Craneworks, Inc. v. RPM Cranes, LLC

239 So. 3d 561
CourtSupreme Court of Alabama
DecidedJune 16, 2017
Docket1150018; 1150028
StatusPublished

This text of 239 So. 3d 561 (Craneworks, Inc. v. RPM Cranes, LLC) is published on Counsel Stack Legal Research, covering Supreme Court of Alabama primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Craneworks, Inc. v. RPM Cranes, LLC, 239 So. 3d 561 (Ala. 2017).

Opinion

PER CURIAM.

CraneWorks, Inc. ("CraneWorks"), and its owners, David Upton ("David") and Steve Upton ("Steve"), and Russell Brooks, Rick Yates, and Casey Markos (all hereinafter collectively referred to as "the defendants") filed two appeals challenging the entry by the Jefferson Circuit Court ("the trial court") of a permanent injunction against them and in favor of RPM Cranes, LLC ("RPM"), and Muhammad Wasim Ali, the owner of RPM. We reverse the trial court's judgment and remand the case.

Facts and Procedural History

The basic facts underlying these appeals are well summarized in the "Findings of Fact" in the trial court's final order of August 25, 2015.1

"Based on the information presented by the parties via affidavit and live testimony, the court makes the following findings of fact:
"A. The Creation of RPM
"The Plaintiff, Muhammad Wasim Ali ('Dr. Ali')2 , is the sole owner of RPM Cranes, LLC ('RPM'). Defendants Russell (Rusty) Brooks ('Brooks') and Rick Yates ('Yates'), along with RPM's current General Manager Patrick Watson ('Watson'), all of whom testified at the hearing, started RPM in 2008 with financial backing from Dr. Ali (who was not present at the hearing). Neither Dr. Ali nor Watson had any prior experience in or knowledge of the crane industry. By contrast, Brooks and Yates had many years of experience in the crane industry, having previously worked for both Birmingham Steel and CraneWorks. Brooks and Yates had many contacts in the crane industry and brought those contacts with them to RPM. Brooks served as RPM's Operations Manager and Yates was its Sales Manager.
"B. Brooks'[s] and Yates'[s] Employment Agreements
"When the company began, Brooks and Yates understood they would become equity owners of the company within five (5) years. Prior to the expiration *563of that five (5) year period, however, Dr. Ali demanded they either buy in to the company at a cost of one million dollars ($1,000,000.00) each or remain employees of the company. Without the resources to make such an investment, Brooks and Yates agreed to remain with RPM as employees. At that time, RPM presented them with employment agreements that contained restrictive covenants pertaining to competition.
"[RPM and Ali] attached copies of Brooks'[s] and Yates'[s] employment agreements to their Complaint as Exhibits B and C. The employment agreements included, inter alia, anon-competition/non-solicitation provision limiting Brooks and Yates from working for a competing business for a period of two years and prohibiting Brooks and Yates from soliciting RPM's customers served within twenty-four (24) months prior to the date their employment with RPM ended.
"The employment agreements also included RPM's commitment to provide employee benefits to Brooks and Yates in the same manner provided to all other employees. Watson testified that most RPM employees are union members and that RPM is obligated to make contributions to the union, on behalf of the union employees, for the employees' health and pension benefits. During his employment with RPM, Brooks was a union member and relied on RPM to make contributions to his health and pension plans via the union. At the request of RPM, Yates withdrew from the union in 2011. With his union withdrawal came RPM's responsibility (admitted by Watson on cross-examination) to pay for Yates'[s] health and pension benefits, in the same way RPM paid for Watson's health and pension benefits. RPM did not pay for Yates'[s] pension benefits for a period of nineteen (19) months-from August 29, 2011 through April 9, 2013-resulting in zero contributions to Yates'[s] pension for that entire period.
"C. Markos'[s] Employment With RPM
"Defendant, Casey Markos ('Markos'), was hired at RPM in 2008 as an oiler, later became a crane operator, and became a salesperson in 2013. Per Markos, Watson asked him to sign a non-compete agreement when Markos became a salesperson in 2013, and Markos declined. Watson testified that he witnessed Markos sign the agreement, but admits that neither he nor RPM have the original agreement bearing Markos'[s] signature. Instead, [RPM and Ali] have presented as Exhibit D to the Complaint a copy of an agreement that appears (even to Markos) to bear Markos'[s] signature. Markos testified that he does not know how his signature was affixed to the non-compete [agreement] and is emphatic that he did not sign the document.
"Watson admits that nothing was offered to Markos in exchange for signing the non-compete [agreement], and the purported agreement does not state that any consideration was provided. The agreement that Markos allegedly signed contains a different restriction than the one in Brooks'[s] and Yates'[s] employment agreements, and prohibits 'Employee' from working for any company 'engaged in the business of rental.' Exhibit D to the Complaint does not specify that Markos was restricted from working in the crane rental business. Like Brooks, Markos was a union member during his employment with RPM, relying on RPM to make contributions to the union for his health and pension benefits.
"D. Events Leading to the Resignation of Brooks, Markos, and Yates *564"In 2015, a number of incidents occurred that led Brooks, Markos, and Yates to believe that RPM was in financial and reputational disarray and to fear that the company would soon close its doors. The men testified (via live testimony and affidavit) that company credit cards were declined on a number of occasions, including credit cards needed to provide fuel for cranes that were located at existing job sites. Salespeople and operators used their personal credit cards to either fuel machinery or pay for overnight hotel stays while on out-of-town jobs. Salespeople were instructed not to spend money on company marketing (including lunches, a primary way salespeople maintain contact with their customers and learn of future crane opportunities).
"In March 2015, Dr. Ali was arrested on federal drug charges, and he was indicted the following month. As part of the indictment, some RPM assets and bank accounts were seized and/or frozen. On June 1, 2015, RPM filed for Chapter 11 bankruptcy protection, where [RPM] remains today.[3 ] Dr. Ali's arrest and indictment, as well as RPM's bankruptcy, received media attention, and Brooks, Markos, and Yates received questions from concerned customers about these incidents.
"In mid-June 2015, Brooks, Markos, and Yates learned RPM had not made payments to the union for the health and pension benefits of any of RPM's union employees, including but not limited to Brooks and Markos, since at least February 2015. RPM admits that it did not make these payments despite its obligation to do so. Approximately six crane operators then resigned their employment with RPM. Brooks, Markos, and Yates knew that a lack of crane operators would result in an inability to service client crane needs. That fact, compounded with the financial problems RPM was experiencing (Yates'[s] last four paychecks were drawn from four different banks), as well as the reputational issues associated with Dr.

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Bluebook (online)
239 So. 3d 561, Counsel Stack Legal Research, https://law.counselstack.com/opinion/craneworks-inc-v-rpm-cranes-llc-ala-2017.