Convergent Technologies, Inc. v. Jasper Stone, Kurt A. Bernard, Paul R. Hutchinson, and Michael D. Fleming

FIRST DISTRICT COURT OF APPEAL
STATE OF FLORIDA
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No. 1D18-389
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CONVERGENT TECHNOLOGIES, CORRECTED PAGES: pg 2, 4, 6, 7,
INC., and 11
CORRECTIONS ARE UNDERLINED IN
RED
Appellant, MAILED: November 15, 2018
BY: FTA
v.
JASPER STONE, KURT A.
BERNARD, PAUL R. HUTCHINSON,
and MICHAEL D. FLEMING,
Appellees.
_____________________________
On appeal from the Circuit Court for Escambia County.
John L. Miller, Judge.
November 13, 2018
PER CURIAM.
Appellant, Convergent Technologies, Inc. (“CTI”), the plaintiff
below, appeals the trial court’s Decision and Order Granting
Motion for Summary Judgment, which entered final summary
judgment in favor of Appellees, defendants below, in a lawsuit
alleging breaches of non-solicitation agreements. Having
considered the depositions, affidavits, and other materials of
record in a light most favorable to CTI as the non-moving party,
see Brookie v. Winn-Dixie Stores, Inc., 213 So. 3d 1129, 1131 (Fla.
1st DCA 2017), we conclude that the trial court erred in entering
summary judgment, and reverse.
I.
CTI provides cyber-security training both as a prime
contractor and subcontractor with the United States government.
George Dands is CTI’s president.
Acting in the latter capacity in 2010, CTI entered into a
subcontract with Telecommunications Systems, Inc. (“TCS”), to
provide instructors for a Joint Cyber Analysis Course (“JCAC”), a
beginner’s level cyber-security program for Navy personnel at Cory
Field in Pensacola, Florida. Over the course of three years, CTI
hired Appellees Paul Hutchinson, Kurt Bernard, Jasper Stone,
and Michael Fleming as instructors for the JCAC job. Each
appellee signed an employment contract with CTI that contained
a non-solicitation clause. Although CTI refined the wording of the
clauses over the years as each Appellee was hired, the following
clause contained in Paul Hutchinson’s contract—the first hire—
conveys the gist of the other non-solicitation agreements:
In accordance with contract guidelines, I also agree that
I will not solicit employment with any other company
associated with the JCAC contract during the customer
review period, full-time employment period, or a six
month post employment [sic] period.
In his affidavit, George Dands claimed that CTI required
Appellees to execute the non-solicitation agreements primarily for
the following four reasons: (1) the considerable resources expended
in recruiting and “on-boarding” Appellees for the JCAC project; (2)
the fact that Appellees would be managed remotely from CTI’s
Maryland headquarters; (3) the significant training expense and
time CTI would incur in replacing Appellees on the project; and (4)
the fact that CTI’s relationship with TCS required the non-
solicitation agreements as “a term of employment.”
Along with CTI, TCS had a number of other subcontractors to
support its efforts on the JCAC contract. One of the other
subcontractors was Epsilon, Inc. (“Epsilon”). Under the terms of
the contract between TCS and CTI, the companies agreed they
would not solicit or hire each other’s employees who provided
services under the JCAC contract. There was no similar agreement
between CTI and Epsilon, or between it and any of the other
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subcontractors on the JCAC job. That fact served as the proverbial
“crack in the door” through which slid employment negotiations
between Appellees and Epsilon. In light of the non-solicitation
clauses, the crux of the motion for summary judgment was who
solicited whom for employment.
In his affidavit, Christopher Gaukel asserted that prior to
March 2016, he worked for Epsilon as the lead instructor and
considered himself to be “work friends” with Paul Hutchinson.
Gaukel stated that Hutchinson told him he was frustrated with,
and had concerns about, his employment with CTI regarding pay
rates, health insurance, training courses, and the “complete lack
of response and communication from CTI senior management and
its owner, George Dands.” Gaukel “encouraged” Hutchinson to
“reach out” to Keith Pabst, TCS’s project manager on the JCAC
project.
In addition, around September 2013, Gaukel informed Peter
Penzell—Epsilon’s Chief Executive Officer—about “some of the
issues employees with CTI were having with CTI’s management,”
based on his conversations with Hutchison. Gaukel told
Hutchinson that Penzell might contact him about a potential
employment opportunity with Epsilon. Hutchinson told Gaukel he
would be “interested in taking the call.”
In his affidavit, Penzell explained that problems with
management, such as Hutchinson had described, “could cause
employees to resign,” a “situation” that might “adversely affect the
ability of TCS and the subcontractors to continue to provide and
deliver to the United States government the high level of
instructor services required under the JCAC Contract.”
Accordingly, Penzell said he called Keith Pabst, who—without
naming names—“confirmed that the four CTI employees were very
unhappy and that CTI had been unresponsive” to their concerns.
Penzell added that Pabst had “noted that each of the CTI
employees had come to him about their problems and concerns,
including lack of communication, unpaid expense report costs, lack
of training, lapses in health insurance benefits and other
discrepancies, including improper 401K contributions and
matching.” When Penzell asked Pabst whether TCS would fill the
positions if the CTI employees resigned, Pabst informed him that
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the provisions in the contract between CTI and TCS prohibited
each company from hiring the other’s employees. Penzell
responded, “‘Nothing prevents me from hiring these guys.’”
Accordingly, Penzell contacted his recruiter, Michael Kane, and
assigned him the task of contacting Hutchinson and proposing that
he come to work for Epsilon. Kane interviewed Hutchinson and
reported back to Penzell that Hutchinson was willing to speak with
Epsilon.
When deposed, Hutchinson admitted that he had spoken to
Kane, who told him that he would pass on the information to
Penzell. During a phone call from Penzell, Hutchinson shared with
him the same issues he had discussed with Kane—his
qualifications, experience, and his concerns with CTI. During the
call, Hutchinson also expressed his concern about the non-
solicitation agreement he had signed with CTI. Hutchinson
scanned and emailed a copy of the agreement to Epsilon for its
lawyers to review. When the call with Penzell ended, Hutchinson
was left with the “understanding that this was not necessarily a
simple situation,” but that they would continue to talk about the
possibility of hiring.
Hutchinson went on to testify that the next time he spoke with
Penzell, Penzell informed him that the non-solicitation agreement
was “laughable” and Epsilon would pay his legal fees if necessary.
Penzell then asked Hutchinson if there were other disaffected CTI
employees on the JCAC contract. Hutchinson named Stone,
Fleming, and Bernard, who were experiencing the same
frustrations working for CTI. Hutchinson could not remember how
that call with Penzell ended, but he estimated that between their
first conversation and when he received an offer of employment
from Epsilon, he spoke to Penzell no less than ten times.
Hutchinson estimated that he had been a part of about a dozen
“personal conversations” with Stone, Fleming, and Bernard
concerning potential employment with Epsilon.
Jasper Stone testified in deposition that he first spoke to
Keith Pabst about his complaints with CTI in October 2013, and
related that the others—Hutchinson, Bernard, and Fleming—all
had the same complaints. He stated he had looked to Paul
Hutchinson for guidance, as the JCAC job was his first government
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contract, and the two talked together with Pabst. According to
Stone, Pabst told them he would get in touch with Dands and
would let them know the result of the conversation. Stone admitted
that in November 2013, he was involved in a four-way conversation
between himself, Hutchinson, Fleming, and representatives from
Epsilon on their personal cell phones outside the building where
they were working for CTI. He said Pabst had asked him “in
passing” if he would be interested in working for Epsilon. Stone
brought up the non-solicitation agreement and Pabst ended the
conversation there. Stone then testified that it was Hutchinson
who told him that Penzell wanted to have a phone conversation
with them concerning employment. Stone again raised the non-
solicitation clause and was told by Hutchinson that it was not they
who were doing the soliciting; it was Epsilon who had initiated
contact with them as a group and was interested in talking about
employment. Stone maintained that it “might be hard to prove
where the first contact came from,” but insisted it “definitely” had
been Epsilon soliciting them for employment. What ultimately
eased his mind was his conversation with Penzell, who informed
him Epsilon’s general counsel had advised him that Florida law
would not recognize the non-solicitation agreement because
Florida is a “right to work” state and it had been Epsilon who had
solicited them.
In early to mid-November 2013, Penzell asked Gaukel to
reach out to Appellees for their contact information in order that
he could speak to them directly about employment with Epsilon.
By November 25, 2013, Penzell, himself, contacted Hutchinson,
Stone, and Fleming and conveyed an offer of employment with
Epsilon on the JCAC project. Penzell interviewed them, and all
three discussed their work experience as CTI employees on the
JCAC contract, while voicing their concerns with CTI. Penzell
allayed their fears that CTI would take legal action against them
for leaving its employ and going to work for Epsilon, but, again,
assured them that Epsilon would pay their attorney’s fees in the
event of a lawsuit.
Hutchinson, Stone, and Fleming each expressed their
willingness to accept employment with Epsilon. In his affidavit,
Penzell said he explained to them that a formal written job offer
would be conditioned on their being able to receive updated
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security clearances from the U.S. government. To obtain the
updates, Hutchinson, Stone, and Fleming would have to provide
Epsilon with updated “packages” for Standard Form 86—the
Questionnaire for National Security Positions (“SF 86”). Epsilon
provided the three men with the SF 86 clearance materials and
coordinated their submission for forwarding to the government. No
other documents, such as resumes, applications, or other personnel
forms, were required of Appellees before they started work with
Epsilon.
The last remaining CTI employee to be officially contacted by
Epsilon was Kurt Bernard. It was in late November 2013 when
Gaukel asked him about coming on board. Bernard said he was
interested and would be willing to speak with Penzell. Gaukel
informed Penzell of Bernard’s response, but because Bernard did
not hear from Penzell by early December, he contacted Fred Luke,
a friend employed by Epsilon. Bernard explained to Luke that
Gaukel had approached him about a job and asked Luke if he knew
anything about the offer. Luke said he did not, but would check on
the status of the matter. He subsequently informed Bernard that
Bernard would be receiving a call soon.
When Bernard did not hear from Penzell by December 20,
Luke suggested he call or convey his contact information. Bernard
did the latter and Penzell called him, apologizing for not calling
sooner. Penzell confirmed Epsilon’s offer of employment to him and
informed him Gaukel had been personally authorized by him to
offer him a job with Epsilon. Nevertheless, during the
conversation, Penzell directly indicated he would like to hire
Bernard and advised him his job would be conditioned upon
Epsilon’s receipt of Bernard’s updated SF 86 clearance. Epsilon
staff members facilitated the paper work for Bernard, as it had
done for the other three Appellees.
Jasper Stone was the first to begin working as an instructor
in support of the JCAC contract for Epsilon, on January 17, 2014.
Then, in February 2014, a “meet and greet” was held in Pensacola
in order for Penzell to meet Appellees. Although Michael Fleming
attended, he later flatly denied that there was any discussion
about transitioning his employment to Epsilon during the
gathering. Instead, he said the evening was for socializing, and
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later in the evening, they were joined by other Epsilon employees.
Nevertheless, in March 2014, Fleming, along with Hutchinson and
Bernard, resigned their positions with CTI and became employed
by Epsilon as JCAC instructors.
II.
On June 3, 2014, CTI filed a complaint against Appellees to
have the non-solicitation agreements enforced and treated as non-
compete agreements, to enjoin Appellees from working for Epsilon
or any other company associated with the federal government
contract, and to recover damages for breach of contract. Appellees
filed a motion for summary judgment on June 27, 2015. On
September 9, the trial court entered a partial summary judgment
in favor of Appellees on CTI’s claim of breach of non-compete
agreements, but found genuine issues of material fact remained on
the question of the enforceability of the non-solicitation
agreements, entitlement to relief and damages for breach of
contract, and Appellees’ affirmative defenses.
A hearing was held on the remainder of Appellees’ motion for
summary judgment on November 6, 2017, at which time the
parties presented their arguments. Ultimately, the trial court
granted Appellees’ motion. In its Decision and Order Granting
Motion for Summary Judgment, the trial court ruled:
[T]here is no genuine issue of material fact or law and []
the evidence presented in the record before the Court
clearly shows that Epsilon solicited these Defendants,
and not the converse. Defendants responded and
eventually accepted offers from Epsilon. Defendants’
conduct was what would be characterized as the normal
job application processing for the job of an instructor on
the JCAC Contract. Defendants’ actions, as reflected in
this case, were simply in response to Epsilon’s offer of
employment and were the process they had to go through
to accept the job. Because Defendants did not engage in
any proactive solicitation, although Epsilon did,
Defendants did not violate or breach their non-
solicitation agreements.
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Pivotal to its decision was the trial court’s rejection of CTI’s
argument that Scarbrough v. Liberty National Life Insurance Co.,
872 So. 2d 283 (Fla. 1st DCA 2004), controlled and, under that
opinion’s analysis, that Appellees had engaged in sufficiently
“proactive” conduct to constitute a breach of the non-solicitation
agreements, regardless of who made the first contact. Instead, the
trial court found “instructive and persuasive” the decision of the
Indiana Court of Appeals in Enhanced Network Solutions Group,
Inc. v. Hypersonic Technologies Corp., 951 N.E.2d 265 (Ind. Ct.
App. 2011), which distinguished its facts from the proactive
conduct in Scarbrough. Applying the Indiana appellate court’s
analysis to the facts in the instant case, the trial court concluded
there was “no genuine issue of material fact or law” and “the record
clearly shows that Epsilon solicited these Defendants, and not the
converse.” For the reasons that follow, we respectfully disagree
with the trial court’s conclusion.
III.
An order granting summary judgment is reviewed de novo.
Volusia Cty. v. Aberdeen at Ormond Beach, L.P., 760 So. 2d 126,
130 (Fla. 2000).
The law is well settled in Florida that a party moving
for summary judgment must show conclusively the
absence of any genuine issue of material fact and the
court must draw every possible inference in favor of the
party against whom a summary judgment is sought. . . .
A summary judgment should not be granted unless the
facts are so crystallized that nothing remains but
questions of law. . . .
If the evidence raises any issue of material fact, if it
is conflicting, if it will permit different reasonable
inferences, or if it tends to prove the issues, it should be
submitted to the jury as a question of fact to be
determined by it. . . .
Moore v. Morris, 475 So. 2d 666, 668 (Fla. 1985) (emphasis added)
(citations omitted). As this Court accentuated in Bowman v.
Barker, 172 So. 3d 1013 (Fla. 1st DCA 2015):
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A summary judgment proceeding is not a trial by
affidavit or deposition. . . . The movant must demonstrate
conclusively that no genuine issue exists as to any
material fact, and the court must draw every possible
inference in favor of the party opposing summary
judgment. . . . Moreover, “[A]ll doubts as to the existence
of a genuine issue of material fact must be resolved
against the moving party; if the slightest doubt remains,
a summary judgment cannot stand.”
Id. at 1015 (emphasis added) (citations and some quotation marks
omitted) (quoting Brock v. Assocs. Fin., Inc., 625 So. 2d 135, 135-
36 (Fla. 1st DCA 1993)).
As we earlier remarked, the trial court resolved the question
of who initiated solicitation as a matter of law by concluding that
Enhanced Network Solutions Group—not Scarbrough—compelled
the conclusion that Appellees did not proactively solicit
employment with Epsilon. We appreciate the trial court’s attempt
to parse the legal issue central to Scarbrough by comparing it to
an out-of-state appellate court’s critique of our analysis, but
Scarbrough is the controlling precedent in the First District and
the trial court was bound to apply it. Pardo v. State, 596 So. 2d
665, 666 (Fla. 1992) (holding that “‘[t]he decisions of the district
courts of appeal represent the law of Florida unless and until they
are overruled by this Court,’” quoting Stanfill v. State, 384 So. 2d
141, 143 (Fla. 1980)). Even so, because the trial court felt
compelled to locate another court’s decision presenting different
facts in order to distinguish those in Scarbrough exemplifies just
how fact-driven this particular case is.
Initially, it is important to note that neither Scarbrough nor
Enhanced Network Solutions Group were decided on motions for
summary judgment. Enhanced Network Solutions Group involved
an appeal from the trial court’s order granting a declaratory
judgment. The Indiana appellate court restated the issue as being
“[w]hether the trial court erred when it found that Hypersonic did
not solicit or induce an employee of ENS to terminate his
employment in violation of the terms of the Sub-Contractor
Agreement entered into between Hypersonic and ENS.” 951
N.E.2d at 266. The appellate court reviewed the trial court’s
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findings to determine whether they were supported by the
evidence and also “considered only the evidence favorable to the
judgment and all reasonable inferences to be drawn therefrom.” Id.
at 267 (emphasis added) (citations omitted). That standard of
review clearly differs from the one we must employ in reviewing
the instant summary judgment order, where every possible
inference must be resolved in favor of CTI, the party opposing
summary judgment. Brookie, 213 So. 3d at 1131.
In turn, Scarbrough was an appeal from an order temporarily
enjoining Scarbrough from soliciting the sale of insurance to
customers of Liberty National Life Insurance, Scarbrough’s former
employer. Again, the standard of review differed. On appeal, it was
whether the trial court abused its discretion. But apart from that,
in Scarbrough we adopted the definition of “solicit” from Black’s
Law Dictionary to be applied to non-solicitation cases. We
concluded that “[i]t reasonably appears [] that a person may, in
appropriate circumstances, solicit another’s business regardless of
who initiates the meeting” because “the term ‘solicit’ in an
agreement prohibit[s] the employee from being ‘proactive’ in such
efforts.” Id. at 285 (citing J.K.R., Inc. v. Triple Check Tax Serv.,
736 So. 2d 43, 44 (Fla. 1st DCA 1999)). As a result, Scarbrough
expanded the concept of direct solicitation to encompass conduct
that, while less direct, is nonetheless more active than passive in
nature.
We conclude that whether a defendant’s behavior is proactive
presents a question of fact for the trier of fact. Indeed, the question
of whether Appellees were “proactive” in soliciting employment
with Epsilon is just as unsuitable for resolution on a motion for
summary judgment as was the fraud claim in Bowman, for the
reason that it is “a subtle thing requiring a full explanation of the
facts and circumstances of the alleged wrong[.]” 172 So. 3d at 1017
(internal quotation marks omitted) (quoting Palmer v. Santa Fe
Healthcare Sys., Inc., 582 So. 2d 1234, 1236 (Fla. 1st DCA 1991)).
For instance, in the present case, the essence of Hutchinson’s
deposition testimony and Gaukel’s affidavit draws forth the
reasonable inference that Hutchinson, along with the other
Appellees, might have been complaining just a little too loudly
about employment woes with CTI in a working environment where
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everyone involved knew there was more than one subcontractor on
the job to hear their protests. Furthermore, Hutchinson’s round-
up of the other three Appellees also is subject to a reasonable
inference that there might have been a concerted plan to leave CTI
for Epsilon. And, Penzell’s act of referring the issue of the non-
solicitation agreements to his company’s legal team because of
concerns expressed by Appellees suggests a general
acknowledgment of a potential conflict with the agreements,
despite Penzell’s disparaging opinion that CTI’s non-solicitation
clauses were “laughable.” Those facts, alone, go a long way toward
“permit[ing] different reasonable inferences,” and, moreover, they
“tend[] to prove the issues.” Moore, 475 So. 2d at 668.
It is also worth noting that this is not a case where the issue
is resolved based on the interpretation of the contractual language,
or turns on the enforceability of the non-solicit/non-compete
clause. Cf. White v. Mederi Caretenders Visiting Servs. of Se. Fla.,
LLC, 226 So. 3d 774 (Fla. 2017); Henao v. Prof’l Shoe Repair, Inc.,
929 So. 2d 723 (Fla. 5th DCA 2006); Univ. of Fla., Bd. of Trs. v.
Sanai, 837 So. 2d 512 (Fla. 1st DCA 2003). Instead, whether the
terms of the non-solicitation agreements were violated here is
largely predicated on the inferences to be drawn from the facts of
Appellees’ behavior prior to, and during, their negotiations with
Epsilon. On that point, we hold that the facts contained in the
depositions, affidavits, and other papers of record are not “so
crystallized that nothing remains but questions of law.” Moore, 475
So. 2d at 668. Instead, they raise a legitimate doubt so that “‘a
summary judgment cannot stand . . . .’” Bowman, 172 So. 3d at
1015 (emphasis added) (quoting Brock, 625 So. 2d at 135–36).
Consequently, the Decision and Order Granting Motion for
Summary Judgment is reversed and the cause is remanded for
further proceedings on CTI’s Amended Complaint.
REVERSED and REMANDED.
MAKAR, OSTERHAUS, and JAY, JJ., concur.
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_____________________________
Not final until disposition of any timely and
authorized motion under Fla. R. App. P. 9.330 or
9.331.
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Jeremy C. Branning, Daniel E. Harrell, and Andrew M. Spencer of
Clark Partington, Pensacola, for Appellant.
Ralph A. Peterson, Marcus A. Huff, and John R. Zoesch, III, of
Beggs & Lane, RLLP, Pensacola, for Appellees.
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