Opinion ID: 1626687
Heading Depth: 1
Heading Rank: 1

Heading: United States District Court's Order Certifying Question

Text: Plaintiff F. Lee Robinson (`Robinson') asserts Alabama state law claims against the accounting firm of Boohaker, Schillaci & Company, P.C. (`BS & C'), and against Ben J. Schillaci (`Schillaci'), John C. Boohaker, John H. Reamey, Clyde E. Putman, and Gregory A. Grey, for breach of contract, stockholder oppression, and unjust enrichment. Defendant BS & C asserts counterclaims against Mr. Robinson for breach of contract. These claims arise out of two agreements entered into by the parties on January 1, 1991, and December 31, 1994, respectively. Mr. Robinson asserts that BS & C has breached these two agreements by terminating, after June of 1996, monthly payments he was to receive under the agreements; by changing BS & C's cash management practices to his detriment; by failing to allow Mr. Robinson to purchase a life insurance policy owned by the firm on Mr. Robinson's life; and by failing to reimburse expenses Mr. Robinson allegedly incurred in 1995 on the firm's behalf. BS & C, in turn, asserts counterclaims for an injunction and other relief on the ground that Mr. Robinson violated, inter alia, the non-compete provisions contained within the two buy-sell agreements. The allegations of fact showing the nature of this cause and the circumstances out of which the question of law arises are as follows: Mr. Robinson is a former shareholder, officer, director, and employee of the defendant firm, BS & C. While an employee of BS & C, Mr. Robinson worked as a licensed certified public accountant (C.P.A.) for the firm. The business of BS & C (of which all individual defendants are stockholders) is that of a certified public accounting firm or practice. At the end of 1994, Mr. Robinson decided to terminate his association with BS & C and exercised his rights under the buy-sell agreement previously entered into by Mr. Robinson and the defendants in 1990, which was to be effective as of January 1, 1991. The 1991 agreement was supplemented by another agreement dated December 31, 1994. It is undisputed that although Mr. Robinson was in charge of legal matters for the firm, the 1994 agreement was actually drafted by defendant Mr. Schillaci. The 1991 agreement contained monetary disincentives for any partner leaving BS & C to compete with the firm. The 1991 agreement, therefore, contained a non-compete clause, and defined `competition' for purposes of that agreement as follows: `For purposes of this agreement, a shareholder is deemed to be competing if he does any work for clients of the Firm (clients are determined at date of shareholder's departure from the Firm) within 3 years after the date of his departure. This does not preclude the departing shareholder from doing any work for the Firm's clients if such work does not compete with the Firm in any way.' 1991 Agreement, at 6-7. In the 1994 agreement, BS & C promised to purchase Mr. Robinson's stock in BS & C on the following terms: `THE PURCHASE PRICE of Lee's stock in BSR will be $280,000 ... payable monthly over five years ... at the rate of $4,666.66 per month.' 1994 Agreement, at 1. When Mr. Robinson left the firm, BS & C began making these monthly payments. After eighteen months, BS & C ceased making payments on the ground that Mr. Robinson had allegedly breached the 1991 and 1994 agreements. [1] The 1994 agreement also contained the following non-compete provision: `SELLER, LEE [ROBINSON], hereby agrees not to compete in any way with the business of the Firm for a five year period beginning January 1, 1995 and ending December 31, 1999. Competing is defined as doing any work for clients of BSR (clients are determined as of the effective date of this agreement). This does not preclude Lee from doing any work for BSR's clients if such work does not compete with BSR in any way.' 1994 Agreement, at 1. BS & C would not have agreed to the 1994 agreement absent Mr. Robinson's promise to refrain from doing any work for the firm's clients if such work competed with the business of the firm. On November 7, 1997, the Court granted Mr. Robinson's motion for partial summary judgment on BS & C's counterclaims concerning the validity of the non-compete provisions contained in the 1991 and 1994 agreements. By doing so, the Court held that the non-compete provisions contained in the agreements were void ab initio and that these covenants were, therefore, unenforceable in every respect pursuant to [Ala.Code 1975,] § 8-1-1. The Court also concluded that the remaining provisions of the 1991 and 1994 container agreements were themselves not invalid by virtue of the void non-compete provisions. Finally, the Court also ruled that the defendants' affirmative, equitable defenses of equitable estoppel, in pari delicto, [2] and unclean hands were unavailable in the present action. Subsequent to this ruling, however, the Court received evidence suggesting that, as the partner in charge of legal matters for BS & C, Mr. Robinson may have had actual knowledge that the non-compete agreements contained in the 1991 and/or 1994 agreements were unlawful and unenforceable. Based upon this `new' evidence, whether the doctrine of in pari delicto is an affirmative defense available to the defendants to avoid their obligations to Mr. Robinson under the container agreements is fundamental to a resolution of Mr. Robinson's claims and the defenses to those claims.