SCI Funeral Services of Florida, Inc. v. Henry, 3D00-3607.

• Decision Date: 20 November 2002
• Docket Number: No. 3D00-3607.,3D00-3607.
• Citation: 839 So.2d 702
• Parties: SCI FUNERAL SERVICES OF FLORIDA, INC., Appellant, v. Anel HENRY, Appellee.
• Court: Florida District Court of Appeals

839 So.2d 702

SCI FUNERAL SERVICES OF FLORIDA, INC., Appellant, v. Anel HENRY, Appellee.

No. 3D00-3607.

District Court of Appeal of Florida, Third District.

November 20, 2002.

Rehearing and Rehearing Denied March 7, 2003.

Shook, Hardy & Bacon and Courtney B. Wilson and Gaye L. Huxoll, Miami, for appellant.

Clyne & Self and Reginald J. Clyne, Coral Gables, and Donnise A. Desouza, for appellee.

Before COPE, GREEN and RAMIREZ, JJ.

Rehearing and Rehearing En Banc Denied March 7, 2003.

PER CURIAM.

This is an appeal of an adverse judgment after jury verdict in a lawsuit for tortious interference with a contractual relationship. We affirm.

I.

Plaintiff-appellee Anel Henry was employed by defendant-appellant SCI Funeral Services of Florida, Inc. as a group leader in the sales department. Upon being promoted to that position, plaintiff was required to execute a non-compete agreement. The contract contained a non-compete provision which states:

8. Non-Compete Provisions. For a period of twelve (12) months after my employment has been terminated for any reason with or without cause, I will not directly or indirectly solicit or sell any products, goods or services similar to, related to or competitive with the Company's products, goods or services in Dade County, Florida.

....

13. Notice. I authorize the Company to notify others, including clients and customers and my future employers, of the terms of this Agreement and my responsibilities.

R. 17-19.

In the summer of 1994, a female employee made a charge of sexual harassment against the plaintiff.¹ SCI began an investigation and temporarily suspended the plaintiff.

During the suspension, the plaintiff received orders from the United States Army to report for military reserve duty in Panama, beginning on August 29, 1994. The plaintiff left the United States for Panama on August 22.

The evidence showed that on August 24 or 25, SCI employee Evelyn Ortiz, called the plaintiff in Panama to advise him that the sales manager was terminating his employment. In the meantime, the Army extended the plaintiff's tour of duty. The plaintiff eventually returned to Miami from Panama in July 1995. On his return the plaintiff contacted SCI and asked to resume employment. SCI refused.

On August 15, 1995, the plaintiff applied for work with Woodlawn Park Cemetery Company, a competitor of SCI. Woodlawn made an offer of employment to commence in October. Woodlawn's management approved the contract on September 5, and the plaintiff began work with Woodlawn in October.

In November 1995, SCI's counsel sent a letter to the plaintiff, with a copy to Woodlawn, threatening suit for violation of the non-compete agreement.² It was SCI's position that SCI had not formally terminated the plaintiff until his August 1995 return from military duty, and that the twelve-month period began to run in August of 1995, not in August of 1994 when the plaintiff departed for Panama.

Upon receiving its copy of the demand letter, Woodlawn called SCI to inquire about SCI's intentions. An SCI officer advised that SCI intended to sue Woodlawn if Woodlawn employed the plaintiff. As a result, on November 22, 1995, Woodlawn fired the plaintiff.

The plaintiff's position was that his twelve-month non-compete period had expired. By his analysis, he had ceased work with SCI in August of 1994 and did not report to work with Woodlawn until October of 1995. He contended that the non-compete agreement by its terms was no longer enforceable.

Woodlawn advised the plaintiff that they would rehire him if he could obtain a release from SCI. The plaintiff attempted to discuss this with his former supervisor at SCI, but the supervisor would not speak with him.

The plaintiff retained counsel, who in February 1996 wrote to SCI's counsel requesting a release. SCI countered with a proposal to exchange mutual releases. The plaintiff refused because he did not want to give up any potential cause of action he may have against SCI.

In April 1996 plaintiff's counsel persuaded Woodlawn that the plaintiff's non-compete period with SCI had expired. Woodlawn rehired the plaintiff. SCI never filed suit to enforce the non-compete agreement.

II.

The plaintiff sued SCI for damages for having him terminated from his job at Woodlawn. He alleged breach of contract (Count I), reasoning that the non-compete period had expired and that SCI had breached the contract by threatening suit on an expired non-compete agreement. The plaintiff alleged alternatively (Count II) that SCI had tortiously interfered with his employment with Woodlawn.

In Count III, the plaintiff alleged that SCI had violated the Uniformed Services Employment and Reemployment Rights Act of 1994, 38 U.S.C. § 4311. That statute prohibits a denial of reemployment on account of a person's performance of military duty. The plaintiff claimed that SCI had violated the federal statute by terminating him while he was away on military reserve duty, and refusing to reemploy him on his return.

Because the plaintiff's complaint included a federal cause of action, SCI removed the case to the United States District Court for the Southern District of Florida. Finding that SCI's reasons for terminating the plaintiff were not related to his military service, the court entered summary judgment in favor of SCI on the federal statutory claim.

The federal court also found that there had been no breach of contract, and entered summary judgment in favor of SCI on that claim.³ The federal court declined to exercise jurisdiction over the tortious interference claim, and remanded it to the Florida courts for consideration.

Upon the return of the case to the Florida court, SCI moved to dismiss, arguing that the tortious interference cause of action was barred by the litigation privilege and the privilege for settlement discussions. The pretrial motions, as well as the trial objections and motion for directed verdict, were denied.

The jury returned a verdict for the plaintiff for $500,000, which the trial court remitted to $350,000. SCI has appealed.

III.

SCI argues that its demand letter and the conversations thereto were absolutely privileged under the litigation privilege recognized by the Florida Supreme Court in Levin, Middlebrooks, Mabie, Thomas, Mayes, & Mitchell, P.A. v. U.S. Fire Insurance Co., 639 So.2d 606 (Fla.1994). The Levin court held that the litigation privilege bars causes of action in tort for statements made in connection with a judicial proceeding.⁴ SCI argues that the litigation privilege exists for a demand letter which threatens litigation, and any communications pertinent thereto.

We decline to reach this issue because we conclude that SCI is estopped from raising it. We reach that conclusion on the following analysis.

It stands to reason that an employer cannot threaten an employee with litigation over a non-compete agreement which has expired. If the employer wrongly does so, thus causing the employee to lose his or her job, there must necessarily be a judicial remedy for such conduct.

In the present case, SCI successfully persuaded the federal court that the plaintiff in this case did not have a remedy by way of an action for breach of contract. To our way of thinking it is inconsistent for SCI then to argue in the Florida courts that the plaintiff does not have an action in tort. We therefore conclude that SCI is estopped from raising the argument that there is an absolute bar to the tort claim on account of the litigation privilege. For the same reason we decline to entertain SCI's argument under the economic loss rule. See Blumberg v. USAA Casualty Ins. Co., 790 So.2d 1061, 1066 (Fla.2001); Bernard Berman, P.A. v. P. Gary Stern, M.D., P.A., 731 So.2d 148, 149 (Fla. 4th DCA 1999).

SCI argues that it also has a privilege to protect its own pecuniary interest under the non-compete agreement. See Ethyl Corp. v. Balter, 386 So.2d 1220, 1225 (Fla. 3d DCA 1980). Under the facts of the present case, however, SCI's conduct was not protected by such a privilege.

The non-compete agreement provided that upon separation from employment, the plaintiff would observe a twelve-month non-competition period. It necessarily follows that after the twelve-month non-compete period, the employee was allowed to work in a competing business.

In August 1994, the plaintiff left the United States on military duty and did not return until July 1995. On his return, he asked SCI to rehire him and SCI refused.

In mid-August, the plaintiff applied for work with Woodlawn, who offered him a position to begin in October. Thus, when the plaintiff began work with Woodlawn, it had been fourteen months since his departure from SCI on military leave. There is no claim that the plaintiff engaged in any competing work during the twelve months following his departure for Panama.

Under any reasonable analysis, the twelve-month non-compete period began with the plaintiff's departure from Miami in August of 1994, and expired in August of 1995. SCI wrote its demand letter in November of 1995. SCI had no privilege to enforce an expired non-compete agreement against the plaintiff. Thus, SCI had no pecuniary interest privilege under the facts of the present case.

SCI argues that the plaintiff's absence for military duty did not count against the twelve months non-compete period. SCI argues that the plaintiff was not formally separated from SCI until his return from Panama, and that SCI could "tack" the non-compete period on to the end of the military leave.

We reject SCI's argument on this point. SCI contracted for a twelve-month non-compete period, and that is what SCI received. No competition was taking place during the military leave, and the military leave should have been counted as part of the non-compete period.

SCI argues that the twelve-month period cannot be deemed to begin until July 1995, because when the plaintiff applied for unemployment compensation, he stated that his...