Restored Surfaces, Inc. v. Sanchez

82 So. 3d 524, 11 La.App. 5 Cir. 529, 2011 WL 6821529, 2011 La. App. LEXIS 1642
CourtLouisiana Court of Appeal
DecidedDecember 28, 2011
DocketNo. 11-CA-529
StatusPublished
Cited by7 cases

This text of 82 So. 3d 524 (Restored Surfaces, Inc. v. Sanchez) 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
Restored Surfaces, Inc. v. Sanchez, 82 So. 3d 524, 11 La.App. 5 Cir. 529, 2011 WL 6821529, 2011 La. App. LEXIS 1642 (La. Ct. App. 2011).

Opinion

WALTER J. ROTHSCHILD, Judge.

- Isfiestored gurfaceS) jnC- d/b/a Surface Restoration (“RSI”), filed this petition against Emile J. Sanchez seeking damages for breach of Employment and Sales Contracts entered into between the parties1. Specifically, RSI alleged that Sanchez violated the terms of a Noncompete Agreement contained in the Employment Contract. RSI also moved for a Preliminary Injunction seeking to enforce the terms of the Noncompete Agreement and to prohibit Sanchez from engaging in any business that competes with RSI in specified Louisiana parishes. A copy of the Employment Contract, dated March 16, 2005, was attached to plaintiffs petition.

In response to this petition, Sanchez filed a Peremptory Exception of No Cause of Action, seeking dismissal of RSI’s claims for breach of Employment Contract, breach of Noncompete Agreement, and the motion for a Preliminary Injunction. RSI opposed the exception, and the matter was heard by the trial court on February 7, 2011. By judgment with reasons rendered on February 8, 2011, the trial court maintained the exception and dismissed RSI’s claims with prejudice. |sOn March 15, 2011, the trial court certified the judgment as a final, appealable judgment pursuant to La. C.C.P. art. 1915(B). This appeal follows.

RSI argues by this appeal that the trial court erred in maintaining the exception of no cause of action and in failing to hear plaintiffs request for a preliminary injunction. For the reasons stated herein, we find this argument to have merit and we therefore must reverse the trial court’s ruling and remand the matter for further proceedings.

The purpose of the peremptory exception of no cause of action is to test the legal sufficiency of the petition by determining whether the law affords a remedy on the facts alleged in the petition. Scheffler v. Adams and Reese, LLP, 06-1774, p. 4 (La.2/22/07), 950 So.2d 641. The peremptory exception of no cause of action is triable on the face of the pleadings, and, for purposes of resolving issues raised by the exception, the well-pleaded facts in the petition must be accepted as true. Scheffler, 06-1774 at p. 5, 950 So.2d at 646. Thus, to determine whether the trial court erred in granting the defendant’s Exception of No Cause of Action, we must accept all facts alleged in the petition as true.

The burden of demonstrating that a petition fails to state a cause of action is upon the mover. Because the exception of no cause of action raises a question of law and the district court’s [527]*527decision is based solely on the sufficiency of the petition, review of the district court’s ruling on an exception of no cause of action is de novo. City of New Orleans v. Board of Comm’rs of Orleans Levee Dist., 93-0690, p. 28 (La.7/5/94), 640 So.2d 237, 253.

In support of his exception, Sanchez cites to La. R.S. 23:921, which governs the validity and enforceability of non-competition agreements in Louisiana. At the time of the 2005 agreement between RSI and Sanchez, the statute provided in part as follows:

14A. (1) Every contract or agreement, or provision thereof, by which anyone is restrained from exercising a lawful profession, trade, or business of any kind, except as provided in this Section, shall be null and void. However, every contract or agreement, or provision thereof, which meets the exceptions as provided in this Section, shall be enforceable.

Sanchez does not dispute that he executed this agreement with RSI or that he has been employed by a competitor of RSI. Rather, he contends that because the Noncompete Agreement has the effect of the restraint of his profession, the agreement is against public policy, unenforceable and null and void.

In opposition to the exception, RSI argues that the Noncompete Agreement is valid and enforceable, citing to Subsection C of the statute as an exception to the general rule that contracts restraining trade are unenforceable. That section provides:

C. 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 parishes, municipality or municipalities, or parts thereof, so long as the employer carries on a like business therein, not to exceed a period of two years from termination of employment. An independent contractor, whose work is performed pursuant to a written contract, may enter into an agreement to refrain from carrying on or engaging in a business similar to the business of the person with whom the independent contractor has contracted, on the same basis as if the independent contractor were an employee, for a period not to exceed two years from the date of the last work performed under the written contract.

Historically, Louisiana’s public policy has disfavored noncompetition agreements. SWAT 24 Shreveport Bossier, Inc. v. Bond, 00-1695, p. 3 (La.6/29/01), 808 So.2d 294, 298; H2O Hair, Inc. V. Marquette, 06-930, p. 13 (La.App. 5 Cir. 5/15/07), 960 So.2d 250, 258. This policy is based on the state’s desire to prevent an individual from contractually depriving himself of the ability to support himself and consequently becoming a public burden. SWAT 24, 00-1695 at 3, 808 So.2d at 298; H2O Hair, Inc., 06-930 at 13, 960 So.2d at 258. Such agreements are in derogation of the common right, and must be strictly construed against the party seeking their enforcement. SWAT 24, 00-1695 at 3, 808 So.2d at 298; H2O Hair, Inc., 06-930 at 14, 960 So.2d at 259.

La. R.S. 23:921(C) is an exception to Louisiana’s public policy against non-competition agreements and, as such, must be strictly construed. Kimball v. Anesthesia Specialists of Baton Rouge, Inc., 00-1954, pp. 67 (La.App. 1st Cir.9/28/01), 809 So.2d 405, 410-11, writs denied, 01-3316, 0-13355 (La.3/8/02), 811 So.2d 883, 886. [528]*528Under this provision, an independent contractor may enter into agreements not to compete and not to solicit customers within a specified geographical area for a period of no more than two years. The exceptions set forth in La. R.S. 23:921(C) must be strictly construed, and agreements con-fected pursuant to this provision must strictly comply with its requirements. SWAT 24, supra.

A noncompetition agreement is a contract between the parties who enter it, and it is to be construed according to the general rules of contract interpretation. SWAT 24, supra. The common intent of the parties is used to interpret a contract. La. C.C. art. 2045. When the words of a contract are clear and explicit and lead to no absurd consequences, no further interpretation may be made in search of the parties’ intent. La. C.C. art. 2046.

In maintaining the defendant’s exception of no cause of action, the trial court relied on two prior decisions from this Court which followed the holding of the Supreme Court in SWAT 24 supra: Richard Berry & Associates, Inc. v. Bryant, 03-106 (La.App. 5 Cir. 4/29/03), 845 So.2d 1263 and Bail Bonds Unlimited, Inc. v. Chedville, 01-1401 (La.App. 5 Cir. 10/29/02), 831 So.2d 403, writ denied, 02-2913 (La.2/07/03), 836 So.2d 104. In SWAT 24 and the cited cases, La. R.S. 23:921(C) was interpreted as restricting an employee or independent contractor from engaging in or carrying on

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Bluebook (online)
82 So. 3d 524, 11 La.App. 5 Cir. 529, 2011 WL 6821529, 2011 La. App. LEXIS 1642, Counsel Stack Legal Research, https://law.counselstack.com/opinion/restored-surfaces-inc-v-sanchez-lactapp-2011.