In a recent case decided by the United States District Court for the Northern District of Texas, the plaintiff alarm company filed an action against one of its dealers and its owner (“the defendant”) alleging that after the parties terminated their relationship, the defendants began soliciting the plaintiff’s customers in violation of the restrictive covenants contained in the Alarm Monitoring Purchase Agreement (AMPA).
The plaintiff alleged that it entered into a dealer relationship with the defendant pursuant to which defendant sold security alarm equipment to individual customers and then assigned the related alarm monitoring contracts to the plaintiff under the terms of the AMPA. The AMPA contained various restrictive covenants prohibiting the defendant from soliciting the plaintiff’s customers for a period of 15 years. The parties agreed that the amount of damage resulting to the plaintiff from a violation was difficult to ascertain and quantify, and therefore the defendant acknowledged and agreed that the plaintiff would be entitled to liquidated damages from the defendant in the event of any affected contract’s monthly payment from defendant to plaintiff multiplied by 50.