Hoist & Crane Service Group, Inc. Versus Standard Crane & Hoist, LLC, Robert Maguire, and Brad Smith ( 2023 )

HOIST & CRANE SERVICE GROUP, INC. NO. 22-CA-389
VERSUS FIFTH CIRCUIT
STANDARD CRANE & HOIST, LLC, COURT OF APPEAL
ROBERT MAGUIRE, AND BRAD SMITH
STATE OF LOUISIANA
ON APPEAL FROM THE TWENTY-NINTH JUDICIAL DISTRICT COURT
PARISH OF ST. CHARLES, STATE OF LOUISIANA
NO. 88,133, DIVISION "E"
HONORABLE TIMOTHY S. MARCEL, JUDGE PRESIDING
March 29, 2023
MARC E. JOHNSON
JUDGE
Panel composed of Judges Marc E. Johnson,
Robert A. Chaisson, and Stephen J. Windhorst
AFFIRMED AS AMENDED
MEJ
RAC
SJW
COUNSEL FOR PLAINTIFF/APPELLANT,
HOIST & CRANE SERVICE GROUP, INC.
William T. Finn
Russell L. Foster
Peter J. Segrist
COUNSEL FOR DEFENDANT/APPELLEE,
ROBERT MAGUIRE AND STANDARD INDUSTRIAL SERVICES, LLC
Charles K. Chauvin
COUNSEL FOR DEFENDANT/APPELLEE,
STANDARD CRANE & HOIST, LLC
Jonathan M. Walsh
Ellis B. Murov
Sean P. Mount
JOHNSON, J.
Plaintiff/Appellant, Hoist & Crane Service Group, Inc. (hereinafter referred
to as “Hoist & Crane”), appeal the partial summary judgment that dismissed its
claim for the breach of its non-competition agreement against Defendant/Appellee,
Robert Maguire, rendered in the 29th Judicial District Court, Division “E”. For the
following reasons, we amend the trial court’s partial summary judgment and affirm
the judgment as amended.
FACTS AND PROCEDURAL HISTORY
The facts pertinent to this appeal are as follows:
Hoist & Crane is a company that services overheard cranes and lifting
equipment, including elevators. In 2016, Mr. Maguire was hired as a technical
trainer for Hoist & Crane’s New Orleans office.1 Prior to joining the company, Mr.
Maguire had spent decades of working in different capacities for several elevator
servicing companies, becoming an expert in elevator service and maintenance.
On May 2, 2016, Mr. Maguire entered into an “Employee Noncompetition
and Confidentiality Agreement” for sales, management, and office staff
(hereinafter referred to as “the Agreement”) with Hoist & Crane. Among the
numerous provisions, the Agreement provided that Mr. Maguire would not
perform the same or similar duties as he performed for Hoist & Crane or engage in
a similar business; solicit any customer of Hoist & Crane to cease doing business
with it or engage in a similar business with a competitor; or engage in any business
with a competitor, with all of the provisions lasting for a period of two years
immediately following his termination of employment with Hoist & Crane. On
September 7, 2018, Mr. Maguire terminated his employment with Hoist & Crane.
He left Hoist & Crane to start a new company, Standard Industrial Services, LLC
1
During the time Mr. Maguire was employed with Hoist & Crane, he was promoted to Service
Manager of the Elevator Branch.
22-CA-389 1
(hereinafter referred to as “Standard Industrial”), which offered industrial elevator
services.
On July 24, 2020, Hoist & Crane filed its petition against Standard Industrial
and Mr. Maguire.2 In its petition, Hoist & Crane alleged that Mr. Maguire
accepted employment with Standard Industrial, its competitor, prior to the two-
year expiration of his obligations to Hoist & Crane. It asserted that Mr. Maguire
violated the non-competition, non-solicitation, and confidentiality obligations of
the Agreement by: assisting Standard Industrial and participating in its direct
competition with Hoist & Crane; soliciting, inducing, and encouraging current and
prospective Hoist & Crane customers to cease doing business with it; soliciting,
inducing, and encouraging Hoist & Crane’s current and former employees to
depart from the company; soliciting, inducing, and encouraging Hoist & Crane’s
current and former employees to undertake employment with Standard Industrial;
using Hoist & Crane’s confidential information to suggest, induce, and encourage
its customers to stop doing business with it; and sharing Hoist & Crane’s
confidential information with Standard Industrial. Hoist & Crane sought
preliminary and permanent injunctions and other damages against Mr. Maguire.
On June 22, 2021, Mr. Maguire filed a motion for partial summary
judgment. In his motion, Mr. Maguire asserted that the Agreement’s non-
solicitation and non-competition with customers provisions were unenforceable
because the Agreement does not specify the parishes and municipalities where the
provisions would be effective.3 He contended that the Agreement cannot be
reformed to legitimacy. In opposition, Hoist & Crane argued that the Agreement
should be fully enforced because the geographic scope of the non-competition
2
Hoist & Crane also named Brad Smith, another former employee of the company, as a
defendant.
3
On February 17, 2022, Mr. Maguire filed a motion to dismiss his request for summary judgment
solely on the issue of enforceability of the Agreement as to the alleged prohibition against soliciting or
inducing Hoist & Crane’s employees to leave their employment. The motion was granted on February
18, 2022.
22-CA-389 2
provisions is determinable. In the alternative, Hoist & Crane argued that the scope
of the Agreement should have been modified and/or reformed by the court.
The partial summary judgment motion was heard by the trial court on March
15, 2022. At the conclusion of the hearing, the trial court granted partial summary
judgment in favor of Mr. Maguire. The trial court rendered a written judgment
granting the partial summary judgment on April 19, 2022, which dismissed Hoist
& Crane’s claims against Mr. Maguire for breach of the non-competition and non-
solicitation of customers provisions contained in Paragraphs 1(a), 1(b), and 1(c) of
the Agreement with prejudice. The trial court made an express determination that
there was no just reason for delay and certified the judgment as a final partial
judgment pursuant to La. C.C.P. art. 1915(B)(1). The instant devolutive appeal
filed by Hoist & Crane followed.
ASSIGNMENTS OF ERROR
On appeal, Hoist & Crane alleges that the trial court legally erred in granting
Mr. Maguire’s partial summary judgment by: 1) finding the non-competition
agreement was unenforceable; 2) failing to enforce the modification clause as
written; and 3) failing to reform the non-competition obligation. 4
LAW AND ANALYSIS
Enforcement of Non-Competition Agreement
Hoist & Crane alleges that the trial court erred in granting Mr. Maguire’s
partial summary judgment by finding the non-competition agreement to be
unenforceable. It argues that Louisiana courts have held that non-competition
agreements are enforceable under La. R.S. 23:921, regardless of whether they
specifically name the parishes in which the agreement applies, as long as the
geographic scope of the non-competition agreement is determinable. It contends
that the provision “in any geographic area or territory wherein Hoist & Crane
4
Assignments of error two and three are interrelated and will be jointly discussed.
22-CA-389 3
Service Group has conducted its business, so long as Hoist & Crane Service Group
carries on its business therein” is sufficient to specify the geographical scope of the
Agreement. Although Hoist & Crane acknowledges this Court’s jurisprudence that
non-competition agreements should specify the parishes of enforcement by name,
it implores us to enforce the non-competition agreement as written.
Mr. Maguire avers that the trial court properly granted his partial summary
judgment because Hoist & Crane’s non-competition provisions violate the law and
strong public policy. He maintains that Louisiana law only permits a narrowly
tailored exception to La. R.S. 23: 921 that requires the geographical territory be
limited to specifically name parishes or municipalities where the non-competition
agreement can be enforced. Because the Agreement fails to comply with naming
the specific parishes or municipalities in which the provisions would apply, Mr.
Maguire asserts that the Agreement broadly restricts him from pursuing similar
employment or business and would deprive him of the ability to work anywhere in
the elevator service industry.
The summary judgment procedure is designed to secure the just, speedy, and
inexpensive determination of every action and is favored. La. C.C.P. art.
966(A)(2). Appellate courts review summary judgments de novo under the same
criteria that govern the trial court’s consideration of whether summary judgment is
appropriate. Jefferson Par. Sch. Bd. v. TimBrian, LLC, 21-67 (La. App. 5 Cir.
10/20/21), --- So.3d ----, 2021WL4891089, writ denied, 21-1725 (La. 1/12/22),
330 So.3d 629, citing Stogner v. Ochsner Clinic Foundation, 18-96 (La. App. 5
Cir. 9/19/18), 254 So.3d 1254, 1257. Summary judgment shall be granted “if the
motion, memorandum, and supporting documents shows that there is no genuine
issue as to material fact and that the mover is entitled to judgment as a matter of
law.” Id., quoting La. C.C.P. art. 966(A)(3).
A material fact is one that potentially insures or prevents recovery, affects a
22-CA-389 4
litigant’s ultimate success, or determines the outcome of the lawsuit. Populis v.
State Department of Transportation and Development, 16-655 (La. App. 5 Cir.
5/31/17), 222 So.3d 975, 980, quoting Pouncy v. Winn-Dixie La., Inc., 15-189 (La.
App. 5 Cir. 10/28/15), 178 So.3d 603, 605. An issue is genuine if it is such that
reasonable persons could disagree. If only one conclusion could be reached by
reasonable persons, summary judgment is appropriate as there is no need for trial
on that issue. Id. Whether a particular fact in dispute is material for purposes of
summary judgment can only be determined in light of the substantive law
applicable to the case. Stogner, 254 So.3d at 1257, citing Jackson v. City of New
Orleans, 12-2742 (La. 1/28/14), 144 So.3d 876, 882, cert. denied, 574 U.S 869,
135 S.Ct. 197, 190 L.Ed.2d 130 (2014).
The party moving for summary judgment bears the burden of proof.
Stogner, supra, citing La. C.C.P. art. 966(D)(1). However, if the mover will not
bear the burden of proof at trial, the moving party must only point out that there is
an absence of factual support for one or more elements essential to the adverse
party’s claims. Id. Thereafter, the burden shifts to the adverse party to produce
factual support sufficient to establish that he will be able to satisfy his evidentiary
burden of proof at trial. Id. If the adverse party fails to meet this burden, there is
no genuine issue of material fact, and the mover is entitled to summary judgment
as a matter of law. Id. Once the motion for summary judgment has been properly
supported by the moving party, the failure of the adverse party to produce evidence
of a material factual dispute mandates the granting of the motion. Id., citing Babin
v. Winn Dixie La., Inc., 00-78 (La. 6/30/00), 764 So.2d 37, 40. The decision as to
the propriety to grant a motion for summary judgment must be made with
reference to the substantive law applicable to the case. Vincent v. Nat’l Gen. Ins.
Co., 21-227 (La. App. 5 Cir. 10/13/21), 330 So.3d 378, 381. The substantive law
in this matter is La. R.S. 23: 921.
22-CA-389 5
La. R.S. 23:921 provides, in pertinent part:
A. (1) Every contract or agreement, or provision thereof, by which
anyone is restrained from exercising a lawful profession, trade, or
business of any kind, except as provided in this Section, shall be null
and void. However, every contract or agreement, or provision thereof,
which meets the exceptions as provided in this Section, shall be
enforceable.
***
C. Any person, including a corporation and the individual
shareholders of such corporation, who is employed as an agent,
servant, or employee may agree with his employer to refrain from
carrying on or engaging in a business similar to that of the employer
and/or from soliciting customers of the employer within a specified
parish or parishes, municipality or municipalities, or parts thereof, so
long as the employer carries on a like business therein, not to exceed a
period of two years from termination of employment… .
In short, the statute limits (1) the scope of the activity from which one agrees to
refrain, (2) the geographic area in which one agrees to refrain from that activity,
and (3) the time period during which the agreement to refrain from the specified
activity may be effective. Yorsch v. Morel, 16-662 (La. App. 5 Cir. 7/26/17), 223
So.3d 1274, 1285, writ denied, 17-1475 (La. 11/13/17), 230 So.3d 207.
Louisiana’s public policy has disfavored non-competition agreements.
Communication and Technology Industries, Inc. v. Global Hunter Securities, Inc.,
12-861 (La. App. 5 Cir. 5/16/13), 116 So.3d 917, 921. In USI Ins. Services, L.L.C.
v. Tappel, 09-149 (La. App. 5 Cir. 11/10/09), 28 So.3d 419, 423-424, writ denied,
09-2697 (La. 2/26/10), 28 So.3d 271, this Court explained:
This policy is based on the State’s desire to prevent an
individual from contractually being deprived of an ability to support
him or herself and consequently becoming a public burden. Such
agreements are in derogation of the common right and must be strictly
construed against the party seeking their enforcement.
La. R.S. 23:921 provides limited instances in which a contract
can restrict the exercise of a lawful profession. That statute must also
be strictly construed, since it is an exception to Louisiana public
policy against such contracts.
(Citations omitted).
In the instant matter, Mr. Maguire signed the Agreement, which states the
22-CA-389 6
following pertinent provisions in the “1. NONCOMPETITION” section:
(a) Employee agrees that, during Employee’s employment and for a
period of two (2) years immediately following Employee’s
termination of employment with Hoist & Crane Service Group, Inc.
regardless of the reason for termination, Employee will not perform
same or similar services or duties as performed while employed by
Hoist & Crane Service Group, Inc. for or on behalf of Employee or
any business engaged in a business similar to the business of Hoist &
Crane Service Group, Inc. in any geographic area or territory wherein
Hoist & Crane Service Group, Inc. has conducted its business, so long
as Hoist & Crane Service Group, Inc. carries on its business therein.
(b) Employee agrees that, during Employee’s employment and for a
period of two (2) years immediately following Employee’s
termination of employment with Hoist & Crane Service Group,
regardless of the reason of termination, Employee will not solicit,
suggest, induce, or encourage any customer of Hoist & Crane Service
Group, Inc. to cease doing business with Hoist & Crane Service
Group, Inc. and/or to do same or similar business with Employee or
any competition of Hoist & Crane Service Group, Inc. in any
geographic area or territory wherein Hoist & Crane Service Group,
Inc. has conducted its business, so long as Hoist & Crane Service
Group, Inc. carries on its business therein.
(c) Employee agrees that, during Employee’s employment and for a
period of two (2) years immediately following Employee’s
termination of employment with Hoist & Crane Service Group, Inc.
regardless of the reason of termination, Employee will not accept, or
conduct or assist in any acceptance or conducting of, same or similar
business with any customer of Hoist & Crane Service Group, Inc. for
or on behalf of Employee or any business engaged in competition
with the business of Hoist & Crane Service Group, Inc. in any
geographic area or territory wherein Hoist & Crane Service Group,
Inc. has conducted its business, so long as Hoist & Crane Service
Group, Inc. carries on its business therein.
The non-competition provisions of the Agreement do not specify the
geographic locations in which the Agreement is to be enforced but only states “in
any geographic area or territory wherein Hoist & Crane Service Group, Inc. has
conducted business.” La. R.S. 23:921(C) requires that a restrictive covenant
identify by name the parishes or municipalities to which it applies. Advanced
Medical Rehab, L.L.C. v. Manton, 21-315, p. 14 (La. App. 5 Cir. 2/23/22), ---
So.3d ----, 2022WL533885, writ denied, 22-606 (La. 6/1/22), 338 So.3d 494, citing
Bell v. Rimkus Consulting Grp. Inc. of La., 07-966 (La. App. 5 Cir. 3/25/08), 983
22-CA-389 7
So.2d 927, 933-34, writ denied, 08-891 (La. 6/20/08), 983 So.2d 1276. It is not
enough if the restrictive covenant simply says it applies to “whatever parishes,
counties, or municipalities the company does business.” Id. Thus, based upon the
Agreement’s geographic description, we find that the geographic restrictive
provisions of the Agreement do not comply with La. R.S. 23:921(C).
Therefore, upon de novo review, we find that the non-competition provisions
in Paragraphs 1(a), 1(b), and 1(c) of the Agreement are overbroad because they do
not specifically list the parishes or municipalities, or parts thereof, where the
geographic restrictions would be effective. Consequently, we also find that those
Paragraphs are unenforceable because the geographic restrictive provisions do not
comply with La. R.S. 23:921(C). (See also, Wechem, Inc. v. Evans, 18-743 (La.
App. 5 Cir. 5/30/19), 274 So.3d 877, 894, writ denied, 19-1176 (La. 10/15/19), 280
So.3d 600, where this Court held that non-competition provisions that do not
comply with La. R.S. 23:921, in that they do not adequately specify the geographic
restrictions, are unenforceable).
Enforcement of Modification Clause and Reformation of Non-Competition
Obligation
Next, Hoist & Crane alleges that the trial court legally erred in granting the
partial summary judgment in favor of Mr. Maguire because the Agreement’s
modification clause should be enforced. It argues that the plain modification
language of the Agreement should be applied, so that Mr. Maguire would be
prohibited from competing only in those parishes and counties in which Hoist &
Crane does business. In the alternative, Hoist & Crane argues that the Agreement
should be reformed due to the mutual error of the parties. It contends that both it
and Mr. Maguire intended to memorialize a binding and enforceable non-
competition obligation, in addition to the other obligations set forth in the
Agreement, and Mr. Maguire willingly, knowingly, and voluntarily agreed to those
22-CA-389 8
obligations. Thus, Hoist & Crane insists that this Court should reform the
Agreement for consistency with the intent of the parties.
Mr. Maguire avers that the entire Agreement is null and void and cannot be
reformed. He maintains that there was no mutual mistake in the Agreement
specifically drafted by Hoist & Crane.
The “MODIFICATION BY COURT” provision of the Agreement states, “It
is understood and agreed that should any portion, provision or clause of this
Agreement be deemed too broad to permit enforcement to its full extent, then it
shall be enforced to the maximum extent permitted by applicable law, and
Employee hereby consents and agrees that such scope shall be modified by the
court in any proceeding brought to enforce such restriction.”
In its judgment, the trial court dismissed Hoist & Crane’s claims against Mr.
Maguire for breach of the non-competition and non-solicitation of customers
provisions contained in Paragraphs 1(a), 1(b), and 1(c) of the Agreement.
Arguably, the remaining provisions in the Agreement can be enforced to the
maximum extent permitted by applicable law. The trial court did not find that the
Agreement was unenforceable in toto.
Hoist & Crane now wants this Court to reform the restrictive provisions of
the Agreement. We decline to reform the overly broad provisions in Paragraphs
1(a), 1(b), and 1(c) of the Agreement to include the specific parishes or
municipalities where the Agreement would be enforceable against Mr. Maguire. 5
If the reformation requested by Hoist & Crane were to be granted, this Court would
effectively be required to rewrite the Agreement’s non-competition provision to
bring it into compliance with La. R.S. 23:921(C). Reformation in such a
5
In its brief, Hoist & Crane urges this Court to adopt the Third Circuit’s decision in Petroleum
Helicopters v. Untereker, 98-1816 (La. App. 3 Cir. 3/31/99), 731 So.2d 965, writ denied, 99-1739 (La.
8/5/99), 747 So.2d 40, where the court reformed a contract in which the geographic restrictions were not
specifically identified by name but were “identifiable.” We decline to follow that decision.
22-CA-389 9
circumstance would mean rewriting a disfavored contract into compliance with a
narrowly drawn statutory exception. See Advanced Medical Rehab, L.L.C.,
2022WL533885 at p. 19, citing Vartech Sys., Inc. v. Hayden, 05-2499 (La. App. 1
Cir. 12/20/06), 951 So.2d 274, 260. However, because we have found that
Paragraphs 1(a), 1(b), and 1(c) of the Agreement are overbroad because they fail to
specifically list the parishes or municipalities, or parts thereof, and are
unenforceable, we reform the Agreement to excise Paragraphs 1(a), 1(b), and 1(c).
Furthermore, we pretermit any discussion regarding the remaining provisions of
the Agreement because they are not currently before us for review.
DECREE
For the foregoing reasons, upon de novo review, we find that Robert
Maguire is entitled to partial summary judgment, as a matter of law. Accordingly,
we affirm the trial court’s partial summary judgment in favor of Mr. Maguire that
dismissed Hoist & Crane Service Group, Inc.’s claims against him for breach of
the non-competition and non-solicitation of customers provisions contained in
Paragraphs 1(a), 1(b), and 1(c) of the May 2, 2016 “Employee Noncompetition and
Confidentiality Agreement” with prejudice. Additionally, we amend the judgment
to reform the Agreement by excising Paragraphs 1(a), 1(b), and 1(c). Hoist &
Crane Service Group, Inc. is assessed the costs of this appeal.
AFFIRMED AS AMENDED
22-CA-389 10
SUSAN M. CHEHARDY CURTIS B. PURSELL
CHIEF JUDGE CLERK OF COURT
SUSAN S. BUCHHOLZ
FREDERICKA H. WICKER
CHIEF DEPUTY CLERK
JUDE G. GRAVOIS
MARC E. JOHNSON
ROBERT A. CHAISSON LINDA M. WISEMAN
STEPHEN J. WINDHORST
FIRST DEPUTY CLERK
JOHN J. MOLAISON, JR.
CORNELIUS E. REGAN, PRO TEM FIFTH CIRCUIT
MELISSA C. LEDET
JUDGES 101 DERBIGNY STREET (70053)
DIRECTOR OF CENTRAL STAFF
POST OFFICE BOX 489
GRETNA, LOUISIANA 70054 (504) 376-1400
(504) 376-1498 FAX
www.fifthcircuit.org
NOTICE OF JUDGMENT AND CERTIFICATE OF DELIVERY
I CERTIFY THAT A COPY OF THE OPINION IN THE BELOW-NUMBERED MATTER HAS BEEN DELIVERED
IN ACCORDANCE WITH UNIFORM RULES - COURT OF APPEAL, RULE 2-16.4 AND 2-16.5 THIS DAY
MARCH 29, 2023 TO THE TRIAL JUDGE, CLERK OF COURT, COUNSEL OF RECORD AND ALL PARTIES
NOT REPRESENTED BY COUNSEL, AS LISTED BELOW:
22-CA-389
E-NOTIFIED
29TH JUDICIAL DISTRICT COURT (CLERK)
HONORABLE TIMOTHY S. MARCEL (DISTRICT JUDGE)
PETER J. SEGRIST (APPELLANT) RUSSELL L. FOSTER (APPELLANT) WILLIAM T. FINN (APPELLANT)
CHARLES K. CHAUVIN (APPELLEE) JONATHAN M. WALSH (APPELLEE) SEAN P. MOUNT (APPELLEE)
MAILED
ELLIS B. MUROV (APPELLEE)
ATTORNEY AT LAW
755 MAGAZINE STREET
NEW ORLEANS, LA 70130