Raines v. Bottrell Ins. Agency, Inc.
| Docket Number: | 2006-CA-02019-COA Linked Case(s): 2006-CA-02019-SCT ; 2006-CA-02019-COA ; 2006-CT-02019-SCT |
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| Court of Appeals: |
Opinion Link Opinion Date: 04-29-2008 Opinion Author: ISHEE, J. Holding: Affirmed |
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| Additional Case Information: |
Topic: Contract - Enforceability of non-compete agreement - Breach of contract - Damages - Attorney’s fees - Counterclaim Judge(s) Concurring: KING, C.J., LEE AND MYERS, P.JJ., IRVING, CHANDLER, GRIFFIS, BARNES, ROBERTS AND CARLTON, JJ. Procedural History: Jury Trial Nature of the Case: CIVIL - CONTRACT |
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| Trial Court: |
Date of Trial Judgment: 11-07-2006 Appealed from: MADISON COUNTY CHANCERY COURT Judge: William Joseph Lutz Disposition: AWARD OF ACTUAL AND PUNITIVE DAMAGES PLUS ATTORNEYS’ FEES TO PLAINTIFF Case Number: 2005-0635 |
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| Party Name: | Attorney Name: | Brief(s) Available: | ||
| Appellant: | JOHN RAINES |
JOHN HINTON DOWNEY |
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| Appellee: | THE BOTTRELL INSURANCE AGENCY, INC. | WILLIAM F. RAY, BRIAN CARTER SMITH |
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Synopsis provided by:  If you are interested in subscribing to the weekly synopses of all Mississippi Supreme Court and Court of Appeals hand downs please contact Tammy Upton in the MLI Press office. |
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| Topic: | Contract - Enforceability of non-compete agreement - Breach of contract - Damages - Attorney’s fees - Counterclaim |
| Summary of the Facts: | John Raines, an insurance salesman, left the employment of the Bottrell Insurance Agency, Inc. to work for Marchetti, Marchetti, and Robinson, Inc, a competitor of Bottrell. Subsequently, Raines began selling policies to and managing accounts for a few of his former clients from Bottrell. Bottrell sued Raines for violation of his employment agreement, specifically the restrictive covenant preventing him from, among other things, accepting any business from Bottrell’s clients for a period of two years. The trial court found in favor of Bottrell, awarding it actual and punitive damages plus attorneys’ fees. Raines appeals. |
| Summary of Opinion Analysis: | Issue 1: Enforceability of non-compete agreement Raines argues that his contract with Bottrell is unenforceable as a matter of public policy because it denies third parties the right to choose a provider of complex services, in this case, insurance sales. Generally, there are three aspects that are examined to determine the enforceability of a non-compete agreement: the rights of the employer, the rights of the employee, and the rights of the public. The law in this state has long been that the public will not be viewed to have been harmed by a covenant not to compete when ample services are available and a monopoly is not created. Raines has failed to demonstrate that restrictive covenants found in insurance sales employment agreements create a deficiency of service in the insurance industry, or that any one insurance company in the state has created or is in danger of creating a monopoly through its use of them. Accordingly, the restrictive covenant was reasonable and the interests of the public are not impaired to the degree necessary to avoid enforcement of the agreement. Raines also argues that the employment agreement is unenforceable for lack of consideration or mutuality. The supreme court has held that continued employment alone can be sufficient consideration to uphold a contract. The contract Raines signed specifically mentions Raines’s continued employment as consideration supporting the agreement, thereby constituting valid consideration to enforce the agreement. Issue 2: Breach of contract Raines argues that Bottrell, through several different actions, breached its employment contract with him and so he is relieved of any further obligations under the contract. The chancellor found that Bottrell had not breached its agreement with Raines. Those findings were based on testimony adduced at trial. No evidence in the record indicates that the chancellor’s findings were manifestly wrong or not supported by substantial evidence. Issue 3: Damages Raines argues that the chancellor incorrectly awarded actual damages based on gross income and a speculative retention rate after two years. Raines, however, never objected to the gross income analysis at trial. Therefore, the issue is waived. Raines also argues that the estimated retention rates used by the chancellor in his calculation of the actual damage award was grossly speculative. However, the record makes clear that the chancellor’s retention rate calculation was based in part on data Raines provided and in part on data provided by Bottrell. The chancellor reached a conclusion that fell between those two projected rates. The chancellor’s conclusion was not manifestly wrong or clearly erroneous. Raines also argues that he relied on the advice of counsel in accepting business from Bottrell’s customers, and this reliance insulates him from the imposition of punitive damages. The chancellor found that Raines “willfully, and with calculated intent, violated . . . the Agreement” and that Raines “weighed his options and accepted this risk.” There was certainly substantial evidence introduced at trial to support these findings. Accordingly, the chancellor’s imposition of punitive damages in this case was not wrong as a matter of law. Raines argues that the award of attorneys’ fees should be overturned because of a total failure on the part of Bottrell to prove the reasonableness and necessity of the amount awarded. The record indicates that Bottrell provided a detailed summary of the work done by its attorneys, as well as an itemized account of the fees incurred by its expert witness. Raines’s counsel had the opportunity to cross-examine Bottrell’s attorneys at length over the work performed and the fees paid. Furthermore, the law in this state does not require any additional offer of proof on the necessity or reasonableness of attorneys’ fees. Attorneys’ fees are available in cases where punitive damages are awarded. Issue 4: Counterclaim Raines argues that his counterclaim against Bottrell for vacation pay and unreimbursed expenses for his final two weeks was improperly rejected by the chancellor. However, Raines testified that, as a salesman working for commission, he never received vacation pay. Additionally, Raines never introduced any evidence at trial of the expenses he claims he was not reimbursed for, nor any evidence supporting why he would be entitled to them. |
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