Hendershot v. Indiana Medical Network, Inc.

750 N.E.2d 798, 2001 Ind. App. LEXIS 882, 2001 WL 576864
CourtIndiana Court of Appeals
DecidedMay 29, 2001
Docket49A02-0007-CV-442
StatusPublished
Cited by4 cases

This text of 750 N.E.2d 798 (Hendershot v. Indiana Medical Network, Inc.) is published on Counsel Stack Legal Research, covering Indiana Court of Appeals primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Hendershot v. Indiana Medical Network, Inc., 750 N.E.2d 798, 2001 Ind. App. LEXIS 882, 2001 WL 576864 (Ind. Ct. App. 2001).

Opinion

OPINION

BROOK, Judge.

Case Summary

Appellant-defendant Patricia K. Hender-shot, M.D. ("Hendershot") appeals the trial court's order granting summary judgment in favor of appellee-plaintiff Indiana Medical Network, Inc. ("IMN"). We reverse. 1

Issues 2

We restate the various issues presented for our review as follows:

I. - whether genuine issues of material fact precluding summary judgment exist regarding whether IMN breached the employment agreement (the "Agreement") before Hendershot terminated the Agreement; and
II. whether Hendershot waived, or is estopped from asserting, any defense by her acceptance of benefits under the Agreement.

Facts and Procedural History

The facts most favorable to Hendershot are that she is a physician specializing in internal medicine. On December 80, 1998, Hendershot entered into the Agreement with Aegis Medical Clinic, Inc. ("Aegis") to work as a physician for a seven-year term, beginning on January 1, 1994, at 8091 Township Line Road (the "Clinic") "or at such other locations as agreed upon by the Parties." Record at 156. Regarding compensation, the Agreement provided that for the first three years, Hendershot would be compensated at the greater of $134,874 or 50% of her cash collections. A separate provision of the Agreement governed her compensation during the remainder of the seven-year term.

The Agreement contained the following provisions regarding termination:

[T]his agreement may be terminated as follows:
(a) At any time during this Agreement, Aegis or Physician may terminate this Agreement for cause, as hereinafter indicated. "Cause" as used herein and the notice required to terminate shall be as follows:
(1) Failure of any party to comply with the terms and/or conditions of this Agreement or failure of the party in breach to cure any material breach of this Agreement within thirty (80) days after written notice of the breach provided by the nonbreaching party;
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(v) After best efforts by Aegis and Physician to reach a mutually acceptable solution, failure of Physician, other than by reason of Physician's permanent disability to maintain the Full Time Practice of Medicine ...
(38) The parties agree that the termination of this Agreement by either Aegis 'or the Physician prior to its expiration without good cause shall constitute a breach of the Agreement. The parties further agree that the injury which would result from such a breach would be significant, but that the damages therefrom would be difficult to compute.
*801 Therefore, unless otherwise mutually agreed upon, Aegis and Physician agree that liquidated damages for the early termination of this Agreement without good cause during the initial term and any renewal term shall be equal to one-half of Physician's salary in the twelve months prior to the breach to be paid by the party in breach to the non-breaching party.

Record at 186-87, 189.

The Agreement's noncompete clause stated:

During the term of this Agreement, including any renewal terms and for a period of one (1) year after this Agreement terminates, Physician agrees that he/she will not provide professional services or take employment, ownership, or a position with comparable duties and responsibilities with a medical practice, hospital, health care delivery system or organization (hereinafter "Health Care Entity") located in Marion County, its contiguous counties or the county in which the Clinic and/or Facility ("Service Area") without the prior written consent of Aegis.
a) This covenant not to compete shall be given effect after the termination of this Agreement only in the event of:
i) termination of this Agreement due to Physician's breach of this Agreement prior to its expiration; or
1) Aegis seeking to renew or extend the Agreement with compensation offered to Physician at the then fair market value for an internal medicine physician in the Indianapolis market place and Physician electing to terminate the Agreement or have it not automatically renewed;
2) The parties further agree that Physician shall have access to trade and business secrets and other confidential and proprietary information concerning Aegis and its related entities, shall have access to Aegis customers, and that the economic injury which would result to Aegis from Physician's breach of this covenant not to compete would be significant, but that the damages arising therefrom would be difficult to compute. Therefore, Aegis and Physician each individually agree that liquidated damages shall be paid by Physician to Aegis in the event that Physician breaches this covenant not to compete. Liquidated damages for Physician's breach of this covenant not to compete shall be equal to Fifty Thousand Dollars ($50,000) less 10% of said $50,000 for each twelve (12) month period of this Agreement which Physician shall have completed without breach of Physician's obligations outlined in this Agreement until the end of the fifth year of this Agreement when the liquidated damages shall total and remain at $25,000 for the original and any renewal terms and for a period of one (1) year after this Agreement terminates. There will be credit given under this formula only for those full 12 month increments during which Physician fulfilled his/her obligations hereunder. No credit will be given for partial periods of time. This liquidated damages provision and the obligations associated with the noncompete agreement shall survive the termination and/or expiration of this Agreement. The parties agree that the purpose of this provision is to prevent Physician from using trade or business secrets and other confidential knowledge of Aegis and to prevent Physician from enticing away patients. '

Record at 146-48.

The Agreement included the following waiver provision:

No consent or waiver, express or implied, by any party to any breach or default by any other party in the perfor *802 mance of obligations hereunder shall be deemed or construed to be a consent or waiver to any other breach or default in the performance of other obligations of such other party. Failure on the part of any party to declare any other party in default, irrespective of how long such failure continues, shall not constitute consent or waiver of the rights of such party.

Record at 144-46. The Agreement could be amended "at any time by mutual agreement of the parties hereto by written amendment signed by each party, but [could not] be modified in any other manner." Record at 142.

As permitted in the Agreement, Aegis assigned its interest to IMN on January 1, 1995. In either late June or early July of 1997, IMN informed Hendershot that it was closing the Clinic on Township Line Road at which she had practiced with other physicians.

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Bluebook (online)
750 N.E.2d 798, 2001 Ind. App. LEXIS 882, 2001 WL 576864, Counsel Stack Legal Research, https://law.counselstack.com/opinion/hendershot-v-indiana-medical-network-inc-indctapp-2001.