{ "id": 11916400, "name": "PROFESSIONAL LIABILITY CONSULTANTS, INC., Plaintiff, v. HOMER U. TODD and INSURANCE MANAGEMENT CONSULTANTS, INC., Defendants", "name_abbreviation": "Professional Liability Consultants, Inc. v. Todd", "decision_date": "1996-04-16", "docket_number": "No. COA95-726", "first_page": "212", "last_page": "221", "citations": [ { "type": "official", "cite": "122 N.C. App. 212" } ], "court": { "name_abbreviation": "N.C. Ct. App.", "id": 14983, "name": "North Carolina Court of Appeals" }, "jurisdiction": { "id": 5, "name_long": "North Carolina", "name": "N.C." }, "cites_to": [ { "cite": "52 ALR4th 139", "category": "reporters:specialty", "reporter": "A.L.R. 4th", "opinion_index": -1 }, { "cite": "379 S.E.2d 824", "category": "reporters:state_regional", "reporter": "S.E.2d", "year": 1989, "pin_cites": [ { "page": "828", "parenthetical": "emphasis added" } ], "opinion_index": 0 }, { "cite": "324 N.C. 523", "category": "reporters:state", "reporter": "N.C.", "case_ids": [ 2482252 ], "year": 1989, "pin_cites": [ { "page": "528", "parenthetical": "emphasis added" } ], "opinion_index": 0, "case_paths": [ "/nc/324/0523-01" ] }, { "cite": "467 S.E.2d 709", "category": "reporters:state_regional", "reporter": "S.E.2d", "year": 1996, "opinion_index": 0 }, { "cite": "342 N.C. 653", "category": "reporters:state", "reporter": "N.C.", "case_ids": [ 795907, 796070, 795979, 795917, 795935 ], "year": 1996, "opinion_index": 0, "case_paths": [ "/nc/342/0653-02", "/nc/342/0653-05", "/nc/342/0653-03", "/nc/342/0653-01", "/nc/342/0653-04" ] }, { "cite": "461 S.E.2d 338", "category": "reporters:state_regional", "reporter": "S.E.2d", "year": 1995, "pin_cites": [ { "page": "339-40" } ], "opinion_index": 0 }, { "cite": "120 N.C. App. 172", "category": "reporters:state", "reporter": "N.C. App.", "case_ids": [ 11914497 ], "year": 1995, "pin_cites": [ { "page": "175" } ], "opinion_index": 0, "case_paths": [ "/nc-app/120/0172-01" ] }, { "cite": "178 S.E.2d 781", "category": "reporters:state_regional", "reporter": "S.E.2d", "year": 1971, "pin_cites": [ { "page": "788", "parenthetical": "five years in thirteen specified states held to be reasonable" } ], "opinion_index": 0 }, { "cite": "10 N.C. App. 323", "category": "reporters:state", "reporter": "N.C. App.", "case_ids": [ 8553702 ], "year": 1971, "pin_cites": [ { "page": "335", "parenthetical": "five years in thirteen specified states held to be reasonable" } ], "opinion_index": 0, "case_paths": [ "/nc-app/10/0323-01" ] }, { "cite": "120 S.E.2d 739", "category": "reporters:state_regional", "reporter": "S.E.2d", "year": 1961, "pin_cites": [ { "page": "743", "parenthetical": "five years reasonable where only restricted from conducting business in Fayetteville" } ], "opinion_index": 0 }, { "cite": "255 N.C. 244", "category": "reporters:state", "reporter": "N.C.", "case_ids": [ 8568420 ], "year": 1961, "pin_cites": [ { "page": "250", "parenthetical": "five years reasonable where only restricted from conducting business in Fayetteville" } ], "opinion_index": 0, "case_paths": [ "/nc/255/0244-01" ] }, { "cite": "454 S.E.2d 251", "category": "reporters:state_regional", "reporter": "S.E.2d", "year": 1995, "opinion_index": 0 }, { "cite": "339 N.C. 612", "category": "reporters:state", "reporter": "N.C.", "case_ids": [ 2558242, 2557640, 2558539, 2558899, 2557052 ], "year": 1995, "opinion_index": 0, "case_paths": [ "/nc/339/0612-01", "/nc/339/0612-04", "/nc/339/0612-03", "/nc/339/0612-02", "/nc/339/0612-05" ] }, { "cite": "450 S.E.2d 912", "category": "reporters:state_regional", "reporter": "S.E.2d", "year": 1994, "pin_cites": [ { "page": "916" } ], "opinion_index": 0 }, { "cite": "117 N.C. App. 307", "category": "reporters:state", "reporter": "N.C. App.", "case_ids": [ 8525264 ], "year": 1994, "pin_cites": [ { "page": "311-12" } ], "opinion_index": 0, "case_paths": [ "/nc-app/117/0307-01" ] }, { "cite": "370 S.E.2d 375", "category": "reporters:state_regional", "reporter": "S.E.2d", "weight": 3, "year": 1988, "pin_cites": [ { "page": "380-81", "parenthetical": "quoting McClure, 308 N.C. at 408, 302 S.E.2d at 763" }, { "page": "381" }, { "page": "382" } ], "opinion_index": 0 }, { "cite": "322 N.C. 643", "category": "reporters:state", "reporter": "N.C.", "case_ids": [ 2518481 ], "weight": 3, "year": 1988, "pin_cites": [ { "page": "650", "parenthetical": "quoting McClure, 308 N.C. at 408, 302 S.E.2d at 763" }, { "page": "651" }, { "page": "653" } ], "opinion_index": 0, "case_paths": [ "/nc/322/0643-01" ] }, { "cite": "302 S.E.2d 754", "category": "reporters:state_regional", "reporter": "S.E.2d", "weight": 2, "year": 1983, "pin_cites": [ { "page": "761" }, { "page": "763" } ], "opinion_index": 0 }, { "cite": "308 N.C. 393", "category": "reporters:state", "reporter": "N.C.", "case_ids": [ 4706622 ], "weight": 2, "year": 1983, "pin_cites": [ { "page": "404" }, { "page": "408" } ], "opinion_index": 0, "case_paths": [ "/nc/308/0393-01" ] }, { "cite": "433 S.E.2d 811", "category": "reporters:state_regional", "reporter": "S.E.2d", "year": 1993, "pin_cites": [ { "page": "813" } ], "opinion_index": 0 }, { "cite": "111 N.C. 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App. 160", "category": "reporters:state", "reporter": "N.C. App.", "case_ids": [ 8520760 ], "year": 1989, "pin_cites": [ { "page": "168" } ], "opinion_index": 1, "case_paths": [ "/nc-app/96/0160-01" ] }, { "cite": "381 S.E.2d 792", "category": "reporters:state_regional", "reporter": "S.E.2d", "year": 1989, "opinion_index": 1 }, { "cite": "325 N.C. 231", "category": "reporters:state", "reporter": "N.C.", "case_ids": [ 2489773 ], "year": 1989, "opinion_index": 1, "case_paths": [ "/nc/325/0231-01" ] }, { "cite": "257 S.E.2d 109", "category": "reporters:state_regional", "reporter": "S.E.2d", "year": 1979, "pin_cites": [ { "page": "114" } ], "opinion_index": 1 }, { "cite": "42 N.C. App. 515", "category": "reporters:state", "reporter": "N.C. App.", "case_ids": [ 8555021 ], "year": 1979, "pin_cites": [ { "page": "521" } ], "opinion_index": 1, "case_paths": [ "/nc-app/42/0515-01" ] }, { "cite": "150 S.E.2d 56", "category": "reporters:state_regional", "reporter": "S.E.2d", "year": 1966, "pin_cites": [ { "page": "58" } ], "opinion_index": 1 }, { "cite": "268 N.C. 137", "category": "reporters:state", "reporter": "N.C.", "case_ids": [ 8560476 ], "year": 1966, "pin_cites": [ { "page": "139" } ], "opinion_index": 1, "case_paths": [ "/nc/268/0137-01" ] }, { "cite": "397 S.E.2d 239", "category": "reporters:state_regional", "reporter": "S.E.2d", "year": 1990, "opinion_index": 1 }, { "cite": "327 N.C. 488", "category": "reporters:state", "reporter": "N.C.", "case_ids": [ 2492968, 2496467, 2498198, 2496765, 2494143 ], "year": 1990, "opinion_index": 1, "case_paths": [ "/nc/327/0488-05", "/nc/327/0488-03", "/nc/327/0488-01", "/nc/327/0488-02", "/nc/327/0488-04" ] }, { "cite": "392 S.E.2d 446", "category": "reporters:state_regional", "reporter": "S.E.2d", "year": 1990, "pin_cites": [ { "page": "448" } ], "opinion_index": 1 }, { "cite": "99 N.C. 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App.", "case_ids": [ 8524488 ], "year": 1993, "pin_cites": [ { "page": "868" } ], "opinion_index": 1, "case_paths": [ "/nc-app/111/0866-01" ] } ], "analysis": { "cardinality": 844, "char_count": 22138, "ocr_confidence": 0.771, "pagerank": { "raw": 2.763336433823641e-07, "percentile": 0.8337493807554032 }, "sha256": "2a1c876225ffa3877c164b9a60bccf38c60927c3b3db79d766d95bae8cb07436", "simhash": "1:29f9d5bae5448b70", "word_count": 3435 }, "last_updated": "2023-07-14T15:39:52.508825+00:00", "provenance": { "date_added": "2019-08-29", "source": "Harvard", "batch": "2018" }, "casebody": { "judges": [ "Judge LEWIS concurs.", "Judge SMITH dissents." ], "parties": [ "PROFESSIONAL LIABILITY CONSULTANTS, INC., Plaintiff, v. HOMER U. TODD and INSURANCE MANAGEMENT CONSULTANTS, INC., Defendants" ], "opinions": [ { "text": "GREENE, Judge.\nHomer U. Todd (Todd) and Insurance Management Consultants, Inc. (defendants), a corporation owned solely by Todd, appeal an order granting Professional Liability Consultants, Inc.\u2019s (plaintiff) request for a preliminary injunction enforcing a covenant not to compete (covenant) against defendants.\nPlaintiff is an insurance agency, selling and servicing liability and malpractice insurance to professionals. Todd was employed by plaintiff as an insurance sales and service representative from July 1989 to July 1993. Plaintiff and Todd entered into an employment contract, including the covenant, which reads:\n[Todd] recognizes and acknowledges that information regarding the customers and clients of [plaintiff] ... is a valuable and unique asset of its businesses.\nAccordingly, [Todd] agrees that during the term of his agreement with [plaintiff] and for a period of five (5) years thereafter he will not, unless acting as an officer or employee of the [plaintiff] or with its prior written consent, directly or indirectly: (i) contact or in any way attempt to solicit insurance business from any individual, corporation or organization which is then or during the preceding three years was such a customer or client of [plaintiff], or (ii) disclose any information ... which would enable any other individual, corporation or organization to solicit insurance business from such customers or clients.\n[Todd] acknowledges that the remedies at law for any breach by him of this Agreement will be inadequate and that the [plaintiff], as the injured party, shall be entitled to injunctive relief therefor, in addition to all other remedies available to it for any such breach ....\nTodd left plaintiffs employment in August 1993 and opened his own insurance agency actively competing with the plaintiff. In March 1995, the plaintiff filed a complaint alleging that Todd was engaged in soliciting and writing \u201cinsurance business for clients who were clients and customers of the Plaintiff during . . . Todd\u2019s employment with the Plaintiff.\u201d The plaintiff claimed, among other things, a breach of contract. The plaintiff requested a preliminary and permanent injunction, as well as damages.\nAt a hearing on the preliminary injunction, evidence was presented that while Todd was an employee \u201che became fully acquainted with Plaintiffs methods in conducting its business and . . . personally acquainted with Plaintiff\u2019s clients and . . . [their] accounts, including . . . the nature of the clients\u2019 business, services required, past informational records, billings, expiration dates, renewal dates, claims information and premiums.\u201d Plaintiff also \u201cconfirmed with [eight]. . . former clients that Mr. Todd has solicited and written their insurance business since his termination with the Plaintiff.\u201d These former clients were \u201cclients and customers of the Plaintiff during Mr. Todd\u2019s employment with the Plaintiff.\u201d\nThe trial court found the following pertinent facts:\n15. Plaintiff\u2019s legitimate business interests include certain aspects of its clients\u2019 accounts known to the Defendant only through his employment with the Plaintiff, including the nature of the clients\u2019 business, services required, past informational records, billings, expiration dates, renewal dates, claims information and premiums.\n20. During the time of his employment, Defendant Todd became fully acquainted with Plaintiff\u2019s methods of conducting its business, and became personally acquainted with Plaintiff\u2019s clients and the various aspects of such clients\u2019 accounts, including among other things, the nature of the clients\u2019 business, services required, past informational records, billings, expiration dates, renewal dates, claims information and premiums.\nThe court also found the covenant to be \u201creasonable and necessary for the protection of the legitimate business interests of the Plaintiff,\u201d Todd breached the covenant by \u201cindirectly contacting, soliciting and writing insurance business,\u201d and \u201c[i]t appears likely that Plaintiff will prevail on the merits of its claims at trial.\u201d The trial court granted plaintiff a preliminary injunction, restraining defendants from:\n1. Directly or indirectly contacting or in any way attempting to solicit insurance business from any individual, corporation or organization who was a client or customer of the Plaintiff while [Todd] was employed by the Plaintiff or who were customers or clients of the Plaintiff within the previous three years from his date of termination.\n5. However, occasional, inadvertent, and casual social contact or conversation with such clients about matters unrelated to insurance or to the issuance, quoting or renewal of insurance policies, and that does not otherwise provide insurance information or counseling, shall not be deemed to be a violation of this Order.\nThe issues are whether (I) the covenant is valid and enforceable; and if so, (II) defendant breached the covenant.\nI\nA preliminary injunction may be issued by the trial court when the evidence reveals that (1) plaintiff is likely to succeed on the merits of its case and (2) will suffer irreparable loss unless the injunction is issued. Milner Airco, Inc. v. Morris, 111 N.C. App. 866, 868, 433 S.E.2d 811, 813 (1993). The defendants only argue that the plaintiff failed in showing that it is likely to succeed on the merits and we address only that issue.\nEmployment agreements in restraint of trade (covenants), in writing, part of the employment contract and based on reasonable consideration, are valid if they are reasonably necessary for the protection of a legitimate business interest and reasonable as to time and territory. A.E.P. Indus. v. McClure, 308 N.C. 393, 404, 302 S.E.2d 754, 761 (1983). A covenant is reasonably necessary for the protection of a legitimate business interest if:\nthe nature of the employment is such [1] as will bring the employee in personal contact with patrons or customers of the employer, or [2] enable him to acquire valuable information as to the nature and character of the business and the names and requirements of the patrons or customers ....\nUnited Labs., Inc. v. Kuykendall, 322 N.C. 643, 650, 370 S.E.2d 375, 380-81 (1988) (quoting McClure, 308 N.C. at 408, 302 S.E.2d at 763). The defendants do not dispute that the covenant at issue was in writing, a part of an employment contract and for valuable consideration.\nLegitimate Business Interest\nThe findings in this case, which are not disputed by the defendants, are that Todd had access to certain aspects of plaintiff\u2019s accounts (nature of client\u2019s business, expiration dates, services required, etc.) and was fully acquainted with plaintiff\u2019s methods of conducting business. Protection against use of this information by Todd to further his own personal interest is \u201cwell recognized as a legitimate protectable interest of the employer,\u201d Kuykendall, 322 N.C. at 651, 370 S.E.2d at 381, and a covenant (reasonable as to time and territory) preventing such use is reasonably necessary for the protection of that interest.\nTime and Territory\nWhen evaluating whether the time and territory restrictions are reasonable, each must be considered in determining the reasonableness of the other. Hartman v. Odell and Assoc., Inc., 117 N.C. App. 307, 311-12, 450 S.E.2d 912, 916 (1994), disc. rev. denied, 339 N.C. 612, 454 S.E.2d 251 (1995). In this case, the covenant places no geographic restrictions on where defendants may conduct their business. The only restriction is that defendants may not, for a period of five years after terminating Todd\u2019s employment with the plaintiff, directly or indirectly contact or solicit business from plaintiff\u2019s clients who were clients when Todd left plaintiff\u2019s employment or three years prior to his leaving. Five year covenants have been upheld as reasonable where the protected territory is relatively small, see Welcome Wagon, Inc. v. Pender, 255 N.C. 244, 250, 120 S.E.2d 739, 743 (1961) (five years reasonable where only restricted from conducting business in Fayetteville); Industries, Inc. v. Blair, 10 N.C. App. 323, 335, 178 S.E.2d 781, 788 (1971) (five years in thirteen specified states held to be reasonable), and in the context of the limited scope of this covenant, we determine that five years is not unreasonable.\nII\nDefendants argue in the alternative that even if the covenant is valid there is no evidence that defendants have breached the agreement. We disagree. Although the evidence is conflicting, there is evidence to support the finding of the trial court that the defendants \u201cindirectly\u201d solicited and wrote insurance \u201cfor a number of clients\u201d who were clients of the plaintiff while Todd was employed by the plaintiff. Although there is no evidence that the defendants directly solicited plaintiff\u2019s customers (which is expressly prohibited by the covenant), it is undisputed that Todd, after leaving plaintiffs employment, opened his own insurance agency in active competition with the plaintiff and wrote several insurance polices with plaintiff\u2019s customers. This fact alone supports the finding of the trial court that, after indirect solicitation, defendants wrote insurance business for plaintiff\u2019s customers. We are thus bound by this finding. Cornelius v. Helms, 120 N.C. App. 172, 175, 461 S.E.2d 338, 339-40 (1995), disc. rev. denied, 342 N.C. 653, 467 S.E.2d 709 (1996). We do note that the plaintiff does not contend that the covenant prevents the defendants from competing in the open market with the plaintiff for insurance business. The plaintiff does not dispute that the defendants are permitted to open an office to sell insurance, even though this constitutes an indirect solicitation of plaintiff\u2019s customers. Therefore, it is only the selling of insurance to plaintiff\u2019s customers who contact defendants as a result of this indirect solicitation that is at issue in this case.\nWe are also unpersuaded by the argument that the defendants developed their \u201ccustomer base [from] . .. membership directories of professional associations, a source readily available to anyone,\u201d and thus cannot be held to have violated the covenant. Although potential customers may be ascertained from public documents, \u201cinformation concerning [plaintiff\u2019s] customers and their specific needs . . . was intimate knowledge, obtainable only because of [Todd\u2019s] employment with plaintiff,\u201d and their solicitation violated the covenant. See Kuykendall, 322 N.C. at 653, 370 S.E.2d at 382.\nPlaintiff has thus shown that it is likely to succeed on the merits of its breach of contract claim and issuance of the preliminary injunction was proper. We note our agreement with the trial court that the language in the covenant preventing \u201ccontact . . . [with] any individual, corporation or organization which is then or during the preceding three years was such a customer or client of the [plaintiff],\u201d is much too broad, does not serve any legitimate business interest and is therefore not enforceable. See Whittaker Gen. Medical Corp. v. Daniel, 324 N.C. 523, 528, 379 S.E.2d 824, 828 (1989) (emphasis added). It is the direct or indirect solicitation of these customers that is legitimately prohibited, not casual contact with them.\nAffirmed.\nJudge LEWIS concurs.\nJudge SMITH dissents.", "type": "majority", "author": "GREENE, Judge." }, { "text": "Judge Smith\ndissenting.\nAs the majority correctly states, a trial court may issue a preliminary injunction when the plaintiffs evidence demonstrates: (1) a likelihood of success on the merits; and (2) irreparable loss if the injunction is not granted. Milner Airco, Inc. v. Morris, 111 N.C. App. 866, 868, 433 S.E.2d 811, 813 (1993). Because I find this Court\u2019s analysis in Hartman v. Odell and Assoc., Inc., 117 N.C. App. 307, 311-18, 450 S.E.2d 912, 916-20 (1994), disc. review denied, 339 N.C. 612, 454 S.E.2d 251 (1995), controlling, I do not believe plaintiff has shown a likelihood of success on the merits.\nAccording to the Hartman Court, viable covenants not to compete must meet five requirements. A covenant must be:\n\u201c(1) in writing; (2) reasonable as to time and territory, (3) made a part of the employment contract; (4) based on valuable consideration; and (5) designed to protect a legitimate business interest of the employer (citations omitted).\u201d\nHartman, 117 N.C. App. at 311, 450 S.E.2d at 916 (emphasis added) (quoting Young v. Mastrom, Inc., 99 N.C. App. 120, 122-23, 392 S.E.2d 446, 448, disc. review denied, 327 N.C. 488, 397 S.E.2d 239 (1990)). Under Hartman's analysis, it is inescapable that the instant covenant overreaches, as it is unreasonable as to time and territory. See Hartman, 117 N.C. App. at 311-15, 450 S.E.2d at 917-20. The covenant\u2019s time and territory terms are so broad that it cannot claim to serve any legitimate business interest. Accordingly, the covenant should not be \u201cblue penciled\u201d (saved) by this Court. Id.\nTime and Territory\nThe majority states that \u201cthe covenant places no geographic restrictions on where defendants may conduct their business. The only restriction is that defendants may not, for a period of five years after terminating Todd\u2019s employment. . . solicit business from plaintiff\u2019s clients . . . .\u201d Under Hartman, this restriction formulation is insufficient. The Hartman Court held that\nto prove that a geographic restriction in a covenant not to compete is reasonable, an employer must first show where its customers are located and that the geographic scope of the covenant is necessary to maintain those customer relationships.\nHartman, 117 N.C. App. at 312, 450 S.E.2d at 917 (emphasis added).\nPlaintiff\u2019s brief describes \u201c[t]he geographic restriction [of the covenant as consisting of its customers] during the prior 3 years from Todd\u2019s resignation.\u201d Neither this description, nor the majority\u2019s analysis that \u201cno geographic restrictions\u201d exist in the covenant, demonstrate the numerical or geographic scope of its customer base. Hartman, 117 N.C. App. at 312, 450 S.E.2d at 917. Plaintiff\u2019s assertion that the covenant\u2019s geographic scope equals its customer base is no more than a tautology. Id. At no point in the record has plaintiff shown the number or location of its customer base.\nThe covenant prohibits \u201ccontact... to solicit insurance business from any individual, corporation or organization which is then or during the preceding three years was such a customer . ...\u201d It is plaintiff\u2019s burden to demonstrate the geographic scope of its customer base. Plaintiff has failed to do so, leaving the Court with no basis upon which to assess the reasonableness of the territory covered by the covenant.\nHartman dictates that time and territory provisions in an anti-competition covenant are to be read in tandem. Each requirement must be considered conjunctively with the other in order to determine the reasonableness of the covenant. Hartman, 117 N.C. App. at 311-12, 450 S.E.2d at 918. I agree with the majority that the covenant contains no particularized geographic restriction. It follows that I cannot adjudge the reasonableness of a nonexistent geographic description, or assess the same in tandem with a time provision.\nOur Supreme Court has held that \u201conly \u2018extreme conditions\u2019 will support a five-year covenant... .\u2019\u2019Hartman, 117 N.C. App. at 315, 450 S.E.2d at 917 (quoting Engineering Associates, Inc. v. Pankow, 268 N.C. 137, 139, 150 S.E.2d 56, 58 (1966). On an operative level, the instant covenant is in essence an eight-year restriction. This restriction is for five years, plus any customer of plaintiff\u2019s during the three years prior to defendant\u2019s separation date.\nThe three-year provision impacts retrospectively for three years, transforming what purports to be a five-year covenant into an eight-year restriction. For instance, if a customer has ended its relationship with plaintiff 2 years and 364 days prior to defendant\u2019s separation date, the customer may not be contacted for five years thereafter. Plaintiff has provided the Court with no compelling reason to uphold such an expansive time restriction, and I find this covenant to be \u201cpatently unreasonable.\u201d Hartman, 117 N.C. App. at 315, 450 S.E.2d at 918.\nLegitimate Business Interest\nA covenant must be no wider in scope than is necessary to protect the business of the employer. Manpower of Guilford Co. v. Hedgecock, 42 N.C. App. 515, 521, 257 S.E.2d 109, 114 (1979). If the covenant at issue is too broad to be reasonable, it will not be enforced. Whittaker Gen. Med. Corp. v. Daniel, 324 N.C. 523, 528, 379 S.E.2d 824, 828, reh\u2019g denied, 325 N.C. 231, 381 S.E.2d 792 (1989). As this dissenter has previously noted, neither the time nor territory provisions of the instant covenant are reasonable. Under this covenant, defendant would be prohibited from transacting business in the year 1998 with clients (how many we cannot determine) that plaintiff lost in 1990.\nThis \u201c \u2018approach to drafting [the covenant] produces oppressive results and [the covenant is thus] invalid.\u2019 \u201d Hartman, 117 N.C. App. at 316, 450 S.E.2d at 919 (quoting Electrical South, Inc. v. Lewis, 96 N.C. App. 160, 168, 385 S.E.2d 352, 357 (1989), disc. review denied, 326 N.C. 595, 393 S.E.2d 876 (1990)).\nThe instant covenant prohibits defendants from \u201cdirectly or indirectly . . . contacting] or in any way attempting] to solicit insurance business from any individual, corporation or organization which is ... [or was] a customer or client of the Company . . . .\u201d Defendant Homer Todd, in his affidavit, states unequivocally:.\u201cAll such policies that I have written have resulted from those clients contacting me and asking that I provide insurance for them. At no time did I first solicit or contact any of those clients after I left PLC [plaintiffs firm] in 1993.\u201d (Emphasis added.)\nThe covenant explicitly prohibits defendants from affirmative contact; it does not speak to the issue of former or current customers of PLC (plaintiff) contacting defendants for the purpose of conducting business. Defendant Todd\u2019s denial of any affirmative contact stands uncontested, as the portion of plaintiff Stuart C. Thomas\u2019s (Thomas is an officer and director of PLC) affidavit dealing with defendants\u2019 alleged solicitations is not based on the personal knowledge of the affiant. It is the long-standing rule of this Court that affidavits must be made on the affiant\u2019s personal knowledge. Singleton v. Stewart, 280 N.C. 460, 467, 186 S.E.2d 400, 405 (1972). Thus, any portion of plaintiff Thomas\u2019s affidavit not based on personal knowledge \u201ccould not have been properly considered by the trial judge\u201d in granting the preliminary injunction. Id.\nParagraph nine of the Thomas affidavit (2 March 1995) states: \u201cEither I or my staff has confirmed with each of these former clients [listed in paragraph eight] that Mr. Todd has solicited and written their insurance business since his termination with the Plaintiff.\u201d Since this allegation forms the central premise of plaintiff\u2019s case, and we cannot discern whether or not it is based on the affiant\u2019s personal knowledge, we are bound by Singleton not to consider this information.\nApplication of the Blue Penciling Doctrine\n\u201cWhen the language of a covenant not to compete is overly broad, North Carolina\u2019s \u2018blue pencil\u2019 rule severely limits what the court may do to alter the covenant.\u201d Hartman, 117 N.C. App. at 317, 450 S.E.2d at 920. If part of an unreasonable covenant may be severed so as to save the contract and render the provision reasonable, this Court may elect to do so. Id. In this case, severing the overly broad time and territory provisions would eliminate clauses inherently necessary to a covenant not to compete. Id. at 311, 450 S.E.2d at 916.\nThis Court may not resurrect, in whole cloth, a covenant not to compete by erasing and replacing offending, but key, portions of a contract. Id. at 311, 317, 450 S.E.2d at 916, 920. Yet this is exactly the necessity raised by the instant facts. As plaintiff\u2019s covenant fails the Hartman analysis, it logically follows they will not succeed at trial. Thus, the covenant not to compete is void, and the trial court should be reversed. Therefore, I respectfully dissent.", "type": "dissent", "author": "Judge Smith" } ], "attorneys": [ "Roberson Haworth & Reese, P.L.L.C., by Robert A. Brinson, for 'plaintiff-appellee.", "The Austin Law Firm, by William 0. Austin, for defendant-appellants." ], "corrections": "", "head_matter": "PROFESSIONAL LIABILITY CONSULTANTS, INC., Plaintiff, v. HOMER U. TODD and INSURANCE MANAGEMENT CONSULTANTS, INC., Defendants\nNo. COA95-726\n(Filed 16 April 1996)\n1. Labor and Employment \u00a7 82 (NCI4th)\u2014 covenant not to compete \u2014 validity and enforceability\nA covenant not to compete which prohibited defendant insurance agent, for a period of five years after termination of his employment with plaintiff insurance agency, from directly or indirectly contacting or soliciting business from plaintiff\u2019s clients who were clients when defendant left plaintiffs employment or were clients three years prior to his leaving was valid and enforceable since defendant had access to certain aspects of plaintiffs accounts and was fully acquainted with plaintiffs methods of conducting business; protection against use of this information by defendant to further his own personal interest was a legitimate business interest of plaintiff; and the five-year time limitation was not unreasonable.\nAm Jur 2d, Master and Servant \u00a7\u00a7 106, 107.\n2. Labor and Employment \u00a7 89 (NCI4th)\u2014 covenant not to compete \u2014 evidence of breach \u2014 preliminary injunction\nPlaintiff insurance agency established that it is likely to succeed on the merits of its claim for breach of a covenant not to compete so that the trial court did not err by issuing a preliminary injunction in favor of plaintiff where there was evidence to support the trial court\u2019s finding that defendant opened his own insurance agency in active competition with plaintiff and, after indirect solicitation, wrote several insurance policies with plaintiff\u2019s customers.\nAm Jur 2d, Master and Servant \u00a7\u00a7 23, 106, 107.\nCovenants to reimburse former employer for lost business. 52 ALR4th 139.\nJudge Smith dissenting.\nAppeal by defendants from order entered 13 April 1995 in Guilford County Superior Court by Judge Howard R. Greeson. Heard in the Court of Appeals 1 March 1996.\nRoberson Haworth & Reese, P.L.L.C., by Robert A. Brinson, for 'plaintiff-appellee.\nThe Austin Law Firm, by William 0. Austin, for defendant-appellants." }, "file_name": "0212-01", "first_page_order": 248, "last_page_order": 257 }