Roberts Express v. Bauman

2 Ohio App. Unrep. 280
CourtOhio Court of Appeals
DecidedApril 20, 1990
DocketCase No. L-89-197
StatusPublished

This text of 2 Ohio App. Unrep. 280 (Roberts Express v. Bauman) is published on Counsel Stack Legal Research, covering Ohio Court of Appeals primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Roberts Express v. Bauman, 2 Ohio App. Unrep. 280 (Ohio Ct. App. 1990).

Opinion

HANDWORK, P.J.

This case is on appeal from a judgment of the Lucas County Court of Common Pleas.

The facts of this case are as follows. Appellee, Roberts Express, Inc. ("Roberts"), is an Ohio corporation whose primary business is to provide time-sensitive surface transportation expedited delivery service to its customers throughout the United States. Appellee, Joseph Johnston, is an independent contractor/sales agent for Roberts. Johnston's exclusive sales territory is Southeastern Michigan and Northwestern Ohio.

In October 1986, appellant, Ben Bauman, began working for Roberts as a customer service agent. In March 1987, Bauman was promoted to sales/telemarketing representative. In mid-October, however, Johnston offered Bauman a position as his sales/customer service assistant. Johnston had several discussions with Bauman about what was expected of him and what the job entailed. Bauman accepted the position and began working for Johnston on November 30, 1987.

In December 1987, within two weeks of starting his new job with Johnston, Bauman and Johnston executed an "Agreement To Refrain From Competition," which was dated November 20, 1987. The agreement provided that upon termination of the parties' employment relationship, Bauman would not directly or indirectly, for himself or another, engage in business related in any way to the time-sensitve expedited delivery service of Roberts Express, Inc. for a period of two years following the termination of employment. The agreement also specifically named Roberts as a third-party beneficiary of the agreement.

For approximately one year, Bauman worked as Johnston's assistant, learning the time-sensitive expedited delivery service and familiarizing himself with Johnston's accounts and contacts.

On November 17, 1988, Johnston terminated the employment relationship between himself and Bauman. Subsequently, on December 12,1988, Bauman began working for [281]*281appellant, Target Expediting, Inc. ("Target"), a company which directly competes with Roberts in the time-sensitive expedited delivery service field.

On January 19, 1989, Roberts filed an action against Bauman seeking damages for violation of the restrictive covenant and an injunction. Roberts further filed a motion for a temporary restraining order ("TRO") to enjoin Bauman and Target from competing with Roberts pending a hearing on Roberts' application for a preliminary and permanent injunction. In his answer of January 31, 1989, Bauman asserted a counterclaim for declaratory judgment against the plaintiffs on the grounds that the employment agreement was void for lack of consideration. The court below granted Roberts' motion for a TRO on January 25,1989. The court ordered Bauman and Target to refrain from competing with Roberts for Roberts' already established customers in Johnston's exclusive sales territory. The court attached a list of zip codes which represented the exclusive sales territory.

After a hearing on Roberts' motion for preliminary injunctive relief (held February 8, 1989), the court below, in an opinion and judgment entry dated February 17, 1989, ordered Bauman restrained from competitive conduct with Roberts and/or Johnston over Roberts' customers in Johnston's exclusive sales territory. The court further ordered Target restrained from using any information received from Bauman in regard to the applicable market and customers.

Subsequently, Roberts filed and the court below granted, a motion to dismiss Bauman's counterclaim for declaratory judgment. The court, in an opinion and judgment entry of May 2,1989, held that declaratory judgment is not a proper form for determining the sufficiency of a legal defense. The court found that lack of consideration is an affirmative defense which would be addressed in the already pending action.

Finally, on June 13, 1989, a trial was held before the court on Roberts' application for a permanent injunction. The court entered its judgment on June 19, 1989, in favor of Roberts and Johnston and against Bauman and Target. The court permanently enjoined Bauman from acting as a sales agent in competition with Roberts and Johnston, within the previously identified zip codes, for Roberts' customers for two years from the date of the issuance of the TRO, which the court stated as being February 17, 1989. The court also permanently enjoined Target from utilizing information conveyed by Bauman or utilizing Bauman's services in competition with the plaintiffs in the territories prescribedfor two years from February 17,1989.

It is from the above judgments that the appellants, Bauman and Target, assert the following assignments of error:

"First Assignment of Error.

"THE COURT ERRED IN DISMISSING BENBAUMAN'S COUNTERCLAIM SEEKING DECLARATORY JUDGMENT THAT THE COVENANT NOT TO COMPETE WAS UNENFORCEABLE FOR LACK OF CONSIDERATION AND RULINGTHAT LACK OF CONSIDERATION WAS AN AFFIRMATIVE DEFENSE.

"Second Assignment of Error.

"(1) THE TRIAL COURT ERRED IN GRANTING A PERMANENT INJUNCTION ENJOINING BEN BAUMAN FROM COMPETING AGAINST THE PLAINTIFFS ROBERTS EXPRESS, INC., AND JOSEPH JOHNSTON.

"(2) THE TRIAL COURT ERRED IN PERMANENTLY ENJOINING TARGET EXPEDITING FROM UTILIZING THE SERVICES OF THE DEFENDANT, BEN BAUMAN, AS A SALES REPRESENTATIVE.

"Third Assignment of Error.

"THE COURT ERRED IN GRANTING A PRELIMINARY INJUNCTION IN EXCESS OF THE PERIOD OF TIME CALLED BY THE 'COVENANT NOT TO COMPETE'.

"Fourth Assignment of Error.

"THE TRIAL COURT ERRED IN GRANTING A PERMANENT INJUNCTION FOR TWO YEARS.

"Fifth Assignment of Error.

"THE TRIAL COURT ERRED IN ADMITTING THE TESTIMONY OF KEITH COLLINS BY WAY OF DEPOSITION."

I.

In their first assignment of error, Bauman and Target argue that the court below erred in dismissing Bauman's counterclaim for declaratory judgment that the covenant not to compete was unenforceable for lack of consideration. The appellants further argue that the court below erred in ruling that lack of consideration was an affirmative defense.

While appellants are correct in their claim that under the Declaratory Judgments Act, any person interested under a contract may have determined any question of construction arising under the contract and obtain a declaration of [282]*282rights under R.C. 2721.03, the law or declaratory judgments does not stop there. It is equally clear under the law of Ohio, that "a declaratory judgment cannot be used to determine the sufficiency of legal defenses which have been or can be asserted in a pending action." Whitacre v. Board of Edn. (1974), 42 Ohio App. 2d 19, 22. See, also, Secrest v. Standard Oil (1963), 118 Ohio App. 270, and Videtto v. Marsh (1960), 112 Ohio App. 151.

Failure of consideration is an affirmative defense, see Civ. R. 8(C), and Sharick v. Szefcyk (1934), 17 Ohio Law Abs. 332, and appellants have presented no authority or arguments which would lead us to hold otherwise. Furthermore, in its granting of Roberts' motion to dismiss, the court below made it clear that the issue of consideration would be considered as part of plaintiffs' claim for enforcement of the agreement. Thus, appellants were not prejudiced in any way by the court's dismissal of their counterclaim for declaratory judgment.

Accordingly, appellants' first assignment of error is found not well-taken.

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Related

Whitacre v. Bd. of Education
326 N.E.2d 696 (Ohio Court of Appeals, 1974)
Videtto v. Marsh
175 N.E.2d 764 (Ohio Court of Appeals, 1960)
Secrest v. Standard Oil Co.
194 N.E.2d 68 (Ohio Court of Appeals, 1963)
Columbus Medical Equipment Co. v. Watters
468 N.E.2d 343 (Ohio Court of Appeals, 1983)
Sharick v. Szefcyk
17 Ohio Law. Abs. 332 (Ohio Court of Appeals, 1934)
Raimonde v. Van Vlerah
325 N.E.2d 544 (Ohio Supreme Court, 1975)

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2 Ohio App. Unrep. 280, Counsel Stack Legal Research, https://law.counselstack.com/opinion/roberts-express-v-bauman-ohioctapp-1990.