Court Denies Enforcement Due to Inconsistencies & Absence of Valid Contract
Luongo Construction & Development, LLC v. Keim, 2008 Conn. Super. LEXIS 1182
Luongo Construction & Development was a limited liability corporation organized under Connecticut law with headquarters in Wallingford, CT that was engaged in the modular home industry. The company employed Mr. Melvin Keim at its office and allegedly executed a “Non-Compete Agreement” with him on March 15, 2006. The agreement prohibited Mr. Keim from competing with Luongo by engaging in the modular home industry within fifty miles of Wallingford, CT for a period of five years following his termination. Luongo brought an action against Mr. Keim to enforce the provisions of the non-compete agreement when he began to work for another company in the same industry.
The court rejected Luongo’s request for injunctive relief and enforcement of the agreement because it concluded that there was no valid or enforceable contract executed by the parties. Luongo submitted the non-compete agreement to the court in two forms: first as an attachment to its application for preliminary injunctive relief (hereafter referred to as “Attachment”) and then as “Exhibit A” for evidence during the hearings regarding its application for an injunction (hereafter referred to as “Exhibit”). The court noted that while the documents had similarities, there were many significant differences. Firstly, the court identified that the documents were both photocopies since the originals could not be located, they were generic agreements that did not specifically mention Mr. Keim’s name, were dated March 15, 2006, and bore the same three signatures (Mr. Michael Luongo, Mr. Keim, and Mr. Robert G. Wetmore, the witness and Commissioner of the Superior Court).
The court went on to identify the numerous differences between the two documents and concluded that they were material differences that substantially affected the nature of the agreement’s obligations and validity. The following differences were cited as damaging to the agreements’ integrity and enforceability: Attachment contained a different provision concerning working for a competing business, Attachment prohibited engagement in the “financial planning business” while Exhibit prohibited engagement in the “modular home business”, and the documents had significant drafting differences with respect to its provisions and formatting”. Furthermore, the court noted that the parties were never in each other’s presence to actually witness the other party sign the agreements.
After an in-depth analysis of the agreements and taking testimony from both side, the court held that there was not a valid and legally enforceable contract executed by the parties. The court specifically stated that “The inconsistency of these two agreement also militates toward the court’s finding that there is insufficient evidence to support a probable cause finding of a bona fide agreement signed by the parties”. In order for parties to create a valid contract, there has be an offer and acceptance between the parties based on a mutual understanding of the terms and obligations. Courts have long held that mutual assent or a meeting of minds is required for a valid and legally binding contract. In this case, the court concluded that there was not an enforceable employment contract between the parties and subsequently denied Luongo’s request for injunctive relief to enforce the provisions of the non-compete agreement.
If you have any questions relating to your non-compete agreement or would like to discuss any element of your employment agreement, please contact Joseph C. Maya, Esq. by phone at (203) 221-3100 or via e-mail at JMaya@Mayalaw.com.