Summary 2007 WY 80

Summary of Decision issued May 11, 2007

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Case Name: WSP, Inc., Trefren and Trefren Trust v. Wyoming Steel Fabricators and Erectors, Inc.

Citation: 2007 WY 80

Docket Number: 06-192

Appeal from the District Court of Laramie County, the Honorable Nicholas G. Kalokathis, Judge

Representing Appellants (Plaintiffs): James R. Salisbury and Sean C. Chambers, of Riske, Salisbury & Kelly, PC, Cheyenne, Wyoming. Argument by Mr. Salisbury.

Representing Appellee (Defendant): Ryan J. Schwartz, of Williams, Porter, Day & Neville, PC, Casper, Wyoming; John E. Masters, of Hathaway & Kunz, PC, Cheyenne, Wyoming. Argument by Mr. Schwartz.

Issues: Whether the district court erred in finding a breach of the covenant not to compete. Whether the district court erred in awarding damages.

Facts/Discussion: WSP, Trefren and the Trefren Trust appealed from a judgment entered in favor of Wyoming Steel Fabricators and Erectors, Inc. (WSFE).
Standard of Review: The Court reviews the district court’s finding that WSP breached the non-compete covenant as a bench trial finding of fact, upheld unless it is clearly erroneous.
Breach: In addition to refraining from direct competition in a general sense, WSP expressly promised not use the Wyoming Steel Products name in any manner that directly competed with WSFE’s business. In purchasing the business, WSFE desired the goodwill of “Wyoming Steel Products” but WSP did not want to part with the name. This was the apparent basis for the non-compete agreement and the reason separate consideration of $10,000 was given. After further review of the Purchase Agreement and the record, the Court stated the district court’s finding that WSP breached the covenant not to compete was not clearly erroneous.
Damages: The district court determined that WSFE was entitled to $4200 as damages for WSP’s breach. In Wyoming, damages must be proven with a reasonable degree of certainty. The record was clear that WSFE did not prove the four elements of lost profits as listed in Hopper. However lost profits are only one measure of damages. The district court relied on WSFE’s expectation interest in performance of the agreement. The Court found there was sufficient evidence to value WSFE’s expectation interest in performance of the non-compete covenant.

Holding: WSFE paid an additional $10,000 for the non-compete agreement for a period of three years. The terms fairly reflect the value to WSFE of full performance of the non-compete covenant and provided the district court with a reasonable, ascertainable measure of the damage caused by WSP’s failure to meet that expectation.

Affirmed.

J. Burke delivered the decision.

Link: http://tinyurl.com/yu4rvv .