Multiut Corp. v. Draiman

834 N.E.2d 43, 359 Ill. App. 3d 527, 295 Ill. Dec. 818
CourtAppellate Court of Illinois
DecidedJuly 22, 2005
Docket1—03—0857, 1—03—2855, 1—04—1192, 1—04—2377 cons.
StatusPublished
Cited by31 cases

This text of 834 N.E.2d 43 (Multiut Corp. v. Draiman) is published on Counsel Stack Legal Research, covering Appellate Court of Illinois primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Multiut Corp. v. Draiman, 834 N.E.2d 43, 359 Ill. App. 3d 527, 295 Ill. Dec. 818 (Ill. Ct. App. 2005).

Opinion

JUSTICE GALLAGHER

delivered the opinion of the court:

This opinion encompasses three related appeals involving defendants Yehuda and Miriam Draiman and plaintiff Multiut Corporation (Multiut), an energy consulting and energy management services company based in Skokie. Central to defendants’ appeals are case Nos. 1 — 03—0857 and 1 — 03—2855, in which defendants challenge the trial court’s rulings in favor of Multiut and its award of more than $1 million in attorney fees. Defendants have separately appealed the trial court’s order of indirect civil contempt and sanctions against Yehuda and an injunction prohibiting Yehuda from competing against Multiut. We have consolidated these appeals sua sponte. For the reasons set forth in this opinion, we affirm the judgments of the trial court in case Nos. 1 — 03—0857, 1 — 03—2855 and 1 — 04—1192. Defendants’ appeal in case No. 1 — 04—2377 is dismissed.

BACKGROUND

The voluminous record on appeal can be distilled to these relevant facts. Yehuda and Miriam Draiman are husband and wife, and Nachshon Draiman, Yehuda’s brother, is the president of Multiut. Multiut was founded in the mid-1980s after the deregulation of the energy industry and negotiates contracts with natural gas and electricity suppliers to provide those utilities to businesses. Multiut employs independent Multiut associates (IMAs) on commission who offer gas and electrical auditing services and advise its customers about possible energy savings.

The following testimony was offered at a hearing on Multiut’s motion for a preliminary injunction against defendants and at a trial on the merits. 1 Nachshon testified that he hired Yehuda in 1989 at the behest of their father. Miriam had already executed an IMA agreement and was receiving commissions, which were being paid to M. Draiman Corporation. Nachshon testified that Yehuda asked to be placed in a salaried position with Multiut and that Yehuda did not want to receive wages that could be garnished because he was being pursued by creditors.

In February 1991, Yehuda and Nachshon executed a written IMA agreement, which included a covenant not to compete and a confidentiality provision as to Multiut’s methods of operation. Several handwritten lines above Yehuda’s signature indicated that in addition to being an IMA, Yehuda also would be the sales and marketing manager of Multiut.

Nachshon testified that in 1998 or 1999, he and Yehuda discussed the continuing deregulation of the electricity business and Multiut’s potential growth in the electrical auditing market. Yehuda expressed an interest in exploring those opportunities and Nachshon encouraged him to do so. In December 2000, Nachshon learned that Yehuda had represented to Multiut’s customers that Multiut was affiliated with various companies that Yehuda and Miriam had formed. Nachshon also learned that Yehuda had opened a bank account in the name of Multiut Electric and had executed contracts to take customers away from Multiut. Nachshon testified that two Multiut employees told him they had worked on Multiut Electric’s accounts with the belief that Multiut Electric was affiliated with Multiut.

Nachshon said he was aware that Yehuda had marketed his own telecommunications business via the Multiut website; however, he denied allowing Yehuda to use the Multiut name. Nachshon testified that he was concerned that Yehuda would take business away from Multiut. He stated that access to the company’s customer list was limited to himself and two computer programmers. Nachshon testified that Yehuda removed a computer from his (Yehuda’s) Multiut office; the computer was returned a few months later, after the beginning of litigation between the parties, with the hard drive erased.

On December 5, 2000, Nachshon wrote a letter to Yehuda and Miriam recounting a litany of family issues and concluding as follows:

“[I]n lieu of any other alternative, I am going to ask you to resign from your employment at Multiut [C]orp. Absent the resignation, consider this a notice of termination. You may continue as an independent contractor subject to following all the rules set forth by the company and the same privileges as any other IMA. This will give you the ability to do other business as you wish.
I want to remind you and reiterate that involvement in any gas, electric or other related ventures of Multiut [C]orp. are direct violation of the agreements [szc].”

An April 2001 letter from Nachshon, addressed to Yehuda, Miriam and the various defendant companies, further stated, in relevant part:

“I will continue to regard your involvement with the company as a regular [IMA], and any funds, commissions or advances that you have received and will receive will be adjusted accordingly. I ask that any accounts that you are going to contact be first submitted in writing to me and approved by me before contact is made. You may not contact company customers, either yours and certainly other salesman’s and or company accounts without the explicit written authorization of the company.”

On June 28, 2001, the trial court entered an agreed order prohibiting Yehuda, Miriam and the defendant companies from using Multiut’s “business plans, pricing methods, customer lists, marketing materials and customer specifications” for 14 days. The temporary restraining order permitted defendants to contact customers during the two-week period after providing written notice to Multiut’s counsel. The order barred defendants from spending or transferring funds derived from Multiut clients and also prohibited them from entering Multiut’s offices or contacting Multiut employees. That order was extended through May 2002 via Multiut’s additional requests for injunctive relief.

Loyd Bostic testified that he started his own utility auditing company, LBE Limited, in 1991. He met Yehuda in 1992 and signed an IMA agreement with Multiut that year. Bostic testified that in 1998, Yehuda asked Bostic if he would sell his accounts to Yehuda at a deep discount. When Bostic asked Yehuda why he would sell his accounts at a low price, Yehuda replied that Bostic was going to be fired. Bostic disregarded Yehuda’s remark and did not mention it to Nachshon. Bostic stated that he perceived himself to be in partnership with Multiut and that he dealt mostly with Yehuda.

Bostic testified that in April 2001, he met with Yehuda and Gershon Draiman, who is Yehuda and Nachshon’s nephew. 2 Yehuda sought Bostic’s involvement in establishing an independent auditing company named U.S. Utilities under Gershon’s direction because Yehuda was concerned about his noncompetition agreement with Multiut. Bostic informed Nachshon of Yehuda’s plan. At the time of his testimony, Bostic continued to work with Nachshon and Multiut.

Testifying as an adverse witness, Yehuda stated that he and Miriam formed various companies, including M. Draiman Corporation (formed in 1991), U.S. Gas, Electric & Telecommunications Corporation (formed in 1999 from a company named D&D Medical Supply), Multiut Electric (formed in 1999 from SGG Diamond, Inc.), and U.S.

Free access — add to your briefcase to read the full text and ask questions with AI

Related

In re Estate of Steele
Appellate Court of Illinois, 2026
Bianchi v. The Human Rights Comm'n
2026 IL App (1st) 241474-U (Appellate Court of Illinois, 2026)
Bridges v. JEHM Financial LLC
2025 IL App (1st) 242452-U (Appellate Court of Illinois, 2025)
City of Granite City v. Link
2022 IL App (5th) 210315-U (Appellate Court of Illinois, 2022)
Vite v. Vargason
2020 IL App (2d) 200487-U (Appellate Court of Illinois, 2020)
In re Adoption of B.W.
2020 IL App (3d) 190694-U (Appellate Court of Illinois, 2020)
Lopez v. Dart
2018 IL App (1st) 170733 (Appellate Court of Illinois, 2018)
Ohio National Life Assurance v. Steven Egbert
803 F.3d 904 (Seventh Circuit, 2015)
First Financial Bank, N.A. v. Bauknecht
71 F. Supp. 3d 819 (C.D. Illinois, 2014)
Ohio National Life Assurance Corp. v. Davis
13 F. Supp. 3d 876 (N.D. Illinois, 2014)
LG Electronics U.S.A., Inc. v. Whirlpool Corp.
790 F. Supp. 2d 708 (N.D. Illinois, 2011)
Holtkamp Trucking Co. v. David J. Fletcher, M.D., L.L.C.
932 N.E.2d 34 (Appellate Court of Illinois, 2010)
Holtkamp Trucking Company v. Fletcher
Appellate Court of Illinois, 2010
Citadel Investment Group, LLC v. Teza Technologies LLC
924 N.E.2d 95 (Appellate Court of Illinois, 2010)
Citadel Investment Group v. Teza Technologies
Appellate Court of Illinois, 2010

Cite This Page — Counsel Stack

Bluebook (online)
834 N.E.2d 43, 359 Ill. App. 3d 527, 295 Ill. Dec. 818, Counsel Stack Legal Research, https://law.counselstack.com/opinion/multiut-corp-v-draiman-illappct-2005.