DEREK D'AGOSTINO AND D'AGOSTINO RACING, INC., APPELLANTS,
v.
LETHAL PERFORMANCE, INC., APPELLEE

Fla. 4th DCA | 2007-06-27
No. 4D06-2590
STONE and TAYLOR, JJ., concur.
958 So. 2d 605 Florida District Court of Appeal, Fourth District (2007)

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Synopsis

Derek D'Agostino and his company appeal a temporary injunction restricting their automotive parts installation business based on a non-compete covenant. The appellate court reverses the portion of the injunction that prohibited them from installing the same brands of aftermarket performance parts as their competitor Lethal Performance, finding insufficient evidence that installation services violated the restrictive covenant.


Holding

The appellate court reversed the portion of the injunction restricting the types of parts D'Agostino Racing could install. The court held that because Lethal Performance does not operate an installation facility itself, D'Agostino's installation services do not violate the restrictive covenant prohibiting businesses that sell products and perform services performed by the company.


Headnotes

[1] A restrictive covenant in a shareholders' agreement may prohibit a former shareholder from engaging in a competing business for a specified period after ceasing to be a p…

[2] Irreparable injury is presumed when a covenant not to compete is violated, obviating the need for proof of such harm to obtain an injunction.

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Key Quotes

“A party seeking temporary injunctive relief must demonstrate: (1) irreparable harm; (2) a clear legal right; (3) an inadequate remedy at law; and (4) that the public interest will be served.”

Establishes the standard test for obtaining temporary injunctive relief in Florida

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Facts & Procedural History

In 2005, D'Agostino and two others formed Lethal Performance, Inc., an internet retailer of aftermarket performance parts. The shareholders signed a R…

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Opinion of the Court
STEVENSON, C.J.

STEVENSON, C.J.

Derek D’Agostino and D’Agostino Racing, Inc. appeal a temporary injunction entered in favor of Lethal Performance, Inc. For the reasons set forth below, we reverse the temporary injunction to the extent it enjoined the appellants from operating an automotive parts accessory installation facility that installed the same brands of after-market performance enhancing parts as Lethal Performance. In all other respects, we affirm.

In 2005, Jared Rosen, Jonas Cooper and Derek D’Agostino formed Lethal Performance, Inc., an internet retailer of aftermarket performance parts which caters to owners of specific automobiles. The Shareholders’ Restrictive Agreement states in part that the company’s shareholders could not “[o]wn, maintain, engage in, or have any interest in any other business which sells products and/or performs any of the various programs and services performed or rendered by the Company.” The Agreement further provides that the covenant not to compete would continue to apply for three-years after any shareholder ceased to be a part of the company.

Around the time period that D’Agostino left Lethal Performance, he began operating D’Agostino Racing, a company that distributed automobile parts and operated an installation facility. Thereafter, Lethal Performance sought a temporary injunction that enforced the restrictive covenant. At the conclusion of the hearing held on Lethal Performance’s motion, the trial judge informed the parties that, although he was concerned about the companies selling the same products, D’Agostino Racing could install parts sold by Lethal Performance.

We agree with D’Agostino that the trial court erred by including in its written order a restriction on the types of parts D’Agostino Racing could install. “A party seeking temporary injunctive relief must demonstrate: (1) irreparable harm; (2) a clear legal right; (3) an inadequate remedy at law; and (4) that the public interest will be served.” Weinstein v. Aisenberg, 758 So. 2d 705, 706 (Fla. 4th DCA 2000). “Where a covenant not to compete is violated, irreparable injury is presumed and does not have to be proven to obtain an injunction.” T.K. Commc’ns, Inc. v. Herman, 505 So. 2d 484, 486 (Fla. 4th DCA 1987). However, the presumption of irreparable harm is rebuttable. See Don King Prods., Inc. v. Chavez, 717 So. 2d 1094, 1095 (Fla. 4th DCA 1998). In the absence of evidence showing Lethal Performance operates an installation facility, Lethal Performance has failed to establish that D’Agostino or D’Agostino Racing would violate the Shareholders’ Restrictive Agreement by installing the types of parts Lethal Performance sells. Accordingly, we remand this case to the trial court to conform the written order regarding the installation facility to the court’s oral pronouncements. We have considered the other issues raised, but find no error. Affirmed in part, Reversed in part, and Remanded.

STONE and TAYLOR, JJ., concur.


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