Momar, Inc. v. Watcon, Inc. (mem. dec.) ( 2016 )

MEMORANDUM DECISION
FILED
Pursuant to Ind. Appellate Rule 65(D), this Nov 03 2016, 5:36 am
Memorandum Decision shall not be regarded as
precedent or cited before any court except for the CLERK
Indiana Supreme Court
purpose of establishing the defense of res judicata, Court of Appeals
and Tax Court
collateral estoppel, or the law of the case.
ATTORNEYS FOR APPELLANT ATTORNEYS FOR APPELLEE
Andrew M. McNeil David R. Pruitt
Bryan H. Babb Brian E. Casey
Mark A. Wohlford Barnes & Thornburg LLP
Bose McKinney & Evans LLP South Bend, Indiana
Indianapolis, Indiana
IN THE
COURT OF APPEALS OF INDIANA
Momar, Inc., November 3, 2016
Appellant-Defendant, Court of Appeals Case No.
71A03-1603-PL-621
v. Appeal from the St. Joseph Superior
Court.
The Honorable Steven L. Hostetler,
Watcon, Inc., Judge.
Appellee-Plaintiff. Cause No. 71D07-1510-PL-353
Friedlander, Senior Judge
[1] In this companion case to Michael Janowiak v. Watcon, Inc., No. 71A04-1512-PL-
2154 (Ind. Ct. App. August 11, 2016), Momar, Inc. appeals the trial court’s
grant of a preliminary injunction enjoining it from aiding its employee, Michael
Janowiak, in soliciting orders from customers of Watcon, Inc., Janowiak’s
previous employer; from accepting orders from Watcon customers whose
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business Momar had previously solicited with aid from Janowiak; and from
using or divulging any of Watcon’s confidential information. Concluding that
the grant of the preliminary injunction was proper, we affirm.
[2] Momar presents three issues for our review, which we consolidate, reorder, and
restate as:
1. Whether the trial court erred in determining that Watcon was
entitled to a preliminary injunction.
2. Whether the trial court erred in fashioning the terms of its
preliminary injunction order.
[3] Watcon, Inc. is a company headquartered in South Bend that provides water
treatment services and related products for industrial, commercial, and
institutional customers. In late 1988, Janowiak began working for Watcon as a
field engineer, providing sales and service to Watcon customers. On December
1, 1988, Janowiak and George Resnik, as President of Watcon, entered into a
contract (the Agreement) which contains clauses regarding non-competition,
confidentiality, and non-solicitation. Janowiak worked for Watcon from 1988
to September 1, 2015, with access to its customer list, customer contact
information, customer order history, and price lists. He was also one of
Watcon’s most successful sales representatives, acquiring new accounts and
increasing his sales each year.
[4] On September 1, 2015, Janowiak tendered to Watcon a letter stating that he
was terminating the Agreement between the two parties effective, September
15, 2015; however, the Agreement was terminated prior to that date. On
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September 8, 2015, Janowiak signed a Sales Employment Agreement with
Momar, Inc., a Georgia corporation with a water treatment division called
Aquatrol. Although executed on September 8, the agreement states that
Janowiak’s employment commenced on September 1, 2015. Prior to hiring
Janowiak, Momar was not selling Aquatrol products in the territory in which
Janowiak had sold Watcon products. Upon commencing employment with
Momar, Janowiak solicited business from some of his Watcon customers and
sold to them Aquatrol products and services that directly compete with those of
Watcon.
[5] On October 16, 2015, Watcon filed a complaint against Janowiak for damages,
preliminary injunction, and permanent injunction. A hearing was held on
Watcon’s request for a preliminary injunction on November 16, 2015. The
parties submitted proposed findings and conclusions, and, on November 24,
2015, the court issued findings of fact and conclusions granting a preliminary
injunction in favor of Watcon.
[6] After learning that Momar was continuing to sell to and service Watcon
customers, Watcon filed an amended complaint and added Momar as a
defendant in January 2016. In addition, Watcon filed a motion to show cause,
or, in the alternative, a motion to modify the preliminary injunction to also
enjoin Momar. The trial court held a hearing on Watcon’s motion on March
17, 2016. On March 21, 2016, the court issued its order modifying the
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preliminary injunction issued against Janowiak, by extending it to also enjoin
1
Momar. This appeal ensued.
1. Requirements of Preliminary Injunction
[7] The grant or denial of a preliminary injunction rests within the sound discretion
of the trial court, and appellate review is limited to whether there was a clear
abuse of that discretion. Apple Glen Crossing, LLC v. Trademark Retail, Inc., 784
N.E.2d 484 (Ind. 2003). In granting or refusing a preliminary injunction, the
trial court is required to make special findings of fact and state its conclusions
thereon. Barlow v. Sipes, 744 N.E.2d 1 (Ind. Ct. App. 2001), trans. denied; Ind.
Trial Rule 52(A). On appeal, we must determine if the findings support the
judgment. Barlow, 744 N.E.2d 1. The findings or judgment shall not be set
aside unless clearly erroneous. T.R. 52(A). Findings of fact are clearly
erroneous when the record lacks evidence or reasonable inferences from the
evidence to support them. Barlow, 744 N.E.2d 1. A judgment is clearly
erroneous when a review of the record leaves us with a firm conviction that a
mistake has been made. Gleeson v. Preferred Sourcing, LLC, 883 N.E.2d 164 (Ind.
Ct. App. 2008). Due regard shall be given to the opportunity of the trial court
to judge the credibility of the witnesses. T.R. 52(A). On appellate review, we
consider the evidence only in the light most favorable to the judgment and
1
In its order, the trial court incorporated by reference all of the findings of fact it made in its November 24,
2015 preliminary injunction order. See Appellant’s App. p. 105.
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construe findings together liberally in favor of the judgment. Barlow, 744
N.E.2d 1.
[8] To obtain a preliminary injunction, the moving party has the burden of showing
by a preponderance of the evidence: (1) a reasonable likelihood of success at
trial; (2) the remedies at law are inadequate, thus causing irreparable harm
pending resolution of the substantive action; (3) the threatened harm to the
moving party outweighs the potential harm to the nonmoving party from the
granting of an injunction; and (4) the requested relief is not contrary to the
public interest. Apple Glen Crossing, LLC, 784 N.E.2d 484. If the movant fails to
prove any of these requirements, the trial court’s grant of an injunction is an
abuse of discretion. Id. On appeal, Momar challenges the trial court’s
determination that Watcon satisfied all four requirements for a preliminary
injunction to issue.
A. Likelihood of Success at Trial
[9] Covenants not to compete are in restraint of trade and are not favored by the
law. Gleeson, 883 N.E.2d 164. These covenants are strictly construed against
the employer and are enforced only if reasonable. Id. To be reasonable, the
agreement’s covenants (1) must protect legitimate interests of the employer and
(2) must contain reasonable terms with regard to time, geography, and types of
prohibited activity. Id.
[10] Momar does not dispute the trial court’s determination that Watcon has
legitimate interests worthy of protection; therefore, we proceed to the second
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factor affecting the reasonableness of the Agreement. In that regard, Momar
contends that the Agreement’s terms concerning geography and type of
prohibited activity in paragraph 9 are overbroad and unreasonable. Paragraph
9 of the Agreement provides:
9. The obligations imposed upon the Seller by Paragraph 2, and
clause (A) of Paragraph 3 above, shall continue in effect
regardless of the means or circumstances by which either this
agreement or the active solicitation of orders in such territory
may be terminated. For a period of two (2) years after the
termination of this agreement, by mutual consent or otherwise,
the Seller promises that he will not, directly or indirectly, solicit orders
from the users of the Companys’ [sic] products in said territory, provided
that, if the applicable law of such territory fixes a shorter period
of restraint, such shorter applicable statutory limitation shall be
deemed to fix the maximum limit of such restraint.
Appellant’s App. p. 78 (emphasis added).
[11] First, Momar claims that paragraph 9 is overbroad as to its geographic
limitation because it extends to all Watcon customers in Janowiak’s territory,
even those with whom Janowiak did not have a relationship. For instance, the
University of Notre Dame and the City of South Bend were Watcon customers
located in Janowiak’s territory, but they were serviced by a Watcon account
representative other than Janowiak. Momar suggests, for that reason, the
covenant is unenforceable.
[12] “A covenant not to compete must be sufficiently specific in scope to coincide
with only the legitimate interests of the employer and to allow the employee a
clear understanding of what conduct is prohibited.” Field v. Alexander &
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Alexander of Ind., Inc., 503 N.E.2d 627, 635 (Ind. Ct. App. 1987), trans. denied.
One accepted method of limiting a covenant’s scope is to impose territorial or
geographic boundaries. Id. In addition, our courts have also recognized that
“as the specificity of limitation regarding the class of person with whom contact
is prohibited increases, the need for limitation expressed in territorial terms
decreases.” Seach v. Richards, Dieterle & Co., 439 N.E.2d 208, 213 (Ind. Ct. App.
1982). Accordingly, a covenant not to compete containing a limitation as to a
group of customers instead of a geographic limit can serve the same limiting
function to maintain a covenant within reasonable bounds.
[13] Here, the covenant proscribes solicitation of orders from a group of persons —
the “users” of Watcon’s products. The evidence at the November injunction
hearing showed the intent of the parties to the Agreement that the term “users”
refers to a specific group of customers. Specifically, the term “users” refers to
Janowiak’s fifty-three active accounts that he was servicing at the time he left
the company. During his cross-examination by Janowiak’s counsel, Resnik
testified as follows:
Counsel: If I ask you to identify the users of Watcon’s products
and services as used in that sentence, would your answer be to
give me a list of names of customers:
Resnik: Yes.
**************
Counsel: One of the things that you testified about on cross-
examination was the customers in his territory, and I take it that
the purpose of this case is to try and preserve those relationships,
right, for Watcon?
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Resnik: Yes.
Counsel: You don’t want Mr. Janowiak to go out and take over
those relationships or interfere with them to the extent they
already exist between Watcon and a customer in his territory,
right?
Resnik: Yes.
Appellee’s App. pp. 51, 53. In addition, Sean McMullen, Watcon’s sales
manager, testified about Janowiak’s list of customers:
Counsel: And you talked about customers that Mr. Janowiak
serviced. How many customers did Mr. Janowiak service for
Watcon at the time he left?
McMullen: At the time he left we [sic] he had 53 active accounts
that he serviced.
Id. at 65-66. This evidence was uncontested by Janowiak, and, from our review
of the transcript of that injunction hearing, it appears that all the parties were
familiar with the identity of the fifty-three customers and understood them to be
“users.”
[14] At the March injunction hearing, Momar did not challenge this evidence.
Instead, Momar offered, and the trial court admitted, Exhibit M-C, which is a
list of the fifty-three Watcon customers being serviced by Janowiak at the time
he left his employment with Watcon.
[15] Thus, based upon all the evidence, we find the term “users” to be sufficiently
definite such that the covenant is not unreasonable and is enforceable. See
Norlund v. Faust, 675 N.E.2d 1142 (Ind. Ct. App. 1997) (finding covenant
sufficient and enforceable where phrase “Referring Optometrist” used in
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covenant was further defined by list of optometrists in exhibit); see also Cohoon v.
Fin. Plans & Strategies, Inc., 760 N.E.2d 190 (Ind. Ct. App. 2001) (finding
covenant enforceable even in face of allegedly overbroad geographical
restriction where covenant defined class of persons with whom ex-employee
was to have no contact).
[16] Momar also asserts that paragraph 9 is overbroad as to the type of activity
prohibited because it forbids Janowiak from selling any products to customers
of Watcon, including those products not in competition with a product of
Watcon. As we did in the companion case, we direct the parties’ attention to
paragraph 2 of the Agreement, which is referenced in paragraph 9 and which
provides:
2. The Seller will attempt to find purchasers in such territory for
such water treatment, water softening and other mechanical
devices for the treatment of water and other products of the
Company and to promote the business of the Company in
conformity herewith and not to sell in such territory competitive
products or to promote businesses in competition with the
products and business of the Company. Nothing herein contained,
however, shall be construed to prevent the Seller from selling and
promoting products and business not competitive with those of the
Company.
Appellant’s App. p. 76 (emphasis added).
[17] Contracts are to be read as a whole. State Farm Fire and Cas. Co. v. Riddell Nat’l
Bank, 984 N.E.2d 655 (Ind. Ct. App. 2013), trans. denied. “The meaning of a
contract is to be determined from an examination of all of its provisions, not
from a consideration of individual words, phrases, or even paragraphs read
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alone.” Washel v. Bryant, 770 N.E.2d 902, 906 (Ind. Ct. App. 2002). Further,
courts should construe the language in a contract so as not to render any words,
phrases, or terms ineffective or meaningless, and courts should attempt to
harmonize the provisions of a contract rather than interpret the provisions as
conflicting. State Farm Fire and Cas. Co., 984 N.E.2d 655.
[18] In light of these rules of harmony, a reading of paragraphs 9 and 2 clearly
reveals that the Agreement limits Janowiak, upon his departure from Watcon,
from soliciting orders from the Watcon customers he serviced for only products
and business that are in direct competition with those of Watcon. This is a
reasonable limitation on the type of activity in which Janowiak, and thus
Momar, may engage. The provision is reasonable and enforceable.
B. Adequacy of Remedies at Law
[19] Momar next alleges that Watcon’s remedies at law are adequate such that a
preliminary injunction should not have issued. Momar’s argument concerns
the trial court’s Findings of Fact 31, 32, 33, 34, and 35, which provide as
follows:
31. On November 18 and 19, 2015, just two and three days after
the hearing on Watcon’s Motion for preliminary injunction,
Janowiak, along with Momar employees Peter Farrar (“Farrar”)
and George Grabow (“Grabow”), visited approximately 22 of the
53 Current Customers.
32. Janowiak used “confidential information” to solicit business
from 22 of the 53 Current Customers on behalf of Momar, and
Momar continues to reap the benefit of the use of that
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confidential information by accepting business from those
customers.
33. The solicitation of Watcon’s customers by Janowiak, Grabow
and Farrar, on behalf of Momar, was for purposes that include
generating sales from some of the 53 Current Customers in
violation of Janowiak’s contract with Watcon.
34. Momar continues to reap the financial benefits of Janowiak,
Grabow and Farrar working in concert, for the benefit of Momar,
to violate Janowiak’s contract with Watcon.
35. Watcon would be irreparably harmed if Momar continues to
take advantage of Grabow and Farrar acting in concert with
Janowiak. Watcon would also be irreparably harmed if Momar
continues to benefit from customer relationships developed using
confidential information that Janowiak has been enjoined from
using. Watcon’s legal remedies are inadequate to protect
Watcon from Momar’s future actions.
Appellant’s App. pp. 105-06.
[20] Injunctive relief is not available where a breach of contract can be adequately
satisfied by money damages. Cent. Ind. Podiatry, P.C. v. Krueger, 882 N.E.2d 723
(Ind. 2008). Yet, a legal remedy is adequate only when it is as practical and
efficient to the ends of justice and its prompt administration as the remedy in
equity. Id.
[21] At the first injunction hearing on November 16, 2015, both Resnik and
McMullen testified that Janowiak was “the face” of Watcon, meaning that he
was the customers’ primary contact with the company and that he knew the
customers’ preferences, ordering history, equipment, and operations.
Appellee’s App. pp. 11, 66. Resnik further testified that Janowiak would
prepare service reports for his customer visits which contained the customer
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contact, the products being used, a summary of test results, evaluation of the
system, and recommendations to maintain and/or improve the customer’s
system. Watcon considered the information in these reports, as well as the
types of products ordered and the ordering preferences, to be confidential. Id. at
15-16. Janowiak agreed that he developed this information for Watcon and
considered it to be valuable to Watcon. Id. at 89. Resnik explained that
keeping this information confidential is important to the company because
obtaining a new customer is a long process that can take a year or more. Id. at
16-19.
[22] Janowiak admitted that within two weeks of leaving Watcon, he was filling
orders for Momar products for at least two companies he serviced as a
representative of Watcon. He further acknowledged that he would not stop
soliciting orders for Momar products from Watcon customers unless court-
ordered to do so. Id. at 97.
[23] As Janowiak testified at the November hearing, he began soliciting Watcon
customers as soon as his employment with Momar commenced, and some of
those fifty-three customers left Watcon and transferred their business to
Momar. The evidence at the March injunction hearing disclosed that just two
days after the November 16 hearing but before the injunction issued on
November 24, Janowiak, George Grabow, corporate vice president at Momar
and general manager of its Aquatrol Division, and Peter Farrar, a sales
representative for Momar, visited these customers. Farrar testified that on
November 18 and 19, 2015, following the injunction hearing on November 16,
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he, Grabow, and Janowiak met with at least eight of Janowiak’s fifty-three
Watcon customers who were now Momar customers being serviced by
Janowiak. Tr. pp. 53-54. On these visits, Janowiak introduced Farrar to the
customers. On November 24, 2015, the day the preliminary injunction issued,
Farrar received a call from Grabow instructing him that he would be servicing
those accounts due to a legal issue with Janowiak. Id. at 56-57. Farrar also
testified that since November 24, 2015, he has continued, on behalf of Momar,
to call upon more of the fifty-three Watcon customers serviced by Janowiak
during his employment with Watcon. Id. at 60. Farrar testified that thirteen of
the fifty-three are current customers of Momar, that Momar had placed no
restrictions on to whom he could sell, and that he would continue to try to sell
to the remainder of the fifty-three Watcon customers unless he was restricted
from doing so. Id. at 64. Most of the thirteen Watcon customers now serviced
by Momar represented Janowiak’s highest revenue sources when he was
employed with Watcon. Id. at 35-36; Exs. M-C, 2, 3.
[24] The evidence supports the trial court’s findings and clearly establishes that
Watcon not only suffered economic losses but also losses to the company’s
goodwill. An employer is entitled to contract to protect the goodwill of its
business. Cohoon, 760 N.E.2d 190. Elements of this goodwill include
confidential information such as the names and addresses and requirements of
customers and the advantage acquired through representative contact. Id. The
evidence here shows that Watcon’s goodwill was infringed upon when
Janowiak, armed with the advantageous familiarity he had acquired through
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his personal contact with Watcon customers and his intimate knowledge of the
customers’ water treatment systems and ordering habits, set about contacting
those customers on Momar’s behalf as soon as he began his employment with
Momar in violation of his non-compete agreement with Watcon. In addition,
following the November injunction hearing but prior to entry of the injunction,
Janowiak visited these customers with Grabow and Farrar in order to introduce
Farrar to the customers so that Momar could maintain them as customers
should an injunction issue against Janowiak.
[25] We therefore conclude, as did a panel of this Court in Norlund, 675 N.E.2d at
1149-50, that “[w]hen a covenant not to compete of this nature is breached, it
follows that the employer will suffer harm. It would be pure speculation to
place a dollar amount on the damages, and an injunction against the prohibited
behavior is the most efficient way to lift the burden of that harm from the
shoulders of the employer who contracted so as not to suffer such harm.” The
trial court properly concluded that the remedies at law available to Watcon
would be insufficient. See Robert’s Hair Designers, Inc. v. Pearson, 780 N.E.2d 858
(Ind. Ct. App. 2002) (finding that beauticians’ violation of non-compete
agreement harmed salon’s client relationships and supported finding of
irreparable harm); Unger v. FFW Corp., 771 N.E.2d 1240 (Ind. Ct. App. 2002)
(finding inadequate remedy at law where employee’s breach of non-compete
agreement resulted in loss of goodwill, client confidence, and business
reputation).
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C. Threatened Injury and Potential Harm
[26] A court may dispense injunctive relief only when the threatened injury to the
moving party outweighs the potential harm to the nonmoving party from the
granting of an injunction. Cent. Ind. Podiatry, P.C., 882 N.E.2d 723. The trial
court’s findings on this topic include:
34. Momar continues to reap the financial benefits of Janowiak,
Grabow and Farrar working in concert, for the benefit of Momar,
to violate Janowiak’s contract with Watcon.
35. Watcon would be irreparably harmed if Momar continues to
take advantage of Grabow and Farrar acting in concert with
Janowiak. Watcon would also be irreparably harmed if Momar
continues to benefit from customer relationships developed using
confidential information that Janowiak has been enjoined from
using. Watcon’s legal remedies are inadequate to protect
Watcon from Momar’s future actions.
Appellant’s App. p. 106.
[27] Momar argues that it will be harmed by injunctive relief through lost profits and
potential liability to customers. Yet, Momar’s situation is of its own making.
The customers Momar is referring to are the very same customers that
Janowiak and Momar appropriated from Watcon in violation of Janowiak’s
non-compete agreement. Momar also mentions a potential claim for damages
should it be wrongfully enjoined; however, we note that when the trial court
extended the injunction to include Momar, it also extended to Momar the
protection of the surety bond posted by Watcon.
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[28] On the other hand, if Watcon is not granted injunctive relief, it will suffer lost
profits, lost customer goodwill, and lost benefit of its covenant not to compete.
The evidence shows that Watcon has already suffered these losses due to the
appropriation of its customers by Janowiak, on behalf of Momar, in violation of
his covenant not to compete with Watcon. Watcon stands to lose further
profits and goodwill from any additional Watcon customers Momar could
obtain by continuing to solicit the remaining Watcon customers previously
serviced by Janowiak when he was employed by Watcon. In fact, Farrar
testified that he has continued to solicit Janowiak’s Watcon customers on
Momar’s behalf and, unless ordered to stop, he would continue to do so. The
trial court properly concluded the threatened injury to Watcon outweighs the
potential harm to Momar if an injunction issued.
D. Public Interest
[29] Momar claims that the granting of the injunction disserves the public interest
because it negatively impacted Momar’s service to its customers. Whether a
particular covenant is against public policy is a question of law for the court to
determine from all the circumstances. Robert’s Hair Designers, Inc., 780 N.E.2d
858. In making this determination, we are mindful that there exists a very
strong presumption of enforceability of contracts that represent the freely
bargained agreement of the parties. Id. This presumption reflects the principle
that it is in the best interest of the public not to unnecessarily restrict peoples’
freedom to contract. Id. Particularly, we recognize an employer’s right to
contract to protect the goodwill of its business. Cohoon, 760 N.E.2d 190.
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[30] First, Momar maintains that the granting of the injunction disserves the public
interest because it rendered Momar unable to service eight of its customers.
Momar’s inability to service its customers is not a public interest but rather a
private interest of Momar’s. Moreover, these eight customers are Watcon
customers appropriated by Janowiak in violation of his non-compete agreement
with Watcon.
[31] Here we must pause to address a key misconception underlying the arguments
in Momar’s brief to this Court. Momar argues that each of these eight
customers was “secured by Momar (through Janowiak) before the November
Injunction issued.” Appellant’s Br. p. 33. It appears from this statement that
Momar believes that prior to the issuance of the November injunction, it was
permissible for Janowiak to solicit his Watcon customers on behalf of Momar.
This is not the case. Janowiak was prohibited from doing so by his non-
compete agreement with Watcon. Momar completely dismisses the fact that
Watcon had to obtain the November injunction to stop Janowiak from
violating the non-compete agreement by soliciting Watcon customers.
Therefore, the Watcon customers obtained by Janowiak and Momar prior to
the issuance of the November injunction were obtained in violation of
Janowiak’s non-compete agreement with Watcon.
[32] Furthermore, Momar created the situation of which it now complains by
assisting Janowiak in breaching his non-compete agreement with Watcon.
Once the November injunction issued, Momar transferred these accounts to
Farrar for sales and servicing. It is a fundamental principle in Indiana that the
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law will not permit persons to do indirectly, or through others, what he or she
could not do directly him or herself. Norlund, 675 N.E.2d 1142. Here, Momar
acted in concert with Janowiak to indirectly, or through Farrar, continue to
solicit and service Janowiak’s Watcon customers because Janowiak is
precluded from doing so himself by the non-compete agreement he entered into
with Watcon.
[33] In addition, Momar alleges that the granting of the injunction disserved the
public interest because of Watcon’s chemical handling and labeling. At the
March injunction hearing, Grabow testified to finding at one Watcon customer
facility some jugs that were not labeled and a chemical label that, according to
him, did not contain all of the information required by the Environmental
Protection Agency (EPA). On cross-examination Grabow admitted that he had
neither contacted Watcon about this, nor filed anything with the EPA.
[34] In light of all the evidence, an injunction in this case is not contrary to the
public interest but rather furthers the public interest by recognizing an
employer’s freedom to contract to protect the goodwill of its business and by
not rewarding the type of behavior in which Momar engaged when it acted in
concert with Janowiak to violate his non-compete agreement with Watcon.
The trial court properly concluded that the public interest would not be
disserved by the grant of a preliminary injunction against Momar.
2. Modification of Terms
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[35] Momar challenges the language of the preliminary injunction order, arguing
that the trial court impermissibly modified the terms of paragraph 9 of the
Agreement. Trial courts have full discretion to fashion equitable remedies that
are complete and fair to all parties involved. Robert Neises Constr. Corp. v. Grand
Innovations, Inc., 938 N.E.2d 1231 (Ind. Ct. App. 2010).
[36] Paragraph 9 of the Agreement provides:
9. The obligations imposed upon the Seller by Paragraph 2, and
clause (A) of Paragraph 3 above, shall continue in effect
regardless of the means or circumstances by which either this
agreement or the active solicitation of orders in such territory
may be terminated. For a period of two (2) years after the
termination of this agreement, by mutual consent or otherwise,
the Seller promises that he will not, directly or indirectly, solicit
orders from the users of the Companys’ [sic] products in said territory,
provided that, if the applicable law of such territory fixes a
shorter period of restraint, such shorter applicable statutory
limitation shall be deemed to fix the maximum limit of such
restraint.
Appellant’s App. p. 78 (emphasis added). Paragraph 1 of the trial court’s order
enjoining Momar in this action provides:
1. Defendant, Momar, Inc., is preliminarily enjoined through
September 3, 2017, from taking any action whatsoever in concert
or participation with Janowiak to generate or accept orders from any
of the 53 Current Customers for products and/or services that compete
with products and/or services provided by Watcon. The “53 Current
Customers” is defined in Paragraph 20 of the Preliminary
Findings of Fact contained in the Preliminary Injunction Order,
and are listed on Exhibit “M-C” admitted into evidence at the
Hearing on March 17, 2016. In addition, Momar, Inc., is
preliminarily enjoined through September 3, 2017, from accepting
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or filling orders from any of the 53 Current Customers for products
and/or services that compete with the products and/or services provided
by Watcon if Janowiak has at any time and in any way acted in
concert or participation with Momar in soliciting business from
that customer.
Id. at 108 (emphasis added).
[37] First, Momar questions the court’s use in its order of the terms “generate or
accept” and “accepting or filling” because paragraph 9 of the Agreement uses
the term “solicit.” Paragraph 9 of the Agreement states that Janowiak “will
not, directly or indirectly, solicit.” The trial court’s language enjoining Momar
is encompassed by the language in paragraph 9. Whether Momar directly or
indirectly solicits, generates, accepts, or fills an order for products, the end
result is the same: Momar is selling to and/or servicing Janowiak’s Watcon
customers in violation of Janowiak’s non-compete agreement with Watcon.
[38] Next, Momar asserts that the trial court improperly modified the terms of the
Agreement by using “53 Current Customers” in its order instead of using the
term “users” from paragraph 9 of the Agreement. As stated previously in our
discussion, the evidence at the November injunction hearing showed
Janowiak’s and Watcon’s understanding of the term “users,” as employed in
paragraph 9 of the Agreement. Watcon presented evidence that the term
“users” refers to Janowiak’s fifty-three active accounts that he was servicing at
the time he left the company, and Janowiak did not contest this evidence.
[39] Furthermore, at the March injunction hearing, Momar did not challenge this
evidence either. Instead, Momar offered, and the trial court admitted, Exhibit
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M-C, which is a list of the fifty-three Watcon customers being serviced by
Janowiak at the time he left his employment with Watcon. Thus, all the parties
demonstrated their familiarity with the fifty-three customers and their
understanding that these customers are the “users” referred to in the
Agreement. The trial court did not impermissibly modify the terms of the
Agreement as a result of the language it used in its injunction order.
[40] Momar also alleges the trial court improperly added terms to the Agreement by
enjoining Momar from accepting orders for products and services “that
compete with products and/or services provided by Watcon.” Paragraph 9 of
the Agreement simply says that Janowiak “will not, directly or indirectly, solicit
orders from the users of the Companys’ [sic] products in said territory.”
[41] In a prior argument, Momar claimed that this terminology in paragraph 9 is
overbroad because it forbids Janowiak from selling any products to customers
of Watcon, including those products not in competition with a product of
Watcon. See Section 1., A., supra. As we did previously, we again direct
Momar to paragraph 2 of the Agreement, which states:
2. The Seller will attempt to find purchasers in such territory for
such water treatment, water softening and other mechanical
devices for the treatment of water and other products of the
Company and to promote the business of the Company in
conformity herewith and not to sell in such territory competitive
products or to promote businesses in competition with the
products and business of the Company. Nothing herein contained,
however, shall be construed to prevent the Seller from selling and
promoting products and business not competitive with those of the
Company.
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Appellant’s App. p. 76 (emphasis added).
[42] The meaning of a contract is to be determined from an examination of all of its
provisions, not from a consideration of isolated words, phrases, or paragraphs.
Washel, 770 N.E.2d 902. Further, courts should construe the language in a
contract by attempting to harmonize the provisions. State Farm Fire and Cas.
Co., 984 N.E.2d 655.
[43] Reading the Agreement as a whole, paragraphs 9 and 2 make it clear that the
Agreement limits the sale of competing products and/or services to Janowiak’s
Watcon customers. Thus, the court did not improperly add terms to the
Agreement as a result of the language it used in its order; rather, it properly
stated the intent of the parties as evidenced by their Agreement.
[44] In light of the foregoing, we affirm the judgment of the trial court.
[45] Judgment affirmed.
Kirsch, J., and Altice, J., concur.
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