Woodbury Business Forms & Systems v. Coleman

372 So. 2d 346, 1979 Ala. Civ. App. LEXIS 940
CourtCourt of Civil Appeals of Alabama
DecidedMay 9, 1979
DocketCiv. 1842
StatusPublished

This text of 372 So. 2d 346 (Woodbury Business Forms & Systems v. Coleman) is published on Counsel Stack Legal Research, covering Court of Civil Appeals of Alabama primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Woodbury Business Forms & Systems v. Coleman, 372 So. 2d 346, 1979 Ala. Civ. App. LEXIS 940 (Ala. Ct. App. 1979).

Opinions

BRADLEY, Judge.

Woodbury Business Forms and Systems [hereinafter Woodbury] appeals from a final decree denying damages and injunctive relief against Jim Coleman [hereinafter Coleman] and Skinner Printing Company [hereinafter Skinner]. The decree denied Woodbury’s demand for an accounting, and for a return of books, catalogues and customer lists. The trial court found Wood-bury indebted to Coleman for $882 and taxed costs against Woodbury.

The facts are revealed from a deposition, the record, and attached exhibits.

Woodbury, a Georgia corporation, employed Coleman as a manager of its Montgomery branch in December of 1975. Woodbury engages in the business of selling business forms, systems and related products. Woodbury agreed to hire Coleman on a trial basis. Coleman had previously owned his own business which became defunct. Coleman had orders from customers he dealt with in his own business that he was unable to fulfill because of his business’ financial problems. Woodbury agreed to fill the orders for him.

A letter dated December 19, 1975 was sent to Coleman which covered items agreed upon concerning his employment. Among those items was a description of Coleman’s sales territory. The letter was sent to Coleman, signed by him and returned on December 29 1975. Woodbury’s stamp with the date appears on the letter. The letter was also signed by Mr. Shagi-naw, an executive of Woodbury. A part of the letter stated Coleman would be required to sign the salesman’s contract before being placed on the payroll. The salesman’s contract was signed by Coleman. The agreement was post-dated July 1, 1976, at which [347]*347time it would become effective after a trial period. It provided in pertinent part:

In consideration of the remuneration herein agreed to be paid to the sales representative by the Company, and in consideration, by both parties, of all the terms and conditions stated herein and the Sales Policies of the Company, it is agreed as follows:
7. In part consideration of the remuneration herein agreed to be paid and the Company’s agreement to disclose confidential information from time to time to the sales representative, and in consideration of similar covenants made by other sales representatives of the Company, the sales representative agrees with the Company and with such other factory representatives:
That for a period of twelve months from date of leaving employ of the Company for whatever reason, he will not sell in [competition], direct or indirect, with the Company to the accounts to which he had been assigned as sales representative of the Company. For the purposes of this Section 7 the term “accounts to which he has been assigned as sales representative of the Company” shall be construed to mean any account which the sales representative has called on and to whom the Company has shipped one or more orders during the twelve months immediately preceding the date of his leaving the employ of the Company.

At the time of the signing of the agreement, Woodbury had not been actively soliciting in Alabama, except perhaps in and around the Opelika area.

Coleman brought many of his own accounts to Woodbury. While working for Woodbury, Coleman gained only three or four new accounts.

Coleman resigned from Woodbury officially on February 1, 1978 by a letter. He did not give any formal prior notice.

After Coleman left, Woodbury had problems continuing to service Coleman’s territory. Mr. Shaginaw testified in deposition that Woodbury did not have anyone to replace Coleman. Woodbury tried to keep contact with customers by phone. In April Woodbury hired a new employee who services the territory two or three days a week. There is presently no Montgomery office.

On February 1,1978 Coleman began work as a salesman for Skinner, a corporation with its principal place of business in Alabama. Skinner engages in commercial printing, office supplies, and furniture. Coleman had worked for Skinner before in 1968 and 1969. The owner of Skinner testified Coleman brought accounts with him when he began his employment the first time with Skinner in 1968-69. Further testimony indicates Skinner lost about ninety-nine percent of the accounts when Coleman left the first time.

When Coleman began to work for Skinner, he serviced accounts which he serviced while he was employed with Woodbury. The owner of Skinner testified he thought accounts to whom Coleman now sold for Skinner were accounts Coleman handled while he was employed by Woodbury. Some of the accounts which Coleman now services for Skinner were handled during 1968 and 1969 when Coleman worked for Skinner the first time.

Coleman testified he has not serviced any new accounts which he acquired while working for Woodbury. Coleman testified he had serviced the greatest portion of accounts he now has since 1968. Since he has worked for Skinner, he has picked up a few accounts; however, they were referrals from accounts he already had.

Coleman admits he knew of the contents of the sales contract he signed when he began his employment with Woodbury. He also realized national companies were not enforcing similar contracts because of “public relations.”

In its brief Woodbury says the issues for decision by this court are: (1) whether the provisions of the sales contract between Woodbury and Coleman are valid and enforceable under Georgia law; and (2) whether the trial court erred in refusing to enjoin Coleman from violating the sales [348]*348contract and Skinner from aiding and abetting in such violation.

We review this case with a presumption in favor of the findings of fact made by the trial court and will not reverse the trial court’s judgment unless we determine it to be plainly and palpably wrong or unless the trial court erroneously applied the law to the facts. Alabama Farm Bureau Mutual Insurance Co. v. Davis, Ala.Civ.App., 354 So.2d 15 (1978); 2A Ala.Dig. Appeal & Error 931(1).

Paragraph thirteen of the sales contract stated that if any question arose concerning the validity of the contract, it was agreed by the parties that Georgia law would govern without reference to the place of execution or performance of the contract. The trial court applied Georgia law. We will review the validity and enforceability of the sales contract by looking also to Georgia law. Evans v. Kittrell, 33 Ala. 449 (1859).

The trial court specifically found paragraph seven of the sales contract invalid and unenforceable because it was in “partial restraint of trade” and unreasonable under the facts of the case. It further found an injunction would result in severe detriment to the defendant Coleman, and this detriment would far exceed any benefit which Woodbury would derive or the interest it has to protect.

We note paragraph seven of the contract is better known as a “restrictive covenant.” Contracts which are in “general restraint” of trade are against public policy and thus void. Ga. Code Ann.

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372 So. 2d 346, 1979 Ala. Civ. App. LEXIS 940, Counsel Stack Legal Research, https://law.counselstack.com/opinion/woodbury-business-forms-systems-v-coleman-alacivapp-1979.