Term Paper on "Legal Briefs Case Briefs Cook's Pest Control"

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[EXCERPT] . . . .

Legal Briefs

Case Briefs

Cook's Pest Control, Inc. v. Robert and Margo Rebar

Facts:

Cook's Pest Control and the Rebars entered into a renewable one-year termite control agreement. The agreement contained a mandatory arbitration clause. When the agreement was about to expire, Cook's notified the Rebars of that fact and requested that they renew the agreement by submitting the annual renewal fee. The Rebars submitted a check for the annual fee, but with the check they included an addendum to the customer service agreement. This addendum replaced the mandatory arbitration clause with an optional arbitration clause. Furthermore, the addendum stated that Cook's acceptance of the check constituted acceptance of the terms of the addendum. Cooks accepted the check and continued to provide service to the Rebars.

The Rebars later filed suit against Cook's for fraud, negligence, breach of contract, breach of warranty, breach of duty, unjust enrichment, breach of the duty to warn, negligent training, supervision, and retention of employees, and bad faith failure to pay and bad-faith failure to investigate a claim. The action was based on the Rebars' claim that Cook's failed to treat the termite infestation, so termites caused damage to the home. Relying upon the arbitration clause in the original agreement, Cook's sought to compel arbitration. The Rebars opposed the motion to compel arbitration, arguing that a binding arbitration agreement did not exist due to Cook's acceptance of the addendum. The trial court agreed with the Rebars and denied Cook's motion to compel arbitration. Cook's appealed the trial court's decision.

Issues Presented or Questions of Law:

1) Did the parties' original contract obligate Cook's to continue to service the Rebars' home?

2) Did the addendum provided by the Rebars constitute a unilateral attempt to modify the parties' contract?

3) Did Cook's acceptance and negotiation of the Rebars' check constitute acceptance of the contract modifications contained in the addendum?

4) Did the employees in the office where the Rebars sent the check and the addendum have the power to enter into a contract on behalf of Cook's pest control?

Holding / Rule of Law:

1) The parties' original contract was due to expire and did not obligate Cook's to continue to service the Rebars' home after the contract's expiration date.

2) The addendum did not constitute a unilateral attempt to modify the parties' contract. Instead, the addendum constituted a counteroffer or conditional acceptance of Cook's offer.

3) Cook's acceptance and negotiation of the Rebars' check constituted acceptance of the Rebars' counteroffer, which included acceptance of the terms contained in the addendum to the contract.

4) The employees had apparent authority to enter into the contract, which made the contract binding and valid.

Rationale:

1) Cook's could not maintain that its continued provision of service to the Rebars was mandated by the parties' original contract. Not only was the contract due to expire, but Cook's had also sent notice to the Rebars of this expiration. It was in response to the notice of expiration that the Rebars sent Cooks the check and the proposed addendum to the parties' agreement.

2) When the words of an acceptance constitute a material change, no matter how slight, to the original offer, then the acceptance is a conditional acceptance or counteroffer. Furthermore, the counteroffer was valid because it contained a definite expression of willingness to contract on definitely ascertainable terms.

3) The Rebars' conditional acceptance of Cook's proposed renewal contract gave Cook's three options: rejecting the counteroffer and treating the agreement as terminated on the original termination date; responding with their own counteroffer; or accepting the Rebars' counteroffer. By accepting the Rebars' check and continuing to inspect and treat the Rebars' home, which was the exact method of acceptance described in the addendum, Cook's neither rejected the counteroffer, nor responded with their own counteroffer. Instead, Cook's accepted the Rebars' counteroffer.

4) An actual or apparent agent has the authority to bind its principal. As the author of the original agreement, Cooks could have limited the ability of its employees to enter into agreements on its behalf. Because Cooks failed to do so, the employees had apparent authority to bind Cook's to the addendum.

Redlee/SCS, Inc. v. Carl J. Pieper

Facts:

Redlee provided janitorial services to large businesses. Redlee hired defendant Pieper in September 1997. At the time he was employed, Pieper signed an employment contract that contained a two-year non-compete agreement. In 1998, Pieper signed a second contract as an area manager. The second contract contained a confidentiality clause. In July 2000, defendant Simon, who had been employed with Redlee for approximately six months, signed an employment contract that contained a confidentiality clause and a two-year non-compete agreement.

In January 2000, Pieper left Redlee and began working for defendant Allied International Building Services, Inc., one of Redlee's direct competitors. In December 2000, Simon also left Redlee and began working for Allied International. Furthermore, Simon and Pieper contacted some of Redlee's customers to solicit business for Allied. Allied filed an action to enforce the covenants not to compete. The trial court granted a preliminary injunction in favor of Redlee. Defendants appealed the preliminary injunction, contending that the trial court improperly granted the preliminary injunction. The court did not consider the issue of Pieper's non-competition agreement because it had expired by the time the court heard the case.

Issues Presented or Questions of Law:

1) Were the non-competition agreements valid?

2) Was Redlee entitled to a preliminary injunction?

Holding / Rule of Law:

1) The restrictive covenants were valid.

2) Redlee was entitled to a preliminary injunction because he could show likelihood that he would succeed on the merits of the case, and that he would suffer an irreparable loss if the injunction did not issue. The agreement prohibited Simon from soliciting Redlee's customers, and Redlee could demonstrate that Simon had solicited its customers.

Rationale:

1) Under the Covenants Not to Compete Act, Tex. Bus. & Com. Code 15.50-15.52, a covenant not to compete is valid as long as it is part of an otherwise enforceable agreement and the restrictions as to time, geography, and scope of activity are reasonable. Simon's employment contract, which guaranteed him employment for 12 months, was an otherwise enforceable agreement. Furthermore, the covenant was not greater than necessary to protect Redlee's interests. Two-year restrictive covenants are presumably reasonable. The scope of activity was specifically tailored to prohibit Simon from using his time at Redlee to build up business contacts for one of Redlee's competitors. Finally, the court reformed the contract's geographical limitations to only that area in which Simon had worked for Redlee, which made the geographical limitation reasonable.

2) A preliminary injunction should only issue when the party seeking the injunction can demonstrate the likelihood of success on the merits. Simon entered into the non-competition agreement voluntarily. Furthermore, because Simon's status was changed from an at-will employee to an employee who could only be terminated for cause when he signed the covenant not-to-compete, he received adequate consideration for signing the covenant. Simon admitted to soliciting Redlee's former clients, which violated the non-competition covenant. Therefore, Redlee demonstrated a likelihood of success on the merits.

A preliminary injunction should also only issue when the party seeking the injunction can show a risk of irreparable loss if the injunction does not issue. Because Simon had intimate knowledge of Redlee's business, which he could use to solicit Redlee's customers, Redlee had a risk of irreparable loss.

Ronald A. Yocca v. The Pittsburgh Steelers Sports, Inc.

Facts:

Plaintiff Ronald A. Yocca and all similarly situated persons (plaintiffs) alleged that defendants, The Pittsburgh Steelers Sports, Inc. (Steelers) and the Sports & Exhibition Authority of Pittsburgh & Allegheny County (Authority), issued a brochure (SBL brochure) soliciting Plaintiffs to purchase stadium builder licenses (SBL). In exchange for the one-time fee, the buyers would receive the right to purchase season tickets for as many seasons as they wished. Buyers would also receive the right to control who gained future control of their season ticket options. The last page of the SBL brochure contained an application, which included a space for the buyer's first, second, and third section preferences. Plaintiffs completed the applications, sent in their deposits, and completed the payments under the terms of the offer. Defendants mailed Plaintiffs the SBL agreement, which contained additional terms and an incorporation clause. When Plaintiffs received their seats, they realized that Defendants had enlarged some of the SBL sections, causing their seats to be shifted outside of the sections as depicted in the SBL brochure. As a result, Plaintiffs allege that they will be required to be a higher price for their season tickets than they would have if the stadium had been divided as depicted in the SBL brochure.

Plaintiff Ronald A. Yocca brought a class action on behalf of himself and all similarly situated persons who bought stadium builder licenses from defendants. The defendants entered preliminary objections, which the trial court sustained. The trial court dismissed Plaintiffs' case in its entirety on the basis that Plaintiffs' breach of… READ MORE

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