WPC )Yî!6;Y0 oG8Tw"AXIV}SɌT*aqqpp7y(isD򯨇hofaΛ ,h})FEsIJs%gemj 4Tזyh9svNV \@~JM"xH%*:#)D>h1 uO*{88e%-F}SDJͲ0mV tV/")H[b;Jujj!Fk۹+}_brKNv5JD<2>;LnN;Utw]_`PHّ9_nbM %ӤN W3؀uk@^f\E]0βŤޯ}VhQW+f ƨ {LN㊙ْaO%%n{)3 VWMV6b#\ % UN# 0q U!N 0DG _ z d  6 ^ @Lw:>4VNjl{E} mb 0 B 0 D3R D- 0K ASP 0 0D AHP LaserJet 4050 Series PCL 6,,,,0(9 Z6Times New Roman Regular(`$.8dd8    ("  Z6Times New Roman Regular(#$  0   U R]$      2     _ԀSofarastherecordreveals,DaviswasacontemporaryagentforthedefendantinanotherCounty.Whenthe  plaintiffresigned,thedefendanthadnoagentinCoffeeCounty. t  C:\PROGRA~1\COREL\WORDPE~1\TEMPLATE\CUSTOM~1\REVISE~1.WPTC:\Program Files\Corel\WordPerfect Office 2000\Template\Custom WP Templates\revised standard opinion.wpt  R]$      3     _ԀItwasthedefendantsemploymentpracticetotrainnewagentsandarrangefortheirlicensure,ratherthanhire  experiencedorestablishedagents.Itwasthedefendantsofficialwhochosetodescribetheplaintiffasa nurseryman, t knowingthatfor17yearshehadbeenalicensed,independentagentformanyinsurancecompanies.{%-s   R]$      1     _ԀTheAgreementprovidedforterminationbytheagentorcompanyuponthreemonthswrittennotice,orinthe  eventofabreach,upon30dayswrittennotice,orimmediatelybymutualconsent,orbythedefendantforspecified t reasons,oneofwhichwas switchinginsurancefrom[thedefendant]toanothercarrier.Level 1Level 2Level 3Level 4Level 5Level 1Level 2Level 3Level 4Level 5Level 1Level 2Level 3Level 4Level 5Level 1Level 2Level 3Level 4Level 59,{3|xU - -(|G2]$ !.8Qdd8         0   d(|3$ !.8Qdd8     VVVV'dxd)!dxdx( $ Figure  1  ^_X`YE<<CLevel 1Level 2Level 3Level 4Level 5(|3$ !.8Qdd8     ($$   1  X[Z&OLE 2.0 Box <=8C HKKKK !.8Vdd8     _  V8XXdd8  @ HVINTHECOURTOFAPPEALSOFTENNESSEE  @kk$ATNASHVILLE#VH #Ԉ &   November6,2000Session L XXV #VXX#H.DALEMINORv.FARMERSINSURANCEEXCHANGE,etal.XXV  J @@ AppealfromtheCircuitCourtforCoffeeCounty  J @@No.30,121JohnW.Rollins,Judge  6 @@*AV) ` dE<` A   @@TTNo.M200001217_COA_ԄR3CVFiledSeptember5,_2002_   AV) ` dE<|` A }     XXXXThedefendantgroupofCaliforniabasedinsurancecompaniescontractedwiththeplaintiffto x  representitinCoffeeCounty.Becausetheplaintiffwasanestablished,licensedindependentagent d hewasineligibletorepresentthedefendantunderitsguidelinestoavoidwhichtherecruitingofficial P ofthedefendantdescribedtheplaintiffsprioroccupationasanurseryman.Thecontractprovided < thatintheeventtheplaintiffresignedhewouldnotsolicitoracceptdefendantspolicyholdersfor (x aperiodofoneyear.Afterfiveyearstheplaintiffresigned,andsoughttorecoverthemonetary d benefitsavailabletohiminaccordancewiththecontract.Thedefendantresistedpayment,relying P onthenoncompeteprovisionsincetheplaintiffadmittedthathesolicitedthedefendantspolicy < holders.Plaintiffargued,interalia,thatthenoncompeteprovisionwasunenforceablebecausethe ( defendantwasfullyawareofthefactthatherepresentedothercompaniesandforfiveyearsfreely  switchedhisclientstoandfromthedefendantwithothercompanies.Recoverywasallowed.We  affirm.#XXXX##VXXz#XXV   Tenn.R.App.P.3AppealasofRight;JudgmentoftheCircuitCourtAffirmed  t BenH._Cantrell_,_P.J._,M.S.,#VX_ #XX.VԀPatriciaJ.Cottrell,J.,#VX #XX.VWilliamB.Cain,J. L   W._Brantley_ԀPhillips,Jr.,Nashville,Tennessee,fortheappellants,FarmersInsuranceExchange,et $"t! al. #`" JamesD.Lane,II,_Tullahoma_,Tennessee,fortheappellee,H.DaleMinor. $8 $ <      OPINION #VXX #XXV &"&  PERCURIUM#VXX #XXV  '"' #VXX9#XXV XXXXI.  )$)    Onapplicationoftheplaintiff,acivilwarrantwasissuedbytheClerkoftheGeneral \+&+  SessionsCourtfortherecoverybytheplaintiffofthebalanceowingunderthe contractvalue H,', _provisionsofanAgentAppointmentAgreementwiththedefendant,whoappealedanadverse  judgmenttotheCircuitCourtwherethecasewashearddenovoandwithoutajury.     Thedefendant[referredtointhesingularforconvenience]filedacounterclaimintheCircuit t CourtallegingthatinNovember1993theplaintiffexecutedanAgentAppointmentAgreement ` wherebyheagreedtoserveasanagentforthedefendantinCoffeeCounty.ThisAgreement L  provided,interalia,thatforaperiodofoneyearfollowingtheterminationoftheagencyrelationship, 8  theplaintiffwouldnot directlyorindirectlysolicit,accept,orservicetheinsurancebusinessofany $ t policyholderofrecordinthisdistrict.Thecounterclaimsoughtrecoupmentoflostpremium  ` income,prejudgmentinterest,andattorneyfees.  L    TheplaintiffresignedhisAgencyeffectiveDecember30,1998.Fivedayslaterthedefendant $  byletterinformedhimthattheresidualcontractvaluewas$20,135.59whichwouldbepaidinthree   semiannualinstallments,thefirstofwhichaccompaniedtheletter.     ThedefendantallegedthatinJuly1999itlearnedthattheplaintiffwasviolatingthenon   competeprovisionoftheAgreementbyacceptingbusinessfromcurrentpolicyholdersand placed p themwithotherinsurancecarriers,inviolationofthecovenantnottocompete. \   TheplaintifffiledhisanswertothecounterclaimadmittingtheexecutionoftheAgency 4 Agreement.Headmittedthat hehaswrittenpoliciesforformerpolicyholdersofthedefendant  p duringthetwelvemonthsfollowingtheterminationofhisAgencyAgreement.Healsoadmitted  \ thattheAgreementincludedanoncompeteprovisionasalleged,butdenieditsenforceability. H   ThecasewastriedonFebruary1and2,2000,ontheissuesof(1)whethertheplaintiffwas   entitledtorecoverthebalanceofthecontractvaluewithinterestandattorneyfees,and(2)whether   theplaintiffhadbreachedthenoncompeteprovisionoftheAgreement.Thetrialjudgefoundthat  thedefendantfailedtocarrythe burdenofproofrelativetoitscounterclaimwhichwassummarily  dismissed,andfoundthattheplaintiffwasentitledtorecoverthebalanceofthecontractvalueof  $13,042.37plusinterestandattorneyfees. l   Thedefendantappeals,andpresentsforreviewtwoissues:(1)whetherthecourterredin D! refusingtoenforcethenoncompeteprovision,and(2)whetherthecourterred whenitrequiredthe 0"  appellantstoperformtheirremainingobligationsunderthepartiescontractdespiteplaintiff #l! appelleesadmittedmaterialbreachofhisobligationsarisingfromthenoncompeteprovision $X" containedinthepartiescontract.Thesecondissueissubsumedintothefirst,andwewillfocus $D # ouranalysisontheissueasrestatedbytheplaintiff:whetherthenoncompeteagreementis %0!$ enforceable.Ourreviewisdenovoontherecord.Wepresumethecorrectnessofthejudgment &"% unlesstheevidenceotherwisepreponderates.Rule13(d)Tenn.R.App.P. '#&  h+&*    II.      Thedefendantdidnotappealthedismissalofitscounterclaimforfailureofproofof  damages.Thethrustofitsargumentisthatthecontractresidualsshouldbeequatedtoitsdamages t owingtotheplaintiffsbreachofcontract;stateddifferently,thatitsdamagesareatleastequalto ` thecontractresiduals,andthatitowestheplaintiffnothing. L    Thepostureofthecaseisnotquestioned,andtheplaintiffdoesnotquestiontheclaimofthe $ t defendantthatitmayproperlyassertnonliabilityonaccountoftheplaintiffsallegedbreachofthe  ` contract.Wewilltreatthecaseasthepartiestreatit,anddiscussthedispositiveissueofwhether  L  thecovenantisvalidandenforceable.Ifthecovenantcannotbelegallyenforced,theplaintiffis  8  entitledtorecover. $    Thetrialjudgeopinedfromthebenchthatthecovenantnottocompetewouldbeenforceable   absentaletterwrittenbyanotherofthedefendantsagents,WayneDavis,whichwereproduce:   8   `     h      p December16,1998p   8  8`   DearValuedClient,\` x` x 8  8`   TheFarmersInsuranceAgencyinTullahomaisnolongerinbusiness. 4 Yourpolicyhasbeenassignedtomyofficeforservice. p` x` x 8  8`   IhavemanagedtheFarmerInsuranceOfficeinFranklinCountysince H 1989.Ourofficehasatraditionoffast,fairandfriendlyservice.4` x` x Thetrialjudgereasonedthatthisletter,mailedabout15daysbeforetheplaintiffsresignationwas   effective,  #  1      ׀ changedtheruleshere.    TheplaintiffresignedasagentforthedefendantinCoffeeCountywhenhebecame  disenchantedwithdefendantspremiumincreases,interalia.Hisrighttoresignwasnotdisputed, l andthedefendantrecognizedtheplaintiffsentitlementtotheresidualcontractvalueof$20,135.59, X  until theplaintiffcashedhisfirstcheck. D!    III.  #l! l)  Followinghisresignationtheplaintiffallegedlyswitchedanumberofpoliciestoother $D # companieswhomherepresented.Thisactionmotivatedthedefendanttoconcludethattheplaintiff %0!$ wasinviolationofthecovenantnottocompete.WecannotagreethattheWayneDavisletter &"%  changedtherules,foratleasttworeasons:first,becausethereisnoevidencethatDaviswas '#& authorizedinthepremises, #  2      ׀and,moreimportantly,because,inpointoffact,theplaintiffhadalready  ceasedhisagencyactivitiesonbehalfofthedefendant.Thelettermerelyinformeddefendants  policyholdersofthetruth:thattheplaintiffwasnolongerassociatedwiththedefendant.     IV.  ` ?-  Thecovenantnottocompeteisreasonableindurationandscope.Itprohibitstheplaintiff, 8  foraperiodofoneyearfollowingtheterminationofhisagency,fromsoliciting,accepting,or $ t servicingtheinsurancebusinessofanypolicyholderofrecordinCoffeeCounty.Wefindnothing  ` unreasonableaboutsuchcontractualprovisions.  L    Itisnotdisputedthattheplaintiffreceivedalegalconsiderationforhisagreementnotto $  compete;thelimitationofoneyearisnotassailed,theplaintiffwouldsuffernoeconomichardship,   and,absenttheagreement,theplaintiffwouldobviouslygainanunfairadvantage.See, Allright   AutoParks,Inc.v.Berry ,409S.W.2d361(Tenn.1966).     Thepeculiarfactsofthiscaserequirethatthevalidityofthecovenantbedistinguishedfrom p itsenforceabilityforthefollowingreasons. \   TheAgencyAgreementwasexecutedinNovember1993followingextensivenegotiations. 4 TheplaintiffwaslicensedasanindependentinsuranceagentinMarch1976.Initially,thedefendant  p declinedtocontractwithhimbecauseofhispriorexperience,butthedefendantsrepresentative,  \ apparentlyintentuponplacinganAgentinCoffeeCounty,latercalledhimforfurtherdiscussion, H stating, ifyouwilljustcomedownhereandfilloutanapplication,Iwilltakecareofit. 4   Therepresentative,Mr.Barkaszi,filledouttheapplication,whichtheplaintiffsigned,and   whichdescribedhisprioroccupationasanurseryman.  #  3          TheplaintiffwasthereuponhiredandbeganhisagencyworkinFebruary1993.He  continuedhisrepresentationofothercompaniesasmanyas50andMr.Barkaszi,andhissuperior, l wereawareofthisfact.He movedalotof...clientstoFarmersbecausetheyhadabetterrate. X  Hewasneverquestionedabouthispracticeofmovingclientsfromanothercompanytothe D! defendant,orviceversa.Followinghistermination,theplaintiffcontinuedhispracticeofswitching 0"  clientsfromonecompanytoanother,andswitchedanumberofclientsfromthedefendanttoother #l! companies. $X"  $D #   Theevidenceclearlyrevealsthatthedefendantwasfullyawareoftheplaintiffshistoryas  anindependentagent,andofhisrepresentationofahostofcompaniesatthetimehecontractedwith  thedefendantwhichcontinuedthroughoutthefiveyearsofhisrelationshipwiththedefendant.It  isnotdisputedthatthedefendantatnotimeobjectedtotheplaintiffsactivities.Underthese t circumstances,weagreewiththeplaintiffsargumentthatthedefendanteffectivelywaiveditsright ` toinsistupontheplaintiffsstrictperformanceofthecontract. TennesseeAdjustmentServicev. L  Miller ,390S.W.2d696(Tenn.Ct.App.1964).Asstatedin W.F.HoltCo.v.A&EElectricCo., 8  Inc. ,665S.W.2d722(Tenn.Ct.App.1983)inordertoconstituteawaiver,apartysconductmust $ t reasonablymanifestanintentionnottoclaimtherightatissue.InthecaseatBar,initiallyandfor  ` fiveyearsthereafter,thedefendantsactsandcourseofconductwereclear,unequivocaland  L  decisive.See, KnoxvilleRod&Bearing,Inc.v.BettisCorp. ,672S.W.2d203(Tenn.Ct.App.  8  1983). $    Weholdthatthedefendanteffectivelywaiveditsrighttoenforcethenoncompeteprovision,   andthejudgmentisaccordinglyaffirmedatthecostsoftheappellant.#XXXX##VXX#XXV      `     h      p PERCURIUM H