Opinion
2015 CA 1583
09-16-2016
RUSSELL PARKER v. SURFACE WORKS, INC. D/B/A SURFACE CONNECTION
Joshua P. Melder Cassie E. Felder Baton Rouge, LA Attorneys for Plaintiff/Appellant Russell Parker Jude C. Bursavich Claude F. Reynaud, Jr. Claude F. Reynaud, III Baton Rouge, LA Attorneys for Defendant/Appellee Surface Works, Inc. d/b/a Surface Connection
NOT DESIGNATED FOR PUBLICATION On Appeal from the Nineteenth Judicial District Court In and for the Parish of East Baton Rouge State of Louisiana
No. C638063 The Honorable Timothy Kelley, Judge Presiding Joshua P. Melder
Cassie E. Felder
Baton Rouge, LA Attorneys for Plaintiff/Appellant
Russell Parker Jude C. Bursavich
Claude F. Reynaud, Jr.
Claude F. Reynaud, III
Baton Rouge, LA Attorneys for Defendant/Appellee
Surface Works, Inc. d/b/a Surface
Connection BEFORE: GUIDRY, HOLDRIDGE, AND CHUTZ, JJ. HOLDRIDGE, J.
Plaintiff-appellant, Russell Parker, appeals a judgment granting a preliminary injunction in favor of defendant-appellee, Surface Works, Inc. d/b/a Surface Connection (Surface Works). For the following reasons, we amend the judgment of the district court and affirm the judgment as amended.
FACTUAL AND PROCEDURAL HISTORY
Parker worked as an independent contractor for Surface Works performing restoration and resurfacing work for residential buildings. On June 20, 2012, Parker signed a "General Independent Contracting Agreement" that included a "Non-Competition/Non-Solicitation Agreement" with Surface Restoration. Thereafter, on or about June 26, 2014, Parker signed a "Non-Competition/Non-Solicitation Agreement" with Surface Works prohibiting him from engaging in any business similar to that of Surface Works in the parishes of East Baton Rouge, Orleans, and Jefferson for a period of two years from the termination date of his employment. Parker subsequently terminated his employment with Surface Works on December 5, 2014, and began working for Prestigious Painting and Janitorial, LLC, performing resurfacing and refinishing work. Prestigious Painting is located in East Baton Rouge parish.
Prior to 2014, Surface Works conducted business through its still-existing sister company, Restored Surfaces, Inc. d/b/a Surface Restoration.
On February 23, 2015, Parker received a "Cease and Desist" letter from Surface Works demanding that any and all conduct or activity related to the resurfacing, re-facing, refinishing, and/or restoring of surfaces on behalf of Prestigious Painting immediately be halted. The letter further requested that Parker immediately cease and desist any and all conduct or activity in violation of the non-competition agreement with Surface Works for the remaining two-year enforcement period ending on November 10, 2016. However, Parker continued to work for Prestigious Painting.
Although Surface Works' "Cease and Desist" letter provided November 10, 2014, as the termination date of Parker's employment, December 5, 2014, was the last date that Parker received payment from Surface Works.
Consequently, on March 23, 2015, Parker filed a Petition for Declaratory Judgment against Surface Works praying that the district court hold the noncompetition agreement invalid and unenforceable. Thereafter, Surface Works filed, among other pleadings, a Motion for Injunctive Relief seeking a preliminary injunction to enforce the non-competition agreement that Parker signed. Surface Works sought a preliminary injunction against Parker through December 5, 2016, the remaining portion of the two-year period that began immediately following the termination of his employment with Surface Works.
A hearing on Surface Works' request for a preliminary injunction was held on July 20, 2015. On August 4, 2015, the district court signed a judgment in favor of Surface Works granting its request for a preliminary injunction. The judgment stated, in pertinent part:
[A] PRELIMINARY INJUNCTION shall be and is hereby GRANTED in favor of Surface Connection and against the plaintiff and defendant-in-reconvention herein, RUSSELL PARKER ("Parker"), and that Parker shall be and is hereby prohibited and enjoined, through December 4 , 2016 (i.e., for the remaining portion of the now-tolling 2-year period following the termination of Parker's work relationship with Surface Connection)[.]
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IT [IS] FURTHER ORDERED, ADJUDGED AND DECREED that bond is hereby set at $50,000[.00] pursuant to La. C.C.P. art. 3610, and that this preliminary injunction, as signed and entered, shall become effective at the moment [Surface Works] posts, and the Clerk of this 19th Judicial District Court accepts, a $50,000.00 bond to protect the interests of Russell Parker until the earlier of either the completion of a trial on the merits of this case or the expiration of the now-remaining portion of the two-year enforcement period of this preliminary injunction which expires at midnight on December 4, 2016[.]
Parker has devolutively appealed the district court's August 4, 2015 judgment. On appeal, Parker asserts that the district court erred in granting the preliminary injunction, as Surface Works did not make a prima facie showing that it would prevail on the merits in light of the overwhelming evidence demonstrating that Parker only signed the signature page and never received a complete copy of the non-competition agreement.
DISCUSSION
An appeal may be taken as a matter of right from a judgment relating to a preliminary injunction. La. C.C.P. art. 3612(B); see Roba, Inc. v. Courtney, 2009-0509 (La. App. 1 Cir. 8/10/10), 47 So.3d 509, 514 n.12. Generally, a party seeking the issuance of a preliminary injunction must show that he will suffer irreparable injury if the injunction does not issue and must show entitlement to the relief sought; this must be done by a prima facie showing that the party will prevail on the merits of the case. However, if an employee enters into an agreement with his employer not to compete and fails to perform his obligation under such an agreement, the court shall order injunctive relief even without a showing of irreparable harm, upon proof by the employer of the employee's breach of the non-compete agreement. La. R.S. 23:921(H); Vartech Systems, Inc. v. Hayden, 2005-2499 (La. App. 1 Cir. 12/20/06), 951 So.2d 247, 255. The issuance of a preliminary injunction addresses itself to the sound discretion of the trial court and will not be disturbed on review absent a clear abuse of discretion. Tobin v. Jindal, 2011-0838 (La. App. 1 Cir. 2/10/12), 91 So.3d 317, 321.
Louisiana has consistently had a strong public policy against any employment contract that prohibits an employee from competing with a former employer. Louisiana Smoked Products, Inc. v. Savoie's Sausage and Food Products, Inc., 96-1716 (La. 7/1/97), 696 So.2d 1373, 1379. Louisiana Revised Statutes 23:921 embodies that general policy, but sets forth specific exceptions defining the limited circumstances under which such agreements may be valid. The exceptions applicable to this matter are La. R.S. 23:921(C) and (H), which provide, in pertinent part:
C. Any person, ... who is employed as an ... employee may agree with his employer to refrain from carrying on or engaging in a business similar to that of the employer and/or from soliciting customers of the employer within a specified parish or parishes, municipality or municipalities, or parts thereof, so long as the employer carries on a like business therein, not to exceed a period of two years from termination of employment.Thus, a valid non-competition agreement may limit competition only in a business similar to that of the employer, in a specified geographic area, for up to two years from termination of employment. Because Subsection C is an exception to Louisiana's public policy against non-competition agreements, it must be strictly construed. Acadian Cypress & Hardwood Inc. v. Stewart, 2012-1425 (La. App. 1 Cir. 3/22/13), 121 So.3d 667, 670. Whether a non-competition agreement is valid is to be determined at the trial on the merits of the action for a declaratory judgment. Since both the action for a permanent injunction and an action for a declaratory judgment follow ordinary proceedings, both actions may be cumulated. See La. C.C.P. arts. 461 and 462.
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H. Any agreement covered by Subsection ... C ... of this Section shall be considered an obligation not to do, and failure to perform may entitle the obligee to recover damages for the loss sustained and the profit of which he has been deprived. In addition, upon proof of the obligor's failure to perform, and without the necessity of proving irreparable injury, a court of competent jurisdiction shall order injunctive relief enforcing the terms of the agreement.
In the instant matter, the issue is whether the district court abused its discretion in granting Surface Works a preliminary injunction. Parker argues that he was unaware that he signed a non-competition agreement with Surface Works on June 26, 2014. We disagree. The testamentary and documentary evidence introduced by Surface Works demonstrated that Parker signed a non-competition agreement pursuant to his independent contractor contract. Under Louisiana law, a party who signs a written instrument is presumed to know its contents and cannot avoid its obligations by contending that he did not read it, that he did not understand it, or that the other party failed to explain it to him. If a party can read, it behooves him to examine an instrument before signing. Henderson v. Windrush Operating Co., L.L.C., 47,659 (La. App. 2 Cir. 8/21/13), 128 So.3d 283, 294, writ denied, 2013-2502 (La. 2/14/14), 132 So.3d 411. Thus, because Surface Works has made a prima facie case showing that Parker agreed to refrain from engaging in a business similar to the one in which it engages, the district court did not abuse its discretion by issuing a preliminary injunction.
Unless there is evidence of fraud, misrepresentation, or deceit, one who signs a written contract is bound by its terms. Object Technology Information Specialists Corp. v. Science and Engineering Associates, Inc., 2006-0162 (La. App. 4 Cir. 2/28/07), 955 So.2d 151, 154, writ denied, 2007-0667 (La. 5/11/07), 955 So.2d 1285.
There is no indication in the record that the parties stipulated to allowing the hearing on the preliminary injunction serve as one on a permanent injunction. See French Market Vendors Association, Inc. v. French Market Corporation, 2012-0964 (La. App. 4 Cir. 2/13/13), 155 So.3d 514, 518, writ denied, 2013-0657 (La. 5/3/13), 113 So.3d 215. --------
A preliminary injunction is interlocutory in nature and designed to preserve the status quo until a determination can be made on the merits of the controversy. Elysian Fields Church of Christ v. Dillon, 2008-0989 (La. App. 4 Cir. 3/18/09), 7 So.3d 1227, 1231. However, the issuance of a permanent injunction takes place only after trial on the merits, in which the burden of proof must be founded on a preponderance of the evidence, rather a prima facie showing. Elysian Fields Church of Christ, 7 So.3d at 1232.
The district court's judgment expressly prohibited Parker from competing with Surface Works through December 4, 2016, rather than until the trial on the merits of the case. Accordingly, we find that the judgment of August 4, 2015, was correct insofar as it granted Surface Works' request for a preliminary injunction. However, the judgment provided a permanent injunction even though there had not been a trial on the merits of this case. Clearly, the district court was without authority to issue a permanent injunction without a full trial on the merits. We find that the district court's enforcement of the non-competition agreement by the issuance of a preliminary injunction was proper, and Surface Works presented prima facie evidence sufficient to show that it would likely prevail on the merits at a hearing for a permanent injunction. Therefore, we find that the judgment of the district court was proper as to the granting of the preliminary injunction and must be amended to omit the portion of the judgment, which extended the injunction until December 4, 2016.
CONCLUSION
For the foregoing reasons, we amend the August 4, 2015 judgment to replace the language ordering:
... that Parker shall be and is hereby prohibited and enjoined, through December 4 , 2016 (i.e., for the remaining portion of the now-tolling 2-year period following the termination of Parker's work relationship with Surface Connection)[.]with the following language:
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... this preliminary injunction ... shall become effective at the moment [Surface Works] posts, and the Clerk of this 19th Judicial District Court accepts, a $50,000.00 bond to protect the interests of Russell Parker until the earlier of either the completion of a trial on the merits of this case or the expiration of the now-remaining portion of the two-year enforcement period of this preliminary injunction which expires at midnight on December 4, 2016[.]
... that Parker shall be and is hereby prohibited and enjoined until a trial on the merits on the permanent injunction.
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... this preliminary injunction ... shall become effective at the moment [Surface Works] posts, and the Clerk of this 19th Judicial
District Court accepts, a $50,000.00 bond to protect the interests of Russell Parker until a trial on the merits on the permanent injunction.
The judgment is affirmed in all other respects. Costs of this appeal are assessed to plaintiff-appellant, Russell Parker.
AMENDED, AND AFFIRMED AS AMENDED.