Novelaire Technologies, LLC v. Harrison

994 So. 2d 57, 2008 WL 3851818
CourtLouisiana Court of Appeal
DecidedAugust 19, 2008
Docket08-CA-157
StatusPublished
Cited by15 cases

This text of 994 So. 2d 57 (Novelaire Technologies, LLC v. Harrison) 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
Novelaire Technologies, LLC v. Harrison, 994 So. 2d 57, 2008 WL 3851818 (La. Ct. App. 2008).

Opinion

994 So.2d 57 (2008)

NOVELAIRE TECHNOLOGIES, L.L.C.
v.
Martin Kenneth HARRISON, Barbara Bucklin and Essential Humidity Solutions, L.L.C.

No. 08-CA-157.

Court of Appeal of Louisiana, Fifth Circuit.

August 19, 2008.

*59 A. Justin Ourso, III, Christopher D. Martin, Attorneys at Law, Baton Rouge, LA, for Plaintiff/Appellee.

Glen R. Galbraith, Attorney at Law, Hammond, LA, for Defendant/Appellant.

Panel composed of Judges FREDERICKA HOMBERG WICKER, GREG G. GUIDRY, and ROBERT L. LOBRANO, Pro tempore.

GREG G. GUIDRY, Judge.

The Defendants, Martin Kenneth Harrison, Barbara Bucklin, and Essential Humidity Solutions L.L.C. (EHS) appeal from a preliminary injunction granted in favor of the Plaintiff, Novelaire Technologies, L.L.C., in a suit for breach of an agreement relating to the design of and/or improvements to a dehumidifier sold by the Plaintiff, for breach of a nondisclosure provision, and for unfair trade practices. We affirm.

The Plaintiff manufactures energy recovery and dehumidification equipment, including the desiccant dehumidifier at issue here.[1] Defendant, Martin Harrison, worked for the Plaintiff as a designer in its engineering department beginning on July 1, 1998, until his resignation on January 23, 2004. He was paid through February 6, 2004. As part of his employment, Harrison executed an agreement in which Harrison agreed that all designs, and/or improvements, Harrison conceived of or made relating to the Plaintiff's business were the property of the Plaintiff. The agreement further obligated Harrison not to disclose or use any confidential information of the Plaintiff without its written consent. While working in the course and scope of his employment, however, Harrison secretly used the Plaintiff's materials, resources and equipment to develop improvements to the design of the Model DH-50 dehumidifier, which he and Bucklin planned to sell for their own profit after he resigned. The planning for this event began many months before Harrison resigned.[2]

*60 Shortly after he left the Plaintiff's employ, on February 5, 2004, Harrison and Bucklin organized their company, EHS, and immediately began selling the improved product to the Plaintiffs sole customer for the product, AAR, a Michigan company.[3] EHS manufactured and sold the dehumidifier for $100-$400 less than AAR had been paying to the Plaintiff.

Bucklin was aware of Harrison's contract with the Plaintiff and its business relationship with AAR. She was intimately involved in the plan to sell the product with Harrison's improvements. She was also actively involved in the management and operation of EHS.

When the Plaintiff discovered Harrison's conduct, it sent a demand letter to him to cease and desist. Following that letter, Harrison donated his interest in the property to Bucklin.[4]

As a result of the Defendants' acts, the Plaintiff filed suit in June of 2004.[5] The Plaintiff also requested a preliminary injunction to prohibit the Defendants from marketing, designing, distributing, manufacturing, or selling a desiccant dehumidifier based on the Novelaire KH-50.

In August of 2007, the trial judge granted the injunction. The trial judge found that Harrison violated his agreement and breached a fiduciary duty to the Plaintiff. The trial judge further found that the Plaintiff made a strong showing that it would succeed at trial of the merits. He also concluded that a showing of irreparable harm was unnecessary for issuing the preliminary injunction under La.C.C. art. 1987.

The Defendants argue that the contract cannot preclude Harrison from using the technology, first because it is in the public domain, and secondly, because federal law preempts state law in this case. They further assert that the trial judge erred in finding the Plaintiff was not required to prove irreparable harm to obtain the injunction, in finding Harrison breached a fiduciary duty to Plaintiff, in finding Bucklin tortiously interfered with the contract, and in concluding the Defendants engaged in unfair trade practices.

PRELIMINARY INJUNCTION

An injunction shall be issued in cases where irreparable injury, loss, or damage may otherwise result to the applicant, or in other cases specifically provided by law ..." La.C.C.P. art. 3601. A. During the pendency of an action for an injunction the court may issue a temporary restraining order, preliminary injunction, or both. C.C.P. art. 3601 C.

A preliminary injunction is a procedural device, interlocutory in nature, designed to preserve the existing status pending a trial of the issues on the merits of the case. La.C.C.P. art. 3601; Levine v. First Nat. Bank of Commerce, 06-0394 (La.12/15/06), 948 So.2d 1051; McCord v. West, 07-958 (La.App. 5 Cir. 3/25/08), 983 So.2d 133, 140. It is a summary proceeding and merely requires a prima facie showing of a good chance to prevail on the merits. McCord, 983 So.2d at 140. The principal demand is determined on its merits only after a full trial under ordinary process, even though the hearing on the summary proceedings to obtain the preliminary injunction may touch upon or tentatively decide merit issues. Smith v. West *61 Virginia Oil & Gas Co., 373 So.2d 488, 494 (La.1979); McCord, 983 So.2d at 140.

a) Standard of review

The Defendants first assert that, because the trial judge erred legally, this Court must review the case de novo. We disagree.

The trial court's issuance of a preliminary injunction will not be disturbed on appeal absent a clear abuse of discretion. H2O Hair, Inc. v. Marquette, 06-930 (La. App. 5 Cir. 5/15/07), 960 So.2d 250, 259.[6]

While a decision related to contract interpretation may be generally interpreted under a de novo standard of review, the issue here is not interpretation of the agreement. Thus, the standard of review is whether the trial judge abused his great discretion in granting the preliminary injunction.

b) Irreparable Injury

To obtain a preliminary injunction, the moving party must show it is entitled to the relief sought, without which irreparable injury, loss or damage will result. See, La.C.C.P. art. 3601. Proof irreparable injury is not required, however, in cases involving an obligation "not to do." La. C.C. art. 1987; New Orleans Cigarette Service Corp. v. Sicarelli, 73 So.2d 339, 341 (La.App.Orl.1954); Louisiana Gaming Corp. v. Jerry's Package Store, 93-320 (La. App. 3 Cir. 12/8/93); 629 So.2d 479, 482.

The Defendants argue that whether or not the contract creates an obligation not to do, it is also an invalid non-compete agreement, citing R.S. 23:921, which requires a showing of irreparable injury.

This agreement is not a non-competition agreement within the meaning of the statute. The Defendants are not precluded from operating a business selling dehumidifiers. Harrison is simply precluded under the contract from using any improvements or designs he made while working for the Plaintiff, and from disclosing or using the Plaintiff's confidential information for his own profit without consent of the Plaintiff. Thus, the non-competition statute is inapplicable here. We find that the Plaintiff was not required to prove irreparable injury.

PREEMPTION

The Defendants argue that federal patent law preempts Plaintiffs exclusive right to the dehumidifier because it is in the public domain and no one can have exclusive rights to it.

Preemption applies to a federal law that displaces a state law addressing the same subject. See,

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Cite This Page — Counsel Stack

Bluebook (online)
994 So. 2d 57, 2008 WL 3851818, Counsel Stack Legal Research, https://law.counselstack.com/opinion/novelaire-technologies-llc-v-harrison-lactapp-2008.