NEW HANOVER RENT-A-CAR, INC., Plaintiff, v. HOLLY N. MARTINEZ,
Defendant
Employer and Employee--covenant not to compete--signature required
In a case where defendant-former employee's name is not found in any form on the
signature line of an agreement not to complete, but defendant did print her name at the top of the
agreement ahead of the substantive portions, the trial court erred in granting a preliminary
injunction preventing plaintiff from working with other rental car agencies because N.C.G.S. §
75-4 requires this type of agreement to be signed, and extrinsic evidence of the other
employment documents completed at the same time reveals that: (1) where a document
requested identification information, defendant printed her name, but where a document
requested a signature as acknowledgment and acceptance of the material or as conformation of
the information requested in the document, defendant wrote her name in cursive; and (2) there
was no cursive script or any writing at all on the signature line of the agreement not to compete.
Hogue Hill Jones Nash & Lynch, LLP, by David A. Nash, for
plaintiff-appellee.
Rice, Bryant & Mack, P.A., by Ralph T. Bryant, Jr., for
defendant-appellant.
EDMUNDS, Judge.
Defendant Holly Martinez appeals the trial court's grant of a
preliminary injunction. We reverse.
Plaintiff New Hanover Rent-A-Car, Inc., is a corporation that
owns Avis automobile rental franchises in New Bern, Wilmington,
Jacksonville, and Greenville, North Carolina; and Florence, South
Carolina. Each location draws customers from an area within a 100-
mile radius of the airport in that city. Because all auto rental
companies offer vehicles that are essentially identical, the
business is driven principally by the prices charged by competingrental agencies. However, according to John Dalton, plaintiff's
president, customer service, including the services provided by
franchise employees who work at the rental counter in each airport,
is also an important factor in the business.
Defendant successfully interviewed for employment with
plaintiff near the end of July 1998 and reported for training on 17
August 1998. She was given a packet of materials to read and sign.
The packet included an agreement not to compete, which is at the
center of this dispute. Defendant worked for plaintiff from 17
August 1998 through 17 December 1998. Her duties included taking
reservations over the phone, serving customers at the counter, and
performing other routine daily chores. On 17 December 1998,
defendant informed plaintiff she was resigning her position to
return to school, adding that she hoped to obtain part-time work in
the auto rental business. The next day, defendant began working
for the Hertz Rent-A-Car Agency in New Bern at a counter adjacent
to plaintiff's counter.
On 29 December 1998, plaintiff obtained a temporary
restraining order to prevent defendant from working for Hertz.
Following a hearing on 8 January 1999, the trial court granted a
preliminary injunction enjoining defendant from continuing her
employment with Hertz Rent-A-Car Agency in New Bern, North
Carolina, and from accepting employment with any other rental car
business within a 100-mile radius of any city where plaintiff has
other rental car franchises. Defendant appeals.
Defendant contends the trial court erred in granting the
preliminary injunction. Our Supreme Court has said regarding apreliminary injunction:
[It] is an extraordinary measure taken by a
court to preserve the status quo of the
parties during litigation. It will be issued
only (1) if a plaintiff is able to show
likelihood of success on the merits of his
case and (2) if a plaintiff is likely to
sustain irreparable loss unless the injunction
is issued, or if, in the opinion of the Court,
issuance is necessary for the protection of a
plaintiff's rights during the course of
litigation.
Investors, Inc. v. Berry, 293 N.C. 688, 701, 239 S.E.2d 566, 574
(1977) (citations omitted). [O]n appeal from an order of [a]
superior court granting or denying a preliminary injunction, an
appellate court is not bound by the findings, but may review and
weigh the evidence and find facts for itself. A.E.P. Industries
v. McClure, 308 N.C. 393, 402, 302 S.E.2d 754, 760 (1983)
(citations omitted).
An agreement not to compete will not be enforced unless it is:
(1) in writing, (2) entered into at the time and as a part of the
original contract of employment, (3) based on a valuable
consideration, (4) reasonable both as to the time and territory
embraced in the restrictions, (5) fair to the parties, and (6) not
against public policy. U-Haul Co. v. Jones, 269 N.C. 284, 286,
152 S.E.2d 65, 67 (1967). The requirement that an agreement not to
compete be in writing includes a requirement that the writing be
signed. No contract or agreement hereafter made, limiting the
rights of any person to do business anywhere in the State of North
Carolina shall be enforceable unless such agreement is in writing
duly signed by the party who agrees not to enter into any such
business within such territory . . . . N.C. Gen. Stat. § 75-4(1999). We have held: G.S. 75-4 is c
onsistent with the other'statute of frauds' provisions in our law which require only that
the writing be 'signed by the party charged therewith[,'] or
require that the writing be signed by 'the party against whom
enforcement is sought.' Manpower, Inc. v. Hedgecock, 42 N.C. App.
515, 519-20, 257 S.E.2d 109, 113 (1979) (internal citations
omitted); see N.C. Gen. Stat. § 75-4.
The case at bar may be resolved by an examination of the
requirement that the writing be signed by defendant. The agreement
not to compete is in the form of a printed EMPLOYMENT AGREEMENT.
It begins with a line at the top for the date. This line has been
filled in by hand and reads 17 August 1998. The next line
begins: I, , in consideration of being accepted for
employment . . . . and continues with the substantive terms of the
agreement. This second blank has been filled in by hand with the
printed name Holly N. Martinez. At the bottom of the form,
following the substantive provisions, there is a line titled
Signature. This line is blank. Beneath the signature line is a
notarization, signed by Robin Dalton, who is plaintiff's
secretary/treasurer and wife of plaintiff's president. Defendant
argues the agreement is invalid because she did not sign it.
Plaintiff responds that a signature is not the same as asubscription, and that by printing her name on the top of the
agreement, defendant signed it and thereby agreed to its terms.
Our Supreme Court has held that when a statute dictates that
a document has to be subscribed, the signature should be at the end
of the document, but it is not essential that the signatures
should be placed at the end of the deed or other instrument, where
the law requires signing only. Devereux v. McMahon, 108 N.C. 134,
140-41, 12 S.E. 902, 904 (1891) (citation omitted); see also Peace
v. Edwards, 170 N.C. 64, 86 S.E. 807 (1915).
The signature, it is obvious, is most
regularly and properly placed at the foot or
end of the instrument signed; but it is
decided in many cases that although the
signature be in the middle or beginning of the
instrument, it is as binding as if at the
foot; although, if not signed regularly at the
foot, there is always a question whether the
party meant to be bound by it as it stood, or
whether it was left so unsigned because he
refused to complete it.
Love v. Harris, 156 N.C. 88, 91, 72 S.E. 150, 151 (1911) (emphasis
added).
In determining whether defendant signed the agreement not to
compete, we find guidance in Routh v. Snap-On Tools Corp., 108 N.C.
App. 268, 423 S.E.2d 791 (1992). In that case, the plaintiff
terminated his dealership agreement with the defendant Snap-On
Tools. As part of the termination, the defendant presented to the
plaintiff a document entitled Termination Agreement. Id. at 269,
423 S.E.2d at 793. This agreement contained a printed provision
binding the plaintiff to pay the difference between any amount the
plaintiff owed the defendant, less any credit the plaintiffreceived from the defendant by turning in unused inventory. The
parties wrote the terms of the plaintiff's repayment plan on the
back of the document, and the plaintiff signed his name beneath
this recitation of terms. Another printed provision in the
document bound the parties to arbitration. The printed signature
line at the bottom of the document contained the signature of one
of the defendant's representatives but not the signature of the
plaintiff. In reviewing the trial court's determination that there
was no meeting of the minds as to the arbitration agreement in the
printed document, we observed that when an agreement is ambiguous,
interpretation of the contract is a question for the fact-finder to
resolve, and parol or extrinsic evidence is admissible to explain
or qualify the written instrument. Id. at 273, 423 S.E.2d at 795
(internal citations omitted). Because plaintiff signed below only
the added language . . . and not on the applicable signature line,
an ambiguity results as to whether plaintiff agreed to all the
terms contained in the Termination Agreement or merely those terms
in the added sentence immediately preceding his signature. Id.
We went on to affirm the trial court's decision that the plaintiff
did not agree to all the terms in the agreement.
The evidence as to the existence of an agreement in the case
at bar is ambiguous. Defendant's name is not found in any form on
the signature line of the agreement; however, she did print her
name at the top, ahead of the substantive portions of the
agreement. Therefore, consistent with Routh, the fact-finder below
could consider extrinsic evidence to determine whether defendantsigned the document , and consistent with A.E.P., we may revi
ew that
extrinsic evidence independently.
Defendant testified that when she began her employment,
plaintiff's office assistant handed her a number of forms. She
testified that the office assistant instructed her to date and put
her name on the agreement not to compete, and then took the
agreement from her after she followed these instructions. Although
the notarization form at the bottom of the agreement recites,
Before me personally appeared Holly N. Martinez to be known as the
person described in and who executed the foregoing instrument, and
acknowledged to and before me that she executed said instrument for
the purposes therein expressed, defendant testified that she never
discussed the agreement not to compete with any of plaintiff's
employees.
A comparison of this document with other documents completed
by defendant at the same time is instructive.
(a) Defendant completed in print an AVIS EMPLOYEE RECORD,
a document that sought basic personal information. This document
did not contain a signature line.
(b) Defendant wrote her name in cursive script at the bottom
of a NON-DISCRIMINATION POLICY in the space labeled Employee.
(c) Defendant wrote her name in cursive script in the space
labeled Employee at the bottom of a document entitled
ACKNOWLEDGMENT OF EMPLOYEE, in which defendant was asked to
acknowledge plaintiff's company policies and receipt of plaintiff's
company personnel manual. (d) Defendant printed her name on State and Federal tax forms
where the forms state Type or print your . . . name, but wrote
her name in cursive script on the line calling for Employee's
signature.
(e) Finally, a document entitled, NEW HANOVER RENT A CAR
RENTAL SALES AND SERVICE AGENT COMPENSATION PACKAGE contains three
spaces at the bottom, labeled Print Name, Sign Name, and
Date. Defendant printed her name in the first space, signed her
name in cursive script in the second space, and provided the date
in the third space.
Plaintiff responded with evidence provided by Ms. Dalton, who
notarized the agreement not to compete. Although the document
contains a blank signature line, Ms. Dalton testified that she
witnessed defendant complete this document before she notarized
it. Ms. Dalton testified that defendant was told to read the form
and, when she asked if defendant had any questions, defendant
responded that she did not. Ms. Dalton further testified that when
she completed the notary form, she did not notice the signature
line directly above the notarization was blank.
Our review of the record reveals that the preliminary
injunction was improperly issued. The evidence established that
where a document requested identification information, defendant
printed her name, but where a document requested a signature as
acknowledgment and acceptance of the material or as confirmation of
information requested in the document, defendant wrote her name in
cursive. There was no cursive script or any writing at all on thesignature line of the agreement not to compete and, therefore, no
signature. Based on this evidence, we hold that plaintiff was
unable to show a likelihood of success on the merits of its case.
Accordingly, we need not address the other issues raised by
defendant. The action of the trial court is reversed, and the case
is remanded for further action consistent with this opinion.
Reversed and remanded.
Judges MCGEE and HORTON concur.
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