Title: Boyd v. Mills
Citation: N/A
Docket Number: 1190615
State: Alabama
Issuer: Alabama Supreme Court
Date: April 23, 2021

REL: April 23, 2021
Notice: This opinion is subject to formal revision before publication in the advance sheets of Southern Reporter. 
Readers are requested to notify the Reporter of Decisions, Alabama Appellate Courts, 300 Dexter Avenue,
Montgomery, Alabama 36104-3741 ((334) 229-0649), of any typographical or other errors, in order that corrections
may be made before the opinion is printed in Southern Reporter.
SUPREME COURT OF ALABAMA
OCTOBER TERM, 2020-2021
____________________
1190615
____________________
John Boyd and Batey & Sanders, Inc.
v.
Emily Hawk Mills, as personal representative of the Estate of
Thomas Batey, deceased
Appeal from Etowah Circuit Court
(CV-17-900343)
MITCHELL, Justice.
This appeal requires us to address an issue of first impression before
this Court: whether a noncompetition agreement executed ancillary to the
1190615
sale of a business terminates upon the death of the individual subject to
the covenant not to compete.  Because the noncompetition agreement in
this case did not impose any affirmative obligations on the decedent and
was executed separately from the other agreements relating to the sale of
the business, we hold that the noncompetition agreement did not
terminate.  
Facts and Procedural History
In 2006, Thomas Batey sold all of his stock in Batey & Sanders, Inc.,
a provider of construction and highway-industry products that he solely
owned, to its president, John Boyd, and to Batey & Sanders ("the buyers")
through stock-purchase agreements ("the stock agreements").  The parties
to the stock agreements simultaneously executed several other contracts,
including a noncompetition agreement ("the noncompete") and an
employment agreement.  The stock agreements required the execution of
the noncompete and the employment agreement as conditions to the
buyers' obligations to close on the stock agreements.
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The noncompete is the center of this dispute.  It was executed "as
further consideration for the purchase of [Batey's] shares" conveyed in the
stock agreements, and it prohibited Batey from doing three things:
"(i) [to] cause, induce or encourage any employees of [Batey]
who are or become employees of [Batey & Sanders] or [Boyd]
to leave such employment; (ii) [to] cause, induce or encourage
any material actual or prospective customer, supplier,
manufacturer or licensor of [Batey], or any other person who
has a business relationship with [Batey] which is material to
[Batey], to terminate or change any such actual or prospective
relationship in a manner which would be adverse to [Boyd] or
[Batey & Sanders]; or (iii) [to] conduct, participate or engage,
directly or indirectly, in any business involving the operation
of a business similar [to] that conducted by [Batey &
Sanders]…."
Those were Batey's only obligations under the noncompete.  In return, the
buyers agreed to pay Batey $2,136,631.62 as the "total consideration" for
the noncompete "in 120 equal monthly payments of $17,805.26 starting on
December 1, 2006 and continuing on the first (1st) day of each month
thereafter until paid in full."
Batey died in April 2013.  The buyers allegedly continued making
most of the monthly payments due under the noncompete until December
2013, but then they ceased making the monthly payments, three years shy
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of the end of the term of the noncompete.  The amount allegedly due for
the remaining three years of the noncompete totaled $640,989.36. 
Emily Hawk Mills, as personal representative of Batey's estate ("the
estate"), sued the buyers in the Etowah Circuit Court, seeking the
remaining amount allegedly due under the noncompete.  After the parties
filed cross-motions for summary judgment, the trial court entered
summary judgment in the estate's favor.  It found that "Batey's interest
in the goodwill of Batey & Sanders, Inc. was consideration given in the
initial sale of the business, and conclusively the Non-Competition
Agreement was not a personal services contract that became voidable" by
the buyers after Batey's death.  The buyers appealed.
Standard of Review
Our review of a summary judgment is de novo.  See Pittman v.
United Toll Sys., LLC, 882 So. 2d 842, 844 (Ala. 2003).  When we review
a summary judgment, we use the same standard as the trial court -- that
is, we determine whether the evidence before it created a genuine issue
of material fact and, if not, whether the movant was entitled to judgment
as a matter of law.  Id.; see also Rule 56(c), Ala. R. Civ. P.  Because the
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issue before us does not hinge on any factual determination, we evaluate
whether the trial court correctly determined that the estate was entitled
to judgment as a matter of law.
Analysis
We have been asked to address one issue: whether the buyers'
obligations under the noncompete survived Batey's death.  When we are
called upon to determine parties' contractual rights, this Court must first
look to the plain language of the contract, and we "may not make a new
contract for the parties or rewrite their contract under the guise of
construing it."  Ex parte Dan Tucker Auto Sales, Inc., 718 So. 2d 33, 35-36
(Ala. 1998).
The noncompete did not expressly address what would happen in the
event of Batey's death.  It merely provided that the buyers "shall" pay
Batey $2,136,631.62 "in 120 equal monthly payments of $17,805.26
starting on December 1, 2006 and continuing on the first (1st) day of each
month thereafter until paid in full."  The buyers could pursue "an
injunction, restraining order or other equitable relief," along with "any
other rights and remedies which [the buyers] may have hereunder or at
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law or in equity" if Batey breached the noncompete.  Importantly,
however, the noncompete did not require Batey to perform any act -- it
only required him to refrain from performing certain acts.  Further, the
buyers did not have an express right to cancel the noncompete in the
event of a breach by Batey, even though the noncompete gave Batey the
"full power and authority to cancel [the noncompete] and exercise all
remedies available to him as set forth in [the noncompete and stock
agreements, among others,]" upon a default by the buyers.  Thus, nothing
in the language of the noncompete expressly allowed the buyers to cease
payments under the agreement after Batey's death.
Because the noncompete did not give the buyers an express right to
terminate, they argue that it was a "personal service contract" that did
not survive Batey's death.  This Court has held that "[c]ontracts resting
on the skill, taste, or science of a party, i.e., those contracts wherein
personal performance by the promisor is of the essence and the duty
imposed can not be done as well by others as by the promisor himself, are
personal and do not survive his death."  Cates v. Cates, 268 Ala. 6, 10, 104
So. 2d 756, 759 (1958).  But "[a] contract that is not one for personal
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services survives the death of the decedent," and the decedent's personal
representative has the right to enforce the contract.  McGallagher v.
Estate of DeGeer, 934 So. 2d 391, 403 (Ala. Civ. App. 2005).  This Court
has not addressed whether a noncompetition agreement is a personal-
service contract that terminates upon the death of the party subject to the
covenant not to compete.1
The buyers rely primarily on Slone v. Aerospace Design &
Fabrication, Inc., 111 Ohio App. 3d 725, 676 N.E.2d 1263 (1996), in which
the Ohio Court of Appeals considered two cases in which a party to a
covenant not to compete died before the payments securing that covenant
were completed.  The court recognized that, in the context of
noncompetition agreements executed in conjunction with the sale of a
business, "[t]he majority rule is that noncompetition agreements which
1This Court has, at least in one case that none of the parties cite,
stated that it will "not specifically enforce, as of course, the naked terms
of a negative covenant in a personal service contract restricting other
employment ...."  Robinson v. Computer Servicenters, Inc., 346 So. 2d 940,
943 (Ala. 1977).  But that reference was in passing -- Robinson did not
directly address whether a noncompetition agreement constitutes a
personal-service contract, let alone whether it terminates upon a party's
death. 
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are not part of larger agreements such as employment contracts
containing affirmative promises of personal services are not personal
service contracts."  111 Ohio App. 3d at 731, 676 N.E.2d at 1267.  But, the
court stated, when they "are joined with affirmative promises, the
covenant not to compete is a personal service contract which terminates
upon the death of the covenantor."  111 Ohio App. 3d at 731-32, 676
N.E.2d at 1267 (emphasis omitted).  In part because the noncompetition
agreements before it did not fit within the majority rule for
noncompetition agreements "ancillary to the sale of a business," 111 Ohio
App. 3d at 731, 676 N.E.2d at 1267, the Ohio Court of Appeals held that
they were personal-service contracts.  The noncompete here, however, was
ancillary to the sale of a business and was not "part of [a] larger
agreement[] such as [an] employment contract[] containing affirmative
promises of personal services."  Id.  Thus, Slone does not apply.
  The buyers also mistakenly rely on Bloom v. K & K Pipe & Supply
Co., 390 So. 2d 770 (Fla. Dist. Ct. App. 1980).  In that case, Joseph Bloom
entered into a noncompetition agreement with the company that
purchased his business, but he died before that agreement expired.  Id. at
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771.  In addition to prohibiting Bloom's competition with the company, the
agreement also required him to "answer any questions and respond to any
request for information from [the company] which relate to the business
of [the company]."  Id. at 771.  Based in part on that language, the Florida
District Court of Appeals held that the noncompetition agreement
terminated upon Bloom's death because the personal representative of his
estate could not "perform as fully and as well as [Bloom] might have."  Id.
at 773.  But, unlike in Bloom, the noncompete here imposed no affirmative
obligations on Batey -- only negative covenants in which he agreed not to
do certain things.  Thus, there is nothing for the personal representative
of the estate to "perform" in the first place. 
The estate, on the other hand, argues that Mail & Media, Inc. v.
Rotenberry, 213 Ga. App. 826, 446 S.E.2d 517 (1994), is on point.  In that
case, Mr. Rotenberry sold a corporation he solely owned and signed
separate noncompetition and employment agreements.  The purchaser
continued making payments under the noncompetition agreement until
Rotenberry died, at which point it argued that the noncompetition
agreement was a personal-service contract that terminated upon his
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death.  The Georgia Court of Appeals disagreed.  It held that, "while a
noncompetition agreement joined with affirmative promises is a personal
services contract which terminates upon the death of the promisor, a
noncompetition agreement standing alone, with no affirmative promises,
is not."  213 Ga. App. at 827, 446 S.E.2d at 519.  More specifically, it
reasoned that, "[w]hen a noncompetition agreement ancillary to the sale
of a business does not also require the seller to affirmatively provide
services to the buyer, the essential benefit the buyer is purchasing is the
business's goodwill (as opposed to the seller's expertise)," so "the seller's
death does not deprive the buyer of this benefit ...."  Id.2
2The Georgia Court of Appeals' decision in Rotenberry does not stand
alone.  See, e.g., Sanfillippo v. Oehler, 869 S.W.2d 159, 163 (Mo. Ct. App.
1993) (holding that covenant not to compete in "Employment and
Non-Competition Agreement" was severable from employment portion of
the agreement and was "not one for personal services and accordingly,
defendant's payment obligation did not terminate" on the covenantor's
death); TPS Freight Distribs., Inc. v. Texas Commerce Bank-Dallas, 788
S.W.2d 456, 458-59 (Tex. App. 1990) (holding that covenant not to compete
ancillary to an asset-purchase agreement, which contained no affirmative
promises, was not a personal-service contract and survived death of
covenantor); Rudd v. Parks, 588 P.2d 709, 712-13 (Utah 1978) (holding
that payments due under covenant not to compete ancillary to sale of
business did not terminate upon covenantor's death); see also Symphony
Diagnostic Servs. No. 1 Inc. v. Greenbaum, 828 F.3d 643, 647 (8th Cir.
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The reasoning of Rotenberry is persuasive.  As in that case, Batey
signed the noncompete -- which was separate from the employment
agreement, had separate consideration, and contained only negative
covenants -- ancillary to the sale of Batey's stock in Batey & Sanders and
as required by the stock agreements.  In addition, the parties entered the
noncompete as "further consideration for the purchase of [Batey's] shares"
conveyed in the stock agreements.  Under these facts, "the essential
benefit" of the noncompete was a purchase of "the business's goodwill (as
opposed to the seller's expertise)," so Batey's death "does not deprive the
2016) (observing that "the crucial difference between a personal services
contract and a non-compete agreement" is that "the former requires
affirmative actions by the employee, whereas the latter requires only that
they refrain from certain actions" (emphasis omitted)); Managed Health
Care Assocs., Inc. v. Kethan, 209 F.3d 923, 929 (6th Cir. 2000) (noting that
a personal-service contract "requires that one of the parties be bound to
render personal services" but that "a noncompetition clause only requires
that one of the parties abstain from certain activities").  The court in
Keller v. California Liquid Gas Corp., 363 F. Supp. 123 (D. Wyo. 1973),
reached the opposite conclusion.  But the buyers do not rely on Keller,
and, as the Georgia Court of Appeals noted, Keller appears to be an
outlier.  Regardless, because Keller "failed to distinguish between those
noncompetition agreements which are made in the context of an
employment agreement and those which are not," its "reasoning is
flawed."  Rotenberry, 213 Ga. App. at 827 n.1, 446 S.E.2d at 519 n.1.
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[buyers] of this benefit."  Rotenberry, 213 Ga. App. at 827, 446 S.E.2d at
519.  Thus, the noncompete was not a personal-service contract in which
"personal performance by the promisor  is of the essence."  Cates, 268 Ala.
at 10, 104 So. 2d at 759.  And because it is not a personal-service contract,
the noncompete "survives the death of the decedent" and the personal
representative of the estate has the right to enforce the noncompete. 
McGallagher, 934 So. 2d at 403. 
The buyers' remaining arguments are unavailing.  First, they argue
that the lack of an inurement clause in the noncompete -- that is, a clause
stating that the benefits and obligations of a contract pass to a decedent's
heirs -- indicates that the parties intended to terminate the noncompete
upon Batey's death.  They say that omission is especially notable because
the stock agreements and a stock-pledge agreement do contain inurement
clauses.  But the mere absence of an inurement clause does not override
the other principles discussed above.  Second, the buyers argue that
requiring their continued payment under the noncompete "would
fundamentally alter the business landscape of this great and business
friendly state" because, they say, it "would render such common
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agreements so risky and such a potential liability that they might as well
be useless."  Buyers' brief at 8.  The buyers, as self-acknowledged
sophisticated parties, are likely aware of an obvious and simple solution:
provide in the contract whether the noncompetition agreement will
survive the death of the party who promises not to compete.  See TPS
Freight Distribs., Inc. v. Texas Commerce Bank-Dallas, 788 S.W.2d 456,
459 (Tex. App. 1990) ("If appellants had wished to reserve the right to pay
less than the full sum, in the event of Blair's death, they could have
inserted such a condition into the contract.  They did not."). 
Conclusion
The language of the noncompete did not give the buyers the right to
cease payments because of Batey's death.  Nor is the noncompete a
personal-service contract that terminated upon Batey's death.  For those
reasons, the trial court properly entered summary judgment in favor of
the estate.
AFFIRMED.
Parker, C.J., and Bolin, Shaw, Wise, Bryan, Sellers, Mendheim, and
Stewart, JJ., concur.
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