Court Opinion

ID: 2893388
Source: CourtListenerOpinion
Date Created: 2015-09-07 22:42:26.753273+00
Date Added: 2024-06-11T11:36:41.733704
License: Public Domain

NO. 07-06-0204-CV

                              IN THE COURT OF APPEALS

                      FOR THE SEVENTH DISTRICT OF TEXAS

                                     AT AMARILLO

                                        PANEL D

                                 SEPTEMBER 18, 2006
                           ______________________________

                                    PAMELA SMITH,

                                                       Appellant

                                            v.

                     LIVINGSTON HEARING AID CENTER, INC.,

                                                  Appellee
                          _________________________________

    FROM THE COUNTY COURT AT LAW NO. THREE OF LUBBOCK COUNTY;

              NO. 2006-598,743; HON. PAULA LANEHART, PRESIDING
                       _______________________________

                                 Memorandum Opinion
                           _______________________________

Before QUINN, C.J., and REAVIS and CAMPBELL, JJ.

      Pamela Smith (Smith) appeals from a temporary injunction entered in favor of

Livingston Hearing Aid Center, Inc. (Livingston). Via three issues, she contends that the

trial court abused its discretion in 1) entering the decree because the underlying covenant

not to compete was unenforceable and 2) denying her attorney’s fees. We affirm.

                                      Background

       After becoming an employee with Livingston, Smith executed a contract containing

the following covenant.
       In further consideration of the sum as set forth in the attached Schedule of
       Terms, during the period commencing on the Effective Date and ending
       three (3) years after the termination of Employee’s employment with
       Employer for any reason, Employee shall not ‘compete directly or indirectly
       with the business of the Employer’ except as Employer shall otherwise
       consent in writing or except in furtherance of Employee’s duties hereunder.
       ‘Compete directly or indirectly with the business of the Employer’ shall be
       deemed to include . . . engaging or having a material interest, directly or
       indirectly, as owner, employee, officer, director, partner, sales representative,
       stockholder, capital investor, lessor, renderer of consultation services or
       advice, either alone or in association with others, in the operation of any
       aspect of any type of business or enterprise competitive with the business
       or operation of the Employer or any of its affiliates, including, but not limited
       to the hearing aid business, within the geographic area as set forth in the
       attached Schedule of Terms.

       The Schedule of Terms alluded to specified that Smith was to be compensated

$3000 and that the geographic boundaries mentioned were “[a]ll counties in which

Livingston Hearing Aid Center, Inc., operates, including, but not limited to: Lubbock County,

Texas, and contiguous areas[,] Ector County, Texas, and contiguous areas[,] Potter

County, Texas[,] Randall County, Texas [and] Curry County, New Mexico[.]”

       Smith worked for Livingston dispensing hearing aids for a short while. However, she

left its employ and began working for another entity involved in similar business. Livingston

discovered this and sued to enforce the covenant. The relief sought consisted of, among

other things, a temporary injunction. The latter was granted, and the trial court temporarily

enjoined her from

       engaging or having a material interest, as owner, employee, officer, director,
       partner, sales representative, renderer of consultation services or advice, in
       the testing of hearing, or in the sale or service of hearing aids or hearing
       devices, within the city of Lubbock and a distance of seventy-five (75) miles
       from the city of Lubbock, and within Scurry County, Texas.

From that order, Smith appealed.

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       Issue One

       Smith initially contends that the trial court abused its discretion in granting the

preliminary relief because the underlying covenant not to compete was “clearly

unenforceable.” In effort to explain why it was unenforceable, she posits that it had to

“meet certain statutory requirements” expressed in §15.50 of the Texas Business and

Commerce Code. It did not, she continued, because 1) “there is no ‘otherwise enforceable

agreement’ to which the covenant . . . is included,” 2) “the covenant . . . is not ‘ancillary to’

the agreement,” and 3) “no consideration was given ‘at the time’ the agreement was

made.” Given the tenor of her arguments, one readily sees that Smith asks us to resolve,

via an appeal from an order granting a temporary injunction, the ultimate question of

whether the covenant is enforceable under §15.50. Yet, that is not something we can do

via the procedure involved for the merits of the case are not implicated when one petitions

for a temporary injunction. Reach Group L.L.C. v. Angelina Group, 173 S.W.3d 834, 837

(Tex. App.–Houston [14th Dist.] 2005, no pet.) (stating that at a temporary injunction

hearing the ultimate merits of the case are not at issue); Tom James of Dallas, Inc. v.

Cobb, 109 S.W.3d 877, 882-83 (Tex. App.–Dallas 2003, no pet.) (stating that “any appeal

of an order granting or denying a temporary injunction based on a covenant not to compete

does not present for appellate review the ultimate question of whether the covenant is

enforceable under section 15.50 of the business and commerce code”); accord Loye v.

Travelhost, Inc., 156 S.W.3d 615, 620 (Tex. App.–Dallas 2004, no pet.) (declining to

address, via an appeal from an order granting a temporary injunction, the validity of the

covenant not to compete). In other words, at a temporary injunction hearing, the trial court

is to assess whether the applicant has a probable right to the relief sought and faces a

probable risk of imminent and irreparable injury if preliminary relief is not granted. Tom

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James of Dallas, Inc. v. Cobb, 109 S.W.3d at 882. The trial court is not to resolve the

ultimate merits of the controversy. Reach Group L.L.C. v. Angelina Group, 173 S.W.3d

at 837; Tom James of Dallas, Inc. v. Cobb, 109 S.W.3d at 882. So, if the trial court cannot

use the interim procedure to resolve the merits of the underlying claim, neither can the

reviewing court. Tom James of Dallas, Inc. v. Cobb, 109 S.W.3d at 882-83.

       In sum, by arguing that the covenant at bar fails to comport with §15.50 of the

Business and Commerce Code, Smith posits a contention which we cannot permissibly

resolve via an appeal from an order granting a temporary injunction. Tom James of Dallas,

Inc. v. Cobb, supra; Reach Group L.L.C. v. Angelina Group, supra. Its resolution must

await the entry of a final judgment on the merits. Loye v. Travelhost, Inc., 156 S.W.3d at

620. Consequently, her first issue is overruled.

       Issue Two

       Through her second issue, Smith addresses the scope of relief granted by the trial

court. That is, she poses the question of “whether the limitations to time, geographical

area, and scope of activity [contained in the covenant] are reasonable and do not impose

a greater restraint than is necessary to protect the goodwill or other business interest of the

employer.” As posed, the argument again presents us with the task of assessing the

validity of the covenant and the merits of the suit. And, for the same reasons expressed

under issue one, that task is not one that we can permissibly assume.

       Again, all must remember that in granting a temporary injunction, the trial court

simply attempts to maintain the status quo until the cause can be tried on its merits.

Butnaru v. Ford Motor Co., 84 S.W.3d 198, 204 (Tex. 2002). Left for another day is the

matter of whether the claims underlying the suit have merit. So, in granting a temporary

                                              4
injunction, the trial court at bar was not declaring that the covenant at issue was valid. It

simply sought to maintain the status quo.

       Yet, we do note that the relief ordered was not that expressed in the contract

between Smith and Livingston. Through the latter, Smith purported to refrain from

competing in “[a]ll counties in which Livingston Hearing Aid Center, Inc., operates,

including, but not limited to: Lubbock County, Texas, and contiguous areas[,] Ector County,

Texas, and contiguous areas[,] Potter County, Texas[,] Randall County, Texas [and] Curry

County, New Mexico[.]” Moreover, the trial court enjoined her from competing “within the

city of Lubbock and a distance of seventy-five (75) miles from the city of Lubbock, and

within Scurry County, Texas.” We take judicial notice of the fact that a 75-mile radius

around the City of Lubbock may encompass counties that are not “contiguous” with that

city. Nonetheless, evidence appears of record suggesting that the area within which

Livingston marketed its services comprised “about 90 miles” around Lubbock.

Furthermore, Smith testified that she treated patients who resided within 75 miles from

Lubbock. So, one could reasonably deduce that the company operated within that 90-mile

range as represented by Livingston.1 Additionally, the status quo existent between the

parties before Smith allegedly breached the covenant encompassed the requirement that

she not compete within the territory wherein Livingston operated. There being evidence

that such territory equated to a 90-mile perimeter around Lubbock, we reject her contention

that the trial court somehow abused its discretion to her detriment by simply restraining her

from competing within a 75-mile radius. See In re Sanders, 159 S.W.3d 797, 800 (Tex.

App.–Amarillo 2005, no pet.) (holding that a trial court abuses its discretion when its

       1
           Evidence appears of record indicating that Scurry County lies within 90 miles of Lubbock.

                                                      5
decision fails to comport with controlling guidelines or principles or lacks evidentiary

support).

       Issue Three

       The third issue raised by Smith involves her recovery of attorney’s fees.

Furthermore, it is founded upon the proposition that the covenant, or aspects of it, was, or

were, invalid or otherwise unenforceable. Because we have not so held, the issue is

premature and, therefore, overruled.

       We feel confident in the trial court’s understanding of the interlocutory nature of the

relief granted and the need to address the ultimate merits of the dispute via a timely trial.

With this in mind, we affirm the order granting the temporary injunction.

                                                  Brian Quinn
                                                  Chief Justice

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