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Ticor Title Ins. Co. v. Cohen

United States Court of Appeals for the Second Circuit

August 31, 1998, Argued ; March 31, 1999, Decided

Docket No. 98-7904

Opinion

 [*65]  CARDAMONE, Circuit Judge: 

Defendant Kenneth C. Cohen (defendant or appellant) appeals from a judgment entered July 1, 1998 in the United States District Court for the Southern District of New York (Martin, J.) that issued a permanent injunction against him and in favor of plaintiffs Ticor Title Insurance Co. and Chicago Title Insurance Co.  [**2]  (Ticor). This panel filed a summary order affirming the judgment of the district court on November 19, 1998, and stating that this opinion would follow.

A principal question to be resolved is whether appellant's services as an employee were so unique to his employer as to provide a basis for injunctive relief. In analyzing whether an employee's services are unique, the focus today is less on the uniqueness of the individual person of the employee, testing whether such person is extraordinary in the sense, for example, of Beethoven as a composer, Einstein as a physicist, or Michelangelo as an artist, where one can fairly say that nature made them and then broke the mold. Instead, now ] the inquiry is more focused on the employee's relationship to the employer's business to ascertain whether his or her services and value to that operation may be said to be unique, special or extraordinary; that inquiry, because individual circumstances differ so widely, must of necessity be on a case-by-case basis.

BACKGROUND

Facts Relating to Employment

A. The Parties 

Plaintiffs are affiliated companies that sell title insurance nationwide. Title insurance  [*66]  insures the buyer of real property,  [**3]  or a lender secured by real property, against defects in the legal title to the property, and guarantees that, in the event a defect in title surfaces, the insurer will reimburse the insured for losses associated with the defect, or will take steps necessary to correct it. This kind of insurance is almost always purchased when real estate is conveyed. Ticor has been, and remains today, the leading title insurance company in New York State. It focuses primarily on multi-million dollar transactions that are handled by real estate lawyers. On large transactions more than one title insurance company is often employed in order to spread the risk.

Defendant Cohen was employed by Ticor as a title insurance salesman. Title insurance salespeople contact real estate attorneys, handle title searches for them, and sell them policies; those salespeople from different title insurance companies compete to insure the same real estate transaction, seeking their business from the same group of widely-known attorneys. Due to the nature of the business, those attorneys commonly have relationships with more than one title insurance company.

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173 F.3d 63 *; 1999 U.S. App. LEXIS 9998 **; 14 I.E.R. Cas. (BNA) 1710

TICOR TITLE INSURANCE CO.; CHICAGO TITLE INSURANCE Co., Plaintiffs-Appellees, --v.-- KENNETH C. COHEN, Defendant-Appellant.

Prior History:  [**1]  Defendant Kenneth C. Cohen appeals from a judgment entered July 1, 1998 in the United States District Court for the Southern District of New York (Martin, J.) that granted an injunction enforcing a non-competition agreement he entered into with his former employer, plaintiffs Ticor Title Insurance Co. and Chicago Title Insurance Co.

Disposition: Affirmed.

CORE TERMS

covenant, injunction, compete, district court, non-compete, title insurance, injunctive relief, customers, employment contract, trial court, transactions, salary, void, confidential information, irreparable harm, competitor, cases, public policy, real property, salesperson, termination, livelihood, permanent, parties

Insurance Law, Coverage, Real Property, General Overview, Real Property Law, Title Quality, Marketable Title, Labor & Employment Law, Conditions & Terms, Trade Secrets & Unfair Competition, Noncompetition & Nondisclosure Agreements, Financing, Mortgages & Other Security Instruments, Mortgagee's Interests, Civil Procedure, Judgments, Relief From Judgments, Remedies, Injunctions, Permanent Injunctions, Business & Corporate Compliance, Contracts Law, Types of Contracts, Covenants, Governments, Legislation, Overbreadth, Trade Secrets Law, Employee Duties & Obligations, Right to Compete, Covenants Not to Compete, Contracts Law, Equitable Relief, Injunctions, Employment Relationships, Employment Contracts, Breaches