BB&T Insurance Services, Inc. v. Thomas Rutherfoord, Inc.

80 Va. Cir. 174, 2010 Va. Cir. LEXIS 25
CourtRichmond County Circuit Court
DecidedFebruary 9, 2010
DocketCase No. CL09-4550
StatusPublished
Cited by5 cases

This text of 80 Va. Cir. 174 (BB&T Insurance Services, Inc. v. Thomas Rutherfoord, Inc.) is published on Counsel Stack Legal Research, covering Richmond County Circuit Court primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
BB&T Insurance Services, Inc. v. Thomas Rutherfoord, Inc., 80 Va. Cir. 174, 2010 Va. Cir. LEXIS 25 (Va. Super. Ct. 2010).

Opinion

By Judge Richard d. Taylor, Jr.

This matter came on for hearing December 10, 2009, upon Defendants’ demurrers to the Complaint and their request that the Court dismiss Plaintiffs claims, on all counts, with prejudice. Further, Defendant William S. Moore moved the Court to find, as a matter of law, that the Employment Agreement (“Agreement”) between himself and BB&T Insurance Services, Inc. (“BB&T”) is overbroad and unenforceable. The Court, having considered the pleadings and written memoranda filed by the parties, arguments of counsel, and applicable Virginia law, finds that the Agreement is invalid and sustains Defendants’ demurrers.

[175]*175 I. Background

This action arises from Moore and Donna Perkinson’s decision to voluntarily terminate their employment relationships with BB&T, and their subsequent decision to accept employment with Thomas Rutherfoord, Inc. (“Rutherfoord”), a BB&T competitor. Plaintiff alleges Breach of Fiduciary Duties (“Count I”), Breach of Contract (“Count II”), Tortious Interference with Contract (“Count III”), Tortious Interference with Business Expectancy (“Count IV”), Common Law Conspiracy (“Count V”), Business Conspiracy in violation of Virginia Code § 18.2-499 (“Count VI”), and Misappropriation of Trade Secrets in violation of the Virginia Uniform Trade Secrets Act (“Count VII” or “VUTSA”). Defendant Moore demurs to Counts I, II, IV, V, VI, and VII of the Complaint Defendant Perkinson demure to Counts I through VII of the Complaint. Defendant Rutherfoord demurs to Counts III though VII of the Complaint. All Defendants contend that the Agreement is invalid as a matter of Virginia law.

II. Analysts

A demurrer tests the legal sufficiency of a pleading to determine whether the pleading states a cause of action. Fun v. Va. Military Inst., 245 Va. 249, 427 S.E.2d 181 (1993). The Court admits the truth of all well-pleaded material facts and all reasonable inferences fairly and reasonably drawn, but does not admit the correctness of the conclusions of law stated by the pleader. Ames v. American Nat’l Bank, 163 Va. 1, 37-38, 176 S.E. 204, 215-16 (1934). On demurrer, “a court may examine not only the substantive allegations of the pleading attacked but also any accompanying exhibit mentioned in the pleading.” Flippo v. F &L Land Co., 241 Va. 15, 17, 400 S.E.2d 156, 156 (1991); Va. Sup. Ct. Rule l:4(i).

A. The Legal Sufficiency of Count I: Breach of Fiduciary Duty

Count I alleges that Moore and Perkinson breached the duty of good faith, loyalty, and honesty owed to BB&T during and after their employment with BB&T. (Comp. ¶ 47.) For the reasons set forth below, the Court finds that BB&T has failed to sufficiently state a claim of breach of fiduciary duties owed to BB&T by Moore and Perkinson and sustains the demurrers to Count I.

[176]*176An employee’s fiduciary duty of loyalty is well established in the law. In Williams v. Dominion Tech. Partners, L.L.C., 265 Va. 280, 576 S.E.2d 752 (2003), the Court recognized the common law principle that “an employee, including an employee-at-will, owes a fiduciaiy duty of loyalty to his employer during his employment. ... Subsumed within this general duty of loyalty is the more specific duty that the employee not compete with his employer during his employment.” Id. at 289. 576 S.E.2d at 757. Further, a fiduciary duty continues after the termination of the employment relationship only when there is a continuation of “transactions” that began during the existence of the employment relationship or that were founded on information gained during the relationship. See Today Homes, Inc. v. Williams, 272 Va. 462, 634 S.E.2d 737 (2006).

The Supreme Court of Virginia has offered guidance with regard to the duty of loyalty. In Dominion Tech. Partners, the Court enumerated the type of unambiguous conduct that constitutes a breach of the duty of loyalty that one owes to his employer. “Principally, an employee must not have ‘misappropriated trade secrets, misused confidential information, [or] solicited an employer’s clients or other employees prior to termination of employment.’ While this list is by no means exhaustive, it is indicative of the types of conduct by an employee that the common law will not condone in an employment relationship.” Dominion Tech. Partners, 265 Va. at 291, 576 S.E.2d at 758 (internal citations omitted).

Plaintiff states in support of its allegations of breach of fiduciary duty that Moore and Perkinson “changed the process for obtaining renewal information for existing BB&T Insurance customers that were coming up for renewal ... [and Moore] met with only one or two of the accounts coming up for renewal before he resigned his employment. . . .” (Comp. ¶ 25.) Plaintiff also alleges that Moore “delayed the consummation of renewal business with current BB&T Insurance customers ... so that he could usurp the opportunities for himself and/or Rutherfoord.” (Comp. ¶ 27.) Plaintiff alleges that Moore encouraged Perkinson to terminate her employment with BB&T and that, together, they encouraged another employee to leave. (Comp. ¶¶ 30, 34, 38.) Lastly, Plaintiff alleges that Moore notified his colleagues and customers of his intentions to leave BB&T. (Comp. ¶¶ 31, 33.)

The Court finds that the allegations as pleaded, in and of themselves, do not constitute a claim for a breach of fiduciary duties during or after employment with BB&T. At best, they are conclusions that lack a sufficient factual basis to so apprise Moore and Perkinson of the [177]*177claims against them and to enable them to formulate a defense. While the Court recognizes that Defendants’ actions exceeded mere preparation, the Court finds that these actions as pleaded do not sufficiently state a cause of action for a breach of fiduciary duties. For these reasons, Defendants’ demurrers to Count I are sustained.

B. The Legal Sufficiency of Count II: Breach of Contract and Count III: Tortious Interference with Contract

The fundamental and critical assumption in Plaintiffs counts alleging breach of contract against Moore and tortious interference with contract against Perkinson and Rutherfoord is the existence of a valid contract. Thus, at the heart of these allegations are contentions surrounding the Agreement signed by Moore in 1999. At issue is language in that Agreement regarding non-competition, confidentiality, and blue-pencil provisions. For the reasons that follow, the Court finds that the non-competition and confidentiality provisions are unenforceable and that the Agreement is invalid in its entirety.

1. Non-Competition Provision

In Virginia, restrictive covenants, or covenants not to compete, are disfavored restraints on trade. Omniplex World Services Corp. v. US Investigations Services, Inc., 270 Va. 246, 249, 618 S.E.2d 340, 342 (2005); Motion Control Systems, Inc. v. East, 262 Va.

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Cite This Page — Counsel Stack

Bluebook (online)
80 Va. Cir. 174, 2010 Va. Cir. LEXIS 25, Counsel Stack Legal Research, https://law.counselstack.com/opinion/bbt-insurance-services-inc-v-thomas-rutherfoord-inc-vaccrichmondcty-2010.