REINELDO URGELLES v. COMBINED INSURANCE COMPANY OF AMERICA

• Court: District Court of Appeal of Florida
• Decided: March 24, 2021
• Docket: 20-1122
• Status: Published

Opinion

Third District Court of Appeal State of Florida

Opinion filed March 24, 2021. Not final until disposition of timely filed motion for rehearing.

________________

Nos. 3D20-1121; 3D20-1122 Lower Tribunal No. 20-7330 ________________

Family Heritage Life Insurance Company of America, et al., Appellants,

vs.

Combined Insurance Company of America, Appellee.

Appeals from a non-final order from the Circuit Court for Miami-Dade County, Martin Zilber, Judge.

Shapiro, Blasi, Wasserman & Hermann, P.A., and Adam S. Chotiner (Boca Raton); Phillips Murrah P.C., and Michele C. Spillman (Dallas, Texas), Pro Hac Vice, for appellant Family Heritage Life Insurance Company of America; Tripp Scott, P.A., and Stephanie C. Mazzola, Catalina M. Avalos and Sarah M. Leon (Fort Lauderdale), for appellants Reineldo Urgelles and Antonio Pineda.

Lewis Brisbois Bisgaard & Smith, LLP, Miguel A. Morel and Kristen Perkins (Fort Lauderdale); Lewis Brisbois Bisgaard & Smith, LLP, David L. Luck and Jenna L. Fischman, for appellee. Before LOGUE, HENDON and GORDO, JJ.

GORDO, J.

In these consolidated appeals, Family Heritage Life Insurance

Company of America, Reinaldo Urgelles, and Antonio Pineda, appeal the

trial court’s entry of a temporary injunction against them. We have

jurisdiction. See Fla. R. App. P. 9.130(a)(3)(B). Because the trial court

made the requisite findings and did not abuse its discretion in entering the

temporary injunction, we affirm.

RELEVANT FACTUAL AND PROCEDURAL BACKGROUND

Combined Insurance Company of America, the plaintiff below, is in

the business of selling, through its agents, supplemental accident, health,

and life insurance products throughout North America. Family Heritage is a

direct competitor of Combined.

Urgelles and Pineda are former employees of Combined. Both were

members of a special team at Combined called Division 48, which is made

up of Spanish-speaking employees who target Spanish-speaking markets.

It is undisputed that Combined invests significant resources into Division 48

and that all employees of that Division receive specialized training.

Prior to his termination in September of 2019, Urgelles was the

Senior Executive Market Director for Combined’s Division 48 and had

2 around 400 employees reporting to him. Following his termination,

Urgelles began working at Family Heritage. In November of 2019, Pineda,

a sales associate, left Combined and joined Family Heritage, under

Urgelles.

As part of his employment with Combined, Urgelles was in

possession of a document called the Alpha Roster. This list contained the

names and contact information for the agents in Division 48. While still at

Combined, Urgelles emailed himself a copy of this confidential document to

his personal email account. Although the contact information for each

Combined agent is accessible through the State’s licensure website, the

fact that they are members of Division 48 is not public information and is

known only to those at Combined in possession of the Alpha Roster.

Both Urgelles and Pineda signed employment agreements with

Combined, which contained confidentiality clauses and restrictive

covenants. In the confidentiality provision, Urgelles and Pineda

acknowledged that they would be receiving confidential information from

Combined and agreed not to disclose or use that information to compete

against Combined. The restrictive covenants prohibited Urgelles and

Pineda from directly or indirectly, alone or with others, soliciting employees

or policyholders of Combined within the Florida market for two years

3 following employment. They also acknowledged that a breach of the

confidentiality clause or restrictive covenants would result in irreparable

harm, which would not be adequately remedied through monetary relief. 1

Following the loss of several employees and policyholders to Family

Heritage, Combined sent cease and desist letters to Urgelles and Family

Heritage in November of 2019. After Pineda left Combined for Family

Heritage and it lost additional policyholders and employees, Combined sent

a cease and desist letter to Pineda in December of 2019. Thereafter,

Combined filed suit, alleging tortious interference as to all and breach of

contract against Urgelles and Pineda, and seeking injunctive relief.

Combined later filed a motion requesting an injunction.

The trial court held a two-day evidentiary hearing on the motion.

Combined presented evidence, through the testimony of its corporate

representative and an assistant vice president that Division 48 was one-of-

a-kind and that the agents in this division received extensive, specialized

training. It presented evidence that it took measures to protect its

1 The agreements provided: “[A] breach by the Employee of any of the covenants or agreements set forth [in preceding paragraphs, relating to goodwill, confidentiality, unfair competition, and restrictive covenants], would cause each of the Combined Companies irreparable damage that could not adequately be compensated for by only monetary compensation.” They further stated that “in the event of any such breach” Combined could apply for and would be entitled to injunctive relief.

4 confidential information, including the Alpha Roster; that Urgelles had

emailed it to his personal email and was in possession of it; and that

disclosure of this roster to a direct competitor would be disastrous.

Combined also brought forth evidence that once Urgelles began working

for Family Heritage, approximately 150 agents left Combined and began

working at Family Heritage. Further, there was evidence that Urgelles and

Pineda both solicited Combined’s agents and policyholders to leave

Combined for Family Heritage. At the hearing’s conclusion, the court

granted the temporary injunction, and entered a written injunction order

specifying its findings.

The trial court’s detailed order makes findings in support of its

conclusions that Combined had a substantial likelihood of success on the

merits, lacked an adequate remedy at law, had a likelihood of irreparable

harm absent the entry of an injunction, and that the injunction would serve

the public interest. The order then enjoins Urgelles, Pineda and Family

Heritage from the following:

(a) Soliciting or attempting to solicit on behalf of another insurer, any insurance of the kind or character sold by Combined (including but not limited to accident & health, Medicare Supplement and life insurance) to any of Combined’s policyholders in the state of Florida; (b) Inducing, or attempting to induce, any of Combined’s policyholders within the state of Florida to cancel,

5 lapse or fail to renew their policies with Combined; (c) Directly or indirectly inducing or attempting to induce any of Combined’s directors, officers, sales representatives, agents or other employees in the state of Florida to terminate their employments with Combined or to sell insurance for any other company; (d) Directly or indirectly divulging or disclosing the identities, skills, talents, knowledge, experience, compensation, and preferences of any Combined Division 48 employees or any other confidential information of Combined acquired during Urgelles and Pineda’s employment with Combined; and (e) Destroying, hiding, deleting, retaining or altering any document or electronically stored information relevant, or which could lead to the discovery of relevant information, to the subject matter of this lawsuit.

The order further required Urgelles and Pineda to cease and desist

from the use of confidential information and return anything confidential in

their possession, and Family Heritage to cease and desist from benefitting

from Urgelles and Pineda’s breaches.

STANDARD OF REVIEW

The lower tribunal’s findings of fact on preliminary injunctions are

subject to an abuse of discretion review and are left undisturbed so long as

they are supported by competent, substantial evidence. See, e.g., Quirch

Foods LLC v. Broce, 45 Fla. L. Weekly D2336, at *6 (3d DCA Oct. 14,

2020). Related questions of law are reviewed de novo. Id.

6 LEGAL ANALYSIS

I. Whether the Issuance of the Temporary Injunction was Proper

To obtain a temporary injunction, Combined was required to prove

“(1) a substantial likelihood of success on the merits, (2) a lack of an

adequate remedy at law, (3) the likelihood of irreparable harm absent the

entry of an injunction, and (4) that injunctive relief will serve the public

interest.” Id. at *7 (quoting Scott v. Trotti, 283 So. 3d 340, 343 (Fla. 1st

DCA 2018)).

1. Substantial Likelihood of Success on the Merits

Combined presented evidence that following Urgelles’s departure to

Family Heritage, about 150 Combined agents left to work for Family

Heritage. It also presented evidence that Urgelles received compensation

from Family Heritage for the recruitment of at least one former Combined

employee and that another former Combined agent now working for

Urgelles at Family Heritage had solicited a Combined policyholder. As for

Pineda, Combined presented evidence that he solicited a Combined agent

to work for Family Heritage. Further, there was evidence that Urgelles and

Pineda were in possession of and had impermissibly used the Alpha

Roster, Combined’s confidential information.

7 The trial court found that Urgelles and Pineda “violated their

employment agreements with Combined” by soliciting or attempting to

solicit Combined’s employees and policyholders and by having used or

disclosed Combined’s confidential information and trade secrets. Based on

this finding, which was supported by competent, substantial evidence,

Combined established that it had a substantial likelihood of success on the

merits.

2. Lack of an Adequate Remedy at Law

It is well-established that where a party demonstrates that a violation

of an enforceable restrictive covenant in an employment agreement has

occurred, an injunction is proper and there is no adequate remedy at law.

See, e.g., Reliance Wholesale, Inc. v. Godfrey, 51 So. 3d 561, 566 (Fla. 3d

DCA 2010) (“[A]lthough a trial court may award damages for a breach of an

employee's agreement not to compete, ‘the normal remedy is to grant an

injunction. This is so because of the inherently difficult, although not

impossible, task of determining just what damage actually is caused by the

employee’s breach of the agreement.’” (quoting Capraro v. Lanier Bus.

Prods., Inc., 446 So. 2d 212, 213 (Fla. 1985))).

8 3. Likelihood of Irreparable Harm

Section 542.335, Florida Statutes, permits the entry of injunctions for

violations of restrictive covenants. Subsection 542.335(1)(j) provides, in

relevant part, that “[t]he violation of an enforceable restrictive covenant

creates a presumption of irreparable injury to the person seeking

enforcement of a restrictive covenant.” An enforceable restrictive covenant

is one in which “the contractually specified restraint is reasonably

necessary to protect [a] legitimate business interest.” § 542.335(1)(c), Fla.

Stat. The statute then provides a non-exhaustive list of “legitimate

business interests,” which includes trade secrets, valuable confidential

business or professional information, goodwill, and specialized training. Id.

at § 542.335(1)(b). To establish this presumption, the party seeking

enforcement of the restrictive covenant must show that it protected a

legitimate business interest and that it was violated. See TransUnion Risk

& Alt. Data Sols., Inc. v. Reilly, 181 So. 3d 548, 550 (Fla. 4th DCA 2015)

(citation omitted).

Combined established, and the trial court found, that its restrictive

covenants sought to protect trade secrets, confidential information,

specialized training, and goodwill with policyholders. Appellants failed to

rebut that presumption. We conclude there is competent, substantial

9 evidence Combined would be irreparably harmed if Appellants were not

enjoined from further breaches.

4. Public Interest in Issuing an Injunction

“Public policy in Florida favors enforcement of reasonable covenants

not to compete.” Quirch Foods, 45 Fla. L. Weekly D2336, at *10 (citation

omitted). “[E]nforcement of a covenant not to compete protects proprietary

business interests and the enforcement of contracts.” Id. (citation omitted).

“[T]he public has a cognizable interest in the protection and enforcement of

contractual rights.” Id. (citation omitted). As we previously stated in Quirch

Foods, there are many benefits to the public interest in courts upholding

enforceable agreements. See id. As in that case, “neither the trial court

nor Appellants have identified any public policy reason that would

‘substantially outweigh the need to protect the legitimate business interest

or interests’” of Combined. Id. (quoting § 542.335(1)(i), Fla. Stat.).

II. Whether the Trial Court Properly Enjoined Family Heritage

Family Heritage argues that the injunction is improper because it is

impermissibly broad. Proof of the benefit received from the former

employees’ breaches, however, is sufficient under Florida law to maintain

an injunction against the new employer, particularly where the employer

was on notice of the violations. Cf. USI Ins. Servs. of Fla., Inc. v. Pettineo,

10 987 So. 2d 763, 767 (Fla. 4th DCA 2008). “There is no doubt that a court

can enjoin others who were not parties to the non-compete agreement” as

long as they “receive notice and have an opportunity to be heard.”

Leighton v. First Universal Lending, LLC, 925 So. 2d 462, 465 (Fla. 4th

DCA 2006). “The Court can enjoin non-parties to the non-compete

agreement, such as a family member of the signator or an alter ego

corporation, where the nonparty is either under the signator’s control or

otherwise being used to aid or abet the signator in violating the non-

compete clause.” Winmark Corp. v. Brenoby Sports, Inc., 32 F. Supp. 3d

1206, 1221 (S.D. Fla. 2014) (citations omitted). An “injunction not only

binds the parties . . . , but also those identified with them in interest, those

in privity with them, and those represented by them or subject to their

control.” Channell v. Applied Rsch., Inc., 472 So. 2d 1260, 1263 (Fla. 4th

DCA 1985) (citations omitted).

There was evidence in the record that Family Heritage knew of and

was benefiting from Urgelles’s and Pineda’s breaches of their employment

agreements. Indeed, Combined sent Family Heritage a cease and desist

letter, advising it that Urgelles was not complying with the restrictive

covenants in his employment agreement and had been recruiting

Combined employees to join Family Heritage. Even after this letter was

11 sent, Urgelles and Pineda continued to solicit employees and policyholders

from Combined on behalf of Family Heritage. Despite having been on

notice of Urgelles’s and Pineda’s breaches, there was no evidence that

Family Heritage made efforts to stop the breaches from continuing. In fact,

on at least one occasion, Family Heritage compensated Urgelles for having

recruited a Combined agent. We find the trial court’s injunction order

proper in scope in enjoining Family Heritage and those acting on its behalf

or subject to its control from further benefiting from Urgelles’s and Pineda’s

breaches.

CONCLUSION

Combined made a prima facie showing of the violation of a restrictive

covenant and the elements for issuance of a temporary injunction were

satisfied. The trial court’s findings were supported by competent,

substantial evidence. As such, the trial court did not abuse its discretion in

entering the temporary injunction.

Affirmed.