Engineered Cooling Servs., Inc. v. Star Serv., Inc.

• Decision Date: 12 October 2012
• Docket Number: 2110178.
• Parties: ENGINEERED COOLING SERVICES, INC. v. STAR SERVICE, INC. OF MOBILE.
• Court: Alabama Court of Civil Appeals

108 So.3d 1022

ENGINEERED COOLING SERVICES, INC.

v.STAR SERVICE, INC. OF MOBILE.

2110178.

Court of Civil Appeals of Alabama.

June 8, 2012.

Opinion on Return to Remand Aug. 10, 2012.

Certiorari Denied Oct. 12, 2012

Alabama Supreme Court 1111515.

Forrest S. Latta and Taylor N. Barr of Burr & Forman LLP, Mobile; and John H. Adams of Emmanuel Sheppard & Condon, Pensacola, Florida, for appellant.

S. Russell Copeland of Hoiles, Dasinger, Hollon & Copeland, P.C., Robertsdale, for appellee.

BRYAN, Judge.

Engineered Cooling Services, Inc. (“ECS”), appeals from a judgment in favor of Star Service, Inc. of Mobile (“Star”). We affirm in part and remand with instructions.

Factual Background

Star specializes in contracting to provide maintenance service for commercial heating, ventilation, and air-conditioning (“HVAC”) equipment for a fixed price. In January 2005, Star employed Mark Davis as a salesman. When Star employed Davis, he had had no previous experience in the HVAC business, and Star trained and developed Davis as a salesman of HVAC-maintenance service.

When he began his employment with Star, Davis signed a written contract titled “Employee Confidentiality Agreement” (“the confidentiality agreement”) in which he agreed, among other things, that he would not remove Star's confidential information from its premises or disclose it to others during or after his employment with Star unless authorized to do so by Star and that, for a year after his employment with Star ended, he would not contact Star's customers for the purpose of offering services from a competitor of Star.

In December 2008, ECS, one of Star's competitors, offered Davis a job as a salesman at a base salary that was almost twice his base salary at Star. Pete Doyle, ECS's president, told Davis that ECS wanted to hire Davis in order to increase its HVAC-maintenance business. On January 6, 2009, Davis accepted ECS's job offer.

When Davis informed Shaun Mayeux, Star's president, that he was leaving Star to accept a job with ECS, Mayeux reminded Davis of his obligations under the confidentiality agreement. On January 9, 2009, Star sent a letter to Davis reminding him of his obligations under the confidentiality agreement and sent ECS a letter informing it of Davis's obligations under the confidentiality agreement. Star subsequently discovered that Davis had e-mailed three of Star's confidential documents from his Star e-mail account to his personal e-mail account, which was a violation of the confidentiality agreement. On January 16, 2009, Star's attorney sent Davis a letter demanding that he return Star's confidential documents and sent ECS a letter informing it that Davis had violated the confidentiality agreement and warning ECS that it would be tortiously interfering with Star's contractual relations with Davis if it induced him to violate the confidentiality agreement. Davis returned two of the three confidential documents to Star on a compact disk and deleted the third from his personal e-mail account.

Within a few months of Davis's leaving Star, Ray Rodriguez, ECS's vice president, asked Davis to accompany him on a visit to Mobile Gas, one of Star's customers. While he was working at Star, Davis had prepared the proposal that had resulted in Mobile Gas's awarding Star the contract to maintain Mobile Gas's HVAC equipment. Davis testified that Rodriguez probably knew that he had prepared Star's proposal and that he accompanied Rodriguez to Mobile Gas because Rodriguez was his boss and had asked him to do so. At Mobile Gas, Rodriguez and Davis met with Daniel Caylor, the Mobile Gas employee with the authority to decide which company should be awarded the contract to maintain MobileGas's HVAC equipment. The evidence was in conflict regarding whether Rodriguez and Davis solicited the contract to maintain Mobile Gas's HVAC equipment at the meeting with Caylor. Davis testified that he and Rodriguez did not solicit it; however, Caylor testified that they did. Caylor further testified that he declined to switch the contract to maintain Mobile Gas's HVAC equipment from Star to ECS.

Also within a few months of Davis's leaving Star, Joel Beckham, an ECS employee, asked Davis to accompany him to a meeting with John Harnish, an employee of the Mississippi National Guard Readiness Center (“Readiness Center”) in Gulfport, Mississippi. Readiness Center was one of Star's customers, and Harnish was responsible for deciding which company should be awarded the contract to maintain Readiness Center's HVAC equipment. Davis testified that he knew that Readiness Center was a customer of Star, that Beckham wanted Davis to accompany him to the meeting with Harnish because Davis had worked for Star, and that he and Beckham had solicited the contract to maintain Readiness Center's HVAC equipment at the meeting with Harnish. Harnish testified that Beckham and Davis told him that they thought ECS could do the work that Star was doing better and cheaper than Star. However, the undisputed evidence indicates that Readiness Center did not switch the contract to maintain its HVAC equipment from Star to ECS.

Davis also contacted Dauphin Way United Methodist Church (“Dauphin Way”) and Holiday Inn Downtown (“Holiday Inn”) in Mobile, who were customers of Star, and solicited the contracts to maintain their HVAC equipment on behalf of ECS. ECS terminated Davis's employment in January 2010.

In 2009, Star had a contract to maintain the mechanical HVAC equipment of Little Sisters of the Poor (“Little Sisters”), while ECS had the contract to maintain the chiller equipment of Little Sisters. By letter dated January 29, 2010, Little Sisters informed Star that it would not be renewing Star's contract. Mayeux testified that Little Sisters' administrator, Sister Paul Mary, told him that ECS knew that Star's price for maintaining Little Sisters' mechanical HVAC equipment was $12,000 and that ECS was offering to maintain it for $2,000 less. Although Little Sisters subsequently agreed to continue using Star to maintain its mechanical HVAC equipment through September 30, 2010, it contracted for ECS to begin maintaining its mechanical HVAC equipment on October 1, 2010. Mayeux testified that Star had derived a profit from its contract with Little Sisters and that it lost that profit when it lost its contract with Little Sisters; however, he testified that, because its contract with Little Sisters was a fixed-price contract and Star's cost for the labor and parts necessary to maintain Little Sisters' mechanical HVAC equipment varied from year to year, the amount of its profit varied from year to year.

Drew Adams, ECS's chief financial officer, testified that Little Sisters asked ECS to quote a price for maintaining its mechanical HVAC equipment, that ECS quoted a price, and that Little Sisters awarded ECS the contract to maintain the mechanical HVAC equipment. Adams testified that he never instructed Davis to go to Little Sisters and that, to his knowledge, Davis never went to Little Sisters on behalf of ECS. Adams admitted that ECS would have an advantage in competing with a competitor for a customer's business if it knew the competitor's price for doing that customer's work.

Procedural History

On August 14, 2009, Star sued Davis, ECS, and Doyle, alleging that Davis had breached the confidentiality agreement and that ECS and Doyle had tortiously interfered with Star's contractual relationship with Davis by inducing him to breach the confidentiality agreement. Answering, Davis denied breaching the confidentiality agreement, and ECS and Doyle denied tortiously interfering with Star's contractual relationship with Davis. After a number of continuances, the trial court held a bench trial at which it received evidence ore tenus on July 20, 2011. On August 22, 2011, the trial court entered the following judgment:

“Upon consideration of the testimony and evidence submitted by the parties during the trial of this matter on July 20, 2011, the Court enters judgment in favor of Plaintiff [Star] and against Defendants Mark Davis and Engineered Cooling Services, Inc. in the amount of $1 in nominal damages and $30,000.00 in punitive damages, for a total judgment of $30,001.00. Judgment is rendered in favor of Pete Doyle. Costs are taxed against Defendants Mark Davis and Engineered Cooling Services, Inc.”

On September 19, 2011, ECS filed a Rule 59(e), Ala. R. Civ. P., motion to alter, amend, or vacate the judgment. The motion specifically requested that the trial court alter, amend, or vacate the punitive-damages award on the ground that it was excessive. After hearing ECS's motion, the trial court entered an order denying ECS's motion on September 30, 2011, without stating its reasons for determining that the punitive-damages award was not excessive. ECS then timely appealed to this court.¹

Analysis

I. Liability and Nominal Damages

ECS first argues that the trial court erred in finding in favor of Star with respect to the issue of liability and in awarding Star nominal damages because, ECS says, Star failed to prove (1) that ECS had interfered with Star's contractual relationship with Davis and (2) that Star was damaged as a result. Because the trial court made no specific findings of fact, this court must assume that it made those findings necessary to support its judgment. Transamerica Commercial Fin. Corp. v. AmSouth Bank, N.A., 608 So.2d 375, 378 (Ala.1992). The ore tenus rule applies to those implicit findings, and, therefore, we must presume that those implicit findings are correct unless they are plainly and palpably wrong. Id.

“In ore tenus proceedings, the trial court is the sole judge of the facts and of the credibility of witnesses, and the trial court should accept only that testimony it considers to be worthy of belief. Ostrander v. Ostrander, 517 So.2d 3 (Ala.Civ.App.1987). Further, in determining the weight to be accorded to the testimony of any witness, the trial court may consider the...