Dove Data Prods. v. DeVeaux

• Decision Date: 24 March 2008
• Docket Number: 2008-UP-202
• Parties: Dove Data Products, Inc., Appellant, v. Jamie DeVeaux, Respondent.
• Court: South Carolina Court of Appeals

Dove Data Products, Inc., Appellant, v. Jamie DeVeaux, Respondent.

No. 2008-UP-202

Court of Appeals of South Carolina

March 24, 2008

Heard December 12, 2007.

Appeal From Florence County The Hon. Thomas A. Russo, Circuit Court Judge.

Paul M. Platte, of Columbia, for Appellant.

Walker Coleman and Ellis Lesemann, both of Charleston, for Respondent.

PER CURIAM

Dove Data Products, Inc. (Dove Data) brought suit against Jamie DeVeaux (DeVeaux), a former employee, alleging eight causes of action: (1) breach of contract; (2) breach of the implied covenant of good faith and fair dealing; (3) misappropriation of trade secrets; (4) intentional interference with contractual relations; (5) intentional interference with prospective contractual relations; (6) breach of the employee duty of loyalty; (7) violation of the South Carolina Unfair Trade Practices Act (UTPA); and (8) equitable relief. Dove Data appeals the trial court's grant of summary judgment in favor of DeVeaux on all eight causes. Dove Data additionally appeals the trial court's grant of DeVeaux's motion to dissolve preliminary injunction. We affirm.

FACTS

Dove Data is engaged in the business of the manufacture re-manufacture, and sale of computer printer, facsimile machine, and copier supplies. For approximately nine and one-half years, DeVeaux was employed with Dove Data as a marketing representative and account manager. ^[1] During DeVeaux's employment, he sold toner cartridges and related products to customers in the Charleston, Myrtle Beach, and Savannah areas.

DeVeaux began working for Dove Data in August 1995. Thirteen months later, Dove Data presented DeVeaux with an Employee Non-Compete Agreement” and Employee Non-Disclosure Agreement.” The Employee Non-Compete Agreement included a non-compete covenant, one year in duration and completely unrestricted as to geographic scope.

On January 31, 2001, over five years after the inception of DeVeaux's employment, Dove Data presented DeVeaux with a new employment agreement (Employment Agreement). DeVeaux signed the Employment Agreement, which contained a covenant not to compete and a covenant not to disclose. The covenant not to compete provided:

(a) [DeVeaux] covenants that he will not at any time during his employment by [Dove Data] or within a period of two (2) years after the termination of his employment with or without cause:

(1)... within [DeVeaux's] territory, engage in the business of selling, soliciting or taking orders for computer printer, facsimile machine, and copier supplies including toner and ink products, in competition with the business of [Dove Data].

(2)... within [DeVeaux's] territory or any other area assigned to him during any part of the two (2)-year period immediately preceding the termination of his employment sell, solicit, or take orders for computer printer facsimile machine, and copier supplies, including toner and ink products, from any person or entity who or which shall have been a customer or account of [Dove Data's] during any part of the two (2)-year period immediately preceding the termination of his employment or who or which was actively solicited as a customer or account by [Dove Data] during the two (2)-year period immediately preceding the termination of his employment.

(3)... within [DeVeaux's] territory, solicit, divert take away, or interfere with or attempt to solicit, divert, take away, or interfere with any of the custom, trade, business or patronage of [Dove Data] or in any manner, directly or indirectly, hire, employ, or interfere with any person who shall be employed by [Dove Data].

The Employment Agreement indicated that continued employment, which included continued access to certain information, was the consideration provided DeVeaux in exchange for entering the Employment Agreement:

[Dove Data] hereby agrees to continue the employment of [DeVeaux] as a salesman. [DeVeaux] hereby agrees to continue in such employment. [DeVeaux] has been and will be furnished with certain data reflecting the names and addresses of present and prospective customers or accounts of [Dove Data] and [Dove Data]'s methods of selling and delivering products to said customers or accounts. [DeVeaux] recognizes and acknowledges that the above-described data is confidential information constituting a business secret and/or a trade secret of [Dove Data].

On October 14, 2004, DeVeaux filed articles of incorporation for a new company, Southpoint Products, Inc. (Southpoint). On the evening of January 23, 2005, DeVeaux faxed a resignation letter, dated January 24, 2005, to Dove Data, which read: please consider this letter as my resignation from Dove Data Products as of 10 am today.” On the afternoon of January 24, 2005, DeVeaux began to compete with Dove Data.

Dove Data filed this action alleging eight causes of action and seeking a preliminary injunction against DeVeaux. The trial court granted Dove Data's motion for preliminary injunction. Under the preliminary injunction, DeVeaux maintained the right to compete with Dove Data but was temporarily prohibited from soliciting or doing business with certain customers identified on an attached list. The injunction and attached list of customers were filed with the court.

On October 10, 2005, Dove Data filed a motion to hold DeVeaux in contempt, based on allegations that he had given a copy of the preliminary injunction order to two of Dove Data's competitors. This motion was set for a hearing on two occasions, but was continued on Dove Data's request both times. On May 3, 2006, DeVeaux filed a motion for summary judgment and motion to dissolve the preliminary injunction. A hearing was set for May 22, 2006, on all pending motions. At the hearing, both parties indicated they wished to go forward on DeVeaux's motion for summary judgment and in the event summary judgment was not granted, Dove Data indicated it would request a third continuance of the motion for contempt.

The trial court granted summary judgment to DeVeaux on all eight causes, dissolved the preliminary injunction, and denied the motion for contempt as moot in light of the fact that there was no legal basis for the injunction. This appeal followed.

STANDARD OF REVIEW

A trial court should grant a motion for summary judgment when the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law.” Rule 56(c), SCRCP; Wells v. City of Lynchburg, 331 S.C. 296, 301, 501 S.E.2d 746, 749 (Ct. App. 1998). When reviewing a grant of a summary judgment motion, this court applies the same standard of review as the trial court. Helms Realty, Inc. v. Gibson-Wall Co., 363 S.C. 334, 340, 611 S.E.2d 485, 488 (2005). In determining whether any triable issues of fact exist, the reviewing court must consider all ambiguities, conclusions, and inferences arising in and from the evidence in a light most favorable to the non-moving party. Willis v. Wu, 362 S.C. 146, 151, 607 S.E.2d 63, 65 (2004).

Summary judgment is not appropriate where further inquiry into the facts of the case is desirable to clarify the application of the law. Gadson v. Hembree, 364 S.C. 316, 320, 613 S.E.2d 533, 535 (2005). Even when there is no dispute as to evidentiary facts, but only as to the conclusions or inferences to be drawn from them, summary judgment should be denied. Nelson v. Charleston County Parks & Recreation Comm'n, 362 S.C. 1, 5, 605 S.E.2d 744, 746 (Ct. App. 2004). However, when plain, palpable, and indisputable facts exist on which reasonable minds cannot differ, summary judgment should be granted.” Ellis v. Davidson, 358 S.C. 509, 518, 595 S.E.2d 817, 822 (Ct. App. 2004).

The moving party has the initial responsibility of demonstrating the absence of a genuine issue of material fact. Rule 56(c), SCRCP. Once the moving party carries its initial burden, the non-moving party must do more than simply show that there is some metaphysical doubt as to the material facts” but must come forward with ‘specific facts showing that there is a genuine issue for trial.'” Baughman v. American Telephone and Telegraph Co., 306 S.C. 101, 115, 410 S.E.2d 537, 545 (1991) (emphasis in original) (citation omitted). The non-moving party must set forth facts, as would be admissible in evidence, ” to show that a true jury issue exists. Rule 56(e), SCRCP. Ultimate or conclusory facts and conclusions of law, as well as statements on ‘information and belief' cannot be utilized on a summary judgment motion.” Dawkins v. Fields, 354 S.C. 58, 68, 580 S.E.2d 433, 438 (2003) (quoting Charles Alan Wright et al., Federal Practice and Procedure § 2738 (3d ed. 2007)).

LAW/ANALYSIS

Dove Data claims the trial court erred in granting summary judgment in favor of DeVeaux on Dove Data's eight causes of action. ^[2] Dove Data also claims the trial court erred in dissolving the preliminary injunction against DeVeaux.

I. Breach of Contract

Dove Data contends summary judgment on its breach of contract claim was improper because the trial court improperly applied the additional consideration requirement of a non-compete covenant to the non-solicitation clause provided in the Employment Agreement. ^[3] Regardless, Dove Data contends it presented evidence that it provided DeVeaux additional consideration, other than at-will” employment, for entering the Employment Agreement.

A. Non-Compete vs. Non-Solicitation

On appeal, Dove Data claims non-solicitation covenants are separate and distinct from non-compete covenants and, as such, do not require additional consideration for support. Dove Data further contends because DeVeaux signed an earlier non-compete...