Advanced Med. Rehab, L.L.C. v. Manton

• Court: Court of Appeal of Louisiana
• Writing for the Court: WICKER, J.
• Citation: Advanced Med. Rehab, L.L.C. v. Manton, 362 So.3d 703 (La. App. 2022)
• Docket Number: 21-CA-315
• Decision Date: 23 February 2022
• Parties: ADVANCED MEDICAL REHAB, L.L.C. v. Shelby MANTON

362 So.3d 703

ADVANCED MEDICAL REHAB, L.L.C. v. Shelby MANTON

NO. 21-CA-315

Court of Appeal of Louisiana, Fifth Circuit.

February 23, 2022

Rehearing Denied March 10, 2022

COUNSEL FOR PLAINTIFF/APPELLANT, ADVANCED MEDICAL REHAB, L.L.C., George D. Fagan, Reagan R. Wilty, New Orleans

COUNSEL FOR DEFENDANT/APPELLEE, SHELBY MANTON, Kenneth C. Bordes, New Orleans

Panel composed of Judges Susan M. Chehardy, Fredericka Homberg Wicker, and Marc E. Johnson

WICKER, J.

Plaintiff-appellant, Advance Medical Rehab, L.L.C. (AMR), seeks reversal of the trial court's May 4, 2021 and May 10, 2021 interlocutory judgments denying its request for a preliminary injunction to enjoin defendant-appellee, Shelby Manton, AMR's former employee, from continuing to engage in business that allegedly competes with AMR's business, in violation of the non-competition provision contained in the Independent Contractor Agreement entered into between the parties. For the following reasons, we affirm the trial court's judgments denying the preliminary injunction; reverse the trial court ruling that deemed moot Ms. Manton's motion seeking to dissolve a temporary restraining order, for damages, and reasonable attorney fees; and remand this matter to the trial court with instructions to set Ms. Manton's motion for hearing to consider the issues of attorney's fees and damages only, and for further proceedings consistent with this opinion.

FACTUAL BACKGROUND AND PROCEDURAL HISTORY

This action arises out Ms. Manton's prior independent contractor relationship with AMR, and her present employment with La Health Solutions.

AMR is a marketing company that represents ten healthcare clinics providing medical and chiropractic care. ¹ The clinics are located in: Chalmette, Gentilly, Gretna, Hammond, LaPlace, Lutcher, Mandeville, Metairie, New Orleans, and Slidell. However, AMR markets and publicizes the services of those clinics in the following parishes: Orleans, Jefferson, Plaquemines, Lafourche, Livingston, St. Bernard, St. Charles, St. Tammany, St. James, St. John the Baptist, and Tangipahoa.

On June 29, 2020, AMR, through its owner, Michelle Seiler-Tucker, retained Ms. Manton as an independent contractor for the position of Public Relations Director to advance AMR's business operations through the marketing of its services. ² As part of her work arrangement with AMR, Ms. Manton was required to sign two agreements: one titled "Independent Contractor Agreement", and another titled "Confidentiality and Nondisclosure Agreement." Section 4 of the Independent Contractor Agreement (the "Agreement"), provides, in pertinent part:

Non-Competition: Ms. Manton agrees that he/she will not knowingly, directly or indirectly, own, manage, operate, jointly control, lend money to, endorse the obligations of, or participate in or be connected as an officer, employee, stockholder, partner, member, counselor, advisor, or otherwise, with any business (other than the Advanced, or an affiliate) engaged to any extent in the business of Advanced, which includes, but is not limited to, the marketing of medical services for chiropractic clinics and physicians, during this contract and for a period of two years after the termination of this contract and/or the relationship between the parties in the Parish of Orleans, Jefferson, Plaquemines, St. Bernard, St. Charles St. Tammany, St. James, St. John the Baptist, Lafourche, Tangipahoa, Terrebonne and Livingston. Further, this non-compete agreement will apply in any parish in which Advanced has a contract and/or has an existing marketing relationship with a clinic to provide marketing services during the term of this contract or any relationship thereafter. Ms. Manton acknowledges that the remedy at law for any breach of this provision will be inadequate, and that Advanced or its assigns shall be entitled to injunctive relief, without the need for a bond to be paid, should Ms. Manton breach this provision. The provisions of this paragraph shall not apply to routine legal, banking, real estate, or other professional services unrelated to competition with the Company or any of its affiliates. If, in any judicial proceeding, a court shall refuse to enforce any of the separate covenants deemed included in this paragraph, on the ground of unreasonable time or geographic scope, then the time and geographic scope shall be reduced to a reasonable time and geographic scope.

On January 22, 2021, Ms. Manton notified AMR that she was terminating her employment with the company, effective February 5, 2021. Following the termination of her employment with AMR, on February 8, 2021, Ms. Manton became employed as an Account Liaison for LA Health Solutions, a Louisiana-licensed healthcare provider network that provides medical treatment to its patients through its licensed physicians at its various locations throughout Louisiana. ³

Upon becoming aware of Ms. Manton's new employment, on April 16, 2021, AMR filed a "Verified Petition for Temporary Restraining Order, Preliminary and Permanent Injunction and for Damages and Other Relief," asserting that Ms. Manton breached the non-competition provision of the Agreement by engaging in marketing of medical services for chiropractic clinics and physicians within the two-year prohibition period post-termination. Attached to the petition were the following exhibits: (1) Independent Contract Agreement executed by Ms. Manton; (2) Verification Affidavit of Michelle Seiler-Tucker; and (3) Affidavit of David Belk, counsel for AMR, who attested to AMR's business practices and the non-compete agreement executed by Ms. Manton. On that same day, the trial court granted AMR's Temporary Restraining Order, and set the hearing for AMR's Preliminary Injunction for April 27, 2021.

On the eve of the evidentiary hearing, April 26, 2021, AMR filed a Prehearing Memorandum in Support of Preliminary Injunction and annexed exhibits: (1) Independent Contract Agreement; (2) Confidential and Non-disclosure agreements; (3) a redacted email dated January 25, 2021; (4) LA Health Solutions’ clinic locations; (5) LA Health Solutions’ main contact information; (6) LA Health Solutions commercial search results from LA Secretary of State's website; (7) LA Health Solutions list of services; and (8) a copy of LA Health Solutions’ website home page. Also, on that same date, Ms. Manton filed a Motion to Dissolve the Temporary Restraining Order, For Damages, and Reasonable Attorney Fees along with a memorandum in support and exhibits of a Facebook post regarding a job opportunity as the Public Relations Director with AMR, a February 11, 2021 email regarding the delinquent payment owed to Ms. Manton for past wages, and a February 5, 2021 email itemizing the items Ms. Manton returned to AMR.

At the April 29, 2021 hearing on the preliminary injunction, AMR presented the testimony of two witnesses, Ms. Manton and Mrs. Seiler-Tucker, regarding their respective understandings of the non-compete provision of the Agreement and the duties and job functions of the Public Relations Director position. Both AMR and Ms. Manton introduced into evidence the same documents attached to their respective pleadings and motions. After closing arguments, in-open court, the trial court ruled that the Agreement's non-compete provision was null and void in its entirety, specifically finding that: (1) the Agreement is enforceable only as to the issue of Ms. Manton's signature appearing on the contract; (2) AMR failed to produce sufficient evidence to satisfy its burden regarding any breach or violation of the Confidentiality and Nondisclosure Agreement; (3) AMR produced sufficient evidence that Ms. Manton engaged in similar services while employed at both AMR and LA Health Solutions; and (4) the Agreement's non-compete provision is overbroad, overreaching and in violation of public policy because the language regarding the duration of the non-compete provision extends beyond two-years and its’ geographic scope includes any parish in addition to the parishes delineated in the clause. On May 10, 2021, the trial court rendered judgment denying AMR's request for preliminary injunction, and deemed Ms. Manton's Motion to Dissolve Temporary Restraining Order as moot. The trial court did not specifically rule on the attorney's fees and damages issues raised by Ms. Manton.

After the trial court's ruling on the preliminary injunction, on May 2, 2021, AMR filed a Second Request and Motion for the Entry of a Preliminary Injunction, asserting the same claims set forth in its original petition, in addition to new arguments to support its opposition to Ms. Manton's original defenses and the trial court's ruling issued at the April 29, 2021 hearing. On May 4, 2021, the trial court rendered a judgment denying AMR's motion, declining to reconsider its ruling, and pointing out AMR's right to seek relief through an appeal.

Accordingly, AMR timely sought the instant devolutive appeal seeking review of the trial court's May 4, 2021 and May 10, 2021 judgments. Ms. Manton filed an Answer to the appeal, contending that while the trial court correctly denied AMR's request for preliminary injunction because AMR's non-competition agreement was overbroad and failed to meet the requirements of La. R.S. 23: 921, the trial court erred in denying her Motion to Dissolve Temporary Restraining Order for Damages and for Reasonable Attorney Fees as moot. Further, Ms. Manton has requested that this Court find that AMR wrongfully obtained an issuance of a temporary restraining order against her such that she is entitled to damages and attorney fees pursuant to La. C.C. art. 3608.

ASSIGNMENTS OF ERROR

On appeal, AMR avers that the trial court erred by: (1) denying AMR's request for a preliminary injunction because AMR and Ms. Manton entered into a valid and enforceable non-compete agreement prohibiting Ms. Manton from competing or working for AMR's competitors in the specifically identified...