HYDRA POOLS, INC.
DANNY MITCHELL LINGERFELT
Session: April 17, 2019
from the Chancery Court for McMinn County No. 2016-CV-294
Jerri Bryant, Chancellor
appeal concerns whether a confidentiality agreement was
assigned from one corporation to another. Danny M. Lingerfelt
("Lingerfelt") was an employee for many years of
P.I., Inc. ("P.I."), a manufacturer. In 2015,
Lingerfelt left P.I and a year later went to work for another
company. In the meantime, Hydra Pools, the P.I. division in
which Lingerfelt had worked, had become a separately
chartered corporate entity, Hydra Pools, Inc. In 2016, Hydra
Pools, Inc. filed a verified complaint against Lingerfelt in
the Chancery Court for McMinn County ("the Trial
Court") alleging that he violated the terms of a
non-competition and confidentiality agreement ("the
Agreement") he had entered into with P.I. Lingerfelt
filed a motion for summary judgment asserting, among other
things, that Hydra Pools, Inc. had no privity of contract
with him because he had worked for P.I. and not its supposed
successor. The Trial Court granted summary judgment to
Lingerfelt on the basis that Hydra Pools, Inc. was not a
party to or successor in interest to the rights or
obligations of the Agreement. Hydra Pools, Inc. appeals. We
hold that there is a genuine issue of material fact as to
whether the Agreement was assigned by P.I. to Hydra Pools,
Inc. We reverse the Trial Court's grant of summary
judgment and remand for further proceedings consistent with
R. App. P. 3 Appeal as of Right; Judgment of the Chancery
Court Reversed; Case Remanded
E. Jarrad and Ann C. Pederson (Kapsimalis), Knoxville,
Tennessee, for the appellant, Hydra Pools, Inc.
C. Blakney and Troy S. Weston, Knoxville, Tennessee, for the
appellee, Danny M. Lingerfelt.
Michael Swiney, C.J., delivered the opinion of the court, in
which John W. McClarty and Thomas R. Frierson, II, JJ.,
MICHAEL SWINEY, CHIEF JUDGE.
worked for P.I. from 2007 to 2015. In March 2007, Lingerfelt
signed the Agreement (formally the "Acknowledgement and
Agreement Concerning NonCompetition and
Confidentiality"). The Agreement contains, as relevant
to the issues on appeal,  the following provisions:
1. In consideration of my employment, my continued
employment, and the offer of certain benefits described and
fully set forth herein below, acceptance of which is
acknowledged, I, Danny Mitchell Lingerfelt, residing at
… Madisonville, Tennessee … SSN: … make
this agreement with P.I., Inc., (herein "the
Company," a Tennessee corporation with its principal
office in McMinn County), and agree to the noncompetition and
confidentiality provisions set forth further below.
7. Further, I acknowledge that because of my employment, I
have had and/or will have access to become familiar with
various trade secrets and confidential information which
belong to the Company, and I agree that such confidential
information and trade secrets including copies thereof are
owned and shall continue to be owned solely by the Company.
This includes but is not limited to any customer files,
customer lists, any business, marketing, financial, or sales
records, data, plans or surveys or any other record or
information relating to the present or future business,
product, or services rendered or contemplated by the Company.
It does not include information which the Company has
voluntarily disclosed to the public without restriction or
which has otherwise lawfully entered the public domain.
Accordingly, I shall not now or hereafter, directly or
indirectly, disclose such information to anyone outside the
Company or use same for any use other than pursuant to my
employment and for the benefit of the Company.
8. I agree not to remove from the Company's offices any
of its property, books, records, documents, customer lists,
or any copies in such documents, nor make any copies of these
for any purpose whatsoever unrelated to my employment with
the Company, nor to use, communicate, reveal or otherwise
make available such information for any purpose whatsoever,
or to divulge such information, other than to authorized
employees or officers of the Company, to any ...