Nalle Clinic Co. v. Parker

399 S.E.2d 363 (1991)

101 N.C. App. 341

The NALLE CLINIC COMPANY, a North Carolina Corporation, Plaintiff, v. Mark W. PARKER, Defendant.

No. 9026SC231.

Court of Appeals of North Carolina.

January 15, 1991.

*365 Parker, Poe, Adams & Bernstein by William L. Rikard, Jr., and Keith M. Weddington, Charlotte, for plaintiff, appellee.

James, McElroy & Diehl, P.A. by William K. Diehl, Jr., Mark T. Calloway and John S. Arrowood, Charlotte, for defendant, appellant.

HEDRICK, Chief Judge.

Defendant's first contention on appeal is that "the trial court erred in granting the plaintiff's motion for preliminary injunction." For the reasons set forth below, we agree.

A preliminary injunction:

`is an extraordinary measure taken by a court to preserve the status quo of the parties during litigation. It will be issued only (1) if a plaintiff is able to show likelihood of success on the merits of his case and (2) if a plaintiff is likely to sustain irreparable loss unless the injunction is issued, or if, in the opinion of the Court, issuance is necessary for the protection of a plaintiff's rights during the course of litigation.' (citations omitted).

A.E.P. Industries v. McClure, 308 N.C. 393, 401, 302 S.E.2d 754, 759-60 (1983), quoting, Investors, Inc. v. Berry, 293 N.C. 688, 701, 239 S.E.2d 566, 574 (1977). In reviewing the trial court's ruling on a motion for a preliminary injunction, "the scope of review is basically de novo" and "we are not bound by the trial court's findings, but may review and weigh the evidence and find facts for ourselves." Iredell Digestive Disease Clinic v. Petrozza, 92 N.C. App. 21, 26, 373 S.E.2d 449, 452 (1988), aff'd, 324 N.C. 327, 377 S.E.2d 750 (1989).

In the present case, the trial judge concluded that "Paragraph 17 of the Junior Staff Contract is valid and enforceable" and that plaintiff would "likely prevail in a final determination of the matter." Our de novo review of the evidence presented and the applicable law, however, indicates that Paragraph 17 of the Agreement, entitled "Practice Limitation," is not a valid and enforceable covenant not to compete.

A covenant not to compete is valid and enforceable upon a showing that it is: (1) in writing, (2) made part of a contract of employment, (3) based upon reasonable consideration, (4) reasonable both as to time and territory, and (5) not against public policy. A.E.P. Industries, 308 N.C. at 402-03, 302 S.E.2d at 760. The validity of the present contract provision attempting to limit defendant from engaging in the practice of medicine or surgery in Mecklenburg County for a period of two years is controlled by our decision in Iredell Digestive Disease Clinic v. Petrozza, 92 N.C. *366 App. 21, 373 S.E.2d 449 (1988), which was affirmed per curiam by our Supreme Court at 324 N.C. 327, 377 S.E.2d 750 (1989). In that case, we held that a covenant not to compete contained in the employment agreement entered into between a physician and a clinic was unenforceable as against public policy where "ordering the covenantor to honor his contractual obligation would create a substantial question of potential harm to the public health. . . ." Petrozza, at 27, 373 S.E.2d at 453.

In the present case, defendant submitted affidavits from twenty physicians practicing in Mecklenburg County and specializing in pediatric medicine which tend to show that: (1) pediatric endocrinologists perform certain highly specialized tests and protocols which pediatricians and other doctors do not perform; (2) defendant is the only pediatric endocrinologist in Mecklenburg County other than Dr. Robert Schwartz; (3) Dr. Schwartz practices exclusively at Charlotte Memorial Hospital where he is the Assistant Chairman of the Department of Pediatrics Residency Program; (4) due to Dr. Schwartz's teaching and administrative duties, he practices pediatric endocrinology only three afternoons per week, and for non-emergency patients there is up to a four-week wait to see him; (4) losing defendant's services would create an excessive workload on Dr. Schwartz; (5) one pediatric endocrinologist would not be able to meet the demand of Mecklenburg County for such services; (6) the nearest pediatric endocrinologist outside of Mecklenburg County is Dr. Lyndon Key, who is located in Winston-Salem, North Carolina; (7) if defendant were not able to practice in Mecklenburg County, it might force young children and their parents to have to travel approximately one and one-half hours to Winston-Salem for treatment by a pediatric endocrinologist, if Dr. Schwartz were unavailable; and (8) losing defendant's services would likely result in undesirable and possible critical delays in patient care and treatment. While there exists some conflict between these affidavits and those submitted by plaintiff as to the exact impact that loss of defendant's services would have on Mecklenburg County's medical community, we find, after reviewing the evidence de novo, that enforcement of the covenant not to compete would "create a substantial question of potential harm to the public health." See Petrozza, at 29, 373 S.E.2d at 454.

Thus, under the facts of this particular case, we hold the covenant not to compete to be unenforceable as a matter of law as against public policy; and since plaintiff bases its action against defendant on this provision in the employment agreement, we find that it would likely not prevail in a final determination of the matter and has not met its burden of establishing the facts necessary for the issuance of a preliminary injunction.

While we need not address defendant's other assignments of error brought forward and argued on appeal, we note, for the record, that we agree with defendant that the trial court erred in concluding that plaintiff would suffer irreparable harm if the preliminary injunction did not issue. In the order granting preliminary injunction in favor of plaintiff, the trial judge failed to make any findings of fact with respect to the harm plaintiff would potentially suffer if defendant were allowed to continue practicing medicine in Mecklenburg County, and our review of the record reveals that no competent evidence was presented to support this conclusion.

For the foregoing reasons, the order of the trial judge granting preliminary injunction in favor of plaintiff is reversed.

Reversed.

WELLS and ORR, JJ., concur.