Ticor Title Insurance Co. v. Cohen

173 F.3d 63 (2nd Cir. 1999)

Purchase the Printed Copy at bsmsphd.com

Nature of the Case

To access this section all you need to do is click here and register.

Facts

P is a group of affiliated companies that sell title insurance nationwide. Cohen (D) was employed by P as a title insurance salesman. D contacted real estate attorneys, did title searches for them and sold them title insurance policies. D started working for P in 1981 and within six years was a senior vice president in charge of several major accounts. D got his business due to his knowledge of the business and his professionalism and his ability to work through problems and get things done. P and D both represented by counsel, entered into an Employment contract dated October 1, 1995. There were extensive negotiations over the terms of the contract, including the covenant not to compete. The term of the contract was until December 31, 1999, and D had the right to terminate the contract without cause on 30 days’ notice. The noncompete clause stated that for the time D was employed by P and for a period ending June 30, 2000, or 180 days following his termination that D could not engage in the business of title insurance in the State of New York either for himself or another firm. P made an express representation that it would not have entered into the contract unless D had agreed to the noncompete clause. The final form of the noncompete clause was drafted by D’s own attorney. Under this contract, D prospered with an annual base salary of $200,000 and commissions running from $400,000 to $900,000 per year. D also got expense account reimbursement that in 1997 exceeded $150,000, which included fully paid memberships in exclusive clubs as well as tickets to Broadway shows, and professional sporting events. D even had a personal six-person staff to support him. In April 1998, TitleServ offered to employ D and agreed to indemnify D by paying him a salary during the 180 days in the event the noncompete clause was held to be valid. D resigned and six days later began to work for TitleServ. D’s new salary was $750,000 per year with a signing bonus of $2,000,000, which was to be paid regardless of the outcome of the litigation. D got his signing bonus and got salary payments as scheduled. D also admits to speaking with 20 of P’s customers about the possibility of his taking a new position with TitleServ before he left P and submitted his resignation. There was strong and credible evidence that D solicited a customer to move to TitleServ even before he left his employ with P. P sued D on June 5, 1998, and applied for a TRO and preliminary injunction. The TRO was entered and eventually after a few more hearings, P got a permanent injunction against D for six months. D appealed. The appeals court then went through a determination of five major issues (those are listed in the “Discussion” paragraph on page 415 Re 5th.