Plaintiff appeals from an order granting defendant’s motion for summary judgment on its claim and the denial of its motion for partial summary judgment as to defendant’s counterclaim.
Lane Company (Lane) was engaged in the management of apartment complexes throughout the nation. Norma Taylor was employed by Lane from November 1977 until April 15, 1983. At first she served as an apartment manager and then became a property manager in charge of several apartment projects. Shortly after becoming a property manager, she was required to execute an employment agreement which included the following provisions: “1. During the term of Employee’s employment by Employer and for a period of one (1) year following the termination of such employment for any reason whatsoever, Employee will not (1) except in the ordinary course of the performance of duties on behalf of and to the benefit of Employer and only as necessary to perform such duties or (2) without prior written consent of Employer: (i) Use, disseminate, disclose, lecture upon or publish (collectively “Disclose”), directly or indirectly, the name or names of, or any list or lists of, past or current customers of Employer or utilize such names or lists for Employee’s own personal advantage, (ii) Disclose, directly or indirectly, any information acquired by Employee from Employer relating to Employer’s methods of doing business, price structures, systems of operation, “know-how”, documents, records, forms or any other confidential information, (iii) Contact directly or indirectly, for purposes of competing directly or indirectly or aiding another to so compete with the business of Employer any current customer of Employer whose name was divulged to him by or through his employment with Employer or whose name or trade was obtained by him for Employer, (iv) Hire or attempt to hire for any other employer any employee of Employer or directly or indirectly cause any such employee to leave his employment in order to work for another. 2. Each of the provisions of subparagraphs (i), (ii), (iii), and (iv) of paragraph 1 above shall be independent and severable from the others and if any such provision be for any reason held illegal, invalid or unenforceable in whole or in part, said illegality, invalidity or unenforceability shall not affect the validity or enforceability of any other provision of this Agreement.”
In 1983 Taylor indicated dissatisfaction with her job to officers of Lane. In April, after giving notice, she left to accept a position with Bay Management Company, a real estate management business. Shortly thereafter three apartment projects managed by Lane and with which Taylor had been associated when she worked with Lane, switched to Bay and became Taylor’s responsibility with that con *357 cern. About this time, the manager of one of the apartment projects and other employees of Lane left and began work with Bay.
As a result, Lane brought an action against Taylor in four counts alleging that: 1) defendant by her actions violated the restrictive covenants of the employment agreement; 2) defendant made promises to plaintiff with no present intention to perform such promises and thereby defrauded plaintiff; 3) defendant owed plaintiff a duty of loyalty and good faith and acted wrongfully and in bad faith; 4) defendant wilfully and maliciously interfered with plaintiff’s contractual relations. Plaintiff sought various damages allegedly resulting from defendant’s wrongful acts.
Defendant answered, denying the material averments of the complaint, and counterclaimed for earnings which she contended plaintiff owed her. The counterclaim was subsequently amended to add counts two through five, addressed to plaintiff’s counts one through four seri-atim. Each count of the counterclaim contained basically the same allegations: that the employment agreement on which plaintiff relies is void as in restraint of trade; that plaintiff wrongfully brought Count I (or II, III or IV) when it knew or should have known the agreement was void and unenforceable; that plaintiff has continued to prosecute the count and has abused the court’s process; that plaintiff continued its complaint and prosecution of the count to intimidate and harass defendant because she left its employ, not for the reasons alleged; that plaintiff brought and continued that count, even though it knew or should have known the employment agreement was void and unenforceable, to make an example of defendant no matter how much it cost so that other employees of plaintiff would be intimidated by the threat of a similarly expensive and distressing lawsuit and would comply with this agreement though unenforceable; that plaintiff has and will continue to wrongfully and unlawfully use the court process to achieve an ulterior purpose the law never intended. The counterclaim sought damages resulting from plaintiff’s allegedly wrongful, malicious and improper abuse of process.
The case proceeded through extensive discovery and both sides filed motions for summary judgment which came on for hearing. The trial court entered two orders. The first denied plaintiff’s motion for partial summary judgment addressed to counts two through five of the counterclaim which sought recovery for plaintiff’s malicious abuse of process. The court found “that there remains substantial material issues of fact as to whether plaintiff abused the legal processes by attempting to make an example of the defendant in order to keep its other employees in check and distract the defendant from her new job.”
The trial court’s second order granted defendant’s motion to all four counts of the complaint. The first count was found defective in
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that subparagraph (iii) of the employment agreement contained no territorial limitation and the entire agreement was thus void and unenforceable. As to Count two (fraud), the record was found not to sustain the allegations and the contract “the pillar of plaintiffs allegation” regarding fraud, was void ab initio. The third court (breach of duty of loyalty) was not sustainable “based on the court’s holding” as to Count one. The fourth count, based on malicious interference with contractual relations, fell because the court held: “Inherent in the offense of contractual interference is the element of malice, i.e., an ‘intention to harm another ... an act by one who, from knowledge of the interests of another, knows this will interfere with them.’
Architectural Manufacturing Company v. Airotec, Inc. et al.,
Plaintiff Lane in its appeal enumerates three errors, but we do not consider the third ground because it raises an issue not addressed by the trial court. Held:
1. Although counsel for Lane proffers several ingenious means by which this court can avoid the controlling authority of the Supreme Court, we must follow the mandate of Art. VI, Sec. VI, Par. VI of the Georgia Constitution.
As succinctly stated in
Guffey v. Shelnut & Assoc.,
2. There can be no “blue pencil theory” of severability of covenants not to compete even where there is a severability clause (see
Richard P. Rita Personnel Services v. Kot,
a) In
Durham v. Stand-By Labor,
In
Nasco, Inc. v. Gimbert,
Here the contract describes “methods of doing business, price structures, systems of operation, “know-how,” documents, records, forms or any other confidential information.”
The reference to confidential has the effect of modifying the terms used in the sentence so that they are not overly broad but severely limited to only those methods, documents, forms, etc., which were confidential. So construed, as in Durham v. Stand-By Labor, supra, a jury question was presented as to the legitimacy of the need to maintain such confidentiality and whether the information fitted the description. Since this was on motion for summary judgment it was incumbent on defendant, as movant to establish the absence of disclosure, or in short, that there was no disclosure of confidential information. The proof in this regard failed to establish, as a matter of law, either that no confidential information was disclosed or that any confidential information was disclosed. Hence, summary judgment as to this issue was unauthorized.
b) The subparagraph regarding “pirating” of employees states: *360 “hire or attempt to hire for another employer any employee of Employer or directly or indirectly cause any such employee to leave his employment in order to work for another.”
In
Orkin Exterminating Co. v. Martin Co.,
The language of this subparagraph is circumscribed by a one-year limitation, and it restricts only the actions of the property manager. The covenant is not too broad in its scope to sustain a finding that it was needed to protect legitimate business interests.
Harrison v. Sarah Coventry, Inc.,
3. We next focus on plaintiff’s right to bring an action for interference with its employment relations. “Interference with contract has long been an actionable wrong in Georgia. [Cits.] ‘The malicious procurement of a breach of contract of employment, resulting in damage, where the procurement was during the subsistence of the contract, is an actionable wrong.’ [Cit.]”
Nasco, Inc. v. Gimbert,
“In opposing a motion for summary judgment it is not necessary for the plaintiff to produce sufficient evidence to show that the plaintiff is entitled to the relief sought.”
Wall v. Ga. Farm Bureau Mut. Ins. Co.,
Consequently, it was error to grant summary judgment as to Count four.
4. The trial court granted summary judgment on Count two dealing with fraud primarily because the contract “which is the pillar of *361 plaintiff’s allegations of fraud” was void.
However, in Division 2. a) of this opinion the nondisclosure covenant was found not to be void.
Since fraud is itself subtle, the combination of several circumstances may constitute proof of fraud.
Grainger v. Jackson,
In
Fletcher Emerson &c. Co. v. Davis,
McCurry v. Bailey,
5. Summary judgment as to Count three involving a claim for breach of loyalty was granted on the basis of the trial court’s holding the restrictive covenants of the employment agreement were unenforceable.
Defendant had duties with her former employer, plaintiff, which included supervision and hiring of on-site apartment managers, marketing the properties, preparing budgets for each property’s operation dealing with residents of the apartment, establishing rental and renewal rates.
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The difference between a master-servant and principal-agent relation is that the former deals with matters of manual or mechanical execution while the latter relates to business or commercial transactions.
Southeastern Fidelity Ins. Co. v. Heard,
Treated as an agent, defendant owed plaintiff the duty of loyalty and absolute good faith.
Napier v. Adams,
Since loyalty to his principal is the agent’s primary obligation, if the agent, as a fiduciary, obtains any advantage or profit out of the relation which injures his principal he becomes a trustee.
Smith v. Merck,
The facts outlined above, in conjunction with those in the previous division, are sufficient to require reversal of the grant of defendant’s motion for summary judgment as to Count three.
6. Defendant Taylor’s counterclaim based on an alleged malicious abuse of process requires consideration of the distinction between an action for malicious use of process and an action for malicious abuse of process. The rationale for the distinction rests on the practical proposition that if the cause is predicated on malicious use of process it cannot be the basis of a counterclaim because the action may terminate favorably to the initial claimant, and therefore could not have been unlawful.
Canal Ins. Co. v. Cambron,
While some opinions of this court have broadly pronounced that damages for both malicious use and abuse of process cannot be recovered by counterclaim in the trial of the same action,
1
the sounder rule
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is that, under the right circumstances, a claim for malicious abuse of process is not per se excluded and may be asserted by counterclaim.
Medoc Corp. v. Keel,
Simply stated, “ ‘Malicious abuse of legal process is where the plaintiff in a civil proceeding wilfully misapplies the process of the court in order to obtain an object which such a process is not intended by law to effect, as contra-distinguished from malicious use of process, where the plaintiff in a civil proceeding employs the court’s process in order to execute an object which the law intends such a process to subserve, but proceeds maliciously and without probable cause.’ [Cits.]”
Dantley v. Burge,
A detailed examination of the principles inherent in malicious abuse of process is found in
Davison-Paxon Co. v. Walker,
In a more recent decision this court grappled with the critical elements necessary to sustain a counterclaim based on malicious abuse of process.
Medoc Corp.
v.
Keel,
The facts found by the trial court as tending to sustain defendant’s counterclaim are not sufficient. In
Pair v. Southern Bell Tel. &c. Co.,
Here, as in so many cases, there is evidence proving a malicious motive and an ulterior purpose. But there is a total absence of acts which amount to a perversion of legal process to some unlawful purpose.
Any defendant might be “distracted by a lawsuit,” while the other alleged purpose was not directed against defendant but to keep plaintiff’s other employees in check. Here the act of prosecution was regular and the motive behind it may serve as a basis for malicious use of process if the action terminates favorably to defendant, but it would not fall within the second category of an act not proper in the regular course of the proceeding.
Thomas v. Ronald A. Edwards Constr. Co.,
In sum, the trial court correctly granted summary judgment as to Count one except as to those portions of the contract providing for non-disclosure of confidential information, subparagraph (ii), and the hiring away of Lane employees, subparagraph (iv). As to Count two it was error to sustain summary judgment insofar as the count alleged fraud regarding the non-disclosure and hiring away provisions. It was error to grant defendant’s motion for summary judgment as to Counts three and four of the complaint. The denial of plaintiff’s motion for partial summary judgment addressed to Counts two, three, four and five of the counterclaim was error.
Judgments affirmed in part; reversed in part.
Notes
Terry v. Wonder Seal Co.,