W. Dudley McCarter, a former president of The Missouri Bar, is a partner in the St. Louis law firm of Behr, McCarter, Neely & Gabris.
NONCOMPETE AGREEMENT REASONABLY PROTECTED CUSTOMER CONTACTS
Jefferson City Medical Group, P.C. v. Brummett, 2024 WL 1517680 (Mo. App. W.D. 2024).
David Brummett appealed a judgment for an injunction enforcing a noncompete clause in his employment agreement with Jefferson City Medical Group, P.C. (JCMG). The Missouri Court of Appeals-Western District affirmed the judgment.1
Missouri courts will enforce noncompete agreements that are “demonstratively reasonable.”2 A demonstratively reasonable noncompete agreement “must be narrowly tailored temporally and geographically and must seek to protect legitimate employer interests beyond more competition by a former employee.”3
“Accordingly, a noncompete agreement is enforceable “only to the extent that the restrictions protect the employer’s trade secrets or customer contacts.” …The employer has the burden to prove that the non-compete agreement protects its legitimate interests in trade secrets or customer contacts and that the agreement is reasonable as to time and geographic space.”4
“An employer has legitimate interest in customer contacts to the extent it seeks to protect against ‘the influence an employee acquires over his employer’s customers through personal contact.”5 “Customer contacts are a protectable commodity because goodwill develops between the customers and the employer through its employees whose job it is to meet and converse with the customer while representing the employer.”6 A non-compete agreement helps keep “the covenanting employee out of a situation in which he might be able to make use of contacts with customers to his former employer’s disadvantage.”7
“While courts do not enforce noncompete clauses to protect the employer from mere competition by a former employee, they do protect the employer from unfair competition. The circuit court did not err in finding JCMG has a legitimate interest in its patient and referral base that is protected by the noncompete clause.8
DISCIPLINARY ISSUES INVOLVING EXPERT WITNESS WERE IMPROPERLY EXCLUDED AT TRIAL
Marchbank v. Chakrabarty, M.D., et al., 2024 WL 1863623 (Mo. App. E.D. 2024).
Jimmie Sue Marchbank and John Marchbank (collectively, “Marchbanks”) filed a lawsuit against Amit Chakrabarty and Urologic Clinics of North Alabama, P.C., d/b/a Poplar Bluff Urology for injuries Jimmie Sue Marchbank sustained following a vaginal prolapse repair surgery. Following a trial, the jury returned a verdict in Chakrabarty’s favor.9
Along with offering testimony as a fact witness, Chakrabarty also testified as a non-retained witness. The Marchbanks claimed the circuit court abused its discretion by preventing them from presenting evidence regarding Chakrabarty’s prior disciplinary history. They argued this decision impacted their ability to “impeach Chakrabarty’s credibility, qualifications, training, and experience when he testified to the issues of the standard of care, causation, and damages.”10 Further, the Marchbanks argued that Chakrabarty’s testimony “opened the door to this evidence being admitted because he testified as an expert.”11
Because the circuit court excluded impeachment evidence of Chakrabarty’s prior disciplinary record, the Missouri Court of Appeals-Eastern District found that the court “deprived the jury of the information it could use to evaluate Chakrabarty’s qualifications as a non-retained expert witness and erred.”12 Therefore, the appellate court reversed the circuit court’s judgment.13
Section 490.065.2(1) allows a witness “who is qualified as an expert by knowledge, skill, experience, training, or education” to testify as an expert to assist the jury in understanding the evidence.14 “Impeachment provides a tool to test a witness’s perception, credibility, and truthfulness, which is essential because a jury is free to believe any, all or none of a witness’s testimony.”15 As long as the witness is qualified as an expert, “any weakness in the expert’s knowledge is for the jury to consider in determining what weight to give the expert.”16
“Because Marchbank sought to question Chakrabarty regarding his qualifications and skill as an expert witness, the circuit court abused its discretion in excluding this impeachment evidence. Marchbank should have been allowed to cross-examine Chakrabarty regarding his qualifications and skill as an expert witness. The exclusion of this evidence was prejudicial to Marchbank’s case. As in most medical malpractice cases, the credibility of the witnesses is of the utmost importance.”17
The Missouri Court of Appeals added: “Had Chakrabarty testified solely as a fact witness, then the evidence of his probation would be evaluated under a different standard. When Chakrabarty provided an expert opinion, however, additional evidence became relevant and admissible.”18
AWARD OF A 1.5 MULTIPLIER TO ATTORNEY’S FEES WAS NOT ERROR
Warren-Cook v. Missouri Dept. of Public Safety, 688 S.W.3d 75 (Mo. App. W.D. 2024).
Ernie Rhodes and Todd Farley (collectively, “appellants”) appealed the trial court’s amended judgment following a jury verdict in favor of Dawn Warren-Cook on her § 105.055 whistleblower claims. The appellants challenged the application of a 1.5 multiplier to Warren-Cook’s award of attorney’s fees. The Missouri Court of Appeals-Western District affirmed the judgment.19
“We deem the trial court an expert on fees in a given case due [to] the court’s familiarity with all issues in the case and the character of the legal services rendered.”20 “We presume an award of attorney’s fees to be correct, and the complaining party has the burden to prove otherwise.”’21 For whistleblowing claims, § 105.055.7(4) authorizes an award of “reasonable attorney fees” to a complainant. After the lodestar amount is determined, trial courts may consider whether enhancement of the amount by “a multiplier [is] necessary to ensure a market fee that compensated … counsel for taking [the] case in lieu of working less risky cases on an hourly basis.”22
In Berry, the Supreme Court of Missouri stated that, in determining whether to apply a multiplier to the lodestar amount, a trial court “should avoid awarding a multiplier based upon facts that it considered in its initial determination of the lodestar amount.”23 The court identified three factors in Berry the trial court had used that were not duplicative of the factors used in the initial lodestar determination:
1. “[t]he fee to be received by … counsel was always contingent,”
2. “[t]aking this case precluded … counsel from accepting other employment that would have been less risky[,]” and
3. “[t]he time required by the demands of preparing this case for trial delayed work on … counsel’s other work.”24
In Warren-Cook, the appellants argued that all three Berry factors must be satisfied to support the application of a multiplier, but this exact argument had recently been rejected by the Missouri Court of Appeals-Eastern District in Kelley v. Dep’t of Corr.25 In Kelley, the appellate court concluded that the trial court had not abused its discretion in applying the 1.5 multiplier “where there was certainly evidence before the court consistent with two of the three factors set forth in Berry.”26
“Indeed, per Kelley, satisfaction of all three Berry factors are not deemed requirements in order to find it was not an abuse of discretion for the trial court to apply a 1.5 multiplier,” the Missouri Court of Appeals-Western District ruled in Warren-Cook.27
RESTRICTIVE COVENANT NOT ENFORCEABLE AGAINST A PURCHASER WHO HAD NO NOTICE OF IT
RVR Enterprises, Inc. v. Cinnamon Hill, LLC, 689 S.W.3d 779 (Mo. App. W.D. 2024).
Cinnamon Hill, LLC filed a motion for judgment on the pleadings related to RVR Enterprises, Inc.’s petition to enforce a restrictive covenant, stating it had no notice of the restrictive covenant at issue. The circuit court granted the judgment. RVR appealed the circuit court’s judgment, and the Missouri Court of Appeals-Western District affirmed it.28
Missouri recognizes two categories of restrictive covenants: “covenants that ‘run with the land’ and ‘personal’ restrictive covenants and, irrespective of the category of restrictive covenant, a successor in interest must take burdened property with actual or constructive notice of the burden for the covenant to be enforceable against a successor.”29 Actual notice includes documents, such as a title policy or a title commitment, that inform the subsequent purchaser the land is burdened at the time of purchase.30 Even when a purchaser is not directly furnished with such documents, they are still “bound with constructive notice of all recorded instruments and any recital therein lying within the chain of title.”31
“Though the Petition does not allege Cinnamon Hill had actual or constructive notice of the Covenant through chain of title, RVR argues a lack of recordation does not thwart its claims because the Restrictive Covenant is a creature of contract rather than deed conveyance. However, this is a distinction without difference for purposes of our analysis. Regardless of whether a restrictive covenant is borne out of deed or contract, notice of such restrictive covenant is required to bind subsequent purchasers.32
Here, the trial court did not need to look beyond the Petition to determine that Cinnamon Hill lacked actual or constructive notice of the Covenant because RVR did not plead that Cinnamon Hill was furnished with a copy of the Agreement at the time of purchase, had actual notice of the Agreement, nor that the Agreement was recorded with the Recorder of Deeds.“33
Endnotes
1 Jefferson City Medical Group, P.C. v. Brummett, 2024 WL 1517680 (Mo. App. W.D. 2024).
2 Whelan Sec. Co. v. Kennebrew, 379 S.W.3d 835, 841 (Mo. banc 2012).
3 Id. at 841-42.
4 Id. 842 (quoting Healthcare Servs. of the Ozarks, Inc. v. Copeland, 198 S.W.3d 604, 610 (Mo. banc 2006)).
5 Id. (quoting Copeland, 198 S.W.3d at 611).
6 Brown v. Rollet Bros. Trucking Co., 291 S.W.3d 766, 774 (Mo. App. 2009).
7 Copeland, 198 S.W.3d at 611.
8 Brummett, 2024 WL 1517680 at 7 (citing Kennebrew, 379 S.W.3d at 843). See Ballesteros v. Johnson, 812 S.W.2d 217, 223 (Mo. App. 1991).
9 Marchbank v. Chakrabarty, M.D., et al., 2024 WL 1863623 (Mo. App. E.D. 2024).
10 Id. at 2.
11 Id.
12 Id. at 1.
13 Id.
14 Portis v. Greenhaw, 38 S.W.3d 436, 446 (Mo. App. 2001).
15 Mitchell v. Kardesch, 313 S.W.3d 667, 675 (Mo. banc 2010)).
16 Kivland v. Columbia Orthopaedic Grp., LPP, 331 S.W.3d 299, 311 (Mo. banc 2011).
17 Marchbank, 2024 WL 1863623 at 3 (citing Miller v. SSM Health Care Corp., 193 S.W.3d 416, 421 (Mo. App. 2006) (finding jury entitled to know about expert witness’s professional organization censure because it could affect credibility); Kinser v. Elkadi, 674 S.W.2d 226, 236 (Mo. App. 1984) (finding
a doctor’s hospital privileges “are legitimate subjects of inquiry when the physician testifies as an expert witness”)).
18 Id.
19 Warren-Cook v. Missouri Dept. of Public Safety, 688 S.W.3d 75 (Mo. App. W.D. 2024).
20 Gray v. Mo Dep’t of Corr., 635 S.W.3d 99, 105 (Mo. App. W.D. 2021) (citation omitted).
21 Id. (quoting Hill v. City of St. Louis, 371 S.W.3d 66, 81 (Mo. App. E.D. 2012)).
22 Berry v. Volkswagen Grp. of Am., Inc., 397 S.W.3d 425, 433 (Mo. banc 2013).
23 Id. at 432 (citation omitted).
24 Id. at 432-33.
25 679 S.W.3d 69 (Mo. App. E.D. 2023).
26 Id. at 89 (emphasis added).
27 Warren-Cook, 688 S.W.3d 75 at 81.
28 RVR Enterprises, Inc. v. Cinnamon Hill, LLC, 689 S.W.3d 779 (Mo. App. W.D. 2024).
29 Poage v. Quincy, O. & K.C.R. Co., 23 S.W.2d 221, 225 (Mo. App. 1930) (“To make even an ordinary purchaser of the land liable for a covenant running with the land, the purchase must have been made with notice.”).
30 Hamrick v. Herrera, 744 S.W.2d 458, 462 (Mo. App. W.D. 1987).
31 Forst v. Bohlman, 870 S.W.2d 442, 447-48 (Mo. App. E.D. 1994); Gross v. Watts, 104 S.W. 30, 36 (Mo. 1907).
32 RVR, 689 S.W.3d 779 at 784.
33 Id. at 784-85.