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Smith v. Union National Life Insurance Co.

April 07, 1998

SMITH V. UNION NATIONAL LIFE INSURANCE COMPANY


Before Thomas, P.j., Herring, And Hinkebein, JJ.

The opinion of the court was delivered by: Herring, J.

LESLIE SMITH, APPELLANT v. UNION NATIONAL LIFE INSURANCE COMPANY, LEE MCDONALD, JOE OZBOLT AND FRANK BROWN, APPELLEES

THIS OPINION IS NOT DESIGNATED FOR PUBLICATION AND MAY NOT BE CITED, PURSUANT TO M.R.A.P. 35-B

DATE OF JUDGMENT: 05/29/96

TRIAL JUDGE: HON. JAMES E. GRAVES, JR.

COURT FROM WHICH APPEALED: HINDS COUNTY CIRCUIT COURT

NATURE OF THE CASE: CIVIL - OTHER

TRIAL COURT DISPOSITION: DISMISSED LAWSUIT

DISPOSITION AFFIRMED - 4/7/98

MOTION FOR REHEARING FILED:

CERTIORARI FILED:

MANDATE ISSUED:

Leslie Smith filed an action in the Circuit Court of the First Judicial District of Hinds County, Mississippi, against Union National Life Insurance Company and three of its managerial employees. In his amended complaint, Smith charged all defendants with slander and libel and sought compensatory and punitive damages in excess of $7,250,000. The trial court dismissed the amended complaint pursuant to Mississippi Rule of Civil Procedure 13(a) and ruled that Smith's action should have been filed as a counterclaim in response to an action filed by Union National, then pending in the United States District Court for the Northern District of Mississippi. Smith now appeals to this Court and contends that his action should not have been dismissed because (1) his action against Union National and the other defendants was not a compulsory counterclaim and (2) in the alternative, the state trial court had concurrent jurisdiction with the federal court to hear his claim even if it were to be considered a compulsory counterclaim in federal court. After a review of the record and the argument of counsel, we rule that the trial court was correct in dismissing Smith's state court action and in requiring Smith to re-file his action as a counterclaim in the federal court action.*fn1

A. THE FACTS

According to the record before us, Leslie Smith began his employment relationship with Union National Life Insurance Company as an insurance salesman on December 18, 1992. In connection with this employment, Smith signed an employment contract which contained a "non-compete" agreement under which he agreed not to sell life, health, or accident insurance for a period of one year to persons in a particular geographic area in Northern Mississippi. Smith's employment relationship with Union National ended on February 17, 1995, but he continued to engage in the insurance business. Smith began working for Life of Georgia, allegedly in violation of his non-compete agreement with Union National. In response, Union National filed an action in the United States District Court for the Northern District of Mississippi charging Smith with violating several clauses of his contract and (1) requesting a temporary restraining order and preliminary injunction prohibiting Smith from disclosing confidential information in violation of his employment contract with Union National and prohibiting Smith from otherwise competing for business with his former employer in a certain geographic area for a period of one year and (2) requesting that Union National be granted a money judgment against Smith for lost premiums and commissions in a sum not less than $120,000, plus attorney's fees and expenses. Union National claimed, inter alia, that Smith improperly accounted for premiums and had been paid too much in commissions.

An agreed preliminary injunction was issued in the federal court action on August 29, 1995, which enjoined Smith from soliciting, selling, or attempting to sell any new insurance policies in Tate, Marshall, or Panola Counties. In addition, Smith was prohibited from disclosing any confidential information which he gained by virtue of his employment with Union National. In his answer to the federal complaint, Smith filed a general denial of the allegations brought ...


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