Flammer v. Patton, No. 38827

CourtUnited States State Supreme Court of Florida
Writing for the CourtCARLTON; ROBERTS
Citation245 So.2d 854
Docket NumberNo. 38827
Decision Date17 March 1971
PartiesRussell B. FLAMMER, Petitioner, v. Glenn E. PATTON, William E. Thompson, Robert A. Tucker, Benjamin P. Frye and Francis X. Crowley, as Trustees in charge of the Employees' Pension and Death Benefit Plan of Beneficial Finance Co., Respondents.

Page 854

245 So.2d 854
Russell B. FLAMMER, Petitioner,
v.
Glenn E. PATTON, William E. Thompson, Robert A. Tucker, Benjamin P. Frye and Francis X. Crowley, as Trustees in charge of the Employees' Pension and Death Benefit Plan of Beneficial Finance Co., Respondents.
No. 38827.
Supreme Court of Florida.
March 17, 1971.

Page 855

J. A. McClain, Jr., of McClain, Turbiville & Heller, Tampa, for petitioner.

Thomas C. MacDonald, Jr., of Shackleford, Farrior, Stallings & Evans, Tampa, for respondents.

CARLTON, Justice:

We now consider whether respondents, as trustees of a loan corporation's pension fund, have the power to withhold petitioner's pension payments so long as he is employed by the loan department of a national bank. In a declaratory judgment proceeding initiated by petitioner, Circuit Court, Hillsborough County, ruled that the trustees were properly exercising powers reserved to them under a provision in the loan corporation's pension plan. The provision permitted the trustees to suspend or terminate benefits to any retiree considered by the trustees to be in the employ of a competitor.

The District Court of Appeal, Second District, affirmed upon petitioner's appeal through an opinion reported at 223 So.2d 750 (2nd D.C.A. Fla.1970). Our jurisdiction results from a conflict between the District Court's opinion and Davis v. Ebsco Industries, Inc., 150 So.2d 460 (3rd D.C.A. Fla.1963). Article V, Section 4(2), Florida Constitution, F.S.A. By our decision today, we reverse the District Court and remand this cause with instructions for further proceedings.

Petitioner retired on December 31, 1964, after thirty-three years of service with Beneficial Finance Company, or with one of its subsidiary small loan companies. He was eligible for monthly pension benefits in the amount of $256.38 under a noncontributory pension plan, known as the 'Employees' Pension and Death Benefit Plan,'

Page 856

which was put into effect after he had been with Beneficial for several years. The plan included the following provision under Section 2A(6):

'Any right or claim to any Retirement Allowance which any employee, retired employee or his beneficiary may have (a) shall terminate, or shall be discontinued or suspended for such periods as the Trustees may determine, if the Trustees shall find that such employee or retired employee has been engaged in a business or occupation in competition with that of the Corporation or any subsidiary thirty days or more after the Trustees have given him written notice to cease his participation in such business or occupation * * *.'

Several months after his retirement, petitioner was taken on by the National Bank of Tampa as a loan officer, discharging duties as head of the installment loan department. The respondent Trustees notified petitioner that he was considered as 'employed by a competitor' under Section 2A(6), and that his benefits would be suspened unless he left the National Bank. Petitioner gave the Trustees the following response: (1) that the National Bank did not seek or solicit the kind of loan business offered by Beneficial; (2) that a check of transactions indicated that Beneficial's clients very rarely did business with the National Bank's loan department; (3) that the National Bank had never advertised his presence or sought to make capital by drawing attention to his employment with the Bank. The Trustees adhered to their position, pointing out that they could not monitor his activities, and that to make an exception in his case would be to create an undesirable precedent. Petitioner's benefits were suspended. 1

In declaratory judgment proceedings, petitioner questioned the sufficiency of the evidence of competition and attacked Section 2A(6) of the pension plan as void under Fla.Stat. § 542.12, F.S.A., a statute controlling contracts in restraint of trade. The Circuit Court held that the plan was analogous to an employment contract, and that under Barr v. Sun Life Assurance Company of Canada, 146 Fla. 55, 200 So. 240 (1941), such contracts, by analogy, would not be considered in violation of Fla.Stat. § 542.12, F.S.A. The Circuit Court also held that sufficient evidence was introduced into the record to support a finding of competition by the Trustees. The District Court affirmed the judgment rendered below, finding that the analogy was valid and that the evidence of competition was sufficient. Petitioner contests both of these holdings.

In our view, this case is to be distinguished from Barr, because two inherently different concepts are involved. In Barr, an insurance agent left one insurance company for employment with another, and then sought to obtain commissions on policies he had handled for the first company. The commission contract stated that commissions would be given to agents for the first ten years of the policy life as each yearly renewal payment from the policyholder was received. The contract also stated that these renewal commissions would be forfeited if the agent left and took work with a competitor.

In its review of the case, this Court held that this was not a contract in restraint of trade because nothing in it precluded the agent from working elsewhere, and that by contract the agent had agreed to cooperate with the company for a period of ten years for each policy. Two significant factors regarding Barr should be recognized. First, the contract referred to specific policies which the company would have to continue servicing even while the agent was working for a competitor. Second,

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the period of each contract obligation was for a specific period of ten years, after which the agent was free to do whatever he wished.

In the instant case, the benefits were not the result of specific policies or negotiations or contracts, but rather the benefits accrued as the result of Years of service; thus, no contract was being protected as in Barr. Also, in Barr an agent was free to receive benefits For a specific period, and then to join another company without loss, whereas in the instant case, the restrictions on receipt of benefits continue until the death of the petitioner.

This last factor--that the restrictions are unending--brings us to the paramount issue in this case: whether Fla.Stat. § 542.12, F.S.A., embraces non-competition provisions...

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30 practice notes
  • State v. Aiuppa, No. 44264
    • United States
    • United States State Supreme Court of Florida
    • May 1, 1974
    ...of a sister state, it is amendable to the same construction that its prototype has been given in the sister state. Flammer v. Patton, 245 So.2d 854 (Fla.1971); Atlantic Coast Line R. Co. v. Beazley, 54 Fla. 311, 45 So. 761 Statutes adopted from another state may be deemed to have been adopt......
  • Closet Maid v. Sykes, No. 1D98-660.
    • United States
    • Court of Appeal of Florida (US)
    • February 15, 2000
    ...on the statute by the courts of the state whose statute provided the `model' in determining the proper construction"); Flammer v. Patton, 245 So.2d 854, 858-59 (Fla.1971) ("We have long held that when our Legislature adopts a statute from another state, we should adopt that state's judicial......
  • Bonar v. Barnett Bank of Jacksonville, NA, No. 77-404-Civ-J-M.
    • United States
    • United States District Courts. 11th Circuit. United States District Court of Middle District of Florida
    • March 31, 1980
    ...prior to their proscription by ERISA, so long as they contained reasonable limitations relating to time and place. Flammer v. Patton, 245 So.2d 854 (Fla.1971). See also Fla.Stat. § 542.12(2)(a) (1979).8 In view of the evidence adduced at trial, neither the resultant time limitation (five mo......
  • Woodward v. Cadillac Overall Supply Co., No. 4
    • United States
    • Supreme Court of Michigan
    • April 21, 1976
    ...Moreover, under these statutes, unlimited non-competition forfeiture clauses have invariably been held invalid. Flammer v. Patton, 245 So.2d 854 (Fla. 1971), held that a non-competition forfeiture clause in a retirement plan which was unlimited in time and area breached a Florida statute wh......
  • Request a trial to view additional results
30 cases
  • State v. Aiuppa, No. 44264
    • United States
    • United States State Supreme Court of Florida
    • May 1, 1974
    ...of a sister state, it is amendable to the same construction that its prototype has been given in the sister state. Flammer v. Patton, 245 So.2d 854 (Fla.1971); Atlantic Coast Line R. Co. v. Beazley, 54 Fla. 311, 45 So. 761 Statutes adopted from another state may be deemed to have been adopt......
  • Closet Maid v. Sykes, No. 1D98-660.
    • United States
    • Court of Appeal of Florida (US)
    • February 15, 2000
    ...on the statute by the courts of the state whose statute provided the `model' in determining the proper construction"); Flammer v. Patton, 245 So.2d 854, 858-59 (Fla.1971) ("We have long held that when our Legislature adopts a statute from another state, we should adopt that state's judicial......
  • Bonar v. Barnett Bank of Jacksonville, NA, No. 77-404-Civ-J-M.
    • United States
    • United States District Courts. 11th Circuit. United States District Court of Middle District of Florida
    • March 31, 1980
    ...prior to their proscription by ERISA, so long as they contained reasonable limitations relating to time and place. Flammer v. Patton, 245 So.2d 854 (Fla.1971). See also Fla.Stat. § 542.12(2)(a) (1979).8 In view of the evidence adduced at trial, neither the resultant time limitation (five mo......
  • Woodward v. Cadillac Overall Supply Co., No. 4
    • United States
    • Supreme Court of Michigan
    • April 21, 1976
    ...Moreover, under these statutes, unlimited non-competition forfeiture clauses have invariably been held invalid. Flammer v. Patton, 245 So.2d 854 (Fla. 1971), held that a non-competition forfeiture clause in a retirement plan which was unlimited in time and area breached a Florida statute wh......
  • Request a trial to view additional results

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