Mills v. Murray

472 S.W.2d 6
CourtMissouri Court of Appeals
DecidedOctober 4, 1971
Docket25512
StatusPublished
Cited by78 cases

This text of 472 S.W.2d 6 (Mills v. Murray) is published on Counsel Stack Legal Research, covering Missouri Court of Appeals primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Mills v. Murray, 472 S.W.2d 6 (Mo. Ct. App. 1971).

Opinion

SHANGLER, Presiding Judge.

Plaintiffs, a co-partnership doing business as Professional Management Midwest (PMM), sued defendants Robert K. Murray, Richard F. Rudolph, Jr. and Professional Consulting Services, Inc. (PCS) for an injunction to enforce the restrictive covenants in contracts of employment and to recover damages for their breach and for an accounting.

Plaintiffs provide business and management services for medical, osteopathic and dental practitioners in eleven states, including Missouri. Defendants Murray and Rudolph were formerly employed by PMM as business consultants to a number of such professional practitioners. As an incident to employment, each had agreed by the restrictive covenant provisions, paragraph 13, of his contract of employment with PMM that:

“(b) * * * if his employment terminates for any cause after he has been employed for ninety (90) days, he will not, for a period of three (3) years thereafter solicit, contract for or render the same or similar services to any individual, firm, partnership, association or corporation who or which has been, within one (1) year prior to the date of such termination, a client of PMM serviced either by Employee or by a Consultant supervised by Employee.”

Defendant PCS commenced its corporate life as a competitor of PMM on the very day Murray left plaintiffs’ employ. Murray was the sole incorporator of PCS, its sole stockholder, and its President. Within weeks, Rudolph was hired away from PMM by Murray to work as a consultant with PCS.

Plaintiffs’ action proceeded on the theory that despite its corporate guise, defendant PCS was actually the alter ego of defendant Murray and was the vehicle whereby all three defendants gave full scope to their conspiracy to breach the restrictive covenants of defendant Murray’s contract with PMM by the artifice of hiring defendant Rudolph as a corporate employee who, then, at Murray’s direction, was to solicit certain of PMM’s clients formerly serviced by Murray and contract with them in the corporate name, all within the proscribed contractual periods. The issues were tried to the court which explicitly found the restrictive covenant provisions of Murray’s (and Rudolph’s) contracts) reasonable, and therefore enforceable, and that the defendants had wilfully and maliciously conspired to breach the restrictive provisions of Murray’s contract. No breach of Rudolph’s contract was found, nor, apparently, was the need for an accounting established. Defendants were permanently enjoined from further violation of the Murray covenant and plaintiffs were awarded actual and punitive damages against all the defendants. From this judgment defendants appeal.

PMM is among the oldest, and is now the largest, concern engaged in offering business management services for practitioners of medicine and dentistry. The management consultation services it provides relate principally to the business aspects of the doctors’ practices and include advice on taxation, insurance, credit and collection, office procedure and management, and generally, all matters which bear on their professional and personal financing. These services are furnished through management consultants, such as Murray *10 and Rudolph, who are employed by PMM to solicit, contract with, and personally consult with clients on a periodic and continuing basis. These consultants were chosen with some care and only after testing, screening and personal interviews with PMM management. A newly-employed consultant submits to a regimen of supervised field training before he may service clients and is furnished an instructional manual devised by PMM to accelerate learning and productivity. Once engaged, the management consultant tends to become intimately acquainted with the doctors whom he serves and with the details of their professional and, at times, personal lives as well. It is not unusual for consultants to gather with clients for social events. And only when requested by a consultant does a supervisor of PMM call on a client for any purpose. As it was aptly put by plaintiff Glenn Kreamer, PMM field manager: “The Consultant in the field is Professional Management Midwest. * * * He is our company.”

Defendant Murray was employed by PMM as a management consultant on April 1, 1965 and executed the employment contract containing the post-employment restrictive covenant provision with which we deal on November 20, 1965. After the customary period of training he was assigned to solicit and service clients in central, eastern and northeastern Missouri. Murray became a skilled consultant, highly regarded by his clients and so valued by his employer that when a vacancy occurred in St. Louis, he was offered the position of supervisor but declined it because it would require him to leave Columbia. There were thirty-six doctors and dentists for whom Murray, as an employee of PMM, had performed consulting services within the year of the termination of his employment with PMM. Murray consulted with each of them during his monthly visits on the range of subjects we have described and on other specific matters as investments, public relations and training office personnel. By the Spring of 1968, Murray had determined to leave PMM and establish a competing business to be known as “Professional Consulting Service, Inc.” While still in the employ of PMM, he executed Articles of Incorporation as sole in-corporator. The Articles issued from the Secretary of State of Missouri on May 31, 1968, and on that date Murray left PMM.

Appellant Rudolph was employed by PMM as a management consultant for the Topeka, Kansas area on December 1, 1967 and then terminated his employment on July 15, 1968. He read and executed an employment contract which contained the identical post-employment restrictive covenant as appears in Murray’s contract and Which, he was told, all management consultants were obliged to execute. Although plaintiffs pleaded that Rudolph had breached the restrictive covenant of his contract, none was proved. The judgment taken against Rudolph, and from which he appeals, is for his participation in the conspiracy to breach the Murray restrictive covenant. In mid-May of 1968, Murray telephoned Rudolph, told him he had resigned from PMM, that he was starting his own competing firm, that he needed an additional man, and asked Rudolph if he would be interested in discussing it further. They arranged to meet in Kansas City on May 31, 1968. At that meeting Murray depicted the want of adequate consulting services in central and eastern Missouri and the large number of doctors needful of them, laid out his plans for a competing business in that area and their promise for success. Murray then told Rudolph he intended to solicit for business and that he was going to call on clients he had previously serviced for PMM to advise them he was starting his own competing business but that he felt he was “restricted by contract with his previous employer from working these clients”. Rudolph began working for Murray and PCS the day after he left PMM.

During May of 1968, while still in the employ of PMM, Murray personally had called on each but one of the thirty-six *11 clients he was then servicing for PMM and solicited their business for PCS. He told each he was leaving PMM and was “setting up (his) own company”.

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Bluebook (online)
472 S.W.2d 6, Counsel Stack Legal Research, https://law.counselstack.com/opinion/mills-v-murray-moctapp-1971.