Pattridge v. Starks

189 So. 3d 1112, 2016 La. App. LEXIS 315, 2016 WL 732720
CourtLouisiana Court of Appeal
DecidedFebruary 24, 2016
DocketNo. 50,351-CA
StatusPublished

This text of 189 So. 3d 1112 (Pattridge v. Starks) 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
Pattridge v. Starks, 189 So. 3d 1112, 2016 La. App. LEXIS 315, 2016 WL 732720 (La. Ct. App. 2016).

Opinion

DREW, J.

|!Billy Joe Edwards challenges a damage award- of $600,000 against him and in favor of Endurall, Inc., for the violation of a noncompete agreement. For the following reasons, we affirm.

FACTS

The background of this dispute is set forth in Pattridge v. Starks, 50,135 (La.App.2d Cir.11/18/15), 181 So.3d 192 (“Pattridge II”). Briefly, in 2004, four investors 1 formed a Louisiana company, Endu-rall, Inc., to manufacture and sell rod guides to the oil and gas industry. The investors all signed a noncompete agreement stating that if any of them were terminated as shareholders, they would not compete against Endurall within 24 months after termination. Appellant Edwards was eventually fired from Endurall as an employee, and after a dissolution fight, he was terminated: as a shareholder on July 31, 2013, when the company’s stock was acquired at auction by two of the original investors, David Pattridge and Gary Gardner.2

Edwards then worked for another energy-related business, Skye Petroleum, marketing paraffin products to many of Endu-rall’s customers. He used some of his [1115]*1115share of the proceeds from the Endurall stock auction to help his son Greg Edwards form a new company, DHE, LLC (“DHE”); DHE commenced doing business in March 2014. DHE, whose office was located in Benton, Louisiana, in the same building as the office .of Skye Petroleum, competed against Endurall in the manufacture and sale of rod | ^guides. Several of Endurall’s former sales reps and customers switched from Endurall products to DHE products, and Endurall’s sales declined.

Endurall, Pattridge, and Gardner sued Edwards in June 2014, alleging that his actions violated the noncompete agreement and damaged Endurall’s business. The district court concluded that Edwards had violated the agreement, and in Pattridge II, this court affirmed that determination, observing:

In its reasons for ruling, the trial court specifically cited the timing and destinations of Edwards’ business trips on behalf of Skye Petroleum and the more than coincidental happenstance that those trips coincided with the opportunity for Edwards to conduct DHE, LLC business. It also took notice of Edwards’ admissions that: he was distributing Gary’s phone number on behalf of DHE, LLC; he helped obtain the building for DHE, LLC; and, he had an office in that Same building. The trial court considered that' the money Edwards received from the salé of his stock in Endurall had been pledged to secure the loan for the founding and" operation of DHE, LLC.

The district court held a separate trial to determine the damages owed by Edwards to Endurall under La. R.S. 23:921(H).3 At the damages trial, the court heard a variety of testimony concerning Edwards’ actions and the effect the premature competition from DHE had on Endurall’s sales, and concluded that Endurall was entitled to $600,000 from Edwards.

Edwards . appealed from the ensuing judgment in favor -of Endurall, arguing:

• The District "Court erred in finding that Edwards’ allegéd violations of the •noncompetition agreement caused damage to plaintiffs. ■
h* The District Court erred in considering competing activities that took place outside of Louisiana in finding that Edwards violated the noncompet-ition agreement and that these activities caused damages to plaintiffs.
• The District Court erred in calculating the amount of the damage award to plaintiffs because the award was based on past and future losses which were too speculative and uncertain. ■
• The District , Court erred in awarding damages for the period after the expiration of the noncompetition agreement on July 31, 2015.
DISCUSSION

Assignment of Error 1. The District Court erred in finding that Edwards’ alleged violations of the noncompetition agreement caused damage to plaintiffs.

Whether or not a particular act has caused another’s damages is a question of fact that must be proven by a preponderance of evidence. See, e.g., Nichols v. NLU, 31,120 (La.App.2d Cir.2/24/99), 729 So.2d 733, writ denied, 99-1209 (La.6/4/99); 744 So.2d 633.

[1116]*1116A court of appeal may not set aside a trial court’s finding of fact in the absence of manifest error or unless it is clearly wrong, and where there is conflict in the testimony, reasonable evaluations of credibility and reasonable inferences of fact should not be disturbed upon review, even though the appellate court may feel that its own evaluations and inferences are as reasonable. Rosell v. ESCO, 549 So.2d 840 (La.1989). See also Stobart v. State through Dept. of Transp. & Dev., 617 So.2d 880 (La.1993). An appellate court must not base its determination on whether it considers the trier of fact’s conclusion to be right or wrong, but on whether the fact finder’s conclusion was reasonable. Stobart, supra. The appellate | ¿court must not reweigh the evidence or substitute its own factual findings because it would have decided the case differently. Pinsonneault v. Merchants & Farmers Bank & Trust Co., 2001-2217 (La.4/3/02), 816 So.2d 270. With regard to decisions of law, however, a trial court’s ruling is subject to de novo review. Hall v. Folger Coffee Co., 2003-1734 (La.4/14/04), 874 So.2d 90.

In rendering its decision on damages, the trial judge had the benefit of having presided over the previous trial concerning the enforceability and breach of the non-compete agreement. There, the judge heard, among other things, details about Billy Joe Edwards’ travels, purportedly on behalf of Skye Petroleum, that coincided with the loss of Endurall customers in the areas where he traveled. At the damages trial, the judge likewise heard testimony from several witnesses.4

David Pattridge testified:

• Before his termination, Billy Joe Edwards was the “sales arm” of Endurall and had relationships with the sales reps and some of the customers.
• After Billy Joe Edwards was fired from Endurall, the sales reps continued to buy from Endurall until the formation of DHE.
• Endurall had lost “a considerable amount of business” since the formation of DHE.
• Upon the formation of DHE, three former Endurall sales reps — Tom Hearring, Mike Kelly, and Mike Carr — switched from selling Endurall rod guides to selling DHE rod guides in | fithe first quarter of 2014.
• These three reps were close to Billy Joe Edwards prior to the formation of DHE.
• Endurall thereafter lost about one-third of its customers and these customers were “relatively in these three reps’ areas”.
• Billy Joe Edwards visited numerous customers of Endurall on several business trips, and these customers thereafter stopped buying from Endurall.

Gary Gardner testified:

• Since the formation of DHE, Endurall lost roughly one-third of its domestic customers and close to half of its domestic revenue.

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Bluebook (online)
189 So. 3d 1112, 2016 La. App. LEXIS 315, 2016 WL 732720, Counsel Stack Legal Research, https://law.counselstack.com/opinion/pattridge-v-starks-lactapp-2016.