Sentilles v. Kwik-Kopy Corp.

652 So. 2d 79, 1995 WL 73478
CourtLouisiana Court of Appeal
DecidedFebruary 23, 1995
Docket94-CA-1553
StatusPublished
Cited by8 cases

This text of 652 So. 2d 79 (Sentilles v. Kwik-Kopy Corp.) 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
Sentilles v. Kwik-Kopy Corp., 652 So. 2d 79, 1995 WL 73478 (La. Ct. App. 1995).

Opinion

652 So.2d 79 (1995)

Wilbur J. SENTILLES and Jacquelyn B. Sentilles
v.
KWIK-KOPY CORPORATION.

No. 94-CA-1553.

Court of Appeal of Louisiana, Fourth Circuit.

February 23, 1995.
Rehearing Denied April 19, 1995.

*80 John D. Lambert, Jr., James L. Yates, Lambert & Lambert, New Orleans, for plaintiffs-appellees Wilbur J. and Jacquelyn B. Sentilles.

S. Daniel Meeks, Abbott and Meeks, New Orleans, for defendant-appellant Kwik-Kopy Corp.

Peter J. Klarfeld, David W. Koch, Brownstein, Zeidman and Lore, and Matthew R. Shay, Intern. Franchise Ass'n, Washington, D.C. 20005 for amicus curiae Intern. Franchise Ass'n.

Before KLEES, BYRNES and CIACCIO, JJ.

KLEES, Judge.

Defendant Kwik-Kopy Corporation appeals the district court's granting of partial summary judgment in favor of plaintiffs, Wilbur and Jacquelyn Sentilles. The district court declared the non-competition clause in the contract between Wilbur Sentilles and Kwik-Kopy to be illegal and unenforceable, and dismissed Kwik-Kopy's claim against plaintiffs for consequential damages based on the clause. We reverse.

In April 1984, Wilbur Sentilles entered into a written franchise agreement with defendant whereby Sentilles as franchisee obtained the right to operate a Kwik-Kopy Center on West Judge Perez Drive in Chalmette, Louisiana. In September 1991, Sentilles exercised his option under the contract to terminate the agreement. In connection with his operation and eventual termination of the franchise, Sentilles and his wife filed suit against Kwik-Kopy seeking a declaratory judgment declaring the franchise agreement to be null and void, and seeking the return of certain monies they had paid under the agreement. Alternatively, plaintiffs demanded that Article 12 of the franchise agreement, which contained the non-competition clause, be declared illegal and unenforceable. In an answer to the suit, Kwik-Kopy reconvened seeking payment of royalties and franchise fees allegedly owed by Mr. Sentilles as well as consequential damages for Mr. Sentilles' breach of Article 12 of the franchise agreement.

Plaintiffs filed a motion for partial summary judgment on the grounds that the restrictions on competition in Article 12 of the agreement were illegal and unenforceable and that defendant's claim for consequential damages should therefore be dismissed. Kwik-Kopy opposed the motion. The trial court granted the motion on February 2, 1994, with written reasons for judgment. Defendant timely filed this appeal.

On appeal, defendant contends that the trial court erred in three respects: (1) in holding that Louisiana law applies rather than Texas law, which is stipulated as the choice of law in the contract; (2) in applying La.R.S. 23:921, which refers to an "employer" and "employee," to the instant contract between a franchisor and franchisee; and (3) in granting partial summary judgment despite the existence of facts in dispute as to the nature of the relationship between Mr. Sentilles and Kwik-Kopy. As an appellate court, we must review the trial court's summary judgment de novo, using the same criteria applied by the lower court to determine whether summary judgment is appropriate. Under Louisiana Code of Civil Procedure article 966(B), summary judgment shall be granted if the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue of material fact, and that the mover is entitled to judgment as a matter of law. Williams v. City of New Orleans, 621 So.2d 3, 5 (La.App. 4th Cir. 1993). Reviewing the judgment according to this standard, we find that the trial court erred in granting the plaintiffs' motion.

Article 12 of the franchise agreement provides, in pertinent part:

12.01 During the term of this Agreement and for a period of two (2) years after termination of this Agreement for any reason, FRANCHISEE agrees to not be associated, either directly or indirectly, by virtue of being an employee, proprietor, a partner, stockholder, agent or through family relationships with a competing instant printing business within *81 the trade area served by the Kwik-Kopy Center of this franchise;
* * * * * *
12.03 During the term of this Agreement and for a period of two (2) years after termination of this Agreement for any reason, FRANCHISE agrees that the trade area, if not otherwise definable, shall be encompassed within an area defined by a 50-mile radius from a business location of any Kwik-Kopy Center....

Section 12:03 was modified by letter addendum dated February 24, 1986, in which the president of Kwik-Kopy advised Mr. and Mrs. Sentilles that the geographical restriction would be limited to a three mile (rather than a fifty mile) radius of any Kwik-Kopy Center.

The franchise agreement contains a choice of law clause stipulating that the agreement is to be interpreted under Texas law. However, in Louisiana, a contractual agreement as to choice of law is subject to certain limitations. Parties may contractually stipulate to choice of law unless such stipulations would violate legal or strong public policy considerations. Francois Chiropractic Center v. Fidele, 630 So.2d 923 (La.App. 4th Cir.1993). In his reasons for judgment, the trial judge noted that Louisiana has a strong public policy against enforcement of noncompetition agreements between employers and employees. This policy existed and was followed in caselaw before it was first codified in 1934, in La.R.S. 23:921. See Orkin Exterminating Co. v. Foti, 302 So.2d 593, 596 (La.1974) At the time Mr. Sentilles entered into the franchise agreement with Kwik-Kopy, the statute provided:

No employer shall require or direct any employee to enter into any contract whereby the employee agrees not to engage in any competing business for himself, or as the employee of another, upon the termination of his contract of employment with such employer, and all such contracts, or provisions thereof containing such agreement shall be null and unenforceable in any court, provided that in those cases where the employer incurs an expense in the training of the employee or incurs an expense in the advertisement of the business that the employer is engaged in, then in that event it shall be permissible for the employer and employee to enter into a voluntary contract and agreement whereby the employee is permitted agree and bind himself that at the termination of his or her employment that said employee will not enter into the same business that employer is engaged over the same route or in the same territory for a period of two years.

La.R.S. 23:921 (prior to 1989 amendments). In 1989, the statute was amended. The new version retained the general prohibition of non-competition agreements, but delineated three specific exceptions: the sale of a business, the dissolution of a partnership, and any employer/employee agreement in which the restraint on competition is confined to specific parishes or municipalities and does not exceed two years from the date of termination of employment. In 1991, an exception was added which specifically permits noncompetition agreements between the parties to a franchise as long as the duration of the non-competition period does not exceed two years from the severance of the franchise relationship. R.S. 23:921(E) (West 1994).

The trial judge concluded that the 1989 (and subsequent) amendments were not to be applied retroactively. He further concluded that according to Winston v. Bourgeois, Bennett, Thokey & Hickey, 432 So.2d 936 (La.

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Cite This Page — Counsel Stack

Bluebook (online)
652 So. 2d 79, 1995 WL 73478, Counsel Stack Legal Research, https://law.counselstack.com/opinion/sentilles-v-kwik-kopy-corp-lactapp-1995.