HA&W CAPITAL PARTNERS, LLC et al.
BHANDARI et al.
MCFADDEN, P. J., RAY and RICKMAN, JJ.
MCFADDEN, PRESIDING JUDGE.
dispute arose when a group of registered representatives
resigned from one financial services firm to join another.
Central to this dispute is the interplay between their former
employment agreements, which contained notice provisions
limiting their ability to move from one firm to another, and
the Protocol for Broker Recruiting, whose purpose is to
facilitate such movement and to which both financial services
firms had been signatories. That interplay is complicated by
the fact that the former employer was undertaking to withdraw
from the protocol as the registered representatives were
undertaking to change firms. The central issue before us
today is whether the protocol invalidates provisions in those
employment agreements requiring the registered
representatives to give advance notice of their resignations.
appeal challenges trial court orders granting and denying
various cross motions for summary judgment on the
parties' respective claims and counterclaims. Because the
unambiguous language of the protocol does not invalidate the
notice provisions at issue, the trial court erred in finding
otherwise. So we reverse the grant of summary judgment that
had disposed of the appellant former employer's breach of
contract claim on the basis of that erroneous finding. The
court's other summary judgment rulings premised on that
erroneous finding require further consideration below, so we
vacate those rulings and remand with direction.
before us are attorney fee counterclaims. We reverse the
denial of summary judgment to the appellant former employer
on the appellee registered representatives counterclaim for
attorney fees under OCGA § 13-6-11 because such fees are
not recoverable for compulsory counterclaims. But, there are
genuine issues of material fact as to the appellees'
counterclaims for attorney fees under a contractual
provision, so we affirm the trial court's denial of
summary judgment to the appellant former employer on that
counterclaim. Likewise, because there are genuine issues of
material fact as to the counterclaims for wrongful injunctive
relief, deferred compensation, and conversion, we affirm the
trial court's denial of summary judgment to the appellant
former employer on those counterclaims.
Facts and procedural posture.
judgment is proper "if the pleadings, depositions,
answers to interrogatories, and admissions on file, together
with the affidavits, if any, show that there is no genuine
issue as to any material fact and that the moving party is
entitled to a judgment as a matter of law[.]" OCGA
§ 9-11-56 (c). "On appeal, we review the grant or
denial of summary judgment de novo, construing the evidence
and all inferences in a light most favorable to the nonmoving
party." Seki v. Groupon, Inc., 333 Ga.App. 319
(775 S.E.2d 776) (2015) (citation omitted).
construed, the evidence shows that Niraj Bhandari, David
Austin, Lisa Schiffer, and Christopher Wynne entered into
employment agreements with HA&W Capital Partners, LLC.
HA&W Capital is a holding company whose operating
subsidiaries include HA&W Wealth Management, LLC, an
investment advisory firm. Pursuant to the employment
agreements, Bhandari, Austin, Schiffer, and Wynne worked as
registered representatives with HA&W Wealth, providing
financial advice to clients.
employment agreements contained notice provisions regarding
an employee's voluntary termination of his or her
employment. The notice provisions in Austin, Schiffer, and
Wynne's respective contracts stated that each of them
"shall have the right to voluntarily terminate [his or
her] employment for any reason, at any time, upon ninety (90)
days prior written notice to [HA&W Capital]."
Bhandari's contract contained virtually the same
provision, except that it provided for 60 days notice instead
of 90 days.
March 26, 2017 HA&W Capital transmitted a letter
withdrawing from the Protocol, effective April, 5, 2014.
HA&W Capital subsequently undertook to make that
April 4, 2014, Bhandari, Austin, Schiffer, and Wynne all
terminated their employment with HA&W Capital without
providing written notice and immediately commenced employment
at Morgan Stanley Smith Barney, LLC (hereinafter "Morgan
Stanley"). That same day, HA&W Capital filed a
complaint and obtained an ex parte temporary restraining
order preventing Bhandari, Austin, Schiffer, and Wynne from
contacting any clients of HA&W Capital, from accessing
any information system of HA&W Capital, and from
destroying documents or electronically stored information
relating to HA&W Capital's business. Five days later,
on April 9, 2014, the trial court entered an order dissolving
the temporary restraining order.
Capital amended the complaint, adding HA&W Wealth and
other affiliated companies as plaintiffs (collectively,
"HA&W"), and adding Morgan Stanley and Dorothy
Stanton, another former HA&W Wealth employee, as
defendants. The amended complaint included a claim for breach
of contract against Bhandari, Austin, Schiffer, and Wynne
(collectively, "the former employees") for
violating the notice of termination provisions of their
respective employment agreements. The defendants jointly
filed an answer and counterclaims. The former employees'
first counterclaim was for breach of contract based on
allegations that HA&W had breached the Protocol for
Broker Recruiting, an agreement between various investment
parties filed cross motions for summary judgment. After a
hearing, the trial court entered three separate summary
judgment orders. Its first order is entitled "Order on
Cross-Motions for Partial Summary Judgment - Advance Notice
Provisions and the Protocol for Broker Recruiting." In
that order the trial court ruled on the former employees'
motion for summary judgment on HA&W's breach of
contract claim that the former employees had violated the
notice provisions in their employment agreements; the former
employees' motion for summary judgment on their
counterclaim that HA&W had breached the protocol;
HA&W's motion for summary judgment on its claim that
the former employees had breached the notice provisions; and
HA&W's motion for summary judgment on the
counterclaim that HA&W had breached the protocol.
order, the trial court stated that "the operative
question in these [four] motions is whether the [p]rotocol
applies and precludes [the former employees'] liability
as to the advance notice provisions." The trial court
then analyzed and rejected HA&W's various arguments
as to why the protocol should not apply. The trial court then
found as a matter of law that the protocol precludes any
liability based on the notice of termination provisions in
the employment contracts. Based on its finding that the
protocol precludes liability under the notice provisions, the
trial court granted summary judgment in favor of the former
employees on HA&W's breach of contract claim; granted
summary judgment in favor of the former employees on their
breach of the protocol counterclaim; denied summary judgment
to HA&W on its breach of contract claim; and denied
summary judgment to HA&W on the breach of the protocol
other two orders, the trial court ruled on the parties'
summary judgment motions concerning other claims and
counterclaims. Among other rulings, the trial court denied
summary judgment to HA&W on the former employees'
counterclaims for wrongful injunctive relief, deferred
compensation, conversion, and attorney fees. HA&W
First summary judgment order: protocol and notice
first enumeration of error, HA&W has included the four
summary judgment rulings set forth in the trial court's
first order and refers to these four rulings collectively as
the "Protocol Orders." In the same way that the
trial court did not separately analyze the four motions for
summary judgment before it, and instead premised all four of
its rulings on those motions on the same
"operative" finding regarding the applicability and
effect of the protocol, HA&W has not set forth separate
arguments challenging each ruling, and instead has relied on
the same arguments to challenge the rulings collectively.
trial court's analysis regarding the protocol precluding
the notice provisions was flawed: the protocol does not
categorically invalidate notice provisions in employment
agreements. So each of the rulings must be analyzed
separately. In doing so, we reverse the grant of summary
judgment to the former employees on HA&W's breach of
contract claim. The other three rulings in the first order -
the denial of summary judgment to HA&W on its breach of
contract claim, the denial of summary judgment to HA&W on
the former employees' breach of contract counterclaim,
and the grant of summary judgment to the former employees on
their breach of contract counterclaim - must all be vacated
and remanded for further consideration.
Summary judgment to former employees on breach of
contends that the trial court erred in granting summary
judgment in favor of the former employees and against
HA&W on its breach of contract claim that the former
employees had violated the notice provisions of their
employment agreements. We agree.
order, the trial court recited the contract provisions for
each of the former employees requiring either 60 or 90 days
prior written notice of termination, and the court further
found that "[t]here is no dispute that Defendants
Bhandari, Austin, Schiffer, and Wynne . . . all voluntarily
terminated their employment with HA&W Capital on April 4,
2014, without providing any prior written notice to HA&W
Capital[.]" Nevertheless, the trial court concluded that
the former employees were entitled to summary judgment on the
breach of contract claim on the ground that the protocol, to
which HA&W Wealth and Morgan Stanley were signatories,
precluded any liability as to the notice provisions. That
conclusion was erroneous.
Protocol for Broker Recruiting is an agreement among [a
number of] firms in the securities industry." Credit
Suisse Securities (USA) LLC v. Tracy, 812 F.3d 249, 252
n. 8 (2d Cir. 2016) (punctuation omitted). It provides:
The principal goal of the following protocol is to further
the clients' interests of privacy and freedom of choice
in connection with the movement of their Registered
Representatives ("RRs") between firms. If departing
RRs and their new firm follow this protocol, neither the
departing ¶ nor the firm that he or she joins would have
any monetary or other liability to the firm that the ¶
left by reason of the ¶ taking the information
identified below or the solicitation of the clients serviced
by the ¶ at his or her prior firm, provided,
however, that this protocol does not bar or otherwise affect
the ability of the prior firm to bring an action ...