| Seymour v Northline Utils., LLC |
| 2010 NY Slip Op 09308 [79 AD3d 1386] |
| December 16, 2010 |
| Appellate Division, Third Department |
| Kevin Seymour et al., Respondents, v Northline Utilities, LLC,et al., Appellants. |
—[*1] Niles, Piller & Bracy, P.L.L.C., Plattsburgh (Evan F. Bracy of counsel), for respondents.
McCarthy, J. Appeals (1) from an order of the Supreme Court (Dawson, J.), entered October 1,2008 in Clinton County, which, among other things, partially granted plaintiffs' motion for summaryjudgment, (2) from an order of said court, entered January 9, 2009 in Clinton County, upon a decisionof the court in favor of plaintiffs, and (3) from the judgment entered thereon.
The parties entered into an asset acquisition agreement whereby defendant Northline Utilities, LLCpurchased most of the assets and goodwill of plaintiff North Country Mechanicals, Inc. The agreementalso incorporated a noncompetition agreement and an employment agreement for plaintiff KevinSeymour to work for Northline. Plaintiffs commenced this action alleging that defendants ceasedmaking payments under a promissory note associated with the agreement. Defendants filedcounterclaims alleging, among other things, violations of the noncompetition agreement and failure todeliver assets free of liens and encumbrances. In an October 2008 order, Supreme Court, among otherthings, partially granted plaintiffs' motion for summary judgment on the complaint. Following a nonjurytrial on the remaining issues, the court found in favor of plaintiffs and dismissed the counterclaims.Defendants appeal from the [*2]two orders and the judgment enteredthereon.[FN1]
Supreme Court did not err in dismissing the portion of the counterclaim pertaining to the transfer ofassets. While on our consideration of a nonjury trial we may review the evidence and independentlyrender judgment as warranted by the record, we grant deference to the trial court's factual findings,especially if they rest largely on credibility determinations (see Charles T. Driscoll Masonry Restoration Co., Inc. v County of Ulster, 40AD3d 1289, 1291 [2007]). The counterclaim vaguely alleged a failure to deliver $20,000 worth ofassets free of liens and encumbrances. On the motion for summary judgment, Northline's owner andpresident, defendant James C. Atkins, averred that plaintiffs failed to deliver title to one vehicle worth$35,000, which prevented defendants from registering the vehicle and thereby using it.[FN2]At trial, contrary to his motion affidavit and deposition testimony, Atkins testified that plaintiffs failed todeliver titles for three vehicles and that he had sent plaintiffs a letter requesting those titles. Atkins alsotestified regarding rental costs to replace those vehicles, but his testimony was not supported bydocumentary proof. Seymour testified that he delivered titles to all of the vehicles encompassed by theasset acquisition agreement and that he never received a letter from Atkins mentioning lack of title forthree vehicles. Giving deference to Supreme Court's credibility determinations and its factual findingsbased on those determinations, defendants did not prove that plaintiffs failed to deliver title to anyvehicles (see Cotton v Beames, 74AD3d 1620, 1622 [2010]).
Supreme Court properly found that plaintiffs did not violate the terms of the noncompetitionagreement. Both parties contend that the agreement is clear and unambiguous. The agreement clearlyprohibits plaintiffs from engaging in, providing services to or deriving income from any "[c]ompeting[b]usiness." That term is defined as any business that "manufactures, assembles, distributes or sells. . . any products or services competitive with those manufactured, assembled, distributedor sold by Northline . . . or under development by Northline." The agreement is unclear,however, because it does not define what services are "competitive" with Northline or what products orservices Northline has under development.
To resolve this ambiguity, Supreme Court considered extrinsic evidence concerning the meaning ofthe contract's terms (see Capital Dist. Enters.,LLC v Windsor Dev. of Albany, Inc., 53 AD3d 767, 770 [2008]; CV Holdings, LLC v Artisan Advisors,LLC, 9 AD3d 654, 657[*3][2004]), namely testimony fromAtkins and Seymour, and Northline's Web site. Atkins testified that, at the time the agreement wassigned, Northline was engaged in high voltage and commercial electric work. For the first time at trial,Atkins testified that Northline had also performed inside electrical work and work involving securitycameras; at his deposition, he had testified that Northline had never done any work installing securitycameras. Seymour testified that he had bid on and accepted a job with the Office of General Servicesto build a shed and install security cameras at a state prison. He also was on bidder's lists for severalstate jobs, meaning that he sought and received packets of information for potential bidders, but he hadnot bid on any of them except the one at the prison. Northline did not seek to be on the bidder's list forany of the mentioned projects. Atkins testified that Northline wanted to expand into that market, but thecompany was busy with other jobs at the time and was hampered in expanding because Seymourterminated his employment with Northline. Seymour also testified that he was earning money by buildinghouses and working on smaller indoor electrical jobs.
Supreme Court noted that if defendants wanted to prohibit plaintiffs from performing any electricalwork, the agreement could have explicitly included such a prohibition. Instead, the agreement onlyprohibited engaging in "competitive" services. After assessing the witnesses's credibility, the courtreasonably determined that the one prison job of installing security cameras was not competitive withNorthline's high voltage work, nor with any business "under development" by Northline (seeCharles T. Driscoll Masonry Restoration Co., Inc. v County of Ulster, 40 AD3d at 1291).Similarly, merely seeking information on potential state jobs did not constitute soliciting Northline'sprospective customers. Seymour's residential electrical work also was not the type of businessNorthline conducted. Thus, the proof did not support defendants' counterclaim alleging that plaintiffsviolated the covenant not to compete (see Cotton v Beames, 74 AD3d at 1622).
Defendants did not argue in Supreme Court that plaintiffs' actions violated the portion of theagreement wherein they sold North Country Mechanicals' goodwill, or that the noncompetitionagreement was ancillary to the overall asset acquisition agreement. Accordingly, those contentions arenot preserved for appellate review (seeGoodspeed v Adirondack Med. Ctr., 43 AD3d 597, 598 [2007]; see also O'Connor v Demarest, 74 AD3d1522, 1524 [2010]). In any event, the finding that plaintiffs did not violate the noncompetitionagreement defeats these claims as well.
Mercure, J.P., Peters, Malone Jr. and Stein, JJ., concur. Ordered that the orders and judgment areaffirmed, with costs.
Footnote 1: Inasmuch as defendants have notaddressed the October 2008 order granting plaintiffs summary judgment on the promissory note, orSupreme Court's holding that Seymour did not violate the employment agreement, any argumentsrelating to those issues are deemed abandoned (see Ostuni v Town of Inlet, 64 AD3d 854, 855 n [2009]).
Footnote 2: Despite that vehicle not beingdescribed in the motion papers, other than its value, Supreme Court originally deemed the assertionregarding title uncontroverted and the October 2008 order required plaintiffs to deliver title todefendants. At trial, plaintiffs explained that title was not delivered in accordance with that orderbecause they were unaware of what vehicle the order referenced.