World Wide Health Studios, Inc. v. Desmond

222 So. 2d 517, 1969 La. App. LEXIS 6080
CourtLouisiana Court of Appeal
DecidedApril 29, 1969
Docket11198
StatusPublished
Cited by11 cases

This text of 222 So. 2d 517 (World Wide Health Studios, Inc. v. Desmond) 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
World Wide Health Studios, Inc. v. Desmond, 222 So. 2d 517, 1969 La. App. LEXIS 6080 (La. Ct. App. 1969).

Opinion

222 So.2d 517 (1969)

WORLD WIDE HEALTH STUDIOS, INC., et al., Plaintiffs-Appellants,
v.
John E. DESMOND, Defendant-Appellee.

No. 11198.

Court of Appeal of Louisiana, Second Circuit.

April 29, 1969.
Rehearing Denied May 27, 1969.

*518 Coen & Pliner, Shreveport, for appellants.

Mayer & Smith, Shreveport, for appellee.

Before GLADNEY, AYRES, and PRICE, JJ.

GLADNEY, Judge.

This action was insituted by plaintiffs against John E. Desmond alleging Desmond breached his employment contract containing provisions not to compete on the termination of his employment. Injunctive relief and stipulated liquidated damages are prayed for. The trial court dismissed the suit and plaintiffs have appealed.

Plaintiffs are the owners of several health spas located in various cities in Texas and Louisiana. In May 1967 plaintiffs' president, Paul Bernstein, contacted John E. Desmond, then living in Houston, Texas, and offered him a job as the manager of World Wide's health studio in Shreveport. The agreement provided Desmond would be a manager trainee and if worthy would become manager of the Shreveport studio. Desmond came to Shreveport, underwent several weeks training and thereafter became the acting manager of the studio. On November 27, 1967 Desmond and several other employees of World Wide attended a meeting at the office of Paul Bernstein in Beaumont, Texas. There Desmond and the other employees signed an employment contract containing a covenant not to compete. On the first of February, 1968, Desmond left the employment of World Wide and opened Intercontinental Health Studio in Minden, Louisiana, a city approximately forty miles from Shreveport. He also acquired a one-third interest in Mr. Lynn's Health and Beauty Spa located near World Wide's studio in Shreveport and became its manager.

It is asserted that in accordance with his employment contract the defendant agreed and obligated himself that he would not: (1) for a period of five years (or for the maximum period provided by law, whichever is less) from the date of his termination of plaintiffs' employment for any reason enter the employment of or become connected with any business within 100 miles of a county or parish in which a studio is located similar or of like nature to the business of plaintiffs; (2) engage in or become interested in as owner, advisor or otherwise in the health studio group or spa business; (3) hire or assist in hiring any employee who had worked for plaintiffs previous to or during the life of the contract; and not to induce in any way other employees of plaintiffs to sever their employment with plaintiffs.[1]

*519 In brief before this court appellants assign error to the judgment complained of: (1) in holding that the written contract voluntarily entered into between plaintiffs and defendant is a valid Texas contract but is rendered null and void in the State of Louisiana; (2) in holding that the written contract voluntarily entered into between plaintiffs and defendant is null and void because it is against the public policy of Louisiana; and (3) in rejecting all demands of plaintiffs herein.

The defense asserts that plaintiffs may not obtain the requested relief in the courts of Louisiana for such contractual provisions are not enforceable under LSA-R.S. 23:921, as amended by Acts 1962, No. 104, §§ 1, 2, which reads:

"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 or employee to enter into a voluntary contract and agreement whereby the employee is permitted to 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." (Italicized language added by the amending act).

It is our conclusion that the contract must be governed by the law of Louisiana. At the time the contract was entered into Desmond was a resident of Shreveport and employed by plaintiffs at their studio located in Shreveport. Unquestionably it was contemplated that the provisions of the contract would have effect in Louisiana. As argued by the defendant the plaintiffs are seeking relief in the Louisiana courts as the result of the action of a Louisiana resident in this state.

The law to be applied for the recognition and enforcement of foreign law is found-in LSA-C.C. Art. 10 which merely states the rule of conflict of laws in a general sense. The pertinent portion of Art. 10 reads:

"Art. 10. The form and effect of public and private written instruments are governed by the laws and usages of the places where they are passed or executed.
"But the effect of acts passed in one country to have effect in another country, is regulated by the laws of the country where such acts are to have effect. * * *" *520 DeMary v. Fontenot, La.App., 161 So.2d 82 (3rd Cir. 1964) and Universal C.I.T. Credit Corporation v. Hulett, La.App., 151 So.2d 705 (3rd Cir. 1963). In DeMary v. Fontenot the court held that where a Texas agreement for the sale of race horses was to have effect in Louisiana and horse racing was legal in Louisiana, Louisiana courts would not refuse to enforce an agreement on the ground of illegality of horse racing in Texas. Universal C.I.T. Credit Corp. v. Hulett, supra, held that under stringent public policy provisions of the Louisiana Deficiency Judgment Act a mortgage creditor under an Indiana contract is barred from a deficiency judgment where he provokes the sale without benefit of appraisement. The contract showed on its face that the vehicle was sold to a Louisiana resident in order to be brought into Louisiana as a result of which the effects of the conditional sale and the subsequent repossession sale all must be governed by the law of Louisiana. The Louisiana rule recognizes that the law of the place where the contract is to have effect determines the rights and obligations of the parties.

Prior to his employment Desmond had never been in Shreveport. For a livelihood he had been a professional boxer for ten years and had worked at odd jobs in gymnasiums and certain health studios. It does not appear, however, that his job experience fully qualified him to operate plaintiffs' studio in Shreveport. He was employed as a trainee for the position of manager. In the contract which the employer signed it is stipulated:

"* * * These contacts are made by Employee working very closely with customer or member in regard to customer's or member's personal matter, such as physical fitness.

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Bluebook (online)
222 So. 2d 517, 1969 La. App. LEXIS 6080, Counsel Stack Legal Research, https://law.counselstack.com/opinion/world-wide-health-studios-inc-v-desmond-lactapp-1969.