X

Thank you for sharing!

Your article was successfully shared with the contacts you provided.
Click here for the full text of this decision FACTS:Garrick Hatfield worked for Auto M. Imports, owned by AutoNation, signing a noncompete agreement when he first started. The noncompete agreement contained a forum-selection provision requiring suits to be brought in Broward County, Fla. Hatfield resigned in January 2005 and went to work with A-Rod OC, another auto dealership. AutoNation sued Hatfield in Florida under the non-compete agreement. Hatfield then sued AutoNation in Texas for a declaration that the non-compete agreement was unenforceable. Hatfield also sought a temporary injunction to prevent AutoNation from enforcing the noncompete agreement in Florida court. The trial court denied AutoNation’s request to dismiss or stay the suit pending disposition of the Florida action. After a hearing the next day, the trial court granted the temporary injunction after hearing that AutoNation had filed a pleading in the Florida action that interfered with Texas’ jurisdiction. AutoNation appeals, arguing the trial court abused its discretion in granting the temporary injunction. Specifically, AutoNation claims the trial court overextended the use of the Texas Declaratory Judgment Act, ignored principles of comity, interfered with Florida’s dominant jurisdiction and failed to enforce the forum-selection clause. AutoNation also argued in oral arguments that the order is void under Texas Rule of Civil Procedure 683, which governs temporary injunction orders. Rule 683 requires that an order granting an injunction: 1. state the reasons for its issuance, 2. be specific in its terms, 3. describe in reasonable detail the act or acts sought to be restrained, and 4. bind only the parties to the action, their officers, agents, employees and attorneys, and those persons in active concert with them who receive actual notice of the order. HOLDING:Affirmed. The court points out that a party seeking an anti-suit injunction must show a special circumstance. Though a single parallel suit (i.e., the Florida suit) is not enough by itself to create a special circumstance, it is enough when it is clear that the Florida court will apply Florida law, which would lead to an irreparable miscarriage of justice without an injunction. The court agrees with Hatfield that AutoNation Inc. v. Hankins, No. 03-14544 CACE (Fla. Cir. Ct. 2003), which involved a similar claim between similar parties, in the same states, demonstrates that the Florida court in this case would apply Florida law to the suit. Florida law says that a choice-of-law provision is presumptively valid unless it contravenes the strong public policy of the forum state. Hankins went on to say that there was no overriding pubic policy, so Florida law applied, and the noncompete agreement was said to be enforceable. The court then notes that such a holding would subvert the “fundamental Texas public policy” announced in DeSantis v. Wackenhut Corp., 793 S.W.2d 670 (Tex. 1990): whether noncompete agreements are reasonable restraints upon employees. Because the law of Florida rather than Texas would be applied in the Florida lawsuit concerning enforcement of the non-compete agreement, a fundamental Texas public policy would be subverted. Thus, AutoNation has not established that the trial court abused its discretion in enjoining the Florida proceeding. The court rejects AutoNation’s argument that the temporary injunction ignores the principles of comity or the TDJA, emphasizing that the case law supporting such an argument did not involve issues of fundamental public policy like the case at hand. Finally, the court turns to review the temporary injunction under Rule 683. The court examines the trial court’s lengthy discussion within the order and concludes that the order meets all of the rule’s requirements. “The order identifies the probable injury that will be suffered by [Hatfield], why the injury is irreparable, and why [Hatfield] will have no adequate legal remedy if the injunction does not issue. The order describes the Texas public policy, explains why Florida would not apply Texas law, and states that the injury to [Hatfield] would be [his] inability to litigate the issue of enforceability of the non-compete clause under Texas law.” OPINION:Yates, J.; Yates, Anderson and Hudson, JJ.

Want to continue reading?
Become a Free ALM Digital Reader.

Benefits of a Digital Membership:

  • Free access to 1 article* every 30 days
  • Access to the entire ALM network of websites
  • Unlimited access to the ALM suite of newsletters
  • Build custom alerts on any search topic of your choosing
  • Search by a wide range of topics

*May exclude premium content
Already have an account?

 
 

ALM Legal Publication Newsletters

Sign Up Today and Never Miss Another Story.

As part of your digital membership, you can sign up for an unlimited number of a wide range of complimentary newsletters. Visit your My Account page to make your selections. Get the timely legal news and critical analysis you cannot afford to miss. Tailored just for you. In your inbox. Every day.

Copyright © 2021 ALM Media Properties, LLC. All Rights Reserved.