Century Business Services, Inc. v. Barton
967 N.E.2d 782
Ohio Ct. App.2011Background
- CBIZ, an Ohio-based company, sued Barton, Krier, Stelzer, and Walter for breaches related to confidential information, noncompetition, and nonsolicitation agreements stemming from the Bertram Vallez sale.
- CBIZ purchased Bertram Vallez nonattest practice for $12 million in 1998, creating restrictive covenants including five-year noncompetition and ten-year nonsolicitation.
- A 2005 merger moved Bertram Vallez into Mayer Hoffman McCann (MHM); later, in 2008, the defendants formed BWK after resigning from CBIZ/MHM.
- CBIZ obtained injunctive relief in 2008 and a jury awarded damages in 2010 totaling about $4.45 million, while some claims (misappropriation) were resolved in the defendants’ favor.
- The trial court also awarded CBIZ substantial attorney fees and expert fees under the confidentiality-and-nonsolicitation agreements, and this appeal followed.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Personal jurisdiction over Barton | Barton consented to Ohio jurisdiction via merger and employment agreements | The time-limited provisions expired; forum clause should not extend jurisdiction | Practiced jurisdiction proper under agreement terms; not merit-dispositive |
| Choice of law and consideration for covenants | Ohio law governs, or Minnesota law validates consideration | Minnesota law requires independent consideration for post-employment covenants | Ohio law properly applied; independent consideration not required under Ohio analysis under the contract context |
| Reasonableness of five-year noncompete | Covenants reasonable to protect CBIZ’s goodwill | Under Minnesota law, five years may be excessive and overly broad | Covenants reasonable under Ohio and Minnesota analyses; not an abuse of discretion to enforce |
| Labor for attest services and trade secrets | CBIZ can staff attest work; nonattorneys can perform under supervision | Labor for attest services is itself an attest service | Court properly enjoined; staffing arrangement consistent with Minnesota law and evidence |
| Attorney fees and Lanterman expert fees | Fees authorized by confidentiality agreements; reasonable under PRR factors | Fees excessive; not all claims prevailed; challenge to Lanterman’s billing | Fees awarded; not an abuse of discretion; joint liability appropriate for concerted action |
Key Cases Cited
- Raimonde v. Van Vlerah, 42 Ohio St.2d 21 (1975) (reasonableness of covenants; Raimonde test for reasonableness of restrictive covenants)
- Seasons Coal Co. v. Cleveland, 10 Ohio St.3d 77 (1984) (injunction standards and balancing equities in equitable relief)
- Lake Land Emp. Group of Akron, L.L.C. v. Columber, 101 Ohio St.3d 242 (2004) (reasonableness of post-employment restrictive covenants under Ohio law)
- Premier Assoc., Ltd. v. Loper, 149 Ohio App.3d 660 (2002) (enforceability of forum-selection clauses; choice-of-law considerations)
- Discount Bridal Serv., Inc. v. Kovacs, 127 Ohio App.3d 373 (1998) (validity and enforceability of forum-selection provisions)
- Garono v. State, 37 Ohio St.3d 171 (1988) (trial court’s discretion in granting or denying injunctions)