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Sugar Creek Carriages v. Hat Creek Carriages

Court of Appeals of Tennessee, Nashville

April 19, 2018

SUGAR CREEK CARRIAGES
v.
HAT CREEK CARRIAGES, ET AL.

          Session February 13, 2018

          Appeal from the Chancery Court for Davidson County No. 15-1203-III, Ellen Hobbs Lyle, Chancellor

         This case involves a claim for procurement of breach of contract. The plaintiff and the defendants operate competing businesses that provide carriage rides for hire in Nashville, Tennessee. The plaintiff sued the defendants for violating Tenn. Code Ann. § 47-50-109 by procuring one of its carriage drivers to breach his noncompete agreement with the plaintiff by driving a carriage for the defendants' business. The trial court granted summary judgment in favor of the defendants upon the determination that the plaintiff could not prove an essential element of a procurement of breach of contract claim, that the underlying contract was enforceable. Agreeing with the determination that the noncompete agreement was not enforceable, we affirm.

         Tenn. R. App. P. 3 Appeal as of Right; Judgment of the Chancery Court Affirmed

          W. Gary Blackburn and Bryant Kroll, Nashville, Tennessee, for the Appellant, Sugar Creek Carriages.

          David L. Cooper, Nashville, Tennessee, for the Appellees, Hat Creek Carriages, Elizabeth Luckey, and Samuel Lee Roberts.

          Frank G. Clement Jr., P.J., M.S. delivered the opinion of the Court, in which Richard R. Dinkins and W. Neal McBrayer, JJ., joined.

          OPINION

          FRANK G. CLEMENT JR., P.J., M.S.

         Sugar Creek Carriages ("Plaintiff") is a business that provides carriage rides for hire in downtown Nashville, Tennessee. Hat Creek Carriages is a competing business, which is owned by Samuel Roberts, and operated by Elizabeth Luckey (collectively, "Defendants").

         Lester Blackwell ("Blackwell") was retained by Plaintiff as a licensed carriage ride driver pursuant to an "Independent Contractor, Non-competition, Non-disclosure, and Confidentiality Agreement" (the "Noncompete Agreement") at all times material to this action. The Noncompete Agreement provided in pertinent part:

In consideration for the training being given by Sugar Creek Carriages to the Independent Contractor in preparation of becoming a professional horse-drawn carriage operator or independent contractor of Sugar Creek Carriages, the Independent Contractor agrees not to directly or indirectly compete with Sugar Creek Carriages and its successors and assigns for a period of one year following his or her termination within the territorial jurisdiction of Davison County, Tennessee. Indirect competition shall be deemed to include the Independent Contractor's position as a shareholder, partner, officer, agent, employee, consultant or independent contractor of any competing business. The parties agree that the actual cost of the training provided by Sugar Creek Carriages to the Independent Contractor is at least two thousand five hundred dollars ($2, 500.00). Independent Contractor will pay Sugar Creek Carriages two thousand five hundred dollars ($2, 500.00), plus attorney's fees, costs and expenses, should Independent Contractor breach the covenant not to compete contained in this agreement. This sum is agreed on as the proper measure of liquidated damages that Sugar Creek Carriages will sustain in the event Independent Contractor breaches this Agreement.

(emphasis in original).

         During the restricted one-year period, Blackwell drove a carriage "one or two times" for Hat Creek Carriages. Upon learning of this fact, Plaintiff commenced this action asserting separate claims against Blackwell and Defendants. The claim against Blackwell was for breach of the Noncompete Agreement. Plaintiff sought to have Blackwell "pony up" the agreed upon liquidated damages of $2500. The claim against Defendants was for procuring Blackwell's breach of his Noncompete Agreement with Plaintiff in violation of Tenn. Code Ann. § 47-50-109, for which Plaintiff sought to recover treble compensatory damages along with attorney's fees and expenses pursuant to the statute. Plaintiff also sought an injunction against Defendants.

         Shortly after the action was commenced, Blackwell settled all claims with Plaintiff. Blackwell was dismissed from the action, and he is not a party to this appeal.

         Thereafter, Defendants filed a motion for summary judgment on two grounds: (1) the Noncompete Agreement between Plaintiff and Blackwell was unenforceable and (2) the claims against Defendants must be dismissed because Plaintiff could not prove an essential element for recovery under Tenn. Code Ann. § 47-50-109 for procurement of breach, that the relevant provision of the underlying contract was enforceable. Plaintiff responded, arguing that the Noncompete Agreement was enforceable because Plaintiff had a protectable business interest in the specialized and unique training Plaintiff provided to Blackwell.

         The trial court determined that the Noncompete Agreement was unenforceable because Plaintiff's "training is also sold to the public and there are no other factors, such as trade secrets, confidential information or client relations, present in this case weighing in favor of a protectable business interest." Based on this determination and the fact that the existence of an enforceable contract was an essential element of a claim for procurement to breach a contract, the trial court summarily dismissed the complaint. This appeal followed.

         Standard ...


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