Associated Mutuals Inc. v. Coe , 196 Ga. 435 ( 1943 )

The grant or refusal of interlocutory injunction being left to the sound discretion of the trial judge, (Code, § 55-108), where the evidence is doubtful or in conflict and it does not appear that the judge has abused his discretion, his action granting in part and denying in part in injunctive relief prayed for will not be disturbed.

No. 14536. JUNE 10, 1943. REHEARING DENIED JULY 9, 1943. Associated Mutuals Inc., an insurance agency representing various insurance companies, by its petition sought injunction and certain other relief against Oscar J. Coe, a former employee of the plaintiff, and Ernest A. Burtzloff, American Mutual Liability Insurance Company of Boston, Allied American Mutual Fire Insurance Company of Boston, and American Policyholders Insurance Company of Boston. It was alleged that Coe was employed by the plaintiff in October, 1939, under a written contract known as a solicitor's agreement which provided, among other things, that Coe should not "directly or indirectly at any time during [his] employment nor at any time within two years after termination of [his] employment . . (a) In any way disturb or seek to secure discontinuance of any insurance business (of which the solicitor has secured any knowledge due to the solicitor's employment by the company), carried by the company or its successors or assigns. (b) Solicit the replacement or renewal of any such insurance written by the company. (c) Divulge to any other insurance company, broker, agent, or agency any information or lists or records with respect to the business of the company. The solicitor agrees upon termination of employment to return to the company any and all literature, manuals, supplies, correspondence, lists or written or printed information or memoranda pertaining to the business of the company immediately upon request." The contract also provided: "The solicitor expressly states the solicitor's understanding and agreement that the intention of the company in employing the solicitor is to secure insurance business for the permanent account of the company, and the solicitor agrees that insurance business produced by the solicitor shall be for the permanent benefit of the company both while the solicitor is employed by the company and thereafter, and agrees to abide thereby at all times." The petition further alleged that while in the employment of the plaintiff Coe acquired much information about plaintiff's business, which was of great value to the plaintiff; that he became acquainted with many customers of the plaintiff, ascertained their insurance requirements, the nature and terms of insurance contracts, the dates of the expiration of these contracts, and other valuable information; and that while in such employment he copied from the records of plaintiff the names of approximately one thousand customers, together with a description of the policies of insurance issued to such customers and the dates of the expiration of policies; that he recorded this information in certain specially bound books, the plaintiff making the contention that such records and books were confidential information belonging exclusively to the plaintiff.

It was further alleged, that these particular customers were those assigned to Coe and generally served by him with reference to their insurance needs; that on July 7, 1942, defendant Coe resigned his position with the plaintiff, representing that he had been offered employment in a field not connected with the insurance business; that the resignation of Coe became effective July 15, 1942, and that he drew his pay from the plaintiff until the latter date; but it is contended in the petition that before that time and about July 3, 1942, Coe had accepted employment from the defendant Burtzloff and the other named corporate defendants, for the purpose of soliciting insurance in their behalf and in competition with plaintiff; that before that time Coe had taken from the office of plaintiff the records referred to above, which he had compiled in reference to the insurance of various customers of plaintiff; that on July 10 the plaintiff discovered that these record books were missing, and demanded that Coe return them immediately; that later Coe denied that he had in his possession such records, but still later when threatened with litigation, on July 17, 1942, the books were returned. But it is charged, that while he held them in his possession they were copied by him "for the purpose of using said information in violation of the employment contract" already mentioned; that his entering the employment of a competitor under the circumstances stated was fraudulent on his part, and that all of the defendants conspired to obtain the use of confidential information Coe had thus obtained in violation of his contract with plaintiff, it being shown that shortly after his employment by the defendant they were notified by plaintiff of the existence of such a contract and of its terms; that Coe immediately upon making the change began to solicit former customers of the plaintiff, and instances were pointed out where he caused certain of such customers to discontinue their insurance with the plaintiff and place it with the defendant companies; that he solicited various such customers whose names were contained on the list mentioned; and that this was continuing in violation of terms of the contract and thereby injuring and damaging the plaintiff. The prayers were for injunction against all of the defendants of continuance of the practice complained of, particularly with reference to soliciting the replacement or the renewing of any insurance written by plaintiff, and divulging to other insurance companies, brokers, etc., any of the information obtained by Coe in the manner described, or using such information against the interest of plaintiff. Several amendments elaborated the charges as stated above, but for the most part supplying details all related to the general case as thus made.

Coe answered, denying generally the allegations of the petition, setting up the invalidity of the contract, but contending also that it had not been violated. The other defendants jointly answered, denying altogether the charges as made. Answers were also made to the different amendments; but the foregoing states substantially and in general terms the issue made in the case when presented to the judge. On interlocutory hearing there was considerable evidence respecting detailed instances of Coe's alleged violation of the contract with respect to the misuse of confidential information which he had obtained while in the plaintiff's employment. There was some evidence which might tend to show Coe's direct or indirect soliciting of former customers of the plaintiff, and other proof respecting circumstances of his resignation, from which the inference might be drawn that he planned to so use knowledge obtained by him while in the employment of the plaintiff. There was no proof that he had copied the lists and records which he had returned to the plaintiff on its demand, this being by him denied. Proof on the part of the other defendants was that they had not conspired with Coe, and had not aided or abetted him in the violation of his contract. There was no affirmative proof that they had done so; and any contention that they should have been enjoined is based upon inferences which it is claimed could be taken from what generally transpired under circumstances above outlined, and from the further fact that another employee of the plaintiff had been employed by these defendants about the same time that Coe began with them. 1. In the circumstances appearing in the foregoing statement of facts the judge on interlocutory hearing entered the following order: "In the contract between plaintiff and defendant Coe it is provided that, for two years after the termination of the defendant Coe's employment with plaintiff, defendant is prohibited in five specific particulars from interfering with the business of plaintiff. The contract dose not prohibit the defendant Coe from entering into the same or a similar business; and although it prohibits defendant Coe from doing five specific acts, it does not prohibit him from writing insurance for one who is a policyholder of the plaintiff, where such insurance has expired, or is canceled by the policyholder, and might be voluntarily offered without solicitation on the part of the defendant Coe. The court is of the opinion that a visit to a policyholder of the plaintiff (whom defendant Coe knows to be such, because of his employment by plaintiff) by defendant Coe in company with some agent of the other defendants, when business is solicited by such other agent, constitutes indirect solicitation of business within the meaning of subparagraphs (a) and (b) of the second paragraph of the contract, even though defendant Coe should not himself solicit any business while on such visit. Until further order of court defendant Coe is restrained and enjoined from accompanying any agent of the defendants herein while such agent solicits business from any one whom defendant Coe knows to be a policyholder of plaintiff by reason of his employment. The court is of the opinion that the contract does not prohibit defendant Coe from quoting rates or furnishing other information to policyholders of the plaintiff, whom defendant knows to be such by reason of his employment by plaintiff, who first have voluntarily asked defendant Coe to quote such rates or furnish such information; and said defendant is not restrained or enjoined from such acts. Said defendant is retrained and enjoined from quoting rates or furnishing information to a policyholder of plaintiff whom he knows to be such by reason of his employment by plaintiff, unless such policyholder has first voluntarily requested said defendant to quote such rates or furnish such information. The court is of the opinion that the contract does not prohibit defendant Coe from writing either new insurance, or replacement insurance where the same has expired or been canceled, for a policyholder of the plaintiff whom he knows to be such by reason of his employment by plaintiff, if such policyholder voluntarily requests defendant Coe to write or furnish such new or replacement insurance; and said defendant Coe is not restrained or enjoined from doing such acts. No injunction is entered against defendants Burtzloff, American Mutual Liability Insurance Company of Boston, Allied American Mutual Fire Insurance Company of Boston, and American Policyholders Insurance Company of Boston. It appearing from the evidence that the record books referred to in paragraph 11 of plaintiff's petition have already been delivered to plaintiff, no order is entered with respect to such record books."

There is no cross-bill of exceptions, and the validity of the contract as treated by the court is not here brought into question. That being stated, we find nothing wrong with this order, certainly nothing that would constitute reversible error. Where evidence on such an interlocutory hearing is in conflict or in doubt, the judgment will not be reversed for granting or refusing or partially granting or refusing an interlocutory injunction, unless it appears that the judge has acted arbitrarily or unless it is clear that he has abused his discretion. "The grant of an interlocutory injunction rests in the sound discretion of the judge. Code, § 55-108. Before the Supreme Court will interfere, an abuse of discretion in granting or refusing an injunction must be manifest." Moon v. Clark,192 Ga. 47, 50 (14 S.E.2d 481), citing Moses v.Flewellen, 42 Ga. 386; Voyles v. Carr, 173 Ga. 627 (160 S.E. 801); Holland Pecan Co. v. Brown, 177 Ga. 525 (170 S.E. 357); Vickers v. Gainesville, 177 Ga. 793 (171 S.E. 299); Reagin v. Harrison, 181 Ga. 742 (184 S.E. 321). "In hearings upon applications for interlocutory injunctions, where the evidence upon material issues of fact is in conflict, the grant or refusal of applications is within the discretion of the chancellor, and the exercise of his discretion in granting or refusing the relief prayed for will not be controlled unless manifestly abused." Sapp v. Ritch, 169 Ga. 33 (149 S.E. 636). "If the evidence is in conflict, such judgment will not be reversed." Moon v. Clark, supra, citing Bowman v. Darby,181 Ga. 103 (181 S.E. 584); Frederick v. McCleskey,182 Ga. 468 (185 S.E. 722); Dickson v. Warren Co., 183 Ga. 746 (189 S.E. 839); Jeanes v. William Prescott TurpentineCo., 185 Ga. 91 (194 S.E. 746). The Supreme Court can not and should not supervise or direct pending litigation. The present case is a typical one where under our system only a jury can finally pass upon the facts; and unless substantial error appears in interlocutory phases of the case, the judge of the superior court will be left free to give it direction until final judgment.

Judgment affirmed. All the Justices concur.