Nail Boutique, Inc. v. Church

• Decision Date: 07 October 1988
• Docket Number: No. 15459,15459
• Citation: 758 S.W.2d 206
• Parties: NAIL BOUTIQUE, INC., Respondent, v. Jane CHURCH, Appellant.
• Court: Missouri Court of Appeals

Page 206

758 S.W.2d 206

NAIL BOUTIQUE, INC., Respondent, v. Jane CHURCH, Appellant.

No. 15459.

Missouri Court of Appeals,

Southern District,

Division One.

Oct. 7, 1988.

Kay S. Graff, Springfield, for appellant.

Lynn E. Heitman, Springfield, for respondent.

CROW, Presiding Judge.

Defendant Jane Church appeals from a judgment enforcing, by injunction, a non-compete covenant in an "Employment Agreement" between her and plaintiff Nail Boutique, Inc. The judgment bars defendant "from working in the area of the application of cosmetic processes to fingernails and toenails and/or the application of artificial nails within the area of Springfield, Missouri, specifically within fifty miles of the Greene County Courthouse, for a period of two years following the termination of her employment with the Plaintiff, that period to terminate on October 31, 1988." ¹

Defendant avers the trial court erred in (1) failing to consider the adequacy of consideration, as "the law requires adequate consideration to support a contract containing a covenant not to compete," and (2) finding that plaintiff had a "protectible interest," as plaintiff failed to show "protectible interests sufficient to support the injunction."

Our review in this judge-tried case is governed by Rule 73.01(c) ² and Murphy v. Carron, 536 S.W.2d 30, 32 (Mo. banc 1976). The judgment will be sustained unless there is no substantial evidence to support it, unless it is against the weight of the evidence, unless it erroneously declares the law, or unless it erroneously applies the law. In determining the sufficiency of the evidence we are mindful that the trial judge determined the credibility of the witnesses, and could accept or reject all, part or none of the testimony. Mills v Cameron Mutual Insurance Co., 674 S.W.2d 244, 246-47 (Mo.App.1984); Cusumano v. Outdoors Today, Inc., 608 S.W.2d 136, 139 (Mo.App.1980). We consequently accept as true the evidence and permissible inferences which may be drawn favorable to the prevailing party, and disregard contradictory testimony. Elliott v. West, 665 S.W.2d 683, 689-90 (Mo.App.1984); Ayers Plastics Co. v. Packaging Products Corp., 597 S.W.2d 177, 179 (Mo.App.1979). All fact issues upon which no specific findings were made by the trial court shall be considered as having been found in accordance with the result reached, and the judgment will be upheld on any reasonable theory supported by the evidence. Rule 73.01(a)(2); O'Bar v. Nickels, 698 S.W.2d 950, 955 (Mo.App.1985); Lohrmann v. Carter, 657 S.W.2d 372, 376 (Mo.App.1983).

Viewed per the above principles, the evidence established that on May 15, 1984, plaintiff and defendant signed the agreement referred to in the first paragraph of this opinion. It provided, among other things, that plaintiff employed defendant as a cosmetician, that defendant would devote eight hours per day, five days per week, exclusively to plaintiff's business, that defendant would be compensated by receiving a percentage of her "gross take each week," and that employment "shall be from day to day and either [plaintiff] or [defendant] may terminate the employment relationship at will." The agreement further said:

"[Defendant] promises that during the term of ... her employment with [plaintiff] and also after ... her employment with [plaintiff] shall terminate, ... she shall not engage, within two (2) years in the business of nail preparation and the application of cosmetic processes and devices to nails, either directly or indirectly as an employee of any entity or as a self-employed person within the City of Springfield, MO, or within an area inside a radius of fifty (50) miles from the Greene County Circuit Courthouse, in Springfield, Missouri, and further, that [defendant] shall not, at any time, divulge or make known any of the secrets, plans, methods, or processes by which said cosmetic work is conducted and carried on."

The business of plaintiff--a corporation--was described by its president, Sherry Wirth, as "[t]he application of sculptured nails, some manicures, pedicures, silk wraps, a process called lamplight." Mrs. Wirth explained that sculptured nails are "the same thing as artificial nails."

Mrs. Wirth recounted that defendant knew the "basic techniques" for applying sculptured nails when defendant went to work for plaintiff, but that Mrs. Wirth had to teach defendant to do such work in a manner acceptable to Mrs. Wirth, i.e., one that "separates the professionalism from anyone on the street." Mrs. Wirth recalled she monitored defendant's work several months before allowing defendant to work on clients without supervision.

In late September or early October of 1986, according to Mrs. Wirth, defendant said she wanted to reduce her days of work each week from five to four, as she needed to be home in the middle of the week. Soon thereafter two of plaintiff's other employees complained to Mrs. Wirth that there were too many employees doing nails at plaintiff's place of business, consequently their incomes had dropped.

Mrs. Wirth testified she and her husband--plaintiff's sole stockholders--decided to lay off one employee (not defendant) and also decided that inasmuch as defendant was then working four days a week, her days would be arranged so she could be on duty at the busiest times. The plan, said Mrs. Wirth, was for defendant to work Monday and Saturday, her regular days, and "Thursday and Friday from noon to eight or five to eight." Mrs. Wirth added that defendant was told she could choose to work those hours or be laid off.

The proposition, said Mrs. Wirth, was submitted to defendant on Friday, October 31, 1986. The following Monday, according to Mrs. Wirth, defendant said her fiancee was not in favor of her working those hours and she thought she ought to take a layoff. That was defendant's last day of work. Mrs. Wirth explained she expected defendant to return to work before Christmas, as "business usually picks up considerably right before Christmas."

On December 4, 1986, defendant met with Mrs. Wirth. On that occasion, testified Mrs. Wirth, defendant said she wanted to "do nails" but did not want to come back to plaintiff's place of business. Mrs. Wirth reminded defendant of the non-compete clause, stating: "If you find an employer who would like to buy out your noncompetition clause in your contract, I would be willing to discuss this with them or, if you would like to buy it out yourself, then, you know, you can talk it over and get back with me."

Mrs. Wirth never heard from defendant again, but in early February, 1987, learned that defendant was working as a manicurist and nail artist at a competing salon within the area covered by the non-compete clause.

Plaintiff immediately commenced this action. A temporary restraining order was promptly issued and remained in effect until replaced by a preliminary injunction, which prevailed until entry of the judgment from which this appeal is taken.

Defendant's first assignment of error maintains the trial court wrongly failed to consider the adequacy of consideration. The point is based on the following excerpt from a memorandum prepared by the trial court after trial and prior to entry of judgment: "An enforceable contract exists between the parties which is supported by some consideration. The adequacy of consideration may be questionable but is not considered herein."

Defendant insists the only right granted her in the parties' agreement was the right to leave plaintiff's employ at will, a right, according to defendant, that "was an empty one in view of the terms of the covenant not to compete." Defendant asserts that all rights and benefits flowed to plaintiff, "resulting in a unilateral contract lacking in consideration sufficient to support a covenant not to compete."

Defendant cites two Missouri cases in regard to her first point: USA Chem, Inc. v. Lewis, 557 S.W.2d 15 (Mo.App.1977), and Reed, Roberts Associates, Inc. v. Bailenson, 537 S.W.2d 238 (Mo.App.1976).

In USA Chem the employee was hired as a sales representative on a commission basis, was trained by the employer in the methods of selling its products, and became acquainted with the customers and business methods of the employer. The employment contract, which was terminable at any time by either party without notice, contained a non-compete clause comparable to the one in the instant case as to time and area. The employee in USA Chem remained with the employer seven years, receiving the commissions called for by the contract. He then resigned and began selling products similar to and in competition with his former employer. The latter sought enforcement of the non-compete clause. The employee argued, among other things, that the non-compete clause was unenforceable against him because the contract lacked mutuality.

Rejecting the argument, the appellate court explained that mutuality of obligation is often confused with consideration; that consideration is essential but mutuality of obligation is not, unless want of mutuality would leave one party without a valid or available consideration for his promise. 557 S.W.2d at 24. The appellate court held there was good and sufficient consideration flowing to the employee, i.e., the full-time employment...