Summary
upholding a covenant not to compete in "commercial contracts between business entities" as "reasonable as to both time and scope" because "the clause in question was reasonably limited in duration, did not restrict defendants from competing with plaintiff for printing jobs, and did not even completely bar them from soliciting plaintiff's customers"
Summary of this case from Crye Precision LLC v. Bennettsville PrintingOpinion
January 26, 1999.
Appeal from the Supreme Court, New York County (Lorraine Miller, J.).
The IAS Court properly denied defendants' motion for summary judgment dismissing the complaint in light of factual issues as to whether plaintiff exercised its option to renew the subject agreements. While defendants challenge the validity of plaintiff's purported oral renewal on the ground that renewal, to be effective, had to be in writing, the law is well settled that "[i]t is the execution of the option agreement, and not the exercise of the option, that is controlling with respect to the application of the Statute of Frauds" ( Kaplan v. Lippman, 75 N.Y.2d 320, 324; see also, Genrich v. Holiday Lady Fitness Ctr., 216 A.D.2d 897, 898). The Statute of Frauds, then, does not bar enforcement of an oral option exercise where, as here, the underlying option agreement is written and signed by the party to be charged, and "[o]nce the optionee gives notice of his intent to exercise the option in accordance with the agreement, the unilateral option agreement ripens into a fully enforceable bilateral contract" ( Kaplan v. Lippman, 75 N.Y.2d, supra, at 325).
The IAS Court also correctly found that the subject agreements do not contain unlawful covenants not to compete since the agreements were commercial contracts between business entities, rather than employment agreements, and the clause in question was reasonably limited in duration, did not restrict defendants from competing with plaintiff for printing jobs, and did not even completely bar them from soliciting plaintiff's customers. The restriction, then, reasonable as to both time and scope, is enforceable ( see, Columbia Ribbon Carbon Mfg. Co. v. A-1-A Corp., 42 N.Y.2d 496, 499; Chernoff Diamond Co. v. Fitzmaurice, Inc., 234 A.D.2d 200, 201-202; Gimper, Inc. v. Giacchetta, 221 A.D.2d 682, 683-684).
Defendants' alternative request for a protective order against the discovery and inspection of their customer lists and sales data was also appropriately denied, their conclusory claim that plaintiff seeks disclosure of trade secrets being insufficient in these circumstances to overcome the well-established preference for liberal discovery ( see, CPLR 3101 [a]; Twenty Four Hour Fuel Oil Corp. v. Hunter Ambulance, 226 A.D.2d 175; Matter of New York County DES Litig., 171 A.D.2d 119, 123).
Concur — Rosenberger, J.P., Ellerin, Tom and Mazzarelli, JJ.