Preferred Research, Inc. v. Reeve

• Decision Date: 01 June 1987
• Docket Number: No. 0969,0969
• Citation: 292 S.C. 545,357 S.E.2d 489
• Parties: PREFERRED RESEARCH, INC., Appellant, v. Brian C. REEVE, Respondent.
• Court: South Carolina Court of Appeals

Page 489

357 S.E.2d 489

292 S.C. 545

PREFERRED RESEARCH, INC., Appellant, v. Brian C. REEVE, Respondent.

No. 0969.

Court of Appeals of South Carolina.

Submitted April 15, 1987.

Decided June 1, 1987.

Frank S. Potts, of Lewis, Lewis, Bruce & Truslow, P.A., Columbia, for appellant.

Frank A. Barton, of Oswald & Floyd, P.A., West Columbia, for respondent.

SHAW, Judge:

Appellant, Preferred Research, Inc., appeals a partial summary judgment granted to respondent, Brian C. Reeve, in Preferred's action to enforce a noncompetition agreement between the parties. We affirm.

In June of 1985, Preferred and Reeve entered into a licensing agreement in which Reeve agreed to perform real estate title work and related services for Preferred. The agreement was for ten years and covered a twelve county area in South Carolina. In March of 1986, Preferred terminated the agreement. Reeve, an attorney, continued to perform real estate work, including work for at least two entities he had worked with while under the licensing agreement with Preferred.

In April of 1986, Preferred brought an action against Reeve, seeking an injunction to enforce the licensing agreement. Preferred argued Reeve was violating the agreement's noncompetition clause by continuing to work with Preferred's customers. Preferred also sought an accounting and the return of certain property in Reeve's possession. Reeve answered and claimed the noncompetition clause is void.

Subsequently, Reeve moved for judgment on the pleadings under Rule 12(c), S.C.R.C.P., or in the alternative, for summary judgment under Rule 56, S.C.R.C.P. Since Reeve submitted his deposition and other exhibits for consideration, the trial judge correctly treated the motion as one for summary judgment. Rule 12(c), S.C.R.C.P. The trial judge ruled the noncompetition clause is void and granted Reeve partial summary judgment on the issues of the noncompetition clause, the accounting, and attorney's fees. The judge ordered the issue of the return of property be determined by a trial on the merits.

The dispositive issue presented to this court by Preferred's appeal is whether the trial judge erred in determining the noncompetition clause is unreasonable and void as a matter of law.

The trial judge ruled the noncompetition clause is unreasonable and void because it is overbroad.

The parties agree, and the judge found, this agreement is governed by Georgia law. The agreement provides in part:

In the event of termination of this Agreement for any reason whatsoever, Licensee shall not thereafter engage either directly or indirectly as principal or employee, alone or in association with others, in a similar business, in any capacity, to that licensed and established hereunder within an airline radius of twenty-five (25) miles of any of Licensee's places of business established under this Agreement and within the Territory described in Exhibit "B" attached hereto and by reference incorporated herein, for a period of twelve (12) months.

(Emphasis added).

This agreement is a licensing agreement, or essentially, like a franchise agreement. Thus, in analyzing the noncompetition clause, the agreement must be treated as an employment contract. Watson v. Waffle House, Inc., 253 Ga. 671, 324...