Parnell v. Sherman & Hemstreet, Inc.

• Citation: 364 Ga.App. 205,874 S.E.2d 394
• Decision Date: 09 June 2022
• Docket Number: A22A0069
• Parties: PARNELL et al. v. SHERMAN & HEMSTREET, INC.
• Court: United States Court of Appeals (Georgia)

364 Ga.App. 205

874 S.E.2d 394

PARNELL et al.

v.SHERMAN & HEMSTREET, INC.

A22A0069

Court of Appeals of Georgia.

June 9, 2022

Trotter Jones, William A. Trotter III, Augusta, for Appellant.

Enoch Tarver, Edward Jerome Tarver ; Murphy Pitts, Warren Marcus Pitts III, Augusta, for Appellee.

Dillard, Presiding Judge.

Michael Parnell appeals the trial court's grant of temporary injunctive relief to his former employer, Sherman & Hemstreet, Inc. ("S&H"), which prohibited him from violating certain non-competition provisions in his employment agreement. In doing so, Parnell argues that the trial court abused its discretion because (1) S&H's complaint and motion for a temporary injunction were not sufficiently verified; and (2) S&H failed to allege or prove all of the prerequisites necessary to obtain a temporary injunction.

In a consolidated brief with Parnell, RE/MAX River Realty Company, Lisa Pops, and Michael Pops (the "RE/MAX parties")¹ appeal the trial court's denial of their motion to dismiss Count 2 of the complaint (i.e. , a claim against them for tortious interference with business relationships) or, alternatively, for a judgment on the pleadings—which they contend was converted to a motion for summary judgment because the court considered matters outside the pleadings. Specifically, the RE/MAX parties argue the employment contract at issue was void, and even if that were not the case, S&H's claim against them for tortious interference with its business relationships fails because S&H did not allege and prove the elements required to establish such a claim. For the reasons set forth infra , we reverse in part, vacate in part, and remand the case for further proceedings consistent with this opinion.

The record shows that,² under the terms of an independent contractor agreement, Parnell worked for S&H as a real estate agent from November 2016 until May 12, 2020, when the agreement was terminated.³ The agreement included confidentiality, non-solicitation, and non-competition clauses. Specifically, Section 17 (a) of the agreement—i.e. , the confidentiality clause—provides:

[Parnell] acknowledges and agrees that the information as to the business procedures and methods, including the names of the clients and customers, their buying practices[,] and the products sold to particular clients of [S&H] are valuable trade secrets of [S&H]. [Parnell] expressly covenants and agrees that, during the term of this agreement and for a period of two years after the termination of this agreement for any reason (whether or not with cause), [he] will not communicate or divulge, or use any confidential information concerning the business of [S&H] without the express written consent of [S&H].

This provision also included a detailed definition for what constitutes "confidential information" for purposes of the agreement.

Next, Section 17 (b) of the agreement—i.e. , the non-solicitation clause—provides that, subject to the time limitations applicable to the previous clause,

[Parnell] shall not ... on his ... behalf or on behalf of any person, firm, partnership, association, corporation[,] or business organization, entity or enterprise other than [S&H], solicit, contact, or call upon any customer of [S&H] or any representative of any customer or prospective customer of [S&H], with a view to facilitating the sale, rental, lease, or management of real property to or on behalf of said customer. Provided, that these restrictions shall apply only to those customers or prospects of [S&H], with respect to whom [Parnell] had Material Contact with such customer or prospect or representatives of such customers or prospects of S&H during the period of Twelve (12) months immediately preceding cessation of this agreement. A "Material Contact" as that term is used herein, exists between [Parnell] and each customer or potential customer of [S&H] (or their representative) if interaction took place between them in an effort to further a business relationship with [S&H].

Lastly, Section 17 (c) of the agreement—i.e. , the non-competition clause—provides, in relevant part, that

[Parnell] expressly covenants and agrees that [he] will not, during the term of [his] employment with [S&H] and for a period of one (1) year after the termination of [his] services, for [himself] individually or on behalf of any other person, partnership, association, or corporation, be employed by, provide services for, or receive compensation from any business which provides real estate sales and rental services which are the same or similar to that of [S&H], within the area known as the Central Savannah River Area ....

The non-competition clause then goes on to list the Georgia counties comprising the so-called Central Savannah River Area and provides that, if Parnell violates this provision, he "shall immediately and prior to providing said competing services, pay to [S&H] a lump-sum cash payment in the amount of ten[ ]thousand dollars ($10,000)."

According to the complaint, Parnell actively engaged in residential and commercial real estate sales in the Central Savannah River Area while employed by S&H, and immediately following the termination of the employment agreement, the RE/MAX parties hired "Parnell to perform the same or substantially the same[ ] services as [he] performed at [S&H] and in the same geographic area." Furthermore, without S&H's prior consent, "Parnell communicated with and solicited [S&H's] client(s) to cancel their contract(s) with [S&H], and sign new contract(s) with RE/MAX." S&H further contended that "Parnell communicated and solicited [S&H's] clients on behalf of RE/MAX with whom he had material contacts on behalf of [S&H] within the twelve months preceding the termination of [the] agreement." And during this time, S&H repeatedly warned Parnell and the RE/MAX parties that Parnell was in violation of the employment agreement and provided them with a copy of same, but Parnell refused S&H's demand that he cease and desist the prohibited conduct.

Based on the foregoing, S&H filed a two-count complaint, asserting a breach-of-contract claim against Parnell (Count 1) and a claim of tortious interference with contractual or business relationships against the RE/MAX parties (Count 2).⁴ In addition, S&H filed a motion for an injunction and temporary restraining order,⁵ requesting that the court prohibit the appellants from continuing to violate the employment agreement by calling upon, soliciting, and inducing its clients to move their business from S&H to RE/MAX. The RE/MAX parties responded, opposing the imposition of a temporary injunction and moving the court to dismiss Count 2 of the complaint or, alternatively, for a judgment on the pleadings.

Following a hearing on the matter, the trial court ultimately granted S&H's motion for a temporary injunction only as to Parnell. Specifically, the trial court, pending its further determination of the issues, prohibited Parnell from (1) communicating, divulging, or using S&H's confidential information; (2) soliciting, contacting, or calling upon S&H's customers or any representative of any of its customers or prospective customers with a view to facilitate the sale, rental, lease, or management of real property to or on behalf of said customer; and (3) providing services for, or receiving compensation from, any business which provides real estate sales and rental services, which are the same or similar to that of S&H within the Central Savannah River Area. At the conclusion of its order, the trial court summarily denied the RE/MAX parties’ motion to dismiss Count 2 of the complaint. This appeal follows.

1. As a preliminary matter, S&H asks this Court to remand this case to the trial court for completion of the record. Specifically, S&H contends that Parnell and the RE/MAX parties failed to satisfy their burden of ensuring the transcript of the relevant motions hearing was included in the record on appeal. We disagree that such a burden exists.

Georgia law specifies the procedure for "the inclusion of a transcript in an appellate record."⁶ Specifically, under OCGA § 5-6-37, a notice of appeal "shall state whether or not any transcript of evidence and proceedings is to be transmitted as a part of the record on appeal." Thus, this provision leaves "the choice of whether to include a transcript in the appellate record to the appellant."⁷ And if an appellant desires that a transcript be made part of the record on appeal, he "must say so in [his] notice of appeal, have the transcript prepared at [his] own expense, and have it filed with the trial court within 30 days of the filing of the notice of appeal, unless [he] obtains an extension of time from the trial court."⁸

Here, Parnell and the RE/MAX parties’ notice of appeal listed various portions of the trial court record to be omitted from the appellate record and then specifically noted, "[a] transcript of the November 6, 202[0] [motions hearing] will not be included in the record on appeal."⁹ And under OCGA § 5-6-37, the appellants were not required to ensure this transcript was available to this Court. Instead, they merely had to indicate whether or not the transcript was to be included in the appellate record, which they did.¹⁰

Even so, S&H contends that evidence necessary for the resolution of this appeal was presented at the relevant hearing and suggests such evidence was intentionally excluded by the appellants because it was unfavorable to them. But under OCGA § 5-6-42, if the appellant designates any matter to be omitted from the record on appeal as provided in Code Section 5-6-37, the appellee may—within 15 days of being served with the notice of appeal by appellant—"file a designation of record designating that all or part of the omitted matters be included in the record on appeal." This, the appellee did not do.

Furthermore, there is no evidence S&H objected in the trial court to the exclusion of the hearing transcript on appeal or that the court ruled on the...