Petrzilka v. Gorscak

556 N.E.2d 1265, 199 Ill. App. 3d 120, 145 Ill. Dec. 363, 1990 Ill. App. LEXIS 920
CourtAppellate Court of Illinois
DecidedJune 26, 1990
Docket2-89-1114
StatusPublished
Cited by6 cases

This text of 556 N.E.2d 1265 (Petrzilka v. Gorscak) 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
Petrzilka v. Gorscak, 556 N.E.2d 1265, 199 Ill. App. 3d 120, 145 Ill. Dec. 363, 1990 Ill. App. LEXIS 920 (Ill. Ct. App. 1990).

Opinion

PRESIDING JUSTICE UNVERZAGT

delivered the opinion of the court:

Plaintiffs, Richard and Nancy Petrzilka, filed a complaint in the circuit court of Kane County, seeking to enjoin the defendant, Steve Gorscak, from operating a carpet cleaning business within a 10-mile radius of the City of Aurora. The circuit court granted plaintiffs a preliminary injunction but entered final judgment in favor of defendant. Plaintiffs contend the trial court erred when it found plaintiffs failed to prove they had no adequate remedy at law and they failed to prove irreparable injury if defendant were not enjoined. Plaintiffs also contend the trial court erred when it took judicial notice of the changing boundaries of the City of Aurora which would make the proposed injunction too difficult to enforce.

On May 19, 1988, plaintiffs purchased defendant’s carpet cleaning business known as “Steam-Power” for $30,000. As part of the contract for sale, defendant covenanted “to not compete in a similar business, in any capacity, including ownership of stock or any other type of ownership, or any type of employment, in a ten mile radius of the City of Aurora for a period of not less than five years.” Plaintiffs also managed some apartment buildings but obtained a separate telephone line to conduct the carpet cleaning business. The actual services of the business, the cleaning of carpets, were performed by Tim Carwyle, the only employee. Plaintiffs incorporated the business as Steam-Power, Inc.

Defendant moved to Florida after he sold the business but returned in April 1989. Plaintiffs did not find the business profitable and intended to sell it to Carwyle and his partner for $20,000 in installments. Defendant assumed that he could reenter the industry and bought carpet cleaning equipment. He advertised in the Aurora newspaper and contacted Steam-Power’s customers. Carwyle then added a paragraph to the contract for sale which stated that “[sjellers warrant they will pursue a court action to stop Steve Gorschak from competing per his contract of 5-19-88.”

The record also reflects the testimony of a former customer of Steam-Power who switched to defendant’s business in 1989. She changed because Steam-Power’s professionalism had slipped, she was being overbilled and her telephone calls were not returned. Carwyle testified that numerous customers were lost to defendant, a fact which defendant readily acknowledged. Carwyle attempted to testify regarding the dollar amounts of the decrease in gross sales, but the trial court ruled that he had not laid a proper foundation to testify as to economic losses.

The trial court entered a directed verdict against plaintiffs on count II, in which they sought monetary damages of $10,000, which plaintiffs claimed was the drop in the value of the business resulting from defendant’s competition. The court found the damages to be unsubstantiated. The court also found that plaintiffs retained a sufficient interest in Steam-Power to maintain standing to sue to enforce the 1988 contract.

Following the close of the evidence, the court found plaintiffs failed to prove that they had no adequate remedy at law and they would suffer irreparable injury. The court further stated that the boundaries of the City of Aurora were changing every day and thus the court could not enforce the contract. The court entered judgment in favor of defendant, and plaintiff appeals.

Plaintiffs contend that they did not need to prove irreparable harm or an inadequate remedy at law inasmuch as the trial court applied the standard for determining a preliminary injunction rather than the standards for a permanent injunction. Such a contention is not unusual because.in many cases the distinction between a temporary restraining order, a preliminary injunction and a permanent injunction becomes blurred during the proceedings. (Buzz Barton & Associates, Inc. v. Giannone (1985), 108 Ill. 2d 373, 385.) A trial court errs when it enters a permanent injunction after a hearing on a motion for a preliminary injunction (Lily of the Valley Spiritual Church v. Sims (1988), 169 Ill. App. 3d 624, 629) of grants the ultimate relief sought (Shodeen v. Chicago Title & Trust Co. (1987), 162 Ill. App. 3d 667, 675). The purposes of the two remedies are different, and the requirements of supporting them also differ. In addition, this area of the law is further confused, by the different analyses utilized in determining noncompetition clauses involving the sale of businesses and those involving employment contracts. (O’Sullivan v. Conrad (1976), 44 Ill. App. 3d 752, 755.) Moreover, any confusion the parties might have had regarding the proper standard is understandable because most of the cases involving noncompetition clauses have arisen from interlocutory appeals regarding preliminary injunctions.

The purpose of a preliminary injunction is to preserve the relative position of the parties until a trial on the merits can be held. (Lily of the Valley Spiritual Church, 169 Ill. App. 3d at 628.) Since it is an extraordinary remedy, the movant must show that he will suffer irreparable harm if the status quo is not preserved. (Baal v. McDonald’s Corp. (1981), 97 Ill. App. 3d 495, 501.) However, a movant need only present a likelihood of success on the merits, i.e., he must raise a fair question as to his rights, rather than fully prove his rights to obtain a preliminary injunction. (PCx Corp. v. Ross (1988), 168 Ill. App. 3d 1047, 1055.) A preliminary injunction concerns only those damages which might arise prior to the final decision of the court. Best Coin-Op, Inc. v. Old Willow Falls Condominium Association (1983), 120 Ill. App. 3d 830, 835.

While the requirements of proving a preliminary injunction are similar to the requisites for establishing a permanent injunction, they are not identical. In both instances, a movant must prove a lack of an adequate remedy at law. For the purposes of a permanent injunction, an inadequate remedy can be the threat of irreparable harm or other harm that cannot be adequately corrected by the payment of monetary damages. Irreparable harm is the most common method of proving an inadequate remedy at law and denotes transgressions of a continuing nature so that redress cannot be had at law. (Board of Education of Niles Township High School District No. 219 v. Board of Education of Northfield Township High School District No. 225 (1983), 112 Ill. App. 3d 212, 217.) However, a court may enjoin the breach of negative covenants and contracts without applying the ordinary rules governing specific performance of the affirmative covenants. (Anheuser-Busch Brewing Association v. Dwyer (1909), 150 Ill. App. 315, 323.) Thus it has been held that, to enforce a negative covenant, the plaintiff need not prove he has an inadequate remedy at law. (Carlson v. Koerner (1907), 226 Ill. 15, 19; Anheuser-Busch, 150 Ill. App. at 325.) Some courts have held, however, that this last rule applies only to contracts concerning real estate. (George F. Mueller & Sons, Inc. v. Morales (1974), 25 Ill. App. 3d 466, 470.) Other cases discuss the reasonableness of restrictive covenants without discussing whether an inadequate remedy at law and irreparable injury need be proved. (See Akhter v. Shah (1983), 119 Ill. App. 3d 131, 134; O’Sullivan v. Conrad (1976), 44 Ill. App.

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Cite This Page — Counsel Stack

Bluebook (online)
556 N.E.2d 1265, 199 Ill. App. 3d 120, 145 Ill. Dec. 363, 1990 Ill. App. LEXIS 920, Counsel Stack Legal Research, https://law.counselstack.com/opinion/petrzilka-v-gorscak-illappct-1990.