Whitby v. Infinity Radio Inc.

• Decision Date: 24 January 2007
• Docket Number: No. 4D05-3888.,4D05-3888.
• Citation: 951 So.2d 890
• Parties: Elena WHITBY a/k/a Jennifer Ross, James Crystal Licenses, LLC, James Crystal Holdings, Inc., and James Crystal Enterprises, LLC, Appellants, v. INFINITY RADIO INC., Appellee.
• Court: Florida District Court of Appeals

951 So.2d 890

Elena WHITBY a/k/a Jennifer Ross, James Crystal Licenses, LLC, James Crystal Holdings, Inc., and James Crystal Enterprises, LLC, Appellants, v. INFINITY RADIO INC., Appellee.

No. 4D05-3888.

District Court of Appeal of Florida, Fourth District.

January 24, 2007.

Rehearing Denied April 13, 2007.

Robert G. Haile, Jr., of Haile, Shaw & Pfaffenberger, P.A., North Palm Beach, for appellants James Crystal Licenses, LLC, James Crystal Holdings, Inc., and James Crystal Enterprises, LLC.

Nancy Little Hoffmann of Nancy Little Hoffmann, P.A., Pompano Beach, for appellant Elena Whitby a/k/a Jennifer Ross.

Alan Rosenthal and Natalie J. Carlos of Adorno & Yoss, LLP, Miami, for appellee.

HAZOURI, J.

James Crystal Licenses, LLC ("Licenses"), James Crystal Holdings, Inc. ("Holdings"), James Crystal Enterprises, LLC ("Enterprises"), and Elena Whitby ("Whitby") ("Appellants") appeal the trial court's entry of partial summary judgment in favor of Infinity Radio Inc. ("Infinity") on the enforceability of a non-compete covenant, the trial court's grant of a directed verdict in Infinity's favor on Appellants' counterclaim for wrongful injunction damages, and a verdict awarding Infinity compensatory and punitive damages. Infinity cross-appeals the trial court's denial of its request for prejudgment interest on its damages award for breach of contract against Whitby and the trial court's granting of Appellants' motion to strike the punitive damages claim against Holdings and Enterprises. We reverse and remand for a new trial.

Whitby, who is known on-air as "Jennifer Ross," was employed as a radio personality by WRMF-FM 97.9 ("WRMF"), in West Palm Beach, for fifteen years, beginning in 1980. On May 19, 1995, Whitby entered into an employment agreement with OmniAmerica Group ("1995 Agreement"), the owner of WEAT-FM 104.3 ("WEAT"). The 1995 Agreement provided for a five-year term and gave WEAT the right to two options to renew for five years each, with a right of first refusal provision. The 1995 Agreement also contained a non-compete covenant, which prohibited Whitby from appearing on radio or television and from working for any competing business within 125 miles of WEAT, for 12 months after leaving WEAT. Further, the 1995 Agreement contained an exclusivity provision, preventing Whitby from discussing or entering into any agreement with any other entity concerning her present or future services during her employment with WEAT.

Whitby started broadcasting at WEAT on September 25, 1995. OmniAmerica sold WEAT to Chancellor Broadcasting, which in turn sold the station to American Radio Systems in 1996. American Radio then merged with CBS Radio in 1998, which has since changed its name to Infinity.

In February 1999, Whitby and Infinity signed an "Amendment to Letter Agreement" ("1999 Amendment"), which gave Whitby a pay increase, but contained language providing that the 1995 Agreement¹ remained in full force and effect and was ratified and confirmed.

The 1995 Agreement was set to expire on September 25, 2000, but in January 2000, Lee K. Strasser, Vice President/General Manager of WEAT, sent a certified letter to Whitby notifying her that Infinity was exercising its option to renew the 1995 Agreement, as amended by the 1999 Amendment, for an additional five-year term. Whitby and Infinity engaged in several months of contract negotiations, which did not result in a new agreement.

In August 2000, Russ Morley, an employee and on-air personality for Holdings, met with Whitby to discuss the possibility of her working as an on-air personality for WRMF, Whitby's former station and a direct competitor of WEAT. James Hilliard, Sr., WRMF's president and owner, asked Morley to meet with Whitby and discuss her potential employment with WRMF. In September 2000, Tim Reever, Vice President of Sales of James Crystal Radio Group, sent a letter to Whitby's attorney outlining prospective terms for Whitby's employment with WRMF.

On September 21, 2000, Holdings executed a three-year employment agreement with Whitby, in which she agreed to broadcast the WRMF morning show. On September 25, 2000, when the 1995 Agreement terminated, Whitby ceased her employment with WEAT. Later that day, she began broadcasting on WRMF. Whitby never advised Strasser of the negotiations or employment agreement with WRMF.

In September 2000, Infinity sued Whitby and Licenses seeking injunctive relief, and simultaneously filed an Emergency Motion for Temporary Injunction. At a hearing, the trial court denied the temporary injunction, finding that Infinity failed to establish that it was an assignee or direct successor to OmniAmerica, that the 1999 Amendment executed by Infinity and Whitby failed to expressly incorporate the 1995 Agreement, and that Infinity failed to carry its burden of substantial likelihood of success on the merits as to the enforceability of the non-compete covenant. The trial court found further that the non-compete covenant did not expressly authorize enforcement by OmniAmerica's assignee or successor, as required by section 542.335(1)(f)2.,² Florida Statutes, and the 1999 Amendment between Infinity and Whitby contained no restrictive covenant.

In November 2000, Infinity amended its complaint to add a count for breach of contract damages against Whitby (Count I) and a count against Licenses for tortious interference with the contract between Whitby and Infinity (Count II). The claim for injunctive relief remained as Count III. Infinity later amended its complaint to add a claim for punitive damages against Licenses. Infinity also later amended its complaint to join Holdings and Enterprises as defendants.

Infinity appealed the order denying its Emergency Motion for Temporary Injunction to this court. See Infinity Radio Inc. v. Whitby, 780 So.2d 248 (Fla. 4th DCA), rev. denied, 796 So.2d 539 (Fla.2001). This court reversed the trial court, reasoning that:

The 1999 "amendment" was not an assignment, but rather, a brand new agreement between Whitby and Infinity that incorporated all provisions of the 1995 agreement by reference. Therefore, and notwithstanding the provisions of section 542.335(1)(f)(2), Infinity, as party to the new agreement, was entitled to enforce the noncompete clause against Whitby.

Id. at 250.

Infinity moved the trial court to issue a temporary injunction pursuant to this court's mandate. In response, Whitby and Licenses filed an emergency motion to stay entry of the injunction pending clarification of the scope of the injunction. After a hearing, the trial court determined that this court's decision "by implication necessarily decided that the party seeking enforcement had established prima facie, that the specific non-compete covenant contained in the 1995 Agreement is reasonably necessary to protect the legitimate business interest or interests of the Plaintiff." The trial court went on to conclude that: "However, the Defendant did not have the opportunity, either in the lower court before appeal or as part of the appeal, to establish that the contractually specified restraint is overbroad, overlong, or otherwise not reasonably necessary to protect Plaintiff's established legitimate business interest or interests."

The trial court entered a temporary injunction in the form originally contained in the 1995 non-compete covenant, but "without prejudice to consider properly raised issues concerning the reasonable scope of the injunction during the course of this litigation." The injunction expired in twelve months, as contractually agreed to by the parties. The temporary injunction was extended to Licenses by order dated May 15, 2001.

Once the injunction was entered, seven months after she began broadcasting at WRMF, Whitby remained off the air for one year. However, she appeared at a promotional event, sponsored in part by WRMF, the day after the injunction. Infinity sought to have her held in contempt for violating the injunction. After several hearings, the trial court found Whitby guilty of indirect civil contempt because she participated in WRMF's promotional event, and because she continued to receive regular, periodic payments from WRMF. Whitby was ordered to pay a $100,000 fine to Infinity, but the fine was suspended on the condition that she commit no further violations.

Infinity moved to liquidate the $100,000 sanction against Whitby, alleging that payments she received from WRMF during the expired injunction period, which were characterized as a loan, nonetheless violated the injunction. Hearings were held before a successor judge, who acknowledged that the previous judge had specifically declined to hold that a loan would violate the injunction until an evidentiary hearing could be held and the issue fully briefed. The successor judge acknowledged also that the injunction had expired, but ordered Whitby to pay the $100,000. The order directed that the fine be paid to the court registry, rather than Infinity.³

In September 2003, Appellants filed a joint amended answer and affirmative defenses to Infinity's third amended complaint, including a counterclaim against Infinity. Their common affirmative defenses included a defense that Infinity was barred from seeking damages because it had elected its remedy in obtaining an injunction against Whitby; that Infinity could not recover damages for the one-year period in which Whitby was enjoined, since any alleged damages would have been remedied by the injunction; and that the option clause in the employment agreement was unenforceable for lack of a material term. Whitby also pled several separate affirmative defenses, including that the restrictive covenant was (1) unreasonable as to area, duration, and scope, and (2) an illegal restraint of trade. In Count III of Appellants' counterclaim, they sought damages for wrongful injunction.

In September 2004, Infinity filed a motion for partial summary judgment and motion to strike Appellants' affirmative...