S L Knee & Sports Rehabilitation v. S L Knee & Sports Medicine

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Salt Lake Knee & Sports Rehabilitation, Inc. v. Salt Lake Knee & Sports Medicine. Filed December 9, 1999 IN THE UTAH COURT OF APPEALS


Salt Lake Knee & Sports Rehabilitation, Inc.,
fka Professional Therapy, Inc.,
Plaintiff and Appellant,


Salt Lake Knee & Sports Medicine;
Lonnie E. Paulos, M.D., P.C.; .
and Thomas D. Rosenberg, M.D., P.C.,
Defendants and Appellees.

(Not For Official Publication)

Case No. 981282-CA

December 9, 1999
  1999 UT App 364 -----

Third District, Salt Lake Department
The Honorable Homer F. Wilkinson

John C. Green and Kim M. Luhn, Salt Lake City, for Appellant
Robert S. Campbell and Sheleigh Chalkley, Salt Lake City, for Appellees


Before Judges Billings, Jackson, and Orme.

ORME, Judge:

The parties agree the trial court on remand was not foreclosed from determining whether the name of the business, Salt Lake Sports Medicine Center, had been sold. We take issue, however, with the trial court's conclusion that, as a matter of law, the name had not been sold. The Asset Purchase Agreement is unambiguous and, as a whole, clearly evidences Medicine's intention to sell every asset of the business, including the name. Paragraph 1(a) of the agreement lists "goodwill and general intangibles" among the assets being sold. Such broad concepts include the name of the business, even though it was not specifically mentioned in the agreement. See Sorensen v. Sorensen, 769 P.2d 820, 825 (Utah Ct. App. 1989) (stating goodwill includes such things as a good name), rev'd in part on other grounds, 839 P.2d 774 (Utah 1992); Black's Law Dictionary 811 (7th ed. 1999) (defining "general intangible" as "[a]ny personal property other than goods, accounts, chattel paper, documents, instruments, investment property, rights to proceeds of written letters of credit, and money").(1)

It is the law of the case that appellees transferred the business to a third party within two years of entering into the Termination Agreement. See Salt Lake Knee & Sports Rehab., Inc. v. Salt Lake City Knee & Sports Medicine, 909 P.2d 266, 269 (Utah Ct. App. 1995), cert. denied, 925 P.2d 963 (Utah 1996). Further, it is undisputed that the transfer was a "sale" as defined by paragraph eleven of the Termination Agreement because a third party, i.e., the joint venture, bought the lease of the business's premises and all of the business's equipment and assets, including patient records and accounts, and assumed complete operational control of the business. We now hold, as a matter of law, that the name Salt Lake Sports Medicine Center was included in the assets transfer. Disputes of material fact remain, however, on the question of whether the business was actually operated after the sale under that name, as required by the Termination Agreement's definition of "sale." Consequently, we again remand to the trial court so that it may conduct an evidentiary hearing or such other proceedings as may be necessary to resolve this factual question. See id., 909 P.2d at 270.

If, on remand, appellant can show the business was indeed operated under the same name after the sale to the joint venture, all preconditions to appellant's entitlement to payment will have been satisfied. In that event, the trial court shall then determine what part of the purchase price of the business was attributable to goodwill and award appellant one third of that sum. Otherwise, the trial court shall enter judgment for appellees.

Vacated and remanded.

Gregory K. Orme, Judge



Judith M. Billings, Judge

Norman H. Jackson, Judge

1. A further indication of appellees' intent to sell every asset of the business is the Joint Venture Agreement, referred to in the Asset Purchase Agreement. That document states that the purpose of the venture is to "own, manage, market, and operate," inter alia, "rehabilitation and therapy operations . . ., which operations shall consist initially of and shall incorporate those rehabilitation and therapy operations presently owned and operated by SLCKSM and located on 39th South."