Alfred Moon v. Medical Technology Associates, Inc. , 577 F. App'x 934 ( 2014 )

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[DO NOT PUBLISH]
IN THE UNITED STATES COURT OF APPEALS
FOR THE ELEVENTH CIRCUIT
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No. 14-11155
Non-Argument Calendar
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D.C. Docket No. 8:13-cv-02782-EAK-EAJ
ALFRED MOON,
ALFRED MOON, JR.,
CHERYL MOON,
MEGAN WHITE,
Plaintiffs -
Counter Defendants -
Appellants,
versus
MEDICAL TECHNOLOGY ASSOCIATES, INC.,
Defendant -
Counter Claimant -
Appellee.
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Appeal from the United States District Court
for the Middle District of Florida
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(August 18, 2014)
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Before TJOFLAT, JORDAN and COX, Circuit Judges.
PER CURIAM:
This case considers whether the district court erred by granting a preliminary
injunction which enjoined the Plaintiffs—Alfred Moon, Alfred Moon, Jr., Cheryl
Moon, and Megan White—from violating restrictive covenants in their
employment agreements with Medical Technology Associates, Inc. (“MTA”).
Because the district court made findings of fact without allowing an evidentiary
hearing, we vacate the district court’s preliminary injunction and remand for
further proceedings.
I. Facts and Procedural History
The Plaintiffs in this suit each signed employment agreements when they
began working for MTA. While the terms of the agreements varied, each
contained restrictive covenants preventing the disclosure of confidential
information, solicitation of MTA’s customers, and restricting competition with
MTA.
Over a three year period, each of the Plaintiffs left employment with MTA
and began working for a similar company called Advanced Compliance Solutions.
Following their departure, MTA sent the Plaintiffs “cease and desist” letters
claiming they were violating the terms of the restrictive covenants and threatening
legal action.
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In response, the Plaintiffs filed this suit seeking a declaratory judgment that
they were not violating the restrictive covenants or that the restrictive covenants
were invalid. MTA responded by filing a counter-claim for an injunction and
moved for a preliminary injunction enjoining the Plaintiffs from violating the
restrictive covenants. The parties submitted various conflicting affidavits related
to the motion for a preliminary injunction. The Plaintiffs moved for an evidentiary
hearing on the motion. The district court denied the motion, but held a non-
evidentiary oral argument on the motion. After the oral argument, the court issued
an order granting the preliminary injunction. The Moons appeal.
II. Issues on Appeal
On appeal, the Plaintiffs contend that the district court erred by issuing the
preliminary injunction. Specifically, they contend that the district court erred by
not holding an evidentiary hearing, erred by holding that MTA was likely to
succeed on the merits, and erred by holding that MTA would be irreparably
harmed absent a preliminary injunction.
III. Standard of Review
We review the decision to grant a preliminary injunction for abuse of
discretion. “In so doing, we review the findings of fact of the district court for
clear error and legal conclusions de novo. This scope of review will lead to
reversal only if the district court applies an incorrect legal standard, or applies
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improper procedures, or relies on clearly erroneous factfinding, or if it reaches a
conclusion that is clearly unreasonable or incorrect.” Forsyth Cnty. v. U.S. Army
Corps of Engineers, 633 F.3d 1032, 1039 (11th Cir. 2011).
IV. Discussion
A. The district court should have conducted an evidentiary hearing.
The Plaintiffs contend that the district court erred by denying their motion
for an evidentiary hearing and deciding the preliminary injunction motion without
an evidentiary hearing.
An evidentiary hearing is not always required before the issuance of a
preliminary injunction. All Care Nursing Serv., Inc. v. Bethesda Mem'l Hosp., Inc.,
887 F.2d 1535, 1538 (11th Cir. 1989). But, “[w]here the injunction turns on the
resolution of bitterly disputed facts, however, an evidentiary hearing is normally
required to decide credibility issues.” Id.
To reach its conclusion in this case, the district court made extensive factual
findings. In fact, the district court’s order—which MTA drafted—includes almost
five pages of factual findings. However, many of these facts are disputed by the
parties’ conflicting affidavits. For example, the Plaintiffs dispute whether they
competed in the restricted area (R. 18-3 at 4–5), whether they solicited MTA’s
customers (18-8 at 2), and whether MTA’s customer relationships were substantial
(R. 18-3 at 5, R. 18-6 at 5, R. 18-7 at 3). Additionally, the district court’s order
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states that the Plaintiffs “admittedly used confidential information to steer business
away from MTA.” (R. 35 at 5.) But the Plaintiffs never made this admission and
in fact stated they did not use confidential information. (R. 18-3 at 5–6, R. 18-5 at
2.) Despite these conflicts, the district court’s order neither references the
Plaintiffs’ affidavits, nor explains why the Plaintiffs’ affidavits are not credible.
In this case, “where much depends upon the accurate presentation of
numerous facts, the trial court erred in not holding an evidentiary hearing to
resolve these hotly contested issues.” Id. In the face of two plausible affidavits
“submitted to demonstrate a contested issue, the district court is not at liberty to
accept one construction of the evidence and reject the other without the benefit of
an evidentiary hearing.” CBS Broadcasting Inc. v. EchoStar Communications
Corp., 265 F.3d 1193, 1207 (11th Cir. 2001). On remand, the district court should
conduct an evidentiary hearing. And, the movant—in this case MTA—must
clearly satisfy the burden of persuasion as to each element of the preliminary
injunction. Siegel v. LePore, 234 F.3d 1163, 1176 (11th Cir. 2000).
B. We cannot decide the merits of the preliminary injunction at this time.
The Plaintiffs also contend that the district erred by failing to apply Florida
law and by applying an incomplete irreparable injury standard. However, because
the propriety of the injunction turns on factual findings, we cannot decide the
merits of the preliminary injunction.
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On remand the district court should consider the application of Shields v.
Paving Stone Co., Inc., 796 So. 2d 1267, 1269 (Fla. 4th DCA 2001), because a
federal court sitting in diversity is bound to apply the law of the forum state. See
Bravo v. United States, 577 F.3d 1324, 1326 (11th Cir. 2009) (“[W]e are ‘bound’
to follow an intermediate state appellate court ‘unless there is persuasive evidence
that the highest state court would rule otherwise.’”). Additionally, the district court
should apply the preliminary injunction standard we dictated en banc in Siegel, 234
F.3d at 1176. In this Circuit, “a preliminary injunction is an extraordinary and
drastic remedy.” Id. (quoting McDonald's Corp. v. Robertson, 147 F.3d 1301,
1306 (11th Cir.1998)). To show irreparable injury, MTA bears the burden of
clearly establishing it will be harmed in the future by an actual and imminent
injury for which adequate compensatory or other corrective relief will not be
available. See Sampson v. Murray, 415 U.S. 61, 90, 94 S. Ct. 937, 953 (1974);
Siegel, 234 at 1176.
V. Conclusion
The district court erred by failing to hold an evidentiary hearing.
Accordingly, we vacate the court’s injunction and remand with instructions to hold
an evidentiary hearing and further proceedings.
PRELIMINARY INJUNCTION VACATED, CASE REMANDED
WITH INSTRUCTION.
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