Richland Towers, Inc. v. Denton
139 So. 3d 318
Fla. Dist. Ct. App.2014Background
- Richland Towers, Inc. (RTI) and Richland Towers, LLC (RTLLC) owned/managed broadcast "tall towers." RTI provided management until late 2008; RTLLC thereafter.
- Denton and West were senior executives under employment agreements effective Jan 1, 2008–Dec 31, 2011 containing restrictive covenants (noncompete, nonsolicit, confidentiality) in §10.
- Paragraph 10(e) of the agreements expressly stated restrictive covenants were "independent" of other contractual obligations and that employee claims would not be a defense to enforcement. Paragraph 10(Z) named the Corporation/Affiliates as third-party beneficiaries with enforcement rights.
- Denton and West resigned in Jan 2012, formed Tall Tower Ventures, LLC, and RT entities sued for breach and misappropriation; defendants counterclaimed.
- The trial court denied (in part) a motion for a temporary injunction enforcing the covenants, finding unpaid bonuses constituted a prior breach that rendered the covenants unenforceable (treating obligations as dependent).
- The Second District reversed, holding the covenants were unambiguously independent and thus enforceable; remanded with instructions for an injunction order to include required findings and a bond.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Enforceability despite RTI ceasing active business in 2008 | Covenants remain enforceable by identified third-party beneficiaries (RTLLC & affiliates) | Cessation of RTI operations renders covenants unenforceable | Court: Covenants enforceable by affiliates as third‑party beneficiaries under §542.335(1)(f) |
| Whether unpaid bonuses = prior breach destroying covenants | Plaintiffs: Covenants are independent; unpaid bonus dispute does not bar enforcement | Denton/West: Employer’s breach (unpaid bonuses) makes covenants unenforceable (dependent covenants) | Court: Covenants are unambiguously independent per paragraph 10(e); prior breach defense fails |
| Contract interpretation standard for dependent vs independent covenants | N/A (plaintiffs rely on plain language) | Defendants urge grammatical/doctrine-of-last-antecedent reading to limit independence clause | Court: Interpret contract de novo; plain language controls; independence clause applies as written |
| Relief requirements on remand | Plaintiffs seek injunction enforcement | Defendants oppose injunctive relief absent factual findings and bond | Court: Reversed denial; remand for injunction with specific findings and bond requirement |
Key Cases Cited
- Atomic Tattoos, LLC v. Morgan, 45 So.3d 63 (Fla. 2d DCA 2010) (elements for temporary injunction)
- Bradley v. Health Coal., Inc., 687 So.2d 329 (Fla. 3d DCA 1997) (employer breach may affect injunction where covenants dependent)
- Steak House, Inc. v. Barnett, 65 So.2d 736 (Fla. 1953) (breach of dependent covenant may destroy contract)
- Murphy v. Chitty, 739 So.2d 697 (Fla. 5th DCA 1999) (noncompete dependent on other closing documents)
- Reliance Wholesale, Inc. v. Godfrey, 51 So.3d 561 (Fla. 3d DCA 2010) (independent‑covenant language allows enforcement despite payment disputes)
- Bellach v. Huggs of Naples, Inc., 704 So.2d 679 (Fla. 2d DCA 1997) (injunction order must include findings and bond)