Featured Chrome Extensions:

Casey IRACs are produced by an AI that analyzes the opinion’s content to construct its analysis. While we strive for accuracy, the output may not be flawless. For a complete and precise understanding, please refer to the linked opinions above.

Keywords

contractdamages

Related Cases

Consolidated Data Terminals v. Applied Digital Data Systems, Inc., 708 F.2d 385, 36 UCC Rep.Serv. 59
View Case »
Janiszewski v. Behrmann, 345 Mich. 8, 75 N.W.2d 77
View Case »
Vanderbilt University v. DiNardo, 174 F.3d 751, 134 Ed. Law Rep. 766, 14 IER Cases 1702, 1999 Fed.App. 0135P
View Case »
Arabie v. CITGO Petroleum Corp., 89 So.3d 307, 2010-2605 (La. 3/13/12)
View Case »
Barrington Group, Ltd., Inc. v. Classic Cruise Holdings S De RL, 435 Fed.Appx. 382
View Case »
Justia Law Link
LexisNexis Link
Westlaw Link
CourtListener Link
Oyez Link

Robinson v. Boohaker, Schillaci & Co., P.C., 767 So.2d 1092, 2000-1 Trade Cases P 72,843, 17 IER Cases 1288

Facts

F. Lee Robinson, an accountant, terminated his relationship with Boohaker, Schillaci & Company and sought payments under a buy-sell agreement that included noncompete provisions. After the firm ceased payments, Robinson sued for damages, claiming the firm made improper changes to cash management practices and failed to reimburse expenses. The firm counterclaimed, asserting that Robinson violated the noncompete provisions, which were drafted by one of the firm's members.

F. Lee Robinson, an accountant, terminated his relationship with the firm of Boohaker, Schillaci & Company, P.C. (“the firm”), and exercised his rights under a preexisting buy-sell agreement executed in 1990, supplemented by a 1994 agreement, that, among other things, called for payments to be made to him over a five-year period for the purchase of his stock.

Issue

Does the doctrine of in pari delicto bar a former professional employee from recovering compensation under an agreement when the employee participated in the negotiation of an unlawful non-compete provision and violated it?

Under Alabama law, does the doctrine of in pari delicto as an affirmative defense bar a former professional employee from recovering compensation under an agreement with his former employer, when such former professional employee directly participated in the negotiation of an unlawful non-compete provision contained within the agreement, while having knowledge that the non-compete agreement was unlawful under Alabama law, when the former employee violates the non-compete provision by entering into competition with his former employer?

Rule

Under Alabama law, the doctrine of in pari delicto precludes a party from obtaining relief if both parties are equally at fault in an illegal agreement.

Where one has entered into an agreement that is either illegal or void, and that party is equally guilty with the other party, the doctrine of in pari delicto precludes him from obtaining relief from the courts.

Analysis

The court determined that since Robinson was involved in drafting the noncompete provisions and was aware of their illegality, he could not claim relief for the employer's failure to make payments. The court emphasized that both parties were in equal fault regarding the illegal contract, thus applying the doctrine of in pari delicto.

Given this fact, the firm cannot assert the defense of equitable estoppel against Robinson as he seeks to recover, notwithstanding his breach of the illegal covenants not to compete.

Conclusion

The Supreme Court of Alabama answered the certified question in the affirmative, holding that the doctrine of in pari delicto prevents Robinson from recovering due to his participation in the unlawful noncompete agreement.

We answer the question in the affirmative and state the effect of the availability of the defense.

Who won?

Boohaker, Schillaci & Company prevailed because the court found that Robinson's involvement in the illegal noncompete provision barred him from recovering payments.

The Supreme Court held that: (1) fact that one of employer's members drafted noncompete provisions precluded firm from contending that employee was equitably estopped from recovering on claim for payment under agreement because employee violated noncompete provisions, and (2) if former employee violates noncompete provision in buy-sell agreement drafted by employer, under circumstances where employee knew when he entered into the agreement that provision was illegal and unenforceable, in action by employee against employer upon employer's ceasing to make payments due employee under the agreement, doctrine of in pari delicto prevents employee from avoiding consequences of breach of noncompete clause by asserting its illegality.

You must be