Opinion
Appeal No. 02A01-9405-CH-00112.
September 13, 1995.
Appeal From The Chancery Court Of Madison County At Jackson, Tennessee, The Honorable George R. Ellis, Chancellor, Madison Chancery No. 44123
JESSE H. FORD, III, FORD, MOSIER MAYO, Attorney for Appellants
DAVID HARDEE, HARDEE, MARTIN JAYNES, P.A., Attorney for Appellees
CONCUR: HEWITT P. TOMLIN, JR., PRESIDING JUDGE, DAVID R. FARMER, JUDGE
AFFIRMED
Plaintiffs/Appellants, Dalton Meat Company, Dewit Dalton and Sharon Dalton, appeal from an order of the trial court dismissing their suit against the defendant/appellee, Bill Case, for failure to prove a cause of action.
The pertinent facts are as follows: On April 20, 1990, Bill Case entered into a contract to sell all assets of his wholesale meat business, Bill Case Meat Co., Inc., to L. Dalton Meat Co., Inc. for the purchase price of $50,000. As part of the contract Case agreed not to engage, either directly or indirectly, in the wholesale meat business in or around a 75 mile radius of Jackson, Tennessee for a period of five years. Following the sale, Case's daughter and son-in-law, David and Ginger Case Bly, worked at Dalton Meat Company to assist with the new accounts and aid in the transition. After working at Dalton Meat Company approximately three months, the Blys quit and opened Ginger Case Meat Company at the former location of Bill Case Meat Company. The Blys rented two buildings, which consisted of a cooler and a freezer, and a pick-up truck from Bill Case all of which had been used to run Bill Case Meat Company. After losing substantially all of the accounts obtained in the sale of Bill Case Meat Company to the Blys, plaintiffs brought this suit against Bill Case alleging that Case violated the covenant not to compete by assisting the Blys in the opening and operation of Ginger Case Meat Company. Plaintiffs sought rescission of the contract of sale.
Plaintiffs originally filed suit against Ginger Case Bly, David Bly and Sarah Case. All three defendants were dismissed from suit prior to the trial.
Three witnesses testified for the plaintiffs. Dewit Dalton, president and general manager of Dalton Meat Company, testified that he had no proof that Bill Case invested any money in his daughter's business or received any profits from the business other than the rent on the buildings and truck. Dalton, asserted however, that by renting his daughter the buildings which had been used for Bill Case Meat Company, Case indirectly competed with Dalton Meat Company in breach of the covenant not to compete. In support of this theory, Dalton testified that Case, who owned a barbeque business next to the meat business, was continually on the premises of Ginger Case Meat Co. According to Dalton, Ginger Case Meat Co. had a large walk-in business and Bill Case would run into old customers while on the premises. Dalton also testified that Case had a "Bill Case" truck parked in front of Ginger Case Meat Company.
Ginger Case Bly testified at trial that Bill Case did not talk to or solicit any former customers on her behalf, nor did he help her in any way with the business. According to Bly, she started the business on her own with a cash loan from a close friend and meat supplier, Robert Baltz, and did not discuss business with her father. She testified that when she approached Case about renting the cooler, which was vacant at the time, he told her not to open a meat business because it was too tough and she could not make it. Bly further testified that the only money her father received from her wholesale meat business was from renting the cooler, freezer and delivery truck. Bly admitted that a truck, bearing the logo "Bill Case Incorporated," was parked on the premises where her company and Case's barbeque business were located, but testified that the truck was used solely for her father's catering business.
Harold Dukes, an owner of a small grocery store and a former customer of both Bill Case and Dalton, testified that he started buying meat from Bill Case about three months before the sale. When Dalton and Bly became competitors, Dukes testified that he bought meat from both dealers for a while then switched exclusively to Ginger Case Meat Company. He testified that at no time did anyone make it clear to him that Bill Case was out of the meat business.
At the close of plaintiff's proof, Bill Case moved pursuant to T.R.C.P. 41.02(2) to dismiss the action on the grounds that plaintiffs had not proven that the he breached the covenant not to compete and therefore had not shown a right to relief. The motion was granted and this appeal ensued.
T.R.C.P. 41.02(2) states:
After the plaintiff, in an action tried by the court without a jury, has completed the presentation of his evidence, the defendant, without waiving his right to offer evidence in the event the motion is not granted, may move for dismissal on the ground that upon the facts and the law the plaintiff has shown no right to relief. The court as trier of the facts may then determine them and render judgment against the plaintiff or may decline to render any judgment until the close of all the evidence. . . .
Under this rule, the trial court must impartially weigh and evaluate the evidence as if it were making findings of fact and conclusions of law after presentation of all the evidence. If on the facts found and the applicable law, the plaintiff has not established his case by a preponderance of the evidence, the case should be dismissed on the basis that the plaintiff has shown no right to relief. City of Columbia v. C.F.W. Constr. Co., 557 S.W.2d 734, 740 (Tenn. 1977). The findings of the trial court in granting such a motion are governed by T.R.A.P. 13(d) and are presumed correct unless the preponderance of the evidence is otherwise. Atkins v. Kirkpatrick, 823 S.W.2d 547, 552 (Tenn.App. 1991).
The covenant not to compete signed by Case prohibits him from engaging in the wholesale meat business either directly or indirectly. Generally, such covenants incident to the sale of a business are enforceable provided they are reasonable and go no further than affording a fair protection to the buyer. Greene County Tire Supply, Inc. v. Spurlin, 338 S.W.2d 597 (Tenn. 1960). In the present case, however, the reasonableness of the covenant not to compete is not disputed. The sole question is whether Case breached the covenant when his daughter entered the wholesale meat business and rented the buildings and truck formerly used by Bill Case Meat Company. We find that he did not.
The only evidence presented by plaintiffs to support their theory that Bill Case breached the covenant by indirectly competing with Dalton Meat Company is the fact that Case rented a cooler, freezer and truck to Ginger Case Meat Company. Plaintiffs offered no proof to show that Case invested in or aided his daughter in her business. In fact, both Dalton and Ginger Case Bly testified that Bill Case tried to discourage her from entering the wholesale meat business. The only benefit Bill Case derived from his daughter's business was the rent money he collected on the buildings and the truck. Although Case parked a truck bearing his name on the lot housing Ginger Case Meat Company and was on the lot frequently, the evidence showed that he was there to run his barbeque business not to help his daughter. Furthermore, plaintiffs presented no proof that Case talked with or solicited former customers while on the premises.
Bill Case was the only person bound by the covenant not to compete. By renting facilities to Ginger Case Meat Company and working on the premises in a different business, Case did not directly or indirectly breach the covenant by engaging in the wholesale meat business. Accordingly, we find that the evidence does not preponderate against the trial court's finding that the plaintiffs failed to show a right to relief.
Judgment of the trial court is affirmed. Costs on appeal are taxed to appellants.
________________________________ HIGHERS, J.
CONCUR:
______________________________________________________ TOMLIN, P.J., W.S.
_______________________________________________________ FARMER, J.