GILBERT, BARBEE, MOORE & McILVOY, P.S.C., d/b/a GRAVES-GILBERT CLINIC v. ROBERT P. LANDSBERG, M.D.
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RENDERED:
December 6, 1996; 10:00 a.m.
NOT TO BE PUBLISHED
NO. 95-CA-002155-MR
GILBERT, BARBEE, MOORE
& McILVOY, P.S.C., d/b/a
GRAVES-GILBERT CLINIC
v.
APPELLANT
APPEAL FROM WARREN CIRCUIT COURT
HONORABLE THOMAS R. LEWIS, JUDGE
ACTION NO. 93-CI-00049
ROBERT P. LANDSBERG, M.D.
APPELLEE
OPINION
REVERSING and REMANDING
* * * * * * * *
BEFORE:
COMBS, EMBERTON and KNOPF, Judges.
EMBERTON, JUDGE.
Graves-Gilbert Clinic appeals from a summary
judgment dismissing its damage claim which arose from Robert
Landsberg's breach of non-competition clause of an employment
contract.
We reverse and remand.
Graves-Gilbert Clinic is a large multi-specialty
medical clinic in Bowling Green, Kentucky.
In May of 1984, Dr.
Landsberg, an orthopedic surgeon, signed an employment contract
with Graves-Gilbert.
In December 1985, a second employment
contract was executed when he became a shareholder in GravesGilbert.
Both contracts contain a restrictive covenant
providing:
In the event of the termination of employment
of Employee, either voluntarily or as
otherwise provided, or in the event of the
dissolution of this corporation, the Employee
shall neither form another partnership or
professional service corporation or be
associated in the practice of medicine with
any other member of this firm, nor shall he
practice medicine individually in Warren
County, Kentucky, for a period of three years
from the date of termination of his
employment with the Employer or from the
dissolution of same. This restriction may be
enforced by injunctive relief from a court of
competent jurisdiction. And it is further
the understanding and intent of this
agreement that said Employee will be liable
to the Employer for damages arising out of
the breach of this contract relative to his
practicing of his profession within Warren
County, Kentucky, during the three-year
period of time. This restriction may be
waived by a vote of 51% of the voting power
of the shareholders of the Employer and said
notification of waiver must be in writing.
In June 1992, Dr. Landsberg gave the contractually required sixmonth notice that he was leaving the Clinic's employ.
He ceased
work on December 31, 1992, and on January 4, 1993, opened an
office for the practice of medicine in Bowling Green.
The Clinic initiated this action on January 15, 1993,
seeking, among other relief, a permanent injunction prohibiting
Dr. Landsberg from practicing medicine in Warren County for a
period of three years following the termination of his employment
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with the Clinic.
Following discovery, the trial court entered an
injunction prohibiting Dr. Landsberg from the practice of
medicine in Warren County until January 1, 1996.
Dr. Landsberg
appealed from the injunction and this Court affirmed.
The trial court was left to resolve the question of
damages, if any, that were sustained by the Clinic as a result of
Dr. Landsberg's breach of the employment contract and his
practice of medicine for a ten-month period in 1993 in Warren
County.
On July 5, 1995, Dr. Landsberg filed a motion for
summary judgment alleging that Ky. Rev. Stat. (KRS) 311.285,
effective July 15, 1994, precluded the enforcement of the
restrictive covenant, and further, that the Clinic waived its
right to enforce the restrictive covenant by allowing the
orthopedic department to become dormant following Dr. Landsberg's
departure.
Following a hearing on July 17, 1995, Dr. Landsberg
tendered an order granting summary judgment in his favor.
The
order, which was ultimately signed by the trial court, states
that the injunction is not enforceable because it violates public
policy as announced by the legislature in KRS 311.285 and that
the damages claimed by the Clinic are speculative.
Upon its
receipt of a copy of the tendered order, the Clinic promptly
filed a response which included an affidavit of the Assistant
Administrator of the Clinic setting forth the methodology
intended to be utilized to prove damages.
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KRS 311.285, upon which the trial court relied, has now
been repealed.1
The statute's life was short, effective only
from July 1994, through January 1996, and the public policy
expressed in that statute concerning non-compete clauses in
employment contracts between health care providers appears no
longer viable in this Commonwealth.
Additionally, the statute
was not in effect when the parties reached their agreement, nor
when the permanent injunction was issued.
Nothing in KRS 311.285
expressed a legislative intent for it to be retroactive.
446.080.
KRS
At oral argument, apparently recognizing the futility,
Dr. Landsberg waived any argument as to the applicability of the
statute.
In his motion for summary judgment Dr. Landsberg argued
that the Clinic waived its claim for damages by its temporary
closing of the orthopedic department following his departure.
On
appeal there is no such contention, presumably because this Court
previously rejected the same argument.
And, we decline to
consider it again.
Whether the Clinic's damages are so speculative that
summary judgment is appropriate, is the issue upon which the
parties have primarily focused.
The ability of the Clinic to
prove damages as a result of Dr. Landsberg's breach of the
contract is clearly a question of fact.
1
On a motion for summary
KRS 311.285 was repealed by Senate Bill 343 during the
1996 Legislative Session.
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judgment it is incumbent upon the trial court to determine only
if there is an issue to resolve, not to decide any question of
fact.
Williams v. City of Hillview, Ky., 831 S.W.2d 181 (1992).
The party moving for summary judgment has the burden to prove
that it would be impossible for the non-moving party to prevail
at trial.
Steelvest, Inc. v. Scansteel Service Center, Ky., 807
S.W.2d 476 (1991).
Dr. Landsberg's motion for summary judgment did not
mention the ability of the Clinic to prove damages nor did Dr.
Landsberg present any proof, by affidavit or otherwise, which
demonstrated that the Clinic cannot prove its damages at trial.
His motion argued waiver and the applicability of KRS 311.285,
and the Clinic's response addressed only those issues.
Indeed,
the Clinic was not aware there was a factual dispute regarding
proof of damages until it received the tendered order.
It then
filed Mr. Heckman's affidavit which calculated the amount of
damages claimed for the period Dr. Landsberg practiced in
violation of the agreement.
The trial court found that because the Clinic shut down
its orthopedic department for a period following Dr. Landsberg's
departure and for the remaining nine months contracted with
Bowling Green Orthopedics for temporary coverage of Clinic
patients, "[i]t would be too speculative to allow proof tending
to hold defendant Landsberg liable for all costs and damages
during that time period, since it was not Dr. Landsberg's fault
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that the clinic incurred unusual costs in connection with its
arrangement with Bowling Green Orthopedics."
It is apparent that
in reaching such a conclusion, the trial court resolved an issue
of fact -- to wit -- whether the Clinic suffered damages as a
result of Dr. Landsberg's violation of the agreement.
judgment was improperly entered.
Summary
Steelvest, supra.
This case is reversed and remanded to the Warren
Circuit Court for a trial on the issue of damages.
ALL CONCUR.
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BRIEF AND ORAL ARGUMENT FOR
APPELLANT:
BRIEF AND ORAL ARGUMENT FOR
APPELLEE:
Jerry A. Burns
Bowling Green, Kentucky
Stephen L. Hixson
Bowling Green, Kentucky
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