Ex Parte Howell Engineering and Surveying

• Decision Date: 15 December 2006
• Docket Number: No. 1050579.,1050579.
• Citation: 981 So.2d 413
• Parties: Ex parte HOWELL ENGINEERING AND SURVEYING, INC. (In re Crown Castle USA, Inc. v. Howell Engineering and Surveying, Inc.).
• Court: Alabama Supreme Court

981 So.2d 413

Ex parte HOWELL ENGINEERING AND SURVEYING, INC. (In re Crown Castle USA, Inc. v. Howell Engineering and Surveying, Inc.).

No. 1050579.

Supreme Court of Alabama.

December 15, 2006.

Gregory A. Kennemer and R. Leland Lesley, Birmingham; and Winthrop E. Johnson, Montgomery, for petitioner.

Susan S. Wagner and Christopher C. Haug of Baker, Donelson, Bearman, Caldwell & Berkowitz, PC, Birmingham, for respondent.

LYONS, Justice.

Howell Engineering and Surveying, Inc. ("HES"), sued Crown Castle USA, Inc. ("Crown Castle"), and Gloria Brown, a former employee of HES who had also performed work for Crown Castle. The case was tried before a jury; it rendered a verdict in favor of HES and against Crown Castle and Brown and awarded damages. The trial court entered a judgment on the verdict. Crown Castle and Brown appealed, and this Court transferred the appeal to the Court of Civil Appeals pursuant to § 12-2-7(6), Ala.Code 1975. Brown's appeal was dismissed by agreement of the parties. The Court of Civil Appeals reversed the judgment against Crown Castle, holding that the contract at issue in this case violated § 8-1-1, Ala.Code 1975, and was therefore void. Crown Castle USA, Inc. v. Howell Engineering & Surveying, Inc., [Ms. 2040076, August 19, 2005] 981 So.2d 400 (Ala.Civ.App.2005). HES then petitioned this Court for a writ of certiorari, and we granted certiorari review.

I. Facts and Procedural History

The Court of Civil Appeals stated the facts as follows in its opinion:

"Crown Castle USA, Inc. (`Crown'), leases space on cellular-telephone towers to cellular-telecommunications providers. In conducting its business, Crown uses the services of several types of professionals, including land surveyors and civil or structural engineers. In the years before approximately mid- to late 2002, Crown contracted with local vendors for the surveying and engineering services it required. Howell Engineering and Surveying, Inc. (`HES'), was one of Crown's approved vendors. Before November 2001, HES and Crown operated under a professional-services agreement (`the former agreement'). In November 2001, HES and Crown entered into a new agreement, entitled the `A & E Agreement,' to govern their business relationship, which was explicitly defined in the A & E Agreement as an independent-contractor relationship. The A & E Agreement included provisions governing such things as the procedures for invoicing, the requirement that the contractor have certain insurance, the grounds for termination of the agreement, and confidentiality. The A E Agreement also specifically stated that the agreement was not exclusive and that Crown could award projects to other contractors. In addition, the A & E Agreement contained the following provision in Paragraph 15E, which we will refer to as the `no-solicitation/no-hire provision':

"`Contractor and Crown mutually agree not to solicit nor hire individuals actively employed by the other party's respective organization during and for a period of one (1) year following termination of this Agreement, without the prior written consent of the other party, which consent will not be unreasonably withheld.'

"In October 2001, before the execution of the A & E Agreement between Crown and HES, Gloria Brown, HES's only civil structural engineer, sought to become an approved vendor for Crown. Brown had decided to start her own business; however, she continued to work for HES. In February 2002, Brown began working on projects assigned to her by Crown. The employee handbook provided to Brown and other employees by HES contained the following provision:

"`MOONLIGHTING

"`Moonlighting is strongly discouraged and must be approved in advance by the President. No moonlighting will be permitted if it is a conflict of interest with our company. Failure to have other employment authorized in advance is grounds for immediate dismissal.'

"Sometime around March 15, 2002, Larry Howell, the president of HES, learned that Brown was doing projects for Crown independently. Immediately after he discovered that Brown was working for Crown, Larry Howell terminated Brown's employment with HES. He testified that he had `laid [Brown] off' and that he had explained to her that the business from Crown was slowing down and that he could not afford to continue employing her.

"HES sued Crown, alleging that Crown had breached the A & E Agreement and the former agreement between the parties and that Crown had intentionally interfered with HES's business relations. HES also sued Brown, alleging that Brown had intentionally interfered with HES's business relations and that Brown had converted certain items of property owned by HES. The intentional-interference-with-business-relations claims against both Brown and Crown were disposed of by the entry of summary judgments in favor of Brown and Crown. The remaining claims proceeded to a jury trial, at which the breach-of-contract claim based on the former agreement between Crown and HES was voluntarily withdrawn by HES. After Crown's and Brown's respective pre-verdict motions for a judgment as a matter of law (`JML') at the close of HES's evidence and at the close of all the evidence were denied by the trial court, the remaining breach-of-contract claim based on Crown's alleged breach of the A & E Agreement and the conversion claim against Brown were submitted to the jury. The jury returned a verdict in favor of HES and against both Brown and Crown, awarding HES $618,634 in damages on its breach-of-contract claim against Crown and $7,300 in compensatory damages and $73,000 in punitive damages on its conversion claim against Brown. Crown and Brown each filed postjudgment motions; Crown's postjudgment motion was denied, but the trial court granted Brown's postjudgment motion in part remitting the punitive-damages award to $50,000. Both Crown and Brown appealed to the Alabama Supreme Court. Brown's appeal was later dismissed by agreement of the parties.

"Later, HES filed a garnishment action against Crown and Brown to recover from Crown a portion of the $57,300 judgment against Brown. The trial court determined that Crown owed Brown $24,600, which amount was subject to garnishment by HES. Crown appealed that judgment to this court (case no. 2031147). Crown's appeal of the judgment entered on the jury's verdict was then transferred to this court, pursuant to Ala.Code 1975, § 12-2-7(6), assigned case no. 2040076, and the two appeals were consolidated."

Crown Castle, 981 So.2d at 403-04 (footnote omitted).

The Court of Civil Appeals reversed the trial court's judgment as to the breach-of-contract claim and remanded the case with instructions that the trial court enter a judgment in favor of Crown Castle.¹ Relying upon Dyson Conveyor Maintenance, Inc. v. Young & Vann Supply Co., 529 So.2d 212 (Ala.1988); and Defco, Inc. v. Decatur Cylinder, Inc., 595 So.2d 1329 (Ala.1992), the Court of Civil Appeals held that the no-hire provision in the A & E Agreement was void under § 8-1-1, Ala. Code 1975,² because HES did not have a concomitant noncompetition agreement with Brown.

"The no-solicitation/no-hire provision in the A & E Agreement between Crown and HES is only void with respect to Brown because HES does not have a noncompetition agreement with her. If HES had had a noncompetition agreement with Brown, the provision would have been enforceable to the extent that it did not impose a greater restraint than that noncompetition agreement."

981 So.2d at 413.

In its petition for a writ of certiorari, HES first contended that the Court of Civil Appeals' holding that the no-hire provision was void because HES did not have a noncompetition agreement with Brown conflicts with this Court's holding in Southeast Cancer Network, P.C. v. DCH Healthcare Authority, 869 So.2d 452, 456 (Ala.2003). We held in Southeast Cancer that a partial restraint of trade does not fall within the conduct condemned by § 8-1-1. HES argues that the no-hire provision was only a partial restraint of trade in that it did not prevent Brown from rendering engineering services for employers other than Crown Castle. Thus, according to HES, there is no basis upon which to declare the no-hire provision void.

HES next contended that the Court of Civil Appeals' holding that Crown Castle had standing to challenge the no-hire provision also conflicts with Southeast Cancer, in which this Court questioned whether one of the parties had standing to invoke § 8-1-1 but did not reach that issue, deciding the case on another ground. Although the proper ground for seeking certiorari review of the standing issue would have been Rule 39(a)(1)(C)—the material question is one of first impression—rather than conflict because the issue of standing was not decided in Southeast Cancer, we nevertheless granted the writ as to this issue because the question of standing goes to our subject-matter jurisdiction.

Finally, HES contended that the Court of Civil Appeals' refusal to hold that Crown Castle was equitably estopped from asserting the invalidity of the no-hire provision conflicts with Pierce v. Hand, Arendall, Bedsole, Greaves & Johnston, 678 So.2d 765 (Ala.1996), in which this Court recognized that, on proper proof, a party could be equitably estopped from asserting § 8-1-1.

II. Standard of Review

A. Standing

This Court recently discussed the appropriate standard of review to be applied to the question of standing.

"The standard of review applicable to a determination of standing was accurately set forth by Judge Crawley in Medical Association of the State of Alabama v. Shoemake, 656 So.2d 863, 865 (Ala.Civ.App.1995) (`No presumption of correctness exists as to the trial court's application of the law to the facts. Jayroe v. Hall, 624 So.2d 522 (Ala.1993). The issue of standing presents a pure question of law, and the trial court's ruling on that issue is entitled to no deference on appeal. Richards v. Cullen, 152 Wis.2d 710, 712, 449...