Cut N Up Hair Salon of Carolina Beach, LLC v. Bennett

CourtCourt of Appeals of North Carolina
DecidedSeptember 16, 2014
Docket13-1417
StatusUnpublished

This text of Cut N Up Hair Salon of Carolina Beach, LLC v. Bennett (Cut N Up Hair Salon of Carolina Beach, LLC v. Bennett) is published on Counsel Stack Legal Research, covering Court of Appeals of North Carolina primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Cut N Up Hair Salon of Carolina Beach, LLC v. Bennett, (N.C. Ct. App. 2014).

Opinion

An unpublished opinion of the North Carolina Court of Appeals does not constitute controlling legal authority. Citation is disfavored, but may be permitted in accordance with the provisions of Rule 30(e)(3) of the North Carolina Rules of A p p e l l a t e P r o c e d u r e .

NO. COA13-1417 NORTH CAROLINA COURT OF APPEALS

Filed: 16 September 2014

CUT N UP HAIR SALON OF CAROLINA BEACH, LLC, and KIMBERLY A. LEWIS, Plaintiffs,

v. New Hanover County No. 12 CVS 3023 STEPHANIE BENNETT and JODA BENNETT, Defendants.

Appeal by Defendants from Order entered 23 August 2013 by

Judge W. Allen Cobb, Jr., in New Hanover County Superior Court.

Heard in the Court of Appeals 4 June 2014.

Law Offices of G. Grady Richardson, Jr., P.C., by G. Grady Richardson, Jr., for Plaintiffs.

Broadwell Phillips & Potter, PLLC, by J. Hunter Broadwell, for Defendants.

STEPHENS, Judge.

Factual Background and Procedural History

This case arises from the operation of a home-based

hairstyling salon by Defendants Stephanie Bennett (“Ms.

Bennett”) and Joda Bennett (“Mr. Bennett”) in Carolina Beach, -2- North Carolina. Before opening the home-based salon, Ms. Bennett

owned and operated a beauty salon under the trade name “Cut N

Up.” On 17 May 2010, Ms. Bennett sold Cut N Up to Plaintiff

Kimberly A. Lewis for $20,000.

Ms. Bennett is a licensed cosmetologist. She does not have

a high school diploma or a college degree. Lewis has an

undergraduate degree in business administration. The purchase

agreement was prepared by Lewis, who downloaded a template from

the internet and made various handwritten changes. In pertinent

part, the signed agreement provided that Ms. Bennett (1) would

not engage in a competitive business for a period of five years

and within a fifty-mile radius of Cut N Up, and (2) would not

make known the names and addresses of the Cut N Up customers or

solicit those customers for a competitive business (the

“restrictive covenants” or the “non-compete provisions”). No

handwritten changes were made to this section of the agreement.

For approximately two years following the sale, Ms. Bennett

remained at Cut N Up as an independent cosmetologist. She was

paid by the customers and rented salon space from Lewis.

Pursuant to the purchase agreement, which stipulated that Ms.

Bennett had “1 yr. of pre-paid [b]ooth rent,” her rent for the -3- first year was paid out of the total purchase price for the

salon. Afterward, Ms. Bennett paid the rent herself.

On 30 April 2012, Lewis decided not to renew Ms. Bennett’s

rental contract and asked Ms. Bennett to leave the salon. In an

attempt to avoid litigation, Lewis then offered to reduce the

geographic limitation in the restrictive covenant from fifty

miles to twenty miles in exchange for certain commitments by Ms.

Bennett. Ms. Bennett declined that offer and, in May, began

practicing cosmetology from her home with the help of Mr.

Bennett. Ms. Bennett’s home is located approximately two miles

from Cut N Up Hair Salon.

On 1 August 2012, Plaintiffs Lewis and Cut N Up Hair Salon

of Carolina Beach, LLC (“Cut N Up”), filed suit against

Defendants, seeking compensatory damages, punitive damages,

costs and expenses, attorneys’ fees, and an injunction. On 13

August 2012, the trial court, Judge Paul L. Jones presiding,

issued a temporary restraining order enjoining Defendants from

operating the home-based salon. Approximately one month later,

on 18 September 2012, the trial court, Judge Gary E. Trawick

presiding, entered a consent order. The order memorialized the

parties’ agreement, without prejudice to either party, and -4- stated that Defendants would be permitted to continue operating

the home-based salon subject to certain restrictions.

Plaintiffs sought to dissolve the consent order one year

later, on 6 August 2013. By order filed 23 August 2013, the

trial court, Judge W. Allen Cobb, Jr., presiding, granted

Plaintiffs’ motion, dissolved the consent order, and permanently

enjoined Defendants from operating the home-based salon until

the restrictive covenants were set to expire on 17 May 2015. By

separate order filed that same day, the trial court granted

Plaintiffs’ motions for attorneys’ fees, costs, and sanctions in

the amount of $13,660.60. On 10 September 2013, Defendants filed

notice of appeal from the trial court’s order, seeking review

only “of the provisions of the [o]rder imposing a permanent

injunction against Defendants.”

Discussion

On appeal, Defendants argue that the trial court erred in

granting partial summary judgment to Plaintiffs and imposing a

permanent injunction on Defendants because (1) the restrictive

covenants are unenforceable as a matter of law or, in the

alternative, (2) the case involves disputed issues of material

fact. We disagree.

I. Appellate Jurisdiction -5- As Defendants acknowledge in their notice of appeal, this

case is interlocutory in nature. See Liggett Grp., Inc. v.

Sunas, 113 N.C. App. 19, 23, 437 S.E.2d 674, 677 (1993) (“A

grant of partial summary judgment, because it does not

completely dispose of the case, is an interlocutory order from

which there is ordinarily no right of appeal.”) (citations

omitted). Therefore, Defendants have no immediate right of

appeal. Id. (“Such prohibition promotes judicial economy by

preventing fragmentary appeals.”) (citation omitted).

Nonetheless, in two instances a party is permitted to appeal interlocutory orders: first, where there has been a final determination of at least one claim, and the trial court certifies that there is no just reason to delay the appeal [under] Rule 54(b); and second, if delaying the appeal would prejudice a “substantial right.” As the court below made no certification, the first avenue of appeal is closed.

Regarding the second, it has been frequently noted the substantial right test is much more easily stated than applied. There are a few general principles governing what constitutes a “substantial right” and[,] thus[,] it is usually necessary to consider the particular facts of each case and the procedural context in which the interlocutory decree was entered. [Generally speaking, a] substantial right . . . is considered affected if there are overlapping factual issues between the claim determined and any claims which have not yet been determined because such overlap creates the potential for inconsistent verdicts -6- resulting from two trials on the same factual issues.

Id. at 23–24, 437 S.E.2d at 677 (citations and certain internal

quotation marks omitted; emphasis in original).

This Court has previously recognized that an injunction

affecting a person’s livelihood involves a substantial right

and, therefore, justifies immediate appellate review. Wade S.

Dunbar Ins. Agency, Inc. v. Barber, 147 N.C. App. 463, 466–67,

556 S.E.2d 331, 334 (2001) (citations omitted). We have also

held that an order enjoining one party from competing in

violation of a non-competition agreement affects a substantial

right. QSP, Inc. v. Hair, 152 N.C. App. 174, 176, 566 S.E.2d

851, 852 (2002). Ms. Bennett’s ability to continue operating the

home-based salon clearly affects her livelihood. Moreover, the

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