Causin, L.L.C. v. Pace Safety Consultants, LLC, 2018-CA-0706

• Court: Court of Appeal of Louisiana
• Writing for the Court: Judge Paula A. Brown
• Decision Date: 30 January 2019
• Docket Number: NO. 2018-CA-0706,2018-CA-0706
• Citation: Causin, L.L.C. v. Pace Safety Consultants, LLC, NO. 2018-CA-0706 (La. App. Jan 30, 2019)
• Parties: CAUSIN, L.L.C., D/B/A BAYOU SAFETY AND SUPPLY v. PACE SAFETY CONSULTANTS, LLC AND JAY R. BAKER

CAUSIN, L.L.C., D/B/A BAYOU SAFETY AND SUPPLY v. PACE SAFETY CONSULTANTS, LLC AND JAY R. BAKER

NO. 2018-CA-0706

COURT OF APPEAL FOURTH CIRCUIT STATE OF LOUISIANA

January 30, 2019

APPEAL FROM 25TH JDC, PARISH OF PLAQUEMINES

NO. 63-949, DIVISION "A"

Honorable Kevin D. Conner, Judge

Judge Paula A. Brown

(Court composed of Judge Roland L. Belsome, Judge Sandra Cabrina Jenkins, Judge Paula A. Brown)

JENKINS, J., DISSENTS WITH REASONS

Lloyd N. Frischhertz

Marc Lloyd Frischhertz

Anthony J. Impastato

FRISCHHERTZ, POULLIARD FRISCHHERTZ & IMPASTATO, L.L.C.

1130 St. Charles Avenue

New Orleans, LA 70130

COUNSEL FOR PLAINTIFF/APPELLEE

Thomas Robert Peak

John Asley Moore

Jonathan A. Moore

TAYLOR PORTER BROOKS & PHILLIPS

450 Laurel Street, 8th Floor

P.O. Box 2471

Baton Rouge, LA 70801

COUNSEL FOR DEFENDANT/APPELLANT

JUDGMENT AMENDED AND AFFIRMED AS AMENDED

This action involves a nonsolicitation/noncompetition agreement. A dispute arose between Appellee, Causin, L.L.C. d/b/a Bayou Safety and Supply ("Causin"), a former employer and Appellants, Jay R. Baker, ("Mr. Baker") a former employee, and Mr. Baker's company, Pace Safety Consultants, LLC ("Pace Safety")(collectively, "Mr. Baker"). Causin filed in the district court a petition for declaratory judgment, preliminary injunction, permanent injunction and damages (the "Petition") alleging Mr. Baker violated the conditions of the nonsolicitation/noncompetition and confidentiality agreement (the "Non-Compete Document") which Mr. Baker signed during his employment with Causin. In turn, Mr. Baker filed an article 965 motion for judgment on the pleadings (the "Article 965 Motion"). Following a trial on the Petition and the Article 965 Motion, the district court rendered a judgment on May 3, 2018, in favor of Causin.

From this judgment, Mr. Baker appeals. For the reasons set forth below, we amend the district court's judgment, and affirm the district court's judgment in all other respects.

FACTS/PROCEDURAL HISTORY

Causin is domiciled in Plaquemines Parish and its principal place of business is in Plaquemines Parish. Mr. Baker was employed as a vice-president of Causin. As a condition of his employment, on April, 7, 2017, Mr. Baker was presented with the Non-Compete Document. The Non-Compete Document restricted Mr. Baker from being employed by or engaging in the same or similar business as Causin and from soliciting any of Causin's customers during Mr. Baker's employment and for two years from the date of termination of his employment.

Mr. Baker's employment with Causin ended on July 25, 2017. After leaving Causin, Mr. Baker began his own safety company, Pace Safety, which does business in Plaquemines Parish. Pace Safety is in direct competition with Causin.

On September 13, 2017, Causin filed the Petition against Mr. Baker alleging that Mr. Baker violated the terms of the Non-Compete Document by establishing Pace Safety.

Mr. Baker filed a peremptory exception of nonjoinder of a party (the "Exception") on October 24, 2017, and a renewed Exception on November 2, 2017, asserting that Causin should be ordered to supplement his petition to join all of its subsidiaries and affiliates. Following the district court's granting of the Exception and the renewed Exception, Causin filed its First and Second Supplemental and Amended Petitions adding its subsidiaries and affiliates as plaintiffs.¹

Thereafter, Mr. Baker filed an Article 965 Motion asserting: (1) Mr. Baker did not agree to the Non-Compete Document; (2) the Non-Compete Document was not signed on behalf of Causin or any of the plaintiffs; (3) the Non-Compete Document did not comply with the requirements of La. R.S. 23:921; and (4) the Non-Compete Document was ambiguous.

A trial was held on April 2, 2018, on Causin's Petition and Mr. Baker's Article 965 Motion. The matter was submitted on the pleadings, briefs, and arguments of counsel; no testimony was taken. However, the parties entered an oral stipulation that if the Non-Compete Document was in fact valid and enforceable, Mr. Baker had violated its terms. As well, the parties stipulated:

Plaintiffs' Stipulation:

If permitted to testify, Randy J. Causin would testify that he intended to bind Causin, L.L.C. to that [Non-Compete Document], a copy of which is attached as Exhibit "A" to the original petition herein.

Defendants' Stipulation:

If permitted to testify. Jay R. Baker would testify that he signed as presented, without revision, that [Non-Compete Document], a copy of which is attached as Exhibit "A" to the original petition herein, that he returned the [Non-Compete Document] to Karen Causin Gaudet, and that Randy J. Causin did not witness his signature.

On May 3, 2018, the district court issued a judgment in favor of Causin, denying the Article 965 Motion and finding that the Non-Compete Document was a "valid and enforceable non-compete agreement which satisfied the requirements of La. R.S. 23:921." As a result, the district court granted Causin's Petition, and First and Second Supplemental and Amended Petitions in all respects except for the issue of damages which the district court indicated would be heard separately.The judgment also enjoined Mr. Baker from conducting business in competition with Causin as delineated by the Non-Compete Document.²

This appeal follows.

THE NON-COMPETE DOCUMENT

The Non-Compete Document provided in pertinent part:

As a condition of my employment with Causin LLC, Bayou Supply & Safety, its subsidiaries, affiliates, successors, or assigns (together "the Company"), and in consideration of my employment with the Company and my receipt of the compensation now and hereafter paid to me by the Company, I agree to be bound by the following provisions of this agreement:

(A) Employee and the Company acknowledge and agree that the Company is engaged in the highly competitive business of selling cylinder gases, liquid gases, compressed gases, welding supplies, safety supplies, marine supplies, electric tools, pneumatic tools, hand tools, service, rentals and repairs of welding equipment, safety equipment, fire extinguishers, safety training, marine equipment, fasteners, signs, labels, tags, embroidery, work clothing, industrial supplies, and tools to its customers ("the Employer's Business") in the parishes within Louisiana identified in Exhibit "A" attached hereto. Employee recognizes that from time to time, the Company's business may expand to other parishes within Louisiana and/or other counties or municipalities in other states and Employee agrees that Company may amend Exhibit "A" and append it to this agreement with the same force and effect as the original Exhibit "A." Company will provide Employee with any and all amendments. Employee and the Employer acknowledge and agree that the Company does business in all of the parishes contained in Exhibit "A." Employee agrees that if the Company provides him with an amendment to Exhibit "A" that it will represent as fact that the Company does business in all of the geographical areas identified in such an exhibit unless the Employee provides the Company with written notice disputing that fact within seven days of his receipt of the amendment.

(B) Employee agrees that Employee will not, during the term of his or her employment and for a period of two years from the date of termination of his or her employment, whether as owner, principle, agent, partner, officer, employee, independent contractor, consultant, licensor, franchisee, or otherwise, alone or in association with any other person become employed or otherwise engaged with any other entity that is engaged in the same or similar business as the Employer's Business in any of the parishes identified in paragraph 5.1(A).

(C) Employee agrees that Employee will not, during the term of his or her employment and for a period of two years from the date of the termination of his or her employment, whether as owner, principle, agent, partner, officer, employee, independent contractor, consultant, licensor, franchisee, or otherwise, alone or in association with any other person directly or indirectly, call upon or solicit any customer of the Company or any subsidiary or affiliate of the Company for the purpose of soliciting and/or selling to, or in any way diverting or taking away, any of said customers in connection with products sold by the Company or products similar to those sold by the Company in any of the parishes identified in paragraph 5.1(A).

* * *

(G) If any court shall determine that any restriction contained in this Agreement is unenforceable, including but not limited to the duration or geographical limits described herein, it is the intention of the parties that the restrictive covenant set forth herein shall not thereby be terminated but shall be deemed amended to the extent to render it valid and enforceable, such amendment to apply only with respect to the operation of the Agreement in the Jurisdiction of the court that has made the adjudication.

Exhibit A, attached to the Non-Compete Document, set forth specific parishes in Louisiana and counties in Mississippi in which Causin did business.³ Mr. Baker dated and signed a Statement of Compliance which certified that he read andunderstood the "Nonsolicitation/Noncompetition and Confidentiality agreement" and "Exhibit 'A.'" On the Statement of Compliance, Mr. Baker indicated he was an employee, and he set forth his social security number. The Statement of Compliance also bore the signature of Randy J. Causin on a section entitled "Witnessed by Supervisory."

DISCUSSION

On appeal, Mr. Baker asserts as his sole assignment of error that the district court erred in concluding the Non-Compete Document was valid and enforceable and satisfied the requirements of La. R.S. 23:921. Although Mr. Baker assigns one error, he essentially challenges the district court's judgment on four grounds: (1) there was no evidence of his intent to be bound by the restrictions contained in the Non-Compete Document; (2) the requirements of La. R.S. 23:921...