North Carolina Business Litigation Report

Integrity Financial Services, LLC v. Gutierrez, October 12, 2007 (Diaz)(unpublished)

The Court denied a Motion for a Temporary Restraining Order.  The Motion sought enforcement of covenants not to compete executed by the Defendants, who were loan officers with the Plaintiff, a mortgage broker.

The covenants stated that the Defendants:

will not directly or indirectly, in any capacity work for any company, entity or individual, including himself/herself, who originates or sells residential housing loans in any state in which LO has originated a loan in the six (6) months preceding the termination of LO’s employment with the Company [Integrity].

The Court found this to be too broad a restriction, holding:

the individual Defendants would not merely be prevented from working as loan officers for other mortgage brokers, but would also be prevented from doing even wholly unrelated work at any firm that competes with the Plaintiff.

The Court also noted that the Defendants contended that the Plaintiff had breached its agreement by failing to pay them, and held:

Our courts have held that “[i]njunctive relief to enforce the terms of a contract will not be granted a party who has himself breached the terms of the contract when his breach is substantial and material and goes to the heart of the agreement."

Full Opinion

Brief in Support of Motion for Temporary Restraining Order

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Mack Sperling
Brooks Pierce, LLP
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