agreed not to engage in the plumbing business in the Wickenburg area for a period of five years.

In Zeff, Farrington & Associates, Inc. v. Farrington, 168 Colo. 48,

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Bluebook (online)
492 P.2d 39, 16 Ariz. App. 159, 1971 Ariz. App. LEXIS 893, Counsel Stack Legal Research, https://law.counselstack.com/opinion/lessner-dental-laboratories-inc-v-kidney-arizctapp-1971.