Court Opinion

ID: 9583095
Source: CourtListenerOpinion
Date Created: 2023-08-21 22:34:45.910365+00
Date Added: 2024-06-11T13:38:51.026696
License: Public Domain

McMurray, Presiding Judge,
dissenting.
I respectfully dissent from the judgment of reversal in this action to enforce noncompetition provisions in a written contract of professional employment brought by the plaintiff accounting firm, Habif, Arogeti & Wynne, P.C. (“HAW”) against defendant Kenneth E. Baggett and his new employer, the Maryland accounting firm Reznick, Fedder & Silverman, P.C. (“RFS”). Pretermitting whether the case sub judice is controlled adversely to plaintiff by the decision of the Supreme Court of Georgia in Singer v. Habif, Arogeti & Wynne, P.C., 250 Ga. 376 (1) (297 SE2d 473), my view of the proper judgment is merely to vacate the decision of the trial court and remand for reconsideration of defendants’ motion for summary judgment in light of this Court’s most recent authorities.
HAW alleged that defendant Baggett breached his contract and fiduciary duties of loyalty and good faith, “acting individually and in concert and collusion with [RFS], [in that he] conspired to and did contact, solicit, and divert both employees and clients of HAW. . . .” The complaint further alleges that defendant Baggett “fail[s] to devote his full time and best efforts to the practice of public accounting on behalf of HAW, and has accepted other gainful employment with [RFS], without the consent of HAW, and despite the fact he is still an employee of HAW.” RFS allegedly “wrongfully interfered in the contractual relations between HAW and its key clients and employees, . . . encouraging defendant] Baggett and other HAW employees, to breach their fiduciary duties and contractual obligations to HAW. . . .” Count 2 alleges defendant Baggett fraudulently *301continued to accept compensation from HAW without the present intent to fulfill his contractual obligations. Count 3 alleges that defendant Baggett breached the duties of utmost trust, loyalty and good faith owed to HAW in Baggett’s roles as an agent for, shareholder in, and officer of the professional corporation. Count 4 alleges conspiracy; Count 5 alleges tortious interference with contractual relations; and Count 6 seeks punitive damages and attorney fees.
The employment contract contained the following paragraph: “10 . . . RESTRICTIVE COVENANT ... (a) In express consideration of the covenants and agreements contained herein, and as an essential part of the consideration to induce the Corporation to enter into this Contract with Employee [defendant Baggett,] Employee covenants and agrees as follows . . . (i) The Employee covenants and agrees that, for a period of twenty-four (24) months following the effective date of his termination of employment with Corporation, regardless of the reason for such termination and regardless of whether such employment is terminated by the Employee or the Corporation, Employee will not, directly or indirectly, individually or as a partner, corporate employee, stockholder, consultant, officer, director, entity or advisor render or perform Accounting Services’ (as hereafter defined) within the counties of Fulton, DeKalb, Clayton, Gwinnett, Cobb, Fayette and Douglas in the State of Georgia.” Subpart 10 (a) (ii) contained defendant Baggett’s promise not to “take any action to divert, solicit, or contact any ‘Client’ (as hereafter defined) for the purpose of rendering or performing or with a view to rendering or performing Accounting Services.’” Defendant Baggett expressly “acknowledge^] that the restrictive covenants contained in this sub-paragraph 10 (a) will not constitute a total restraint on the Employee’s ability to earn a living. . . . The term ‘Client’ shall mean and include any one or more persons, firms, trusts, partnerships, corporations, or other entities for whom or for which the Employee rendered or performed Accounting Services’ during the twelve (12) month period immediately prior to the effective date of the termination of the Employee’s employment with the Corporation,” where defendant Baggett’s accounting services amounted to “five percent (5%) or more of the total ‘Billings’ to such client. . .” for the immediately preceding fiscal year. Subparagraph 10 (f) provides that, in the event defendant Baggett violates the restrictive covenants, plaintiff HAW shall be entitled to “all compensation, commissions, remuneration, or other benefits . . .” realized by defendant Baggett as liquidated damages. As additional liquidated damages respecting a breach of the restrictive covenant involving a former HAW client, defendant Baggett agreed to pay “an amount equal to one and one-half (1-1/2) times all fees billed . . .” by plaintiff HAW for the 12-*302month period immediately preceding defendant Baggett’s termination.
Decided March 17, 1998
Alembik, Fine & Callner, Lowell S. Fine, for appellant.
Alston & Bird, Lisa H. Cassilly, Robert H. Buckler, for appellees.
Defendants’ joint answer denied the material allegations but admitted the chronology of events, whereby defendant Baggett properly terminated his former employment relation with plaintiff by giving on July 1, 1995, the 60 days written notice contemplated in the 1994 written employment agreement. Defendants contended that plaintiff itself breached the written agreement upon receipt of his written termination, constructively firing defendant Baggett by firing his secretary, informing his clients that he had left the firm, and informing him not to return to the HAW offices. In answers to interrogatories, defendants further admitted that defendant Baggett “is an employee and equity principal of [defendant] RFS[,] at its office located at 107 West Courthouse Square, Cummings [sic], Georgia. ... In addition to [defendant] Baggett, some other former employees of Plaintiff are currently employed by [defendant] RFS. . . . Similarly, some former clients of Plaintiff are currently clients of RFS.”
Relying on Vortex Protective Svc. v. Dempsey, 218 Ga. App. 763 (463 SE2d 67), the trial court concluded the restrictive covenants are overbroad and granted defendants’ motion for summary judgment. This appeal followed.
The judgment of the trial court should, in my view, be vacated and the case remanded for reconsideration of the motion for summary judgment in light of the recent whole court decision in Chaichimansour v. Pets Are People Too, No. 2, 226 Ga. App. 69 (485 SE2d 248), cert, denied, where this Court affirmed the validity of a restrictive covenant involving members of a learned profession entered into among parties of roughly equal bargaining power. But it is further my view that, the applicability of this recent authority is not necessarily dispositive of whether all the noncompetition provisions in the case sub judice should be enforced, and so I respectfully dissent from the judgment of outright reversal.