Garcia v. Banfield Pet Hospital, Inc.

35 So. 3d 261, 30 I.E.R. Cas. (BNA) 414, 2009 La.App. 1 Cir. 0466, 2010 La. App. LEXIS 66, 2010 WL 199263
CourtLouisiana Court of Appeal
DecidedJanuary 21, 2010
Docket2009 CA 0466
StatusPublished
Cited by2 cases

This text of 35 So. 3d 261 (Garcia v. Banfield Pet Hospital, Inc.) is published on Counsel Stack Legal Research, covering Louisiana Court of Appeal primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Garcia v. Banfield Pet Hospital, Inc., 35 So. 3d 261, 30 I.E.R. Cas. (BNA) 414, 2009 La.App. 1 Cir. 0466, 2010 La. App. LEXIS 66, 2010 WL 199263 (La. Ct. App. 2010).

Opinion

McDonald, J.

12This is an appeal of a judgment finding a non-competition agreement valid and awarding damages and attorney fees in accordance therewith. After a thorough review, we find the agreement invalid and reverse the trial court judgment.

FACTS AND PROCEDURAL HISTORY

On March 4, 2002, plaintiff, Eugene A. Garcia, III, D.V.M. (Dr. Garcia), as owner and on behalf of Bayou Animal Clinic, hired defendant-appellant, Elizabeth B. Saylor, D.V.M. (Dr. Saylor), to perform veterinarian services at his two veterinary clinics located in St. Tammany Parish. One clinic was located in Slidell, Louisiana, and the other in Lacombe, Louisiana. The parties signed an employment contract, which provided that Dr. Saylor would refrain from competing either directly or indirectly with the Bayou Animal Clinic for two years following the termination of her employment. Specifically, the contract delineated a six-mile radius around each of Dr. Garcia’s veterinary clinics, inside of *263 which Dr. Saylor was prohibited from engaging in the practice of veterinary medicine. The contract also provided for liquidated damages of $1,500 per month for the first twelve-month period following any breach of the agreement and $1,000 per month for the second twelve-month period. In return for executing the non-competition agreement, Dr. Saylor was given additional yearly consideration of $1,500.

On May 1, 2003, Dr. Saylor terminated her employment relationship with Dr. Garcia. Six weeks later, on June 12, 2003, she opened a veterinary clinic, Northshore Veterinary Services, L.L.C. (Northshore Veterinary Services). This new clinic was located within six miles of Dr. Garcia’s veterinary clinic in Slidell. 1 Dr. Saylor continued to operate this clinic for over twenty-four months.

|sOn March 9, 2004, Dr. Garcia filed a petition for permanent injunction and damages against Dr. Saylor, Northshore Veterinary Services, and Charter Practices International L.L.C. (Charter). 2 Dr. Garcia filed a motion for summary judgment on May 10, 2007, asserting there was no genuine issue of material fact that the non-competition agreement was valid, that Dr. Saylor had breached the agreement, and that Dr. Saylor owed damages to Dr. Garcia as per the agreement, together with legal interest and attorney fees. On June 22, 2007, the trial court denied the motion for summary judgment, because the employment contract had not been submitted to the court. Dr. Garcia and Dr. Saylor then filed a joint motion for reconsideration of the motion for summary judgment and attached a copy of the contract. The motion for reconsideration was granted. By judgment dated July 26, 2007, the trial court noted that the request for injunctive relief was no longer viable as the two-year time period had passed; and further, the trial court denied the motion for summary judgment, finding that because the non-competition agreement did not give the location of Dr. Garcia’s place of business, the trial court could not discern whether Dr. Saylor’s clinic was within the prohibited six-mile radius.

Thereafter, Dr. Garcia and Charter filed a joint motion to dismiss Dr. Garcia’s claims against Charter, and Charter was dismissed from the suit by the trial court on October 19, 2007.

The case went to trial on November 19, 2008. On November 21, 2008, the trial judge rendered judgment in favor of Dr. Garcia, finding the non-competition agreement enforceable against Dr. Saylor, and awarding damages in the amount of $1,500 per month for the first twelve months, $1,000 per month for the next twelve months, interest, attorney fees, and all costs. From this judgment, Dr. Saylor appeals.

| ¿THE ASSIGNMENTS OF ERROR

Dr. Saylor makes the following assignments of error: 1) that the trial court erred in using parol evidence to reform the non-competition agreement; 2) that the trial court erred when it ruled that the non-competition agreement was enforceable, even though the parish was not described; 3) that the trial court erred in not declaring the agreement invalid even though it attempts to regulate members of a profession; and 4) that the trial court erred when it awarded attorney fees.

STANDARD OF REVIEW

The issues presented in this case, namely, whether the non-competition *264 agreement in question is valid and enforceable, whether La. R.S. 23:921(C) applies to professions; and whether the trial court properly awarded attorney fees, are questions of law which the court reviews de novo. See Hand v. City of New Orleans, 04-0845, p. 5 (La.App. 4th Cir.12/22/04), 892 So.2d 609, 612, writ denied, 05-0143 (La.4/1/05), 897 So.2d 603. Where the trial court’s decision is based on an erroneous interpretation or application of law, rather than a valid exercise of discretion, such an incorrect decision is not entitled to deference by the reviewing court. Hand, 04-0845 at p. 5, 892 So.2d at 612.

LAW AND ANALYSIS

The crux of the matter before this Court is the validity of the noncompetition agreement. Dr. Saylor asserts in her second assignment of error that the trial court erred in upholding the non-competition agreement because it failed to explicitly state that it was to apply in St. Tammany Parish. Non-competition agreements are governed by La. R.S. 23:921. Subsection C of the statute is particularly pertinent to this assignment of error and provides in part as follows:

Any person, including a corporation and the individual shareholders of such corporation, who is employed as an agent, servant, or 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 |fiparishes, municipality or municipalities, or parts thereof.... (emphasis added).

La. R.S. 23:921(C). In addressing the contentions of Dr. Saylor, we are conscious of the fact that this subsection is an exception to Louisiana public policy against such agreements, and as such, it must be strictly construed. Vartech Systems, Inc. v. Hayden, 05-2499, p. 7 (La.App. 1st Cir.12/20/06), 951 So.2d 247, 255.

Louisiana public policy has consistently looked upon non-competition agreements with disdain. Cellular One, Inc. v. Boyd, 94-1783, p. 4 (La.App. 1st Cir.3/3/95), 653 So.2d 30, 32, writ denied, 95-1367 (La.9/15/95), 660 So.2d 449; Water Processing Technologies, Inc. v. Ridgeway, 618 So.2d 533, 535 (La.App. 4th Cir.1993). However, the Louisiana legislature has modified this public policy in La. R.S. 23:921 to carve out exceptions to the public policy of disfavoring, agreements not to compete. Among such legislative modifications, the 1989 revisions to La. R.S. 23:921 are most pertinent to our review of the validity and subsequent enforceability of the non-competition agreement at issue. In reviewing said revisions to La. R.S. 23:921, this court noted the following,

In amending section 921, the Louisiana Legislature expanded the use of noncompetition agreements.

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35 So. 3d 261, 30 I.E.R. Cas. (BNA) 414, 2009 La.App. 1 Cir. 0466, 2010 La. App. LEXIS 66, 2010 WL 199263, Counsel Stack Legal Research, https://law.counselstack.com/opinion/garcia-v-banfield-pet-hospital-inc-lactapp-2010.