C & D FARMS, INC., A FLORIDA CORPORATION, ET AL., APPELLANTS,
v.
JOSEPH M. CERNIGLIA ET AL., APPELLEES
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This case involves the construction of a non-competition agreement related to the sale of corporate stock in produce businesses. The appellate court affirmed the lower court's finding that the agreement was unenforceable in Florida due to public policy but reversed the finding that it was invalid and void, remanding for modification of the decree.
The agreement is unenforceable in Florida due to the state's public policy as established by statute, but it is not invalid and void. The court affirmed the unenforceability but reversed the voidness.
“We hold that the extent of the chancellor’s determination should only have been that the agreement not to compete was unenforceable in this State because of the provisions of § 542.12, Fla.Stat., F.S.A., which .establishes the public policy of this State.”
Establishes the basis for unenforceability in Florida.
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Join FLexlaw to unlock all legal intelligenceAppellants sold stock in produce corporations and entered into a non-competition agreement for twenty years, in exchange for annual payments. The agre…
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By this appeal, review is sought of a final decree entered in a declaratory decree action wherein the chancellor was called upon to construe a non-competition agreement, which was executed in connection with the sale of certain corporate stock in several corporations engaged in the produce business. The agreement was executed in 1954 and provided that it was to be construed by the laws of Georgia [wherein it was executed and wherein most of the corporate entities had their center of interest]. It provided that the appellees would divest their stock ownership in several corporations; that they would receive certain monies and, for a three-year period, they would be employed by certain of the corporations; that for the next twenty years they would be prohibited from entering into the tomato produce market in competition with the corporations, upon the corporations paying to them an annual fixed sum. But, the corporations reserved the right to terminate this latter twenty-year agreement and relieve themselves of the burden of making the payments. Only that portion of the agreement relative to the twenty-year non-competition is involved in this action.
The chancellor made extensive findings of fact to the effect that there was no good will in the produce field generally, nor in the growing, packing or marketing of tomatoes; that the optional twenty years for which the restrictive covenant was to run was not to protect good will, but to eliminate competition; that the executory portion of the agreement was unenforceable because it was too extensive, both as to time and area. Therefore, he declared the contract unenforceable and for naught.
The territory or area affected was divided into sixteen categories. The greatest area covered was:
“1. In any State, County, Parish or City of the United States of America.
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(i4. All territory within a radius of fifty (50) miles of any city in which any of the COMPANIES presently does business or has customers served by it or them.”
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Many of the areas affected as to particular corporations were limited to the farm areas actually covered by them. In addition to dividing the territory or area affected, the contract had the following sever-ability clause:
“(B) IT IS AGREED AND UNDERSTOOD that as to the geographic area set forth above for the purpose of covenants not to compete herein contained, each area is divisible and separable so that in the event the covenants not to compete shall be invalid or unenforceable in any geographic area described, they shall be valid and enforceable in those geographic areas in which the same are valid and *386enforceable by law, the intention of the parties being that the COMPANIES be given the broadest protection allowed by law as respects the covenants not to compete herein contained and wherever necessary the areas which may be protected by law may be determined and proved by facts and evidence.”
The chancellor, in his decree, did not mention the severability paragraph which is generally held valid and should be recognized. See: Coppedge v. Leiser, 71 Idaho 248, 229 P.2d 977; Producers’ Coke Co. v. Hillman, 243 Pa. 313, 90 A. 144; Heilwood Fuel Company v. Manor Real Estate Co., 405 Pa. 319, 175 A.2d 880; 17 Am.Jur.2d, Contracts, § 325; 17A C.J.S. Contracts § 332. The impact of the decree was to hold that the agreement was invalid and unenforceable.
We hold that the extent of the chancellor’s determination should only have been that the agreement not to compete was unenforceable in this State because of the provisions of § 542.12, Fla.Stat., F.S.A., which .establishes the public policy of this State. See: Davis v. Ehsco Industries, Inc., Fla.App. 1963, 150 So.2d 460. It is not clear from the record that the contract was valid or invalid under the laws of Georgia. See and compare: Rakestraw v. Lanier, 104 Ga. 188, 30 S.E. 735; Hood v. Legg, 160 Ga. 620, 128 S.E. 891; Orkin Exterminating Co. of South Georgia v. Dewberry, 204 Ga. 794, 51 S.E.2d 669; Turner v. Robinson, 214 Ga. 729, 107 S.E.2d 648; Thomas v. Coastal Industrial Services, Inc., 214 Ga. 832, 108 S.E.2d 328; Insurance Center, Inc. v. Hamilton, 218 Ga. 597, 129 S.E.2d 801; Brittain v. Reid, 220 Ga. 775, 141 S.E.2d 903. For the purposes' of this opinion, we consider that it is valid but unenforceable in this State, due to the announced public policy.
Therefore, we affirm so much of the decree as held the agreement unenforceable, but reverse those portions which held it invalid and void, and return the matter to the trial court with directions to eliminate these portions from the final decree.
The appellees have attempted to raise three points in their brief, only two of which questioned rulings of the chancellor; one as to burden of proof and the other as to the mutuality of the contract. However, it does not appear that any cross-assignments of error have been filed by the appellees which would preserve these rulings and, therefore, same have not been considered by the court. See: Regero v. Daugherty, Fla.1954, 69 So.2d 178; Fish Carburetor Corp. v. Great American Ins. Co., Fla.App.1961, 125 So.2d 889; Florida Board of Pharmacy v. Hall, Fla.App. 1963, 157 So.2d 824; 2 Fla.Jur., Appeals, § 129.
Affirmed in part; reversed in part, with directions.
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Cont'l Mortg. Invs. v. Sailboat KEY, Inc., 395 So. 2d 507 (Fla. 1981)…ely stands for the truism that an agreement [*510] against public policy is unenforceable, but does not delineate public policy in terms of usury. Davis v. Ebsco Industries, Inc., 150 So. 2d 460 (Fla. 3d DCA 1963) and C & D Farms, Inc. v. Cerniglia, 189 So. 2d 384 (Fla. 3d DCA 1966), are inapposite since they deal with covenants-not-to-compete, and do not help us understand the strength of the very different policies underlying the usury laws.5 Finding no real support in our case law for the use of the publi…1 / 2
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Auto Club Affiliates, Inc. v. Donahey, 281 So. 2d 239 (Fla. 2d DCA 1973)…ould be noted however that Fountain involved a temporary injunction until its reasonableness could be determined on the facts. Sanford Industries, Inc. v. Jaghory, Fla.App.3d 1969, 223 So. 2d 77, and C & D Farms, Inc. v. Cerniglia, Fla.App.3d 1966, 189 So. 2d 384, involve cases where covenants not to compete have not been enforced because the time and area limitations were determined to be unreasonable under the circumstances. The business involved in Sanford was the manufacturing of equipment for the constr…
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Cerniglia v. C. & D. Farms, Inc., 203 So. 2d 1 (Fla. 1967)…PER CURIAM. By petition for writ of certiorari the petitioner urges that the decision of the District Court of Appeal, Third District, reported as C. & D. Farms, Inc. v. Cerniglia, Fla.App.1966, 189 So. 2d 384, conflicts with the decision of the District Court of Appeal, Second District in Matthews v. Matthews, 177 So. 2d 497 (Fla.App.196S). In the last paragraph of its opinion, the district court refused to consider questions raised by the appellee there…
Previewing 3 of 4 citing cases — full citator treatment, depth of discussion, and citing context are member features.
Join FLexlaw to unlock all legal intelligenceAuthorities Cited
- Fish Carburetor Corp. v. Great Am. Ins. Co., 125 So. 2d 889 (Fla. 1st DCA 1961)
- Regero v. Daugherty, 69 So. 2d 178 (Fla. 1953)
- Pier Pavilion, Inc. v. Hensley, 150 So. 2d 460 (Fla. 2d DCA 1963)
- Shepard W. Davis v. Ebsco Indus., Inc., 150 So. 2d 460 (Fla. 3d DCA 1963)
- Fla. Bd. OF Pharmacy v. Hall, 157 So. 2d 824 (Fla. 2d DCA 1963)