Carter Dental v. Carter

551 P.3d 1225, 173 Idaho 984
CourtIdaho Supreme Court
DecidedJuly 2, 2024
Docket50408 & 50455
StatusPublished
Cited by2 cases

This text of 551 P.3d 1225 (Carter Dental v. Carter) is published on Counsel Stack Legal Research, covering Idaho Supreme Court primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Carter Dental v. Carter, 551 P.3d 1225, 173 Idaho 984 (Idaho 2024).

Opinion

IN THE SUPREME COURT OF THE STATE OF IDAHO

Docket No.’s 50408 and 50455

CARTER DENTAL, P.A., an ) Idaho professional association, ) ) Plaintiff-Counterdefendant- ) Respondent, ) ) v. ) ) ELIZABETH CARTER, an individual, ) Boise, May 2024 Term ) Defendant-Counterclaimant- ) Opinion Filed: July 2, 2024 Appellant. ) ____________________________________) Melanie Gagnepain, Clerk ) ELIZABETH CARTER, an individual, ) ) Third-Party Plaintiff-Appellant, ) ) v. ) ) JASON CARTER, an individual, ) ) Third-Party Defendant-Respondent. ) ____________________________________)

Appeal from the District Court of the Fourth Judicial District of the State of Idaho, Ada County. Michael Reardon, District Judge.

The district court’s judgments are affirmed.

Parsons Behle & Latimer, Boise, attorneys for Appellant, Elizabeth Carter. Robert Burns argued.

Powers Farley, PC, Boise, attorneys for Respondent, Jason Carter. John Howell argued.

Elam & Burke, P.A., Boise, attorneys for Respondent, Carter Dental, P.A. Jaclyn Gans argued. _________________________________

BEVAN, Chief Justice.

1 This consolidated appeal concerns the enforceability of a settlement agreement and a noncompete clause. Elizabeth and Jason Carter are siblings and licensed dentists. They bought Carter Dental from their father in 2006 and worked together as partners in a professional association for more than a decade. In 2020, Jason accused Elizabeth of misusing the practice’s funds for her own benefit. Litigation ensued, during which the parties agreed to mediation. The mediation resulted in an agreement containing 14 bullet points providing that Elizabeth would sell her shares in the dental practice to Jason and not compete against the practice for two years. Those bullet points were later incorporated into a formal settlement agreement. Jason’s counsel then drafted a written mutual release, which Elizabeth refused to sign. Soon after, Jason moved to enforce the settlement agreement, which the district court granted. Over Elizabeth’s opposition, the district court found that the settlement agreement and noncompete clause were enforceable, and that the noncompete clause limits Elizabeth from practicing dentistry within a five-mile radius of Jason’s dental practice for two years. Pursuant to the agreement, the district court entered a judgment dismissing the case with prejudice. Elizabeth timely appealed from the judgment, arguing that the noncompete clause is unenforceable, and more broadly, that the settlement agreement is unenforceable. Following the entry of judgment, Jason and Carter Dental filed motions for attorney fees, which the district court granted. Elizabeth filed a second notice of appeal related to the district court’s award of attorney fees, which resulted in a separate docket number on appeal. This Court consolidated the two appeals. For the reasons below, we affirm the district court’s judgments in full. I. FACTUAL AND PROCEDURAL BACKGROUND The facts at the center of this appeal are highly contested by the parties. Elizabeth Carter and Jason Carter are siblings, and each owned a fifty percent share in Carter Dental, P.A. since jointly buying the practice from their father in 2006. Elizabeth and Jason are both licensed to practice dentistry in Idaho. From 2006 through 2021, Elizabeth served as the president of Carter Dental, and she was employed at Carter Dental as a full-time dentist. Jason practiced at Carter Dental as well as at Our Town Family Dentistry in Weiser, Idaho. In 2020, a dispute arose between Elizabeth and Jason regarding funds that Elizabeth owed to Carter Dental. The details surrounding the dispute remain contested. Elizabeth alleges that she and Jason agreed that certain expenses incurred by either party could be submitted to Carter Dental

2 for reimbursement. Conversely, Jason claims a dispute arose after he learned that Elizabeth was using funds from Carter Dental to pay for personal expenses. Jason requested an audit of Carter Dental’s books. Elizabeth and Jason entered into an agreement not only for an audit, but also for binding arbitration to resolve their dispute and, to that end, they mutually selected Denise McClure (“McClure”), CPA, CFE, to conduct the audit and serve as the sole arbitrator. Part of the agreement explained: Upon completion of her investigation, McClure will determine: (1) the total amount of payments made by the Company, at Elizabeth’s direction, that qualify as valid business expenses, (2) the total amount of payments made by the Company that were for Elizabeth’s personal expenses, and therefore, must be reimbursed by Elizabeth to the Company, and (3) . . . those small transactions ($20 or less) and/or transactions without supporting documentation that do not fall clearly into the other two categories (hereinafter defined as “Grey Area Expenses”). McClure, as arbitrator of the amount owed, shall have sole and binding authority in determining the amount Elizabeth owes to the Company, including, but not limited to, making a decision on the reimbursement amount of the Grey Area Expenses. The amount determined by McClure to be owed by Elizabeth to the Company, including the Grey Area Expenses, shall be final and may not be the subject of future litigation and/or appealed. A few months later, McClure issued her report, which found, in part, that Elizabeth used nearly $500,000 from Carter Dental’s funds for her own benefit. By October 2021, Carter Dental filed an application to confirm the arbitration award against Elizabeth, alleging that Elizabeth had made no payments to Carter Dental or otherwise attempted to satisfy the arbitration award. Elizabeth filed an answer to the application to confirm arbitration. As part of her answer, Elizabeth disputed the arbitration award and asserted three affirmative defenses, a counterclaim, and a third-party complaint against Jason. On March 17, 2022, Elizabeth moved to dismiss Carter Dental’s petition. The district court heard oral arguments on that motion a few weeks later and issued a memorandum decision denying the motion. Jason obtained a stay of litigation to determine the fair value of Elizabeth’s shares. The district court then held an evidentiary hearing on June 24, 2022, to evaluate the fair value of Elizabeth’s shares in Carter Dental. The parties could not complete the presentation of evidence that day, so the court scheduled a second day for the evidentiary hearing on July 29, 2022. However, before the second hearing, Elizabeth requested a continuance, and the evidentiary hearing was rescheduled for August 19, 2022.

3 In the interim, Jason and Elizabeth agreed to mediate the case, and scheduled mediation for August 19, 2022, with the agreement that they would obtain a new hearing date for the continued fair value evidentiary hearing if mediation failed. Thomas Banducci served as a mediator in the case. Elizabeth attended the mediation with her attorney, Wyatt Johnson, and Jason attended with his wife and their attorney, John Howell. After ten hours in mediation, the parties reached an agreement. Johnson memorialized the terms of the agreement in an email and sent them to Howell. The material terms of the agreement included:

1. All claims dismissed with prejudice. Each party to bear own fees and costs. 2. Jason purchases Elizabeth’s shares for $115,000, no interest payable 10%, 30 days of settlement, remainder of the balance due, in full, on or before December 31, 2022. Promissory note by Jason as Maker. 3. Carter Dental to immediately pay the full balance on the Capital One card (approximately $30,000) and the card will be closed (assuming no new charges). 4. Noncompete agreement - 5 mile radius, 2 years 5. Non-solicitation (customers) - 1 year. Non-solicitation applies to affirmative contact. Does not include passive advertisement such as a website or cases where a customer unilaterally comes to Elizabeth. 6.

Free access — add to your briefcase to read the full text and ask questions with AI

Related

Petersen v. Millennial Development Partners, LLC
567 P.3d 780 (Idaho Supreme Court, 2025)

Cite This Page — Counsel Stack

Bluebook (online)
551 P.3d 1225, 173 Idaho 984, Counsel Stack Legal Research, https://law.counselstack.com/opinion/carter-dental-v-carter-idaho-2024.