Court Opinion

ID: 4470291
Source: CourtListenerOpinion
Date Created: 2020-01-08 16:03:04.70929+00
Date Added: 2024-06-11T08:49:02.304843
License: Public Domain

DISTRICT COURT OF APPEAL OF THE STATE OF FLORIDA
                            FOURTH DISTRICT

               PICTURE IT SOLD PHOTOGRAPHY, LLC.,
                   a Florida limited liability company,
                                Appellant,

                                    v.

                         SCOTT BUNKELMAN,
                              Appellee.

                             No. 4D19-1427

                            [January 8, 2020]

   Appeal of a nonfinal order from the Circuit Court for the Fifteenth
Judicial Circuit, Palm Beach County; Lisa S. Small, Judge; L.T. Case No.
50-2018-CA-015988-XXXX-MB.

    Gene D. Lipscher and George P. Ord of Gene D. Lipscher, P.A., Jupiter,
for appellant.

    Bennett S. Cohn of Law Offices of Bennett S. Cohn, West Palm Beach,
for appellee.

CONNER, J.

   Picture It Sold Photography, LLC (“Employer”) appeals the denial of its
motion for a temporary injunction to enforce a non-solicitation and non-
compete agreement against Scott Bunkelman (“Contractor”), an
independent contractor formerly employed by Employer. Because the trial
court failed to properly apply the presumption of irreparable harm flowing
from violations of the agreement and improperly determined that evidence
in support of a fraudulent inducement affirmative defense precluded a
temporary injunction, we reverse and remand for the entry of a temporary
injunction.

                               Background

   Employer is a business that provides photography and videography
services for real estate professionals. In October 2016, Contractor was
hired by oral agreement to provide photography services as an
independent contractor for Employer. The following December, the terms
of Contractor’s employment were memorialized in a written independent
contractor agreement, which included the following non-solicitation and
non-compete provisions:

     Independent Contractor agrees that he/she will not directly or
     indirectly do or attempt to do any of the following during
     Independent Contractor’s engagement (except in the faithful
     performance of his/her duties for the Company) or during the
     period of two years after the date of termination of Company’s
     engagement of Independent Contractor, within the Florida
     counties of Palm Beach, Broward, Martin and St. Lucie: solicit,
     employ, engage, hire, call on, compete for, sell to, divert, or
     take away any customer, supplier, endorser, advertiser or
     employee, agent, subagent, or independent contractor of
     Company or aid, assist or plan for anyone else to do so; divert
     or aid, assist or plan for others to divert from the Company
     any past or pending sale or exchange of any goods, product or
     service; entice, aid or cooperate with others in soliciting or
     enticing any employee, agent, subagent or independent
     contractor of the Company to leave, modify or terminate its
     relationship with the Company; participate in planning for any
     new or existing business that is or would be similar to the
     business of the Company or that does or would compete with
     the Company or solicit customers of the Company; accept any
     other employment or engagement that would call upon
     Independent Contractor to use, disclose or base judgments on
     the Company’s trade secrets or confidential information or to
     utilize the Company’s customer goodwill in making sales or
     other advantageous business relations for a business similar
     to or in competition with the Company’s business; compete
     against the Company for customers, suppliers, employees,
     agents or independent contractors; or own, manage, be
     employed by, be engaged by, work for, consult for, be an
     officer, director, partner, manager, employee, independent
     contractor or agent of, advise, represent, engage in, or carry
     on any business which is similar to the type of business
     engaged in by the Company at this time or on the date of
     termination of Independent Contractor’s engagement and
     which competes with the Company.

(emphases added). The initial term of the agreement was one year, with
an automatic renewal provision for additional one-year periods, unless
terminated by either party by written notice. An addendum to the written

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agreement provided that Contractor would be compensated pursuant to a
fee schedule.

   Upon discovering that Contractor was violating the agreement,
Employer sued him for violating the restrictive covenants in the agreement,
seeking injunctive relief and damages. Employer also filed an emergency
motion for temporary injunction. Contractor filed an answer, asserting
several affirmative defenses and a counterclaim against Employer.

   At the temporary injunction hearing, Contractor admitted that he was
unsatisfied with his earnings and began providing his services for some of
Employer’s customers on the side without Employer’s knowledge or
consent. Contractor’s testimony established that when confronted by
Employer prior to suit, he admitted to working on the side. He further
admitted that he never gave a written notice of termination of the
agreement, but claimed he stopped providing independent contractor
services to Employer as of December 2018. Additionally, he admitted that
he had in the past and, as of the date of the hearing, continued to provide
photography and video services to a few of Employer’s customers.

   Contractor presented testimony from some of Employer’s former
customers. Several customers, but not all, testified that they would not
use Employer again, for reasons that had nothing to do with Contractor.

   At the hearing, Contractor argued that the agreement was invalid
because Employer fraudulently induced him to enter it by assuring him a
$60,000 salary, which he never earned while working for Employer. He
did not dispute that he was paid according to the fee schedule in the
agreement. However, he testified that he could not earn a $60,000 salary
because Employer did not do its part and never sent him enough business.
He argued that he was fraudulently induced to enter the agreement as to
the location of his work. He also argued that while negotiating the
agreement, he explained to Employer that he needed to work in northern
Palm Beach County due to personal family issues. He further testified that
he was assured seventy-five percent of his work would be in northern Palm
Beach County, but it turned out that eighty to ninety percent of the work
he was given was in southern Palm Beach County and Broward County.

    The court entered a written order that found the written employment
agreement contained restrictive covenants that were reasonably necessary
to protect Employer’s legitimate business interests and that Contractor
failed to prove the restraints were overbroad, overlong, or otherwise
unreasonable. The trial court further found that Contractor violated the
restraints while working for Employer and thereafter, and thus Employer

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was entitled to the presumption of irreparable injury. Additionally, the
trial court found that Contractor failed to prove the presumption was
rebutted by proof of the absence of injury. However, the trial court denied
Employer’s motion for temporary injunction. The trial court concluded
that Employer failed to demonstrate there was no adequate remedy at law
because the customers Contractor solicited would not use Employer again,
irrespective of Contractor’s actions. Additionally, the trial court concluded
that Contractor’s testimony in support of his fraudulent inducement
defense was “credible and unequivocal” and that Employer made
fraudulent misrepresentations as to the salary Contractor would earn
under the agreement and the location of his work.

   Employer gave notice of appeal of the nonfinal order.

                             Appellate Analysis

   The standard of review in this appeal is a hybrid: the trial court’s factual
findings are reviewed for abuse of discretion, and its legal conclusions are
reviewed de novo. Colucci v. Kar Kare Auto. Grp., Inc., 918 So. 2d 431, 436
(Fla. 4th DCA 2006).

    Employer argues the trial court erred in denying its motion for a
temporary injunction. Section 542.335, Florida Statutes (2018), governs
the enforcement of restrictive covenants. Under section 542.335, a party
seeking a temporary injunction must establish four elements: “(1) the
likelihood of irreparable harm[;] (2) the unavailability of an adequate
remedy at law[;] (3) a substantial likelihood of success on the merits[;] and
(4) that a temporary injunction will serve the public interest.” Hilb Rogal
& Hobbs of Fla., Inc. v. Grimmel, 48 So. 3d 957, 959 (Fla. 4th DCA 2010)
(quoting Envtl. Servs., Inc. v. Carter, 9 So. 3d 1258, 1261 (Fla. 5th DCA
2009)). The trial court found that Employer established the first and
fourth elements to support a temporary injunction, but failed to establish
the second and third elements.

Unavailability of an Adequate Remedy at Law

    The trial court concluded that Employer failed to establish the
unavailability of an adequate remedy at law because several former
customers testified that they would not retain Employer’s services again,
irrespective of Contractor’s actions. The trial court erred in this regard.
“[T]he continued breach of a non-compete agreement threatens a former
employer’s ‘goodwill and relationships with its customers, and nothing
short of an injunction would prevent this loss.’” TransUnion Risk & Alt.
Data Sols., Inc. v. Reilly, 181 So. 3d 548, 551 (Fla. 4th DCA 2015) (quoting

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DePuy Orthopaedics, Inc. v. Waxman, 95 So. 3d 928, 939-40 (Fla. 1st DCA
2012)).

    Contractor admitted at the hearing that he continues to solicit
Employer’s customers. While some customers testified that they would
not retain Employer’s services again, others who worked with Contractor
still retain Employer’s services as well. Additionally, the evidence shows
that Contractor continues to compete against Employer for business,
regardless of whether he solicits Employer’s former customers. Absent an
injunction, there is nothing to stop Contractor from soliciting Employer’s
current and prospective customers and further competing with Employer
in the market.

Substantial Likelihood of Success on the Merits

     “Evidence that an enforceable covenant not to compete was breached
will support a trial court’s finding of the likelihood of success on the
merits.” Walsh v. Paw Trucking, Inc., 942 So. 2d 446, 448 (Fla. 2d DCA
2006). But the trial court must also consider any affirmative defenses.
Benemerito & Flores, M.D.’s, P.A. v. Roche, 751 So. 2d 91, 93 (Fla. 4th DCA
1999). When an “employee introduces evidence of the employer’s breach,
. . . the employer must then demonstrate that it is likely to succeed on the
merits of the proffered defense, as well.” Supinski v. Omni Healthcare, P.A.,
853 So. 2d 526, 532 (Fla. 5th DCA 2003).

    The trial court found Contractor breached the enforceable covenant but
also found credible Contractor’s testimony in support of his affirmative
defense that Employer misrepresented his future earnings and ability to
work mainly in northern Palm Beach County in order to induce him to
enter the agreement. However, we agree with Employer’s arguments that
the evidence does not support the conclusion that Employer fraudulently
induced Contractor to enter into the employment agreement as a matter
of law for two reasons.

    First, the written agreement has a provision that states the document
is the entire agreement between the parties, and the agreement provides a
specific schedule of services and fees. There is no provision in the
agreement that supports a representation of an annual earnings amount.
Moreover, by Contractor’s own testimony, it was possible to earn a $60,000
salary with the agreed-upon fee schedule, but Employer allegedly did not
generate enough business. The agreement itself does not promise
Contractor a $60,000 salary, nor does it promise that Contractor would
work primarily in northern Palm Beach County. Even assuming the salary
and geographic region were promised orally, Contractor did not present

                                     5
sufficient evidence to show he would likely prevail because a party cannot
recover in fraud for oral misrepresentations that are later contradicted in
a written contract. See Ioannides v. Romagosa, 93 So. 3d 431, 435 (Fla.
4th DCA 2012) (finding specific provisions in a contract detailing salary
and formula for computing bonuses preclude recovery for allegedly
fraudulent oral statements about potential earnings made prior to entering
into the contract); Hillcrest Pac. Corp. v. Yamamura, 727 So. 2d 1053, 1056
(Fla. 4th DCA 1999) (“A party cannot recover in fraud for alleged oral
misrepresentations that are adequately covered or expressly contradicted
in a later written contract.”).

   Second, based on the one-year term and renewal provisions of the
agreement, Contractor did not present sufficient evidence to show
justifiable reliance on the misrepresentation as to salary or location of the
work. It is clear that Contractor renewed the agreement by continuing to
work after the first year, despite being aware of the alleged
misrepresentations.      “Without justifiable reliance, there can be no
actionable fraud.” Hillcrest, 727 So. 2d at 1057. In addition, as Employer
argues, the evidence established a waiver of any claim of fraud in the
inducement. See Merovich v. Huzenman, 911 So. 2d 125, 127 (Fla. 3d DCA
2005) (“Execution of a contract with knowledge that an initial agreement
was fraudulently procured constitutes a waiver of claims based on the
previous fraud.”).

                                Conclusion

   Accordingly, we determine that the trial court erred as a matter of law
in concluding that Employer did not establish the unavailability of an
adequate remedy at law and a substantial likelihood of success on the
merits. Because Employer demonstrated that it is entitled to a temporary
injunction, we reverse and remand for entry of a temporary injunction in
favor of Employer which protects its interest under the restrictive
covenants contained in the employment agreement. Our opinion reverses
a nonfinal order and is based on the evidence presented at a temporary
injunction hearing. We leave for another day the merits of a final hearing.

   Reversed and remanded with instructions.

CIKLIN and GERBER, JJ., concur.

                            *        *         *

   Not final until disposition of timely filed motion for rehearing.

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