Cascio v. Cascio Invs., LLC

• Decision Date: 26 August 2021
• Docket Number: NO. 2019-CA-01506-SCT,2019-CA-01506-SCT
• Citation: 327 So.3d 59
• Parties: Philip T. CASCIO, Jr. v. CASCIO INVESTMENTS, LLC, Jackie Cascio Pearson and Phyllis Cascio
• Court: Mississippi Supreme Court

327 So.3d 59

Philip T. CASCIO, Jr.

v.CASCIO INVESTMENTS, LLC, Jackie Cascio Pearson and Phyllis Cascio

NO. 2019-CA-01506-SCT

Supreme Court of Mississippi.

August 26, 2021

ATTORNEY FOR APPELLANT: O. STEPHEN MONTAGNET, III, Ridgeland

ATTORNEYS FOR APPELLEES: WILLIAM C. BRABEC, LINDSEY O. WATSON, TIMOTHY J. ANZENBERGER, Ridgeland

BEFORE KITCHENS, P.J., MAXWELL AND CHAMBERLIN, JJ.

CHAMBERLIN, JUSTICE, FOR THE COURT:

¶1. This case comes before the Court on direct appeal of a judgment from the Circuit Court of Washington County. There, Cascio Investments, LLC (Investments), sued Philip T. Cascio (Cascio) for breach of contract, alleging violations of a noncompetition agreement (NCA). The circuit court found in favor of Investments, and Cascio appeals. Investments also cross-appeals regarding additional issues involving the award of punitive damages and injunctive relief. Investments further request attorneys’ fees for their defense of this appeal.

FACTS AND PROCEDURAL HISTORY

¶2. This case arises from decades of family strife. The Cascio family has long owned and operated a variety of businesses. The patriarch of the family, Phil Cascio, Sr., founded Cascio's Storage and Warehouse, Inc. (CSW), during the 1970s, a business that primarily engaged in warehousing and storage of agricultural products in the Mississippi Delta region and beyond. Eventually, Phil Cascio, Sr., expanded his enterprises, including the establishment of Investments, which purchases properties for lease to commercial or manufacturing tenants.

¶3. Importantly, as Phil Cascio, Sr., advanced in his years, the general management of these businesses fell to his eldest son, Philip T. Cascio, Jr. Indeed, while the other three children, Jackie Pearson, Phyllis Cascio, and Patrick Cascio, pursued other careers, Cascio, Jr., tended to the day-to-day operations of the Cascio family businesses. Not until later did Phil Cascio, Sr., divide his interests among his children. This extremely dissatisfied Cascio, Jr., who believed he should receive full ownership of the family businesses on account of the years of work he had poured into them. This chain of events led to a degeneration of the familial bonds between the Cascio siblings, which has ultimately resulted in the action before us today.¹

¶4. In 2014, Cascio's sisters, Jackie and Phyllis, brought a shareholder-derivative suit against Cascio for alleged improper uses of their family businesses including, but not limited to, allegations that Cascio used their family businesses as his own "personal piggy bank" while "amassing a fortune of more than $35 million, a multi-million dollar home near Scottsdale, Arizona, and a large Montana ranch." After discovering these discrepancies, Jackie and Phyllis sued their brother Cascio. In October of 2015, the parties met for a two-day-long settlement conference to resolve the issues surrounding the family businesses. An accord was reached. As part of the settlement, the parties would each become one-third owners of CSW. Also, Cascio would agree to surrender his rights in Investments, leaving the two sisters, Jackie and Phyllis, as the remaining owners of the company. Further, Cascio would be given sole ownership of Caspear, LLC (Caspear).

¶5. During their settlement conference, the parties agreed to an NCA. The agreement stated, in part, that

[Cascio] will execute a non-compete agreement with CSW for a period of five years covering Mississippi, Arkansas, Louisiana, Tennessee, and Missouri. Further, [Cascio] will agree to never hire or solicit Terry Hughes or any other employee to leave the employ of CSW . The non-compete agreement would prohibit [Cascio] from being involved, directly or indirectly, in any business that stores agricultural products in the covered area.

(Emphasis added.)

¶6. On December 10, 2015, before Cascio signed the NCA, the chancellor approved "the settlement reached during the Settlement Conference held on October 27 and 28, 2015." In the December 10, 2015 order, the chancellor specifically required that, "[u]pon satisfaction of the terms of settlement and the execution of all required documents, the parties are hereby ordered and directed to present an Agreed Final Judgment to the Court for its consideration and entry."

¶7. On December 15, 2015, the agreement was finalized, and Cascio signed the NCA. There were significant additions included in this final version of the NCA. Specifically, under the proposed terms from the October 2015 settlement conference, Cascio promised not to compete with CSW only . The actual NCA that he signed on December 15, 2015, is much broader. It included not only CSW but also Investments and C-Rental Services, Inc. (C-Rental).

¶8. The NCA, which Cascio signed, in relevant part, provides that

3. For a period of (5) years from the date of this Non-Competition Agreement neither the undersigned nor anyone acting in concert with the undersigned, whether directly or indirectly, will have any contact with any existing customer of CSW , Cascio Investments, LLC ("Investments") and/or C-Rental for any purpose without regard to geographic limits or shall by any means encourage any existing customer of CSW , Investments and/or C-Rental to terminate, reduce or otherwise adversely change, or affect that customer's business relationship with CSW , Investments and/or C-Rental .

4. The undersigned agrees that he will not use or register in any state the business names "Cascio's Storage and Warehouse, Inc.," "C-Rental Services, Inc.," or any derivation thereof. To the extent the undersigned has registered such names or any derivation thereof with the state of Arizona, such registrations shall be cancelled.

5. The undersigned warrants that between October 28, 2015 and the date of the execution of this Non-Competition Agreement, the undersigned has taken no actions that would have violated the provisions of this Non-Competition Agreement had it been in effect during that period of time.

6. It is the intent and desire of the undersigned for this Non-Competition Agreement to be construed broadly. Any ambiguities should be construed broadly in a manner to prevent competition with CSW, Investments, and/or C-Rental. The undersigned hereby agrees that the terms of this Non-Competition Agreement are reasonable and the undersigned hereby expressly waives any defense against this Non-Competition Agreement or any term hereof based on unconscionability.

7. This Non-Competition Agreement is a freely-negotiated, arms-length agreement. There shall be no presumptions or construction for or against any party as the drafting party.

8. In the event of a breach of any provisions of this Non-Competition Agreement, in addition to any provable damages, CSW , Investments and/or C-Rental shall be entitled to injunctive relief and reasonable attorney's fees and litigation expenses. Further, in the event of any breach of this agreement, the time period of non-competition shall be extended by the time the undersigned was in breach, even if the time period of non-competition would have otherwise expired according to the terms of this Non-Competition Agreement.

9. In the event any provision of this Non-Competition Agreement is found to be unenforceable, such shall not invalidate the remaining provisions, which provisions shall remain in full force and effect.

10. The Non-Competition Agreement shall be governed and construed by the law of the State of Mississippi. The undersigned hereby submits to the jurisdiction of the state and/or federal courts having venue over Washington County, Mississippi, for all actions relating to this Non-Competition Agreement and agrees that exclusive venue shall be there.

(Emphasis added.) The final paragraph of the NCA indicated that "[Cascio] has read and understands this Non-Competition Agreement and has executed it freely after full consultation with his counsel."

¶9. The chancellor, per his previous order, entered an "Agreed Final Judgment" on January 11, 2016. This Agreed Final Judgment "approved of the terms of the settlement pursuant to that certain Order Approving Settlement entered on December 10, 2015." While this order did not specifically mention the NCA signed by Cascio on December 15, 2015, the chancellor did find that "the parties have executed all documents required to effectuate the terms of said settlement ." (Emphasis added.)

¶10. Roughly two years later, in January 2018, Investments brought the instant case against Cascio for his alleged breaches of the NCA. Investments alleges that Cascio breached the NCA by contacting five of Investments’ customers: CSW, U.S. Ag Recycling (U.S. Ag), Beulah Land Global Farms (Beulah Land), Baker Distributing (Baker), and Aramark. As for CSW specifically, Investments alleges that Cascio sent a threatening letter to the president of CSW, Terry Hughes, warning CSW that a storage facility it used, owned by Investments, was in need of a sprinkler system. The letter stated as follows:

October 6, 2017

MR. TERRY HUGHESPRESIDENT & CHIEF OPERATIONS OFFICERCASCIO STORAGE & WAREHOUSE, INC.BOX 4938GREENVILLE, MS. 38704-4938

DEAR MR. HUGHES

AS A 33 % STOCK HOLDER OF THIS COMPANY, AND A PERSON WHO HAS ALWAYS BEEN CONCERNED WITH LIABILITY OF STORAGE OF AGRICULTURAL CHEMICALS , [sic] IT HAS BEEN BROUGHT TO MY ATTENTION, THAT CASCIO STORAGE & WAREHOUSE, IS USING FACILITIES, THAT ARE NOT SPRIKLERED [sic] OR CONTAINED. THE FOLLOWING ARE LISTED.

....

CASCIO INVESTMENTS [sic] BUILDING NEEDS TO BE SPRINKLERED [sic] WITH A 3.5 OVER 5,000, [sic] JUST A BUILDING NUMBER 3 [sic] IS, [sic] A SYSTEM THAT CAN COVER AN AGRICULTURAL FIRE, FOR NON HAZARDOUS MATERIAL, AND CHEMICALS. YOU NEED TO APPROACH THEM, AND LET THEM KNOW, THAT CHEMICALS ARE BEING STORED IN THEIR BUILDING, [sic] EITHER THEY SPRINKLER [sic] THE BUILDING, OR GIVE UP THEIR LEASE WITH CASCIO STORAGE. THE FIRE DEPT. NEEDS TO KNOW THIS PRESENTLY TO [sic], SO THEY WILL KNOW THE DANGERS OF ENTERING A BUILDING, WITH CHEMICALS, [sic] WITHOUT A SPRINKLER SYSTEM. I KNOW IN FACT,

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