Drawdy Cpa Servs., P.C. v. N. Ga Cpa Servs., P.C.

• Decision Date: 25 March 2013
• Docket Number: No. A12A2407.,A12A2407.
• Citation: 320 Ga.App. 759,740 S.E.2d 712
• Parties: DRAWDY CPA SERVICES, P.C., et al. v. NORTH GA CPA SERVICES, P.C., et al.
• Court: Georgia Court of Appeals

320 Ga.App. 759

740 S.E.2d 712

DRAWDY CPA SERVICES, P.C., et al.

v.NORTH GA CPA SERVICES, P.C., et al.

No. A12A2407.

Court of Appeals of Georgia.

March 25, 2013.

Rebecca Wyatt McLaws, Marietta, for Appellants.

Michael J. Kramer, Marietta, for Appellees.

BARNES, Presiding Judge.

Drawdy CPA Services, P.C., and John T. Drawdy, Jr. (“Drawdy”) appeal the trial court's order denying their motion for an injunction against North GA CPA Services, P.C. and Jamie Howell Pritchett (“Pritchett”). For the reasons that follow, we affirm.

Drawdy sued Pritchett, claiming she breached her employment agreement with him by creating her own CPA firm and then soliciting his clients. He sought injunctive relief against Pritchett to prevent what he contended was continuing misappropriation of client information and trade secrets. Pritchett answered and counterclaimed for attorney fees under OCGA § 9–15–14, and several months later Drawdy filed an “emergency motion” for injunctive relief to prevent Pritchett from accessing Drawdy's “client portals” and “siphoning off” Drawdy's clients.

The trial court held a hearing on the emergency motion. Both parties testified, and Pritchett called four witnesses, all of whom had been clients of Drawdy CPA but testified that they sought out Pritchett on their own after she started her own firm. One of those clients also testified that his company printed and distributed a direct market mailer for Pritchett to a list of 2,500 people who fit a particular demographic profile compiled by a third-party company. Additionally, Pritchett submitted 113 affidavits from clients of Pritchett's who were formally clients of Drawdy's, and who all verified that Pritchett did not solicit them to leave Drawdy. Drawdy submitted the affidavit of one of his clients who had received the direct mail flyer from Pritchett at his home address.

The trial court denied Drawdy's motion for injunctive relief. The court found that although Pritchett had inadvertently solicited one of Drawdy's clients via a mass market mailer, Drawdy had submitted insufficient evidence to establish that Pritchett violated her employment agreement or had deliberately solicited Drawdy's former clients. The court also concluded that Pritchett did not obtain client information that belonged to Drawdy, but accessed her clients' tax returns through a “client portal” on Drawdy's website. Finally, the court noted, the tax returns and information contained in them belonged to the client, as Drawdy had admitted.

The trial court granted Drawdy a certificate of immediate review and Drawdy filed an application for interlocutory appeal in the Georgia Supreme Court. The Supreme Court transferred the application to this court, noting in an order that the denial of injunctive relief was ancillary to the underlying legal issues and thus that court's equity jurisdiction was not invoked. This court granted the application because the denial of a motion for interlocutory injunction is directly appealable under OCGA § 5–6–34(a)(4). See OCGA § 5–6–35(j).

Drawdy contends that the trial court erred in denying his motion for an injunction. “An interlocutory injunction is a device used to maintain the status quo of the parties pending final adjudication of the case,” and should not be granted “except in clear and urgent cases where there is a vital necessity to prevent a party from being damaged and left without a remedy.” (Citations omitted.) Atlanta Area Broadcasting v. James Brown Enterprises, 263 Ga.App. 388, 392–393, 587 S.E.2d 853 (2003). Whether to grant or deny an injunction rests in the sound discretion of the trial court judge, “according to the peculiar circumstances of the particular case.” (Citations and punctuation omitted.) Slautterback v. Intech Mgmt. Servs., 247 Ga. 762, 765–766, 279 S.E.2d 701 (1981). The appellate courts will not reverse a trial court's decision on a temporary injunction “unless there was no evidence upon which to base the ruling or it was based on an erroneous interpretation of the law.” Atlanta Area Broadcasting, 263 Ga.App. at 393, 587 S.E.2d 853.

1. Drawdy contends first that the trial court erred in denying a temporary injunction because the non-disclosure covenant in Pritchett's employment agreement was reasonably designed to protect Drawdy's confidential business information accessible only to former employees of Drawdy. Drawdy testified that he had a “client portal” on his website to give clients access to their tax returns or other accounting information. Each client had a unique username and password that allowed him to access only that client's documents. After Pritchett left, Drawdy determined through a log-in history report that the client portals of multiple clients had been entered from the same computer, which turned out to be Pritchett's.

Pritchett admitted that she entered Drawdy's client portals with the express permission of her clients, who were formerly Drawdy's clients, to obtain copies of their tax returns. Drawdy's predecessor began using the portal system to save the expense and time of providing hard copies of tax returns to clients, to give them access to the returns at any time, and to allow them to share their access information to a third party, such as a banker processing a refinancing...