ARKANSAS COURT OF APPEALS

NOT DESIGNATED FOR PUBLICATION

CHIEF JUDGE JOHN F. STROUD, JR.

DIVISION III

BUDDY YORK BAIL BONDS, INC.

APPELLANT

V.

ANTHONY WALKER

APPELLEE

CA 00-1085

May 2, 2001

APPEAL FROM THE PULASKI

COUNTY CHANCERY COURT

[EIJ 99-5291]

HONORABLE ELLEN BASS

BRANTLEY, CHANCELLOR

AFFIRMED

Appellant, Buddy York Bail Bonds, Inc., sought: 1) to enjoin appellee, Anthony Walker, from writing bail bonds in certain designated Arkansas counties pursuant to a "no-compete" clause; 2) to enforce a liquidated damages clause; and 3) to collect one-half of its expenses in apprehending individuals on bonds written by appellee and attorney's fees and costs. Appellee counterclaimed for an accounting of all premiums collected by appellant on bonds written by appellee. Following a trial, the chancellor determined that the no-compete clause was not enforceable and assessed damages between the parties by applying a set-off that resulted in a judgment against appellee for $179.94. We affirm.

For its first point of appeal, appellant contends that the trial court erred in ruling that the no-compete clause was unenforceable and that appellant was therefore not entitled to recover liquidated damages from appellee. We find no error.

In Duffner v. Alberty, 19 Ark. App. 137, 139-40, 718 S.W.2d 111, 112-13 (1986), we explained:

Contracts in partial restraint of trade, where ancillary to a sale of a business or profession with its goodwill, are valid to the extent reasonably necessary to the purchaser's protection, and are looked upon with greater favor than such an agreement ancillary to an employer-employee or professional association relationship. Where the covenant grows out of an employment or other associational relationship, the courts have found an interest sufficient to warrant enforcement of the covenant only in those cases where the covenantee provided special training, or made available trade secrets, confidential business information or customer lists, and then only if it is found that the associate was able to use information so obtained to gain an unfair competitive advantage.

(Citations omitted.) (Emphasis added.) Moreover, the validity of these covenants depends upon the facts and circumstances of each particular case. Id.

Here, appellee testified that he started to work for appellant in 1996; that he signed three of "these contracts"; that he was terminated by appellant on or about July 27, 1999; that he went to work for All Arkansas Bail Bonds a couple of weeks after that; and that his duties for All Arkansas were that of a bond agent. He acknowledged that his duties at All Arkansas would be in direct competition with appellant. He stated that appellant did not file his complaint until appellee had been working at All Arkansas for about two months, and that the ninety-day no-compete period had passed prior to the hearing. He stated that he got a new telephone number for All Arkansas; that appellant did not have any trade secrets, or companylists of prospective customers, "or anything like that"; that he did not take any of appellant's assets when he was terminated; and that appellant was the one who suggested that he call All Arkansas for a job after the termination.

Buddy York, president of Buddy York Bail Bonds, Inc., testified that he terminated appellee because he was not properly collaterizing the bonds and because he was engaging in the prohibited practice of soliciting bonds. Appellant also testified that the original contract signed by appellee was signed in 1997 and that it had the same provisions as the one signed in 1999. He further testified that when someone calls looking to bond out of jail, they usually go to a company they know; that part of the job of a good agent is to be able to cultivate people to his reputation in the business and his goodwill with his client base.

Paragraph eleven of the agreement between the parties provides:

11. Upon termination of this contract AGENT agrees that for a period of three (3) months from the date of termination of this contract, with or without cause, AGENT will not, within any county in the State of Arkansas in which AGENT has ever written a bail bond on behalf of COMPANY, directly or indirectly engage in the bail bond business nor shall AGENT assist any business in competition with employer for said period of three (3) months from the date of termination of this contract. AGENT shall not directly or indirectly engage in the bail bond business or in any competitive business as owner, partner, agent, or employee of any person, firm, or corporation engaged in the bail bond business, or in being interested directly or indirectly in any such business conducted by any person, firm, or corporation.

It is not the geographic limitations nor the three-month time limitation of this contractual provision that poses a particular problem in the instant case. Rather, we agree with the chancellor's comments in the following colloquy:

Court: [T]hese covenants not to compete have to go with some sort of specialized knowledge. And particularly when you're dealing with an employment covenant rather than one for the sale of a business. I just don't think this is real. I don't think when someone leaves your business, without any allegation that they have some special knowledge or trade secrets, that you can restrict them from working. And even if I did I would have to find in this particular circumstance that Mr. York knew he was going some place else, may have recommended him there. So I'm inclined to find that the plaintiff just can't win on that issue.

. . .

Counsel: Your Honor, . . . the Supreme Court specifically noted that a customer base can be covered by a covenant not to compete. Mr. York testified, he cultivated the clients and cultivated them through his advertising. I would ask the Court to reconsider. I don't know if the Court has read this case or not.

Court: I am familiar with that case. . . . I would just say you failed to establish it here.

Appellant simply did not establish that he provided special training, or that he made available trade secrets, confidential business information, or customer lists. Moreover, even though he contends that his customer base was jeopardized, we agree with the chancellor that he provided no real evidence to support that contention.

For his second point of appeal, appellant contends that "it was clearly erroneous for the trial judge to rule that the appellant was only entitled to one-half of the expenses he incurred apprehending individuals bonded by appellee and appellant should be awarded $2,194.88 for his expenses and forfeitures incurred." We find no error.

At the hearing, appellant's secretary, Ann Marie Harris, presented a summary of credit regarding bonds written by appellee and copies of receipts for expenses that appellant incurred looking for appellee's forfeitures. She showed a "total collected" of $1,785;"forfeiture expenses" of $1,182.32; "research time" of $200; "transportation on Billy Williams" of $180 and $147.50; and "forfeiture pay off on Eric Williams" of $800.

At the close of the May 24, 2000, hearing, appellee's counsel indicated that the parties would "get together to work up the numbers for the offset." The chancellor told the parties that they could look at the figures and reach her on a conference call regarding anything they could not resolve. There is no record of any later hearing or conference call.

In its order of August 3, 2000, the chancery court determined that appellee owed appellant $1,097.44 (one-half of the $2,194.88 amount claimed by appellant) for expenses relating to bond forfeitures; that appellant owed appellee the sum of $917.50 for premiums collected by appellant; and that by applying a set-off, appellant was entitled to a judgment against appellee in the amount of $179.94. Appellant contends that the chancellor erred in failing to award it all of the expenses it incurred and the payoff on the bond forfeiture.

The provision of the agreement that he relies upon is paragraph 7(d), which provides in pertinent part:

7. In the event that AGENT should have any reason to believe that any bail bond written by AGENT should be ordered forfeited by any Court of competent jurisdiction for failure of the bonded person to appear, or if AGENT believes that a forfeiture might be forthcoming on any such bond for any other reason, then AGENT shall immediately notify COMPANY and,

. . .

(d) In the event AGENT shall fail and refuse to assist COMPANY in apprehending the bonded person, the AGENT shall be liable for the entire forfeiture amount.

(Emphasis added.) With respect to this provision and the chancellor's decision, appellant contends:

It is ludicrous to think that had appellant not bothered to apprehend the persons that appellee had bonded out that appellee would be liable for the full amount of forfeiture, but by appellant apprehending the individuals appellee is only liable for one-half of the expenses appellant incurred. A much more reasonable construction is that if the appellee fails to assist in apprehending individuals who missed court he should be liable for the full amount of any forfeitures incurred or the full amount of any expenses incurred by the appellant up to the amount of the potential forfeiture.

First, the language of paragraph seven only addresses "forfeiture amounts," not expenses. Second, even with respect to forfeitures, paragraph seven limits the agent's liability for the entire forfeiture amount to situations in which "the agent shall fail and refuse to assist company in apprehending the bonded person." The testimony was not solidly in favor of appellant's position that appellee "failed and refused" to assist in the apprehension. Appellee testified that he had heard that some of the defendants for whom he wrote bail bonds had failed to appear, but that he never heard that appellant had paid any money on bond forfeitures or expenses. Moreover, he stated that except for one situation in which appellant notified him about a female who missed court, he was not otherwise notified until after the fact. Furthermore, regarding the notification about the female, appellee stated that he was in the middle of a divorce and could not go with them to apprehend her, but that he told them what he knew about how to find her. Finally, Buddy York acknowledged that he did not actually call appellee to get his help in trying to apprehend Eric or Billy Williams.

In conducting our de novo review of chancery cases, we give due deference to the chancellor's superior position to determine the credibility of the witnesses and the weight to be accorded their testimony, and we do not reverse the chancellor's findings of fact unless they are clearly against the preponderance of the evidence. Myrick v. Myrick, 339 Ark. 1, 2 S.W.3d 60 (1999). Moreover, it is the appellant's responsibility to file an abstract with this court setting forth sufficient testimony or exhibits to demonstrate the validity of its contentions of error made by the trial court. See Jacobs v. Yates, 342 Ark. 243, 27 S.W.3d 734 (2000). Based on the abstracted record that is before us, we find no clear error in the chancellor's determination of the amount of the judgment awarded to appellant.

Affirmed.

Pittman and Roaf, JJ., agree.