#NO.

12-3456

IN THE UNITED STATES COURT OF APPEALS FOR THE ELEVENTH CIRCUIT _____________________ BILBETTE BAGGINS Plaintiff/appellant, v. HOGWARTS HOSPITAL, Defendant/appellee. ______________________ On Appeal from the United States District Court for the Southern District of Florida

BRIEF OF THE APPELLANT BILBETTE BAGGINS _______________________ BILBETTE BAGGINS Attorney for Appellant Post Office Box Number Anywhere You Are, USA 12345

______________________________________________________

CERTIFICATE OF INTERESTED PERSONS AND CORPORATE DISCLOSURE STATEMENT

Bilbette Baggins v. Hogwarts Hospital Case No. 96-1501 Appellant files this Certificate of Interested Persons and Corporate Disclosure Statement, listing the parties and entities interested in this appeal, as required by 11th Cir. R. 26.1.

Honorable Volder Mort JED CREEK RONALD WEASLY BILBETTE BAGGINS HOGWARTS HOSPITAL

United States District Judge Attorney for Plaintiff Attorney for Defendant Plaintiff Defendant

STATEMENT REGARDING ORAL ARGUMENT The plaintiff respectfully submits that oral argument is necessary to the just resolution of this appeal and will significantly enhance the decision making process.

TABLE OF CONTENTS

CERTIFICATE OF INTERESTED PERSONS STATEMENT REGARDING ORAL ARGUMENT TABLE OF CITATIONS

. . . . . . . . . . . . C-1 . . . . . . . . . . . . . i iii

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STATEMENT OF JURISDICTION STATEMENT OF THE ISSUES STATEMENT OF THE CASE

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. . . . . . . . . . . . . . .. . . 2

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Course of Proceedings and Disposition in the District Court Statement of Facts Standard of Review SUMMARY OF THE ARGUMENT . . . . . . . . . . . . 3-4 4 4-5

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. . . . . . . . . . . . . . .. . . 6 . . . . . . . . . . 7-16

ARGUMENT AND CITATIONS OF AUTHORITY CONCLUSION

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CERTIFICATE OF COMPLIANCE CERTIFICATE OF SERVICE

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TABLE OF CITATIONS

CASES:

Abbott v. Williams, 888 F.2d 1550, 1552 (11th Cir. 1989). . . . . . . . . . . . . 5

AGS Computer Services, Inc. v. Rodriguez, 592 So.2d 801 (Fla. 4th DCA 1992) . . . . . . . . . . . . . . 12

Askew v. Dupree, 30 Ga. 173 (1860) . . . . . . . . . . . . . . . . . . . . . 10

Brown v. Brown, 234 Ga. 300, 215 S.E.2d 671 (1975) . . . . . . . . . . . . 10

Carpineta v. Shields, 70 So.2d 573 (Fla. 1954). . . . . . . . . . . . . . . . . . . 7

Champion v. Gray, 478 So.2d 17 (Fla. 1985). . . . . . . . . . . . . . . 6, 9, 10

Fish v. Adams, 401 So.2d 843 (Fla. 5th DCA 1981). . . . . . . . . . . . . . 15

Flickenger v. R.J. Fitzgerald & Co., Inc., 732 So.2d 33 (Fla. 2nd DCA 1999) . . . . . . . . . . . . . . 13

General American Life Ins. Co. v. AmSouth Bank, 100 F.3d 893, 897 (11th Cir. 1996). . . . . . . . . . . . . 5

Gonzalez v. Metropolitan Dade County Public Health Trust, 626 So.2d 1030 (Fla. 3rd DCA 1993). . . . . . . . . . . . . 8

Gupton v. Village Key & Saw Shop, Inc., 656 So.2d 475 (Fla. 1995) . . . . . . . . . . . . . . . . . 10

Hapney v. Central Garage, Inc., 579 So.2d 127, 132 Fla. 2nd DCA 1991) rev. denied, 591 So.2d 180 (Fla. 1991) . . . . . . . . . . . . . . . . . 10

Harry G. Blackstone, D.O., P.A. v. Dade City Osteopathic Clinic, 511 So.2d 1050 (Fla. 2nd DCA 1987), review denied, 523 So.2d 576 (Fla. 1988) . . . . . . . . . . . . . . . . . 14

Insurance Co. of North America v. Lexow, 937 F.2d 569, 571 (11th Cir. 1991). . . . . . . . . . . . . 5

Kephart v. Hair Returns, Inc., 685 So.2d 959 (Fla. 4th DCA 1996), rev. denied, 695 So.2d 699 (Fla. 1997) . . . . . . . . . . 12

King v. Jessup, 698 So.2d 339 (Fla. 5th DCA 1997). . . . . . . . . . . . . . 15

Pure Foods, Inc. v. Sir Sirloin, Inc., 84 So.2d 51 (Fla. 1955) . . . . . . . . . . . . . . . . . . 14

Renpak, Inc. v. Oppenheimer, 104 So.2d 642 (Fla. 2nd DCA 1958) . . . . . . . . . . . . . 14

Salve Regina College v. Russell, 499 U.S. 225, 231, 111 S.Ct. 1217, 1221 (1990). . . . . . . 4

State Chemical Mfg. Co. v. Lopez, 642 So.2d 1127 (Fla. 3rd DCA 1994) . . . . . . . . . . . . . 12

Templeton v. Creative Loafing Tampa, Inc., 552 So.2d 288 (Fla. 2nd DCA 1989) . . . . . . . . . . . 13, 14

Wynne v. State, 17 Ga. App. 263, 86 S.E. 823 (1915) . . . . . . . . . . . . 10

Zell v. Meek, 665 So.2d 1048 (Fla. 1995) . . . . . . . . . . . . . 7, 8, 9

STATUTORY AND OTHER AUTHORITY:

28 U.S.C. 1291. . . . . . . . . . . . . . . . . . . . . . . 1 28 U.S.C. 1332. . . . . . . . . . . . . . . . . . . . . . . 1 Fed.R.Civ.P. 56(e) . . . . . . . . . . . . . . . . . . . . . Fla. Stat. 542.33 (1993). . . . . . . . . . . . . . . Stat. 542.335 (1997). . . . . . . . . . . . . . . . 7

10, 12 Fla. 13 10

Ga. Code Ann. 19-3-1 (2001). . . . . . . . . . . . . . .

STATEMENT OF JURISDICTION The district court had jurisdiction of this case pursuant to 28 U.S.C. 1332 because of diversity between the parties. The court of

appeals has jurisdiction over this appeal pursuant to 28 U.S.C. 1291 which gives the courts of appeals jurisdiction over all final decisions of the district courts of the United States. The appeal was timely filed on December 12, 1996, from the final judgment and commitment order entered on November 5, 1996 that disposed of all claims between the parties to this cause.

STATEMENT OF THE ISSUES ISSUE I WHETHER THE DISTRICT COURT ERRED IN GRANTING SUMMARY JUDGMENT ON PLAINTIFFS COMPLAINT, AS THE COURT MISCONSTRUED THE HOLDING IN CHAMPION V. GRAY. ISSUE II WHETHER THE DISTRICT COURT ERRED IN GRANTING SUMMARY JUDGMENT ON DEFENDANTS COUNTERCLAIM, AS COVENANTS NOT TO COMPETE MUST BE BETWEEN PARTIES ENGAGED IN A SIMILAR BUSINESS AND REASONABLY LIMITED BOTH IN TIME AND PLACE.

STATEMENT OF THE CASE The appellant was the plaintiff for the negligent infliction of emotional distress claim and the defendant for the breach of contract claim in the district court and will be referred to by name. The

appellee was the defendant for the negligent infliction of emotional distress claim and plaintiff for the breach of contract claim and will be referred to by name. The record will be noted by reference to the

volume number, document number, and page number of the Record on Appeal as prescribed by the rules of this Court. Course of Proceedings and Disposition in the District Court Plaintiff-Appellant Bilbette Baggins (herein Baggins) filed its Original Complaint against Defendant-Appellee Hogwarts Hospital (herein HH)on March 3, 1996 in the United States District Court, Southern District of Florida. The complaint alleged negligent

infliction of emotional distress stemming from the death of Baggins husband at the hands of a driver working for HH. R1-2-5. HH filed a Counterclaim for breach of a covenant not to compete on March 19, 1996. R2-6-9. The District Court granted summary judgment for HH on both its counterclaim and the original complaint on November 5, 1996. R10-22. On December 12, 1996, Baggins timely filed a Notice of Appeal with the District Court, alleging errors further developed herein. R11-23.

Statement of Facts Baggins, a former employee of HH from November 1990 until August of 1992, began a business selling herbal remedies over the internet in June of 1994. Just prior to leaving the employ of HH, Baggins signed a noncompete agreement for which Baggins received $20,000. severance. R7-19. On February 1, 1996, while watching live television, Baggins witnessed the death of her husband by a speeding driver employed by HH. Subsequently, Baggins suffered from emotional trauma that

resulted in severe back pain, elevations in blood pressure and a heart condition. R8-20. Standard of Review The district courts ruling does not come to this Court clothed with a presumption of correctness because this case was decided on pure questions of lawtwo summary judgments on both the original complaint and the counterclaim. When reviewing the district courts interpretation of state law, the Court should apply a de novo standard of review. Salve Regina College v. Russell, 499 U.S. 225, 231, 111 S.Ct. 1217, 1221 (1990). A de novo standard of review requires that the reviewing court grant no deference to the lower courts ruling, evaluating the applicable law and facts anew. General American Life Ins. Co. v.

AmSouth Bank, 100 F.3d 893, 897 (11th Cir. 1996); Insurance Co. of

North America v. Lexow, 937 F.2d 569, 571 (11th Cir. 1991); Abbott v. Williams, 888 F.2d 1550, 1552 (11th Cir. 1989).

SUMMARY OF THE ARGUMENT The district court misstates and misconstrues the Florida Supreme Courts holding in Champion v. Gray, 478 So.2d 17 (Fla. 1985), it misinterprets the legal relationship between Baggins and the deceased, Mr. Gandalf Grey, and then compounds these errors with a misapplication of summary judgment. Further, the district court misreads the law regarding covenants not to compete, as the two parties were not in similar businesses, the terms were unreasonable as to time and place, customer lists are not trade secrets, and there was no showing of irreparable injury. Finally, the high standard of certainty required for granting summary judgment precludes the ruling of the lower court, as genuine issues of law fact remain in dispute.

ARGUMENT AND CITATIONS OF AUTHORITY THE DISTRICT COURT ERRED IN GRANTING SUMMARY JUDGMENT ON PLAINTIFFS COMPLAINT, AS THE COURT MISREADS THE HOLDING IN CHAMPION V. GRAY. There are two requisites for granting a summary judgment. there must be no genuine issue of material fact. First,

Second, one of the

parties must be entitled to judgment as a matter of law on the undisputed facts. In assessing whether the nonmoving party has raised

a genuine issue precluding summary judgment, the court must believe nonmovant and draw all justifiable inferences in his favor. Fed.R.Civ.P. 56(e); Carpineta v. Shields, 70 So.2d 573 (Fla. 1954). Four elements constitute a cause of action for negligent infliction of emotional distress: (1) the plaintiff must suffer a physical injury; (2) the plaintiff's physical injury was caused by a psychological trauma; (3) the plaintiff was involved in some way in the event causing the negligent injury to another; and (4) the plaintiff had a close personal relationship to the directly injured person. The landmark case is Champion v. Gray, wherein a husband had brought an action for damages against a drunk driver whose negligence caused his wifes death. The driver had run his car off the road,

killing the couples daughter, and the mother, having heard the impact, came immediately to the accident scene, and, upon seeing her daughter's body was so overcome with shock and grief that she collapsed and died on the spot. Considering these compelling facts, the court concluded:

[T]he price of death or significant discernible physical injury, when caused by psychological trauma resulting from a negligent injury imposed upon a close family member within the sensory perception of the physically injured person, is too great a harm to require direct physical contact ["impact"] before a cause of action exists. Champion at 18-19. Accordingly, the court retreated from its strict adherence to the impact rule and recognized for the first time a negligence action for physical injuries occurring without an actual impact. See Gonzalez v.

Metro. Dade County Pub. Health Trust, 651 So.2d 673, 675 (Fla. 1995) (recognizing that the impact rule is not applicable in cases "where a person suffers a significant discernible physical injury caused by the psychological trauma that results from observing the death or physical injury of a close family member that was negligently caused by another"). In Zell v. Meek, 665 So.2d 1048 (Fla. 1995), the daughter of an apartment tenant who witnessed the tenant's death after a bomb was placed in the apartment doorway by an anonymous bomber brought an action for negligent infliction of emotional distress against the owner of apartment complex, and the owner moved for summary judgment. Although summary judgment was granted, the decision was later reversed on appeal. In Meeks the manifestations of psychic injury began immediately with insomnia, depression, short-term memory loss, extreme fear of loud noises, and bad dreams resulting in professional treatment within three weeks of the bombing. They continued in a progressive pattern of

exacerbation before rising to the level of physical impairment within nine months after the bombing. Thereafter, the resulting physical injuries continued to become more and more serious. The Florida Supreme Court ruled that we find some evidence in the record which indicates that the Meeks may be able to establish all the elements of the Champion test for a cause of action for negligent infliction of emotional distress. summary judgment on their claim. Accordingly, it was error to enter Meek at 1054.

Under the Champion analysis, space, time, distance, the nature of the injuries sustained, and the relationship of the plaintiff to the victim of the accident must all be considered. As the court

pointed out in Meek, the closer the tie in relationship or emotional attachment, the greater the claim for consideration will be. 1052. In that respect, it must be noted that the lower court disregarded the relationship between Baggins and Grey, as it is clear they were husband and wife as common law marriages have been recognized in Georgia since at least 1860. By the common law and the law of Georgia a mutual agreement to be husband and wife, by parties able to contract, followed by cohabitation, is recognized as a valid marriage. Askew v. Dupree, 30 Id. at

Ga. 173 (1860); Wynne v. State, 17 Ga. App. 263, 86 S.E. 823 (1915); Brown v. Brown, 234 Ga. 300, 215 S.E.2d 671 (1975); Ga. Code Ann. 19-3-1 (2001). This state of marriage should clearly have altered the

lower courts analysis and this issue alone should have been sufficient to preclude the granting of summary judgment.

Reviewing its earlier decision in Champion, the court in Meek observed that we rejected the impact rule to the extent that we held that no impact need be shown where psychological trauma could be demonstrated to cause a demonstrable physical injury. emphasis added. Accordingly, for the lower court to have ruled that as a matter of law, Plaintiff cannot establish that she satisfies the test set out by our Supreme Court in Champion v. Gray, because Plaintiff did not suffer an impact, is clearly erroneous, clearly contrary to the Florida Supreme Courts holding, and clearly reversible error. R10-22. Meek at 1052,

THE DISTRICT COURT ERRED IN GRANTING SUMMARY JUDGMENT ON DEFENDANTS COUNTERCLAIM, AS COVENANTS NOT TO COMPETE MUST BE BETWEEN PARTIES ENGAGED IN A SIMILAR BUSINESS AND REASONABLY LIMITED BOTH IN TIME AND PLACE. It is well settled law in Florida that competition may not be eliminated per se absent a legitimate business interest. See Hapney v. Central Garage, Inc., 579 So.2d 127, 132 Fla. 2nd DCA 1991), rev. denied, 591 So.2d 180 (Fla. 1991), disapproved on other grounds, Gupton v. Village Key & Saw Shop, Inc., 656 So.2d 475 (Fla. 1995). Florida Statutes, section 542.33 establishes the legal principles applicable to covenants not to compete. Prior to its 1990 amendment, the section simply stated that a covenant not to compete could be enforced by injunction, but that before injunctive relief could be granted, the movant had to show irreparable injury. The only

requirements to obtain an injunction were to establish a valid covenant not to compete and a breach.

In 1990 the legislature severely weakened these covenants in favor of the breaching competitor by amending section 542.33 to read as follows: 542.33 Contracts in restraint of trade valid.-(2)(a) One who sells the goodwill of a business, or any shareholder of a corporation selling or otherwise disposing of all of his shares in said corporation, may agree with the buyer, and one who is employed as an agent, independent contractor, or employee may agree with his employer, to refrain from carrying on or engaging in a similar business and from soliciting old customers of such employer within a reasonably limited time and area, so long as the buyer or any person deriving title to the goodwill from him, and so long as such employer, continues to carry on a like business therein. Said agreements may, in the discretion of a court of competent jurisdiction, be enforced by injunction. However, the court shall not enter an injunction contrary to the public health, safety, or welfare or in any case where the injunction enforces an unreasonable covenant not to compete or where there is no showing of irreparable injury. However, use of specific trade secrets, customer lists, or direct solicitation of existing customers shall be presumed to be an irreparable injury and may be specifically enjoined.... (Emphasis added). Under the 1990 amendment, the legislature eliminated the judicial presumption by requiring a showing of irreparable injury before an injunction could be entered. See State Chemical Mfg. Co. v. Lopez, 642 So.2d 1127 (Fla. 3rd DCA 1994); AGS Computer Services, Inc. v. Rodriguez, 592 So.2d 801 (Fla. 4th DCA 1992) (party seeking injunction to enforce covenant not to compete was required to plead and prove irreparable injury because irreparable injury is no longer presumed upon proof of breach of a valid covenant not to compete under the 1990 amendment to section 542.33). Although section 542.33 has since been repealed with respect to restrictive covenants entered into or having an effective date on or after July 1, 1996, it still governs enforcement of restrictive covenants entered into before that date.

In Kephart v. Hair Returns, Inc., 685 So.2d 959 (Fla. 4th DCA 1996), rev. denied, 695 So.2d 699 (Fla. 1997), a former employer sued a former employee to enforce a noncompetition clause in an employment contract. In overruling the lower court, the district court found that statute 542.33 did not prohibit a former employee from servicing customers who voluntarily followed that employee to their new place of employment. The court ruled that the statute only validated contractual restrictions on soliciting an employer's old customers, that there was no prohibition against servicing those customers who voluntarily followed an employee to her new place of employment, and that without the use of trade secrets, customer lists, or direct solicitation, there was no irreparable injury. Id. at 960.

In Flickenger v. R.J. Fitzgerald & Co., Inc., 732 So.2d 33 (Fla. 2nd DCA 1999), an employer filed an action against former employees for breach of a restrictive covenant. The court found

the three-year restrictive covenant presumptively unreasonable, and reduced the period of restraint to two years. The court noted that [u]nder section 542.335(1)(d)1, Florida Statutes (1997), "a court ... shall presume unreasonable in time any restraint more than 2 years in duration." Id. at 35.

In Templeton v. Creative Loafing Tampa, Inc., 552 So.2d 288 (Fla. 2nd DCA 1989), a magazine publisher sought damages against a former employee alleging the employee was using confidential information from advertiser and distribution lists.

Even though most of the 80 to 100 advertisers in the employers magazine were the same merchants who advertised in the rival employees magazine, the lower courts decision to grant injunctive relief was reversed on appeal. [I]n our view, the lists in question do not qualify as trade secrets entitled to injunctive protection. There is no evidence that they are the product of any great expense or effort, that they are distillations of larger lists, or that they include information not available from public sources. See Pure Foods, Inc. v. Sir Sirloin,

Inc., 84 So.2d 51 (Fla. 1955); Harry G. Blackstone, D.O., P.A. v. Dade City Osteopathic Clinic, 511 So.2d 1050 (Fla. 2nd DCA 1987), review denied, 523 So.2d 576 (Fla. 1988); Renpak, Inc. v. Oppenheimer, 104 So.2d 642 (Fla. 2nd DCA 1958). Templeton at 289-290.

The court further ruled that employees could not be precluded from utilizing contacts and expertise gained during their former employment, or even customer lists they themselves had developed. Fish v. Adams, 401 So.2d 843 (Fla. 5th DCA 1981). In King v. Jessup, 698 So.2d 339 (Fla. 5th DCA 1997), one physician sought to enforce a covenant not to compete against another physician. Dr. King, who had an established medical practice, Their

employed Dr. Jessup who had just completed his medical studies.

written agreement included a covenant that prohibited Jessup from beginning a competitive medical practice for two years within a specified area after separating from King's practice, but Jessup began a new medical practice about a block away from King's practice within the two year period. Id. at 339, emphasis added.

Jessup acknowledged that he serviced patients who he had previously cared for while employed by King, but insisted that he did not directly solicit these patients, and that the only actions he took with respect to keeping his former patients was to inform them that he was located at a new address. King testified that, as a result of Jessup's actions, he had experienced emotional as well as financial difficulties. He testified that his billings had dropped by $50,000 from a thirty- six month average of $162,000 per month to $114,000 per month, his lowest monthly billing in three years. Id. at 340.

The district court affirmed the trial courts ruling that had refused injunctive relief and held that King had not suffered irreparable injury from Jessups breach of the covenant not to compete. Although placing an advertisement in the local newspaper is certainly a form of solicitation, we cannot conclude that such is a form of "direct solicitation" of the past patients. Nor does the fact that past patients voluntarily sought out Dr. Jessup at his new practice establish direct solicitation. Id. at 341.

Placing an advertisement on the internet is clearly not a form of direct solicitation either. Baggins can neither be precluded from

utilizing contacts and expertise gained during her former employment, nor be precluded from using customer lists developed during that employment. A hospital concession stand may sell hotdogs, chocolate bars and magazines, but this does not mean that a hospital is in the hotdog,

chocolate bar, or magazine selling business.

There was no direct

competition with HH, as sidelines are not a primary business, by law the 30 month term was presumptively unreasonable, and therefore, sufficient disputes of law remain to preclude the granting of summary judgment.

CONCLUSION Based upon the foregoing argument and citations of authority, the Court should reverse the order of the District court.

JED CREEK Counsel for BILBO SAGGINS

Name of Attorney Post Office Box Forgotten Anywhere, Anywhere You Are 12345

CERTIFICATE OF COMPLIANCE I CERTIFY that this brief complies with the type-volume limitation of FED. R. APP. P. 32(a)(7). According to the Microsoft Word program on which it is written, the numbered pages of this brief contain 4,240 words. Name of Attorney CERTIFICATE OF SERVICE I CERTIFY that a copy of the foregoing was served by mail this ____ day of _____, 2002, upon WHOMEVER IT REQUIRES,PONCE DE LEON BLVD., CORAL GABLES, FLORIDA, 33134.

Name of Attorney