Southern Pipe Supply Company V Chris Wiseman

Key Facts

Transaction Type

Issues

• The court analyzed whether default judgment was procedurally warranted using six factors from Lindsey v. Prive Corp., including whether material facts are in dispute, prejudice to the plaintiff, clearly established grounds for default, excusable neglect, harshness of the judgment, and grounds to set aside default.
• The court evaluated whether injunctive relief was appropriate and addressed Plaintiff's request for cost awards, requiring Plaintiff to provide cost information within 30 days before any award.
• The court determined whether Southern Pipe's Complaint sufficiently states a breach of contract claim based on the Employment Agreement between Southern Pipe and Chris Wiseman, which contained non-compete and non-solicitation provisions that Defendant allegedly violated.

Holdings

Remedies

• During the same two-year period, Defendant Chris Wiseman is permanently enjoined from soliciting, calling on or accepting business from any customer of Southern Pipe with whom Wiseman had business contact during the two years immediately prior to Wiseman's departure from Southern Pipe.
• Defendant Chris Wiseman is permanently enjoined from violating his Employment and Noncompetition Agreement with Southern Pipe by competing against Southern Pipe in the utilities plumbing or pipe supply business within a 125-mile radius of Southern Pipe's Nashville, Tennessee branch, for a period of two years from the entry of this Order.

Legal Principles

• The court applied the three-step default judgment analysis: (1) procedural warrant, (2) substantive merits, and (3) appropriate relief. Using the Lindsey v. Prive Corp. six factors, the court found default judgment procedurally warranted as Defendant failed to respond, was willfully absent from service, and no grounds existed to set aside default. The court also denied the declaratory judgment request as duplicative since breach of contract necessarily requires an enforceable agreement.
• The court applied Mississippi law standards for breach of contract claims, requiring proof by preponderance of evidence that a valid and binding contract exists and that the defendant breached it. The Employment Agreement between Southern Pipe and Chris Wiseman contained non-compete and non-solicitation warranties, and the court found the complaint sufficiently stated a claim for breach of contract based on Defendant's employment with a competitor and solicitation of Southern Pipe's customers.
• While injunctive relief was granted, the court held that Plaintiff must demonstrate costs incurred before any award. The Employment Agreement authorized recovery of costs for breach, but Plaintiff had not yet provided information needed to calculate costs. Plaintiff was ordered to produce an affidavit or sworn declaration within 30 days with cost information.
• Under Mississippi law, a plaintiff asserting a breach-of-contract claim must prove by a preponderance of the evidence that a valid and binding contract exists and that the defendant breached it, regardless of the remedy sought or actual damage sustained. The court found the Complaint alleged facts sufficient to establish these elements for breach of the Employment Agreement.
• The court determined that injunctive relief was appropriate for this default judgment case. Mississippi law recognizes non-compete and non-solicitation covenants as enforceable, and the court granted a permanent injunction preventing the Defendant from competing within 125 miles of Southern Pipe's Nashville branch for two years and from soliciting Southern Pipe's customers. The court noted costs must be demonstrated prior to any award.

Precedent Name

• Lindsey v. Prive Corp.
• Bus. Commc'ns, Inc. v. Banks
• Cascio v. Cascio Investments, LLC
• Wooten v. McDonald Transit Assocs., Inc.
• Helena Agri-Enters., LLC v. Grand Oak Farms
• Twist & Shout Music v. Longneck Xpress, N.P.

Key Disputed Contract Clauses

• The Employment Agreement between Southern Pipe and Chris Wiseman contained a non-compete covenant prohibiting Wiseman from competing against Southern Pipe in the utilities plumbing or pipe supply business. The court analyzed whether this covenant was valid and enforceable under Mississippi law, finding it was. The court granted injunctive relief enjoining Wiseman from competing within a 125-mile radius of Southern Pipe's Nashville, Tennessee branch for two years from the entry of the Order.
• The Employment Agreement between Southern Pipe and Chris Wiseman contained a non-solicitation covenant prohibiting Wiseman from soliciting or attempting to solicit business from Southern Pipe's customers. The court found this covenant enforceable under Mississippi law and granted injunctive relief preventing Wiseman from soliciting, calling on, or accepting business from any customer of Southern Pipe with whom he had business contact during the two years immediately prior to his departure from Southern Pipe.

Cited Statute

• Federal Rule of Civil Procedure 8(a)(2)
• Federal Rule of Civil Procedure 55(a)

Judge Name

Passage Text

• Based on the foregoing analysis of facts and legal principles, the Court concludes that the Plaintiff's Motion for Default Judgment requesting a permanent injunction should be and hereby is GRANTED IN PART.
• a) Defendant Chris Wiseman is enjoined from violating his Employment and Noncompetition Agreement with Southern Pipe by competing against Southern Pipe in the utilities plumbing or pipe supply business within a 125-mile radius of Southern Pipe's Nashville, Tennessee branch, for a period of two years from the entry of this Order.
• Where appropriate, the Court may grant injunctive relief, when entering Default Judgment. The Court determines that such an injunction is appropriate here. Mississippi law recognizes as enforceable the type of non-compete and non-solicitation covenants presented in this case.

Damages / Relief Type

• Declaratory judgment request denied as duplicative - Court found breach of contract claim necessarily requires enforceable agreement, making separate declaration unnecessary
• Permanent injunction granted against Defendant from competing with Southern Pipe in utilities plumbing/pipe supply business within 125-mile radius of Nashville, Tennessee branch for two years and from soliciting Southern Pipe's customers with whom he had business contact during two years prior to departure
• Costs award pending - Court ordered Plaintiff to submit affidavit detailing costs incurred within 30 days; costs must be shown before any award