Riddick v. Suncoast Beauty College, Inc., 90-03211

• Decision Date: 17 May 1991
• Docket Number: No. 90-03211,90-03211
• Citation: 579 So.2d 855
• Parties: 1991-1 Trade Cases P 69,438, 16 Fla. L. Weekly D1339 Ogelean RIDDICK and Suncoast Beauty School of Florida, Inc., a Florida corporation, Appellants, v. SUNCOAST BEAUTY COLLEGE, INC., a Florida corporation, and JoAnn Phillips, Appellees.
• Court: Florida District Court of Appeals

Page 855

579 So.2d 855

1991-1 Trade Cases P 69,438, 16 Fla. L. Weekly D1339

Ogelean RIDDICK and Suncoast Beauty School of Florida, Inc. a Florida corporation, Appellants, v.SUNCOAST BEAUTY COLLEGE, INC., a Florida corporation, and JoAnn Phillips, Appellees.

No. 90-03211.

District Court of Appeal of Florida Second District.

May 17, 1991.

Aubrey O. Dicus and Margie E. Fraley of Battaglia, Ross, Hastings and Dicus, P.A., St. Petersburg, for appellants.

Charles M. Phillips, Dunedin, for appellees.

THREADGILL, Acting Chief Judge.

Ogelean Riddick files this interlocutory appeal from a trial court order finding that Riddick's operation of a beauty salon violates a covenant not to compete.We reverse.

In 1988, the appellant, Ogelean Riddick, sold the Suncoast Beauty School of Florida, Inc. to the appellees, Suncoast Beauty College, Inc., a Florida corporation, and JoAnn Phillips.The appellant, in exchange for payment of $20,000.00 from the appellees, executed a covenant not to compete which stated in pertinent part:

For a period of five (5) years from date of closing and transfer of the business interest and assets, SUNCOAST BEAUTY SCHOOL OF FLORIDA, INC. and OGELEAN RIDDICK, as an individual, will not directly or indirectly for themselves or on behalf of any person, persons, partnership or corporation engage or attempt to engage in the ownership or operation of a beauty school in Pinellas County, Florida; nor aid or assist anyone else, except the Buyer, to do so within these limits; nor solicit in any manner any past accounts of the business; nor have any interest, directly or indirectly, in such a business; except that Ogelean Riddick, individually may perform inspections for National Accrediting Commission of Cosmetology Arts and Sciences(NACCAS), and may be a free-lance conductor of seminars and a teacher of instructors and students in the beauty school environment.

The appellant subsequently opened a hair salon within one mile of the location of the beauty school.

The appellees filed a complaint against the appellant for breach of the covenant not to compete.The complaint alleged, among other things, that the appellant had solicited past accounts of the business which she had sold to the appellees.The complaint sought temporary and permanent injunctions as well as compensatory and punitive damages.

The trial court bifurcated the issues and held an evidentiary hearing strictly on whether the appellant's operation of the beauty salon violated the covenant not to compete.After the hearing, the trial court found that the appellant's beauty salon "has had such identity with the customer-related portion of the business of [the beauty school], that the said two businesses are 'like businesses' within the meaning of the Covenant Not To Compete so that the Covenant Not To Compete has been violated...."This order is the subject of this appeal.¹

The interpretation of a covenant not to compete is a matter of law to be resolved by the trial court.Atkins v. Litsinger, 513 So.2d 178(Fla. 2d DCA1987).An appellate court is, however, empowered to assess a covenant's meaning.Id., (citingHartford Insurance Company of the Southeast v. City of Sanibel, 500 So.2d 581(Fla. 2d DCA1986)).Upon review, we find that the trial court applied the covenant beyond its express terms.

Non-compete agreements are in the nature of agreements in restraint of trade.As such, they are in derogation of common law, and must be strictly construed against the alleged restraint.Frumkes v. Beasley-Reed Broadcasting of Miami, Inc., 533 So.2d 942(Fla. 3d DCA1988).The operative phrase of the covenant to be examined at the evidentiary hearing was: "nor have any interest, directly or indirectly, in such a business."The term "such a business" necessarily refers to the antecedent term "beauty school."Therefore, the question before the trial court at the hearing was whether the beauty school encompassed a beauty salon.

Testimony at the hearing established that the beauty school has a clinic floor to provide students with an opportunity to apply the theory they have learned.Similarities between a clinic floor and a salon are that both provide hairdressing services for a fee and attempt to attract customers from the general public.In addition, the appellant had previously owned the school and presently owned the salon, and the salon's hairdressers were former students of the school.The appellee, JoAnn Phillips, testified that prior to buying the school, she examined financial records reflecting that, in 1986 and 1987, the percentage ratio between the school's tuition income and that from the clinic floor was 50:50.The...