Court Opinion

ID: 4348255
Source: CourtListenerOpinion
Date Created: 2018-12-07 09:32:02.56502+00
Date Added: 2024-06-11T13:30:15.082319
License: Public Domain

Opinion issued December 6, 2018

                                     In The

                              Court of Appeals
                                    For The

                         First District of Texas
                            ————————————
                              NO. 01-17-00401-CV
                           ———————————
                         ALEXEI FOMINE, Appellant
                                        V.
                          ROSA BARRETT, Appellee

                   On Appeal from the 234th District Court
                            Harris County, Texas
                      Trial Court Case No. 2015-02838

                         MEMORANDUM OPINION

      Appellant, Alexei Fomine, challenges the trial court’s order granting

appellee, Rosa Barrett, summary judgment in his suit against her for breach of a

covenant not to compete. In two issues, Fomine contends that the trial court erred

in granting Barrett summary judgment.
      We affirm.

                                     Background

      In his second amended petition, Fomine alleged that on April 5, 2013, he

hired Barrett to work at his chiropractic clinic, Eastex Medical Clinic (“Eastex”),

as a “case manager.”         Upon employment with Eastex, Barrett signed an

“employment offer letter.” She also signed a “confidentiality agreement” and a

“covenant not to compete,” which were “separate contracts,” but were both

contained in the single document entitled “Confidentiality and Employee Non-

Compete Agreement.” In signing the confidentiality agreement, Barrett “agreed to

maintain the confidentiality of certain information (i.e., ‘trade secrets, customers

and other confidential data and good will’),” including “patient documents, referral

sources, specialized industry training, negotiation procedures, and participation in

the development of Fomine’s business venture.”

      According to Fomine, Barrett entered into the covenant not to compete in

“exchange” for “confidential and valuable information and the [e]mployment

[a]greement.”    The covenant “limited her from owning, managing, operating,

consulting, or being employed in a business substantially similar to or competitive

with Eastex (i) for two years after any termination or expiration of her employment

and (ii) within a 500 mile radius of the clinic’s location.”

                                           2
      Barrett was allegedly made privy to confidential and valuable information

by working with “sensitive patient files,” communicating with “referral sources,”

engaging in the “negotiation procedures for bill reductions,” participating in and

becoming knowledgeable about Fomine’s “business venture,” and receiving

“experience and training in a specialized industry.” After a “poor performance

evaluation in December 2013,” Fomine terminated Barrett from her employment

with Eastex in January 2014 “due to declining work performance and her failure to

come to work.”

      Fomine further alleged that in September 2014, he learned that Barrett

“began competing with Eastex shortly after her termination by opening and owning

medical clinics” that directly compete with Eastex.     Partnering with Santiago

Guajardo and Sky Rodriguez, on or about February 20, 2014, Barrett opened the

249 Accident Clinic, located approximately twenty-two miles from Eastex.

Rodriguez had been a “major referral source for Eastex, referring approximately 5

to 10 clients per month (or approximately $10,000.00 to $30,000[].00 in revenue

per month).” And Guajardo had been a chiropractor at Eastex. Partnering with

Guajardo, Barrett also opened the “Beltway 8 Accident Clinic,” located

approximately seven miles from Eastex.

      According to Fomine, since the termination of Barrett’s employment,

Fomine has lost “approximately $110,000.00 to $330,000.00 in revenue” to the

                                         3
249 Accident Clinic alone. And Barrett has misrepresented to Fomine’s referral

sources that Eastex is no longer in business.

      Fomine sued Barrett for breach of the covenant not to compete, seeking

economic damages, permanent injunctive relief, attorneys’ fees, and pre- and

post-judgment interest.    Barrett answered, asserting a general denial, verified

denial, and various affirmative defenses.

      Barrett subsequently moved for summary judgment, arguing that the

covenant not to compete is unenforceable on its face because: (1) it is not ancillary

to an enforceable agreement since she was an “at-will employee,” (2) she never

received any consideration from Fomine or Eastex in exchange for her execution

of the covenant, and (3) the restraint imposed by the covenant is unreasonable as

the activities restricted extend beyond her “work responsibilities for Eastex” and

the covenant imposed an unreasonable geographic limitation.

      Barrett attached to her summary-judgment motion the Employment Offer

letter, the Confidentiality and Non-Compete Agreement, her affidavit, Fomine’s

First Amended Petition, and Fomine’s objections and responses to Barrett’s

interrogatories.

      In his summary-judgment response, Fomine argued that Barrett was not

entitled to summary judgment on his claim for breach of the covenant not to

compete because: (1) there is a fact issue as to whether she received consideration

                                            4
in exchange for her promise not to compete as her job responsibilities, by

necessity, required access to confidential information; (2) the covenant not to

compete is ancillary to the confidentiality agreement and her employment

agreement, which are both enforceable; and (3) the covenant not to compete

“imposes reasonable geographic and activity limitations to protect Fomine’s

business interest.” Fomine further asserted that Barrett marketed to patients all

over Texas, was “an integral” member of the “Eastex team,” and was “hired to

evaluate potential cases, provide administrative support, market Eastex to potential

referral sources and patients, and manage active cases.”

      Fomine attached to his response his affidavit, the Employment Offer letter,

the   Confidentiality   and   Non-Compete      Agreement,     and   certain   email

communications between Barrett and her colleagues and insurance adjustors

concerning the assignment of benefits, patient records, and other confidential

information that Barrett had reviewed on a regular basis.

                               Standard of Review

      We review a trial court’s summary judgment de novo. Valence Operating

Co. v. Dorsett, 164 S.W.3d 656, 661 (Tex. 2005); Provident Life & Accident Ins.

Co. v. Knott, 128 S.W.3d 211, 215 (Tex. 2003). In conducting our review, we take

as true all evidence favorable to the non-movant, and we indulge every reasonable

inference and resolve any doubts in the non-movant’s favor. Valence Operating,

                                         5
164 S.W.3d at 661; Provident Life, 128 S.W.3d at 215. If a trial court grants

summary judgment without specifying the grounds for granting the motion, we

must uphold the trial court’s judgment if any of the asserted grounds are

meritorious. Beverick v. Koch Power, Inc., 186 S.W.3d 145, 148 (Tex. App.—

Houston [1st Dist.] 2005, pet. denied).

      A movant for a matter-of-law summary judgment has the burden of

establishing that she is entitled to judgment as a matter of law and there is no

genuine issue of material fact. TEX. R. CIV. P. 166a(c); Cathey v. Booth, 900
S.W.2d 339, 341 (Tex. 1995). When a defendant moves for a matter-of-law

summary judgment, she must either: (1) disprove at least one essential element of

the plaintiff’s cause of action or (2) plead and conclusively establish each essential

element of her affirmative defense, thereby defeating the plaintiff’s cause of

action. Cathey, 900 S.W.2d at 341; Centeq Realty, Inc. v. Siegler, 899 S.W.2d
195, 197 (Tex. 1995); Lujan v. Navistar Fin. Corp., 433 S.W.3d 699, 704 (Tex.

App.—Houston [1st Dist.] 2014, no pet.). Once the movant meets her burden, the

burden shifts to the non-movant to raise a genuine issue of material fact precluding

summary judgment. Siegler, 899 S.W.2d at 197; Transcon. Ins. Co. v. Briggs

Equip. Trust, 321 S.W.3d 685, 691 (Tex. App.—Houston [14th Dist.] 2010, no

pet.). The evidence raises a genuine issue of fact if reasonable and fair-minded

jurors could differ in their conclusions in light of all of the summary-judgment

                                          6
evidence. Goodyear Tire & Rubber Co. v. Mayes, 236 S.W.3d 754, 755 (Tex.

2007).

                             Covenant Not to Compete

      In a portion of his second issue, Fomine argues that the trial court erred in

granting Barrett’s summary-judgment motion “to the extent it found the

Non-Compete Agreement was not reasonable in its restrictions” because it is

reasonable as to the geographic and activity restrictions. He asserts that “Barrett’s

statewide marketing and business development efforts rendered a 500-mile

geographic restriction reasonable to protect [his] interests.”

      The enforceability of a covenant not to compete is a question of law. Butler

v. Arrow Mirror & Glass, Inc., 51 S.W.3d 787, 792 (Tex. App.—Houston [1st

Dist.] 2001, no pet.). “The hallmark of enforcement is whether or not the covenant

is reasonable.” Marsh USA Inc. v. Cook, 354 S.W.3d 764, 768 (Tex. 2011). “[A]

covenant not to compete is enforceable if it is ancillary to or part of an otherwise

enforceable agreement at the time the agreement is made to the extent that it

contains limitations as to time, geographical area, and scope of activity to be

restrained that are reasonable and do not impose a greater restraint than is

necessary to protect the goodwill or other business interest of the promisee.” TEX.

BUS. & COM. CODE ANN. § 15.50(a) (Vernon 2011).                  In other words, to be

enforceable, a covenant not to compete must be (1) ancillary to or part of an

                                           7
otherwise enforceable agreement and (2) contain reasonable limitations as to time,

geographic area, and scope of activity that do not impose a greater restriction than

necessary. See id.

      In determining the reasonableness of a covenant not to compete, we consider

whether the covenant contains limitations that are reasonable as to geographical

area and do not “impose a greater restraint than is necessary to protect the goodwill

or other business interest of the promisee.” Marsh, 354 S.W.3d at 777. The

territory in which an employee worked for an employer is generally considered to

be the benchmark of a reasonable geographic restriction. Butler, 51 S.W.3d at

793; Zep Mfg. Co. v. Harthcock, 824 S.W.2d 654, 660 (Tex. App.—Dallas 1992,

no writ).

      Here, Fomine did not raise a genuine issue of material fact as to the

reasonableness of the geographic restrictions in the covenant not to compete.

Although he concedes that Eastex patients “were treated solely in Houston,”

Fomine argues that the 500-mile geographic restriction in the covenant not to

compete is reasonable because Barrett “marketed to patients injured in accidents

occurring throughout the state” and “communicated with such patients, developed

business opportunities, maintained the then-current referral network, and was

instructed to market the clinic to persons injured elsewhere in Texas.” However,

even assuming this to be true, the 500-mile radius in the covenant not to compete

                                         8
here does not just include most of Texas, but also all of Louisiana and significant

portions of Alabama, Arkansas, Mississippi, Oklahoma, and Mexico.1

      Fomine further asserts that his plans to expand his business statewide are

relevant to the evaluation of whether the 500-mile restriction is reasonable.

However, nowhere in the summary-judgment record is there evidence of Fomine’s

plans to expand into Alabama, Arkansas, Louisiana, Mississippi, or Oklahoma

beyond vague assertions in his affidavit that “within ten years, the goal is to have

developed a nationwide network.”2 And, there is no evidence in the record that

Fomine’s business plans included expansion into Mexico, which is also firmly

within the 500-mile radius of the geographic restriction at issue.

      Finally, Fomine asserts that even if the 500-mile restriction is unreasonable,

Barrett’s opening of clinics approximately seven and twenty-two miles from

Eastex are “within what would be a reasonably restricted geographic area.”

However, because the covenant not to compete is unenforceable as written, he is

1
      Fomine asserts that we may take judicial notice of this geographical fact. See In re
      J.M.H., 414 S.W.3d 860, 863 (Tex. App.—Houston [1st Dist.] 2013, no pet.)
      (recognizing courts may properly take judicial notice of “geographical facts, such
      as the location of cities, counties, boundaries, dimensions, and distances”). “Facts
      such as these are easily ascertainable and capable of verifiable certainty.” Id.; see,
      e.g.,      STATSAMERICA:              Your        Portal     to      U.S.       Data,
      http://www.statsamerica.org/radius/big.aspx (last visited Nov. 27, 2018).
2
      Further, Fomine does not cite any authority in which the reasonableness of a
      geographic restriction in a covenant not to compete included plans for future
      expansion. See Cobb v. Caye Publ’ing Grp., Inc., 322 S.W.3d 780, 785
      (Tex. App.—Fort Worth 2010, no pet.).
                                            9
precluded from recovering damages on his contract claim.            See TEX. BUS. &

COMM. CODE ANN. § 15.51(c) (Vernon 2011) (stating court must reform

unreasonable covenant and enforce it as reformed “except that the court may not

award the promisee damages for a breach of the covenant before its reformation

and the relief granted to the promisee shall be limited to injunctive relief”); see

also Peat Marwick Main & Co. v. Haass, 818 S.W.2d 381, 388 (Tex. 1991)

(“Since [plaintiff] obtained no reformation of the covenant before [defendant’s]

actions for which it sought damages, the act would prohibit [plaintiff] from

obtaining damages.”). And Fomine does not contend that the trial court erred in

refusing to reform the covenant not to compete.3 See TEX. R. APP. P. 38.1.

      The geographic restriction in the covenant not to compete is significantly

broader than the geographic scope of Barrett’s employment with Eastex. Thus, it

is broader than is reasonably necessary to protect the interests of Fomine and

Eastex. See Marsh, 354 S.W.3d at 777. Accordingly, we hold that the trial court

did not err in granting Barrett summary judgment “to the extent it found” that the

covenant not to compete was unreasonable in its geographic restriction.

3
      In any event, exercise of reformation in this case would be futile as the covenant
      not to compete expired by its own terms in January 2016, two years from the date
      of termination of Barrett’s employment. See John R. Ray & Sons, Inc. v. Stroman,
      923 S.W.2d 80, 85 (Tex. App.—Houston [14th Dist.] 1996, writ denied)
      (explaining covenant expired so “any reformation of that provision by the trial
      court would have been an exercise in futility”).
                                          10
      We overrule this portion of Fomine’s second issue. Having overruled this

portion of Fomine’s second issue, we need not address his remaining issues. See

TEX. R. APP. P. 47.1.

                                   Conclusion

      We affirm the judgment of the trial court. We dismiss all pending motions

as moot.

                                             Terry Jennings
                                             Justice

Panel consists of Justices Jennings, Higley, and Massengale.

                                        11