Ameripath, Inc. and DFW 5.01(a) Corporation v. Steven Hebert M.D.

447 S.W.3d 319, 38 I.E.R. Cas. (BNA) 1573, 2014 WL 3827834, 2014 Tex. App. LEXIS 8525
CourtCourt of Appeals of Texas
DecidedAugust 5, 2014
Docket05-12-00321-CV
StatusPublished
Cited by38 cases

This text of 447 S.W.3d 319 (Ameripath, Inc. and DFW 5.01(a) Corporation v. Steven Hebert M.D.) is published on Counsel Stack Legal Research, covering Court of Appeals of Texas primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Ameripath, Inc. and DFW 5.01(a) Corporation v. Steven Hebert M.D., 447 S.W.3d 319, 38 I.E.R. Cas. (BNA) 1573, 2014 WL 3827834, 2014 Tex. App. LEXIS 8525 (Tex. Ct. App. 2014).

Opinion

OPINION

Opinion by Justice LEWIS.

AmeriPath, Inc. (“AmeriPath”) and DFW 5.01(a) Corporation (“DFW”) appeal the trial court’s judgment, which finalized a series of summary judgments and separate legal rulings, and which awarded attorney’s fees to appellee Steven Hebert. In four issues, appellants contend the trial court erred by (1) denying their motion to confirm an arbitration award, (2) granting summary judgment on appellants’ contract counterclaims against Hebert, (3) granting summary judgment on appellants’ tort counterclaims against Hebert, and (4) granting Hebert attorney’s fees. We affirm the trial court’s judgment in part, and we reverse and remand the remainder of the case for further proceedings consistent with this opinion.

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Background

Hebert is a pathologist. He began his employment relationship with appellants in September 1998, when he contracted with DFW — a Texas nonprofit corporation that is wholly owned by AmeriPath — to provide professional services on its behalf (the “1998 Agreement”). In September 2002, Hebert and DFW amended the 1998 Agreement; the new contract was titled Amendment to Employment Agreement (the “First Amendment”). The First Amendment contained a recital that made specific reference to the 1998 Agreement and said the parties wished to amend their agreement. In February 2005, Hebert signed a third contract, this one titled Second Amendment to Employment Agreement (the “Second Amendment”), which again contained recitals, this time referring specifically to both the 1998 Agreement and the First Amendment. And finally, Hebert signed a fourth contract, titled simply Employment Agreement, in January 2008 (the “2008 Agreement”), which contained recitals referring to the 1998 Agreement, the First Amendment, and the Second Amendment. In each of the four agreements, Hebert was defined as the “Employee,” his employer was defined as the “Company,” and the Company was consistently defined as “a Texas not for profit corporation certified to practice medicine by the Texas Board of Medicine pursuant to Section 5.01(a) of the Texas Medical Practices Act.” However, in the 1988 Agreement and the First Amendment, the not for profit company is “DFW 5.01(a) Corporation,” and in the Second Amendment and the 2008 Agreement, the not for profit company is called “AmeriPath DFW 5.01(a) Corporation” (“ADFW”). The record indicates neither party realized this name change had occurred until well into the litigation at hand, but the change has shaped the litigation from the point of realization forward.

During the period of his employment, Hebert became a director and an officer of DFW. The record indicates that Hebert was appointed Vice President of nine Texas non-profit corporations, including DFW. 1 Hebert’s appointment was made in a 2004 joint resolution approved by the three members of the AmeriPath Board of Directors — one of whom was Hebert — and the “Sole Member,” AmeriPath. 2 In 2008, Hebert became the Managing Director of DFW.

All of Hebert’s employment agreements contained covenants not to compete.- The covenant in the 2008 Agreement became relevant when — in 2009 — Hebert resigned and went to work for a competitor, Pro-Path Associates (“ProPath”). His move was facilitated by a contract he signed in 2008 with an AmeriPath client, Columbia Medical Center of McKinney (the “Hospital”), on behalf of DFW (the “Hospital PSA”). The Hospital PSA contained a key-man provision, which essentially provided that if Hebert was no longer employed by DFW, then his agreement not to compete was waived as to the Hospital. Thus, when Hebert resigned, the client Hospital followed him to ProPath, and He *325 bert took the position he was not violating his 2008 Agreement. The parties have starkly different views of how the Hospital PSA was negotiated and signed. It is undisputed that a second, different agreement was being negotiated at the same time between AmeriPath and HCA, Inc., the Hospital’s parent company. This new agreement would have governed DFWs relationship with the Hospital. While both forms of the agreement contained a key-man provision, the form Hebert signed was much more favorable to him if he were to leave his employment as he did in 2009. Hebert contends he thought he was signing the form of agreement AmeriPath had negotiated; AmeriPath contends Hebert negotiated his own deal with the Hospital and signed that form of the agreement without authority from AmeriPath.

AmeriPath opposed Hebert’s employment with ProPath, relying on the covenant not to compete in his 2008 Agreement (the “Noncompete”). That agreement contained a legislatively mandated provision allowing Hebert to buy out the Noncom-pete. It provided:

The Employee is entitled to buy out of these Non-Competition and Non-Solicitation provisions at a reasonable price as agreed to by the Employee and the Company, or, at the option of either party, as determined by a mutually agreed upon arbitrator, or, in the case of an inability to agree, an arbitrator of the court whose decision shall be binding on all parties.

The parties attempted to reach agreement on a “reasonable price,” but they were-unsuccessful.

In September 2009, Hebert sued ADFW (using the employer’s name on his 2008 Agreement), seeking an injunction preventing ADFW from interfering with his employment with the Hospital and a declaration that his Noncompete with ADFW was unenforceable; Hebert also pleaded a claim for tortious interference with his employment relationship with the Hospital. DFW answered (under the name ADFW) and filed counterclaims against Hebert for breach of contract, unfair competition, misappropriation of trade secrets, breach of fiduciary duty, harmful acts by computer, civil conspiracy, and tortious interference. DFW also sought injunctive and declaratory relief of its own. Soon thereafter, DFW joined ProPath in the suit and pleaded a crossclaim against ProPath for tor-tious interference and civil conspiracy.

In October 2009, the parties informed the trial court they had come to an agreement to arbitrate the Noncompete buyout amount in accordance with the 2008 Agreement. The arbitrator determined the reasonable buyout price was $2,580,175. But Hebert did not follow through with the buyout. Instead, he continued to argue the Noncompete was unenforceable. The parties returned to the trial court, and litigation continued over their various clainjs.

On September 7, 2010, Hebert filed his Third Amended Petition, re-captioning the lawsuit with two defendants: AmeriPath and DFW. Almost immediately, appellants asked the trial court to confirm the arbitration award; Hebert opposed confirmation.

Hebert also filed a motion for partial summary judgment, seeking a declaration that he was not bound by the Noncom-pete. The trial court granted the motion, concluding the employment contract was invalid because the named contracting entity, ADFW, did not exist (the “First Summary Judgment”). At the same time, the trial court vacated the arbitration award. DFW filed an interlocutory appeal, seeking to have this Court overturn the order to vacate.

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447 S.W.3d 319, 38 I.E.R. Cas. (BNA) 1573, 2014 WL 3827834, 2014 Tex. App. LEXIS 8525, Counsel Stack Legal Research, https://law.counselstack.com/opinion/ameripath-inc-and-dfw-501a-corporation-v-steven-hebert-md-texapp-2014.