Fl SUPER! COUR1 OF GUAM 1 1618 .JUN 13 !? 8: q I 2 cl £RK 0 F~ ~0 URT 3
6 IN THE SUPERIOR COURT OF GUAM
7 ISLAND EYE CENTER, INC. dba ISLAND ) Civil Case No. CV0026-17 8 ) EYE AND RETINA CENTER, ) 9 ) Plaintiff, ) DECISION AND ORDER 10 ) vs. ) ) 11 ) PETER N. LOMBARD, M.D., ADVANCED ) 12 EYECARE LLC dba LOMBARD HEALTH, ) DESIREE NEDEDOG, JOHN and JONE DOES ) 13 1 through 20, ) ) 14 ) Defendants. ) 15 ______________________________) 16 I. STATEMENT OF THE CASE. 17 This matter came before the Honorable Michael J. Bordallo on Plaintiff's Motion for 18 Partial Summary Judgment, taken under advisement on April 6, 2018. Attorney Daniel J. 19 Berman represents Plaintiff Island Eye Center, Inc. dba Island Eye and Retina Center ("Island
20 Eye"). Attorney Delia Lujan Wolff represents Defendants Peter N. Lombard, M.D. ("Lombard"), Advanced Eyecare LLC dba Lombard Health ("Lombard Health") and Desiree 21 Nededog ("Nededog") (collectively "Defendants"). After having received and reviewed the 22 papers, arguments and the file herein, the Court hereby DENIES Plaintiff's Motion for Partial 23 Summary Judgment. 24
Page 1 of6 1 II. BACKGROUND.
2 This matter arises out of Island Eye's January 17, 2017 Complaint. 1 On March 20, 2017, Island Eye amended its Complaint and asserted the following seven causes of action: ( 1) 3 Common Law Misappropriate of Trade Secrets; Unfair Competition against all Defendants; (2) 4 Civil Conspiracy against all Defendants; (3) Breach of Contract: Non-Solicitation against 5 Lombard; (4) Breach of Fiduciary Duties against Lombard and Nededog; (5) Breach of 6 Covenant of Good Faith and Fair Dealing against Lombard; (6) Breach of Contract: Non- Competition against Lombard; and (7) Injunctive Relief against all Defendants. Am. Compl. at 7 10-19. The Request for Relief seeks monetary damages, punitive damages, injunctive relief, 8 attorneys' fees and costs, and any other relief deemed appropriate. Id. at 19. 9 On April 6, 2018, Island Eye filed a Motion and Memorandum for Partial Summary 10 Judgment, seeking summary judgment on the causes of action for breach of contract.
11 Defendants Peter N. Lombard, M.D., Advanced Eyecare LLC dba Lombard Health, and Desiree Nededog filed an Opposition on May 11, 2018. Island Eye filed its Reply on June 1, 12 2018. 13 III. ISSUES. 14 1. Whether Island Eye is entitled to summary judgment on its claims of breach of
15 contract. IV. FACTS. 16 1. On August 9, 2010, and by extension on November 17, 2011, Lombard entered into 17 a services/employment contract with Island Eye. Am. Compl. at 2. 18 2. From August 9, 2010, to February 28, 2013, Lombard served as a licensed medical 19 doctor for Island Eye. Id. 3. On January 31, 2013, Lombard executed and recorded, with the Department of 20 Revenue and Taxation, Articles of Organization for an LCC called Advanced 21 Eyecare. Def's Opp. at 3. 22 1 The initial Complaint asserted the following eight causes of action: (1) Breach of Contract: Non-Solicitation 23 against Lombard and Lombard Health; (2) Breach of Contract: Non-Competition against Lombard and Lombard Health; (3) Breach of Fiduciary Duties against Lombard and Lombard Health; (4) Breach of Covenant of Good 24 Faith and Fair Dealing against Lombard and Lombard Health; (5) Intentional Interference with Prospective Economic Advantage or Tort against all Defendants; (6) Unfair Competition - Common Law Misappropriation of 25 Trade Secrets against all Defendants; (7) Civil Conspiracy against all Defendants; and (8) Injunctive Relief against all Defendants. Compl. at 3-13. 26
Page 2 of6 1 4. Lombard's contract to render medical services on behalf of Island Eye ended on
2 February 28, 2013. Am. Compl. at 2. 5. According to the Amended Complaint, Island Eye has developed a number of "trade 3 secrets" including its client list, various procedures, unique treatment protocols, 4 forms, litigation and claim experiences, and insurance relationships that are the 5 product of over twenty years of business. Am. Compl. at 4-6. Island Eye
6 Employees, including Lombard, were exposed to this information during employment. Id. at 6-7. 7 6. On September 5, 2017, this Court issued a Decision and Order dismissing Island 8 Eye's Sixth Cause of Action (Breach of Contract: Non-Competition against 9 Lombard). Dec. and Ord. (Sep. 5, 2017). In that Decision, the Court ruled that 10 Section 17 of Lombard's contract with Island Eye Center, a non-competition clause,
11 was facially void due to its overbreadth.
12 v. PRINCIPLES OF LAW. 13 Summary Judgment Rule 56 of the Guam Rules of Civil Procedure regulates when a court may grant 14 summary judgment. Guam R. Civ. P. 56. Summary Judgment is appropriate if the pleadings, 15 deposition, interrogatories, and admissions on file together with the affidavits, if any, show that 16 there is no genuine issue as to any material fact and that the moving party is entitled to 17 judgment as a matter of law. Guam R. Civ. P. 56(c), Izuka Corp. v. Kawasho International,
18 (Guam), Inc., 1997 Guam 10
22 Celotex Corp. v. Catrett, 477 U.S. 317,323 (1986) (citations omitted). In rendering its decision on a motion for summary judgment, a court must draw 23 inferences and view the evidence in a light most favorable to the non-moving party. Bank of 24 Guam v. Flores, 2004 Guam 25. If, however, the movant can demonstrate that there are no 25 genuine issues of material fact, the non-movant cannot merely rely on allegations contained in 26
Page 3 of6 1 the pleading but must produce at least some significant probative evidence to support the
2 pleading, Edwards v. Pacific Financial Corporation, 2000 Guam 27
8 Complaint, two are for breach of contract. These are the Third Cause of Action (Breach of Contract: Non Solicitation) and Sixth Cause of Action (Breach of Contract: Non-Competition 9 against Lombard). This Court dismissed the Sixth Cause of Action on September 5, 2017, 10 leaving the Third Cause of Action as the only cause of action for breach of contract. The Court 11 notes that the Third Cause of Action is against Defendant Lombard only. In its Reply brief,
12 Island Eye asserts that "breaches of the Duty of Loyalty, Covenant of Good Faith and Fair Dealing and Fiduciary Duties are a breach of contract," and the present motion therefore seeks 13 summary judgment on all related causes of action. PI's Reply at 1-2. The causes of action to be 14 determined are as follows: 15 Third Cause of Action (Breach of Contract: Non-solicitation) Fomih Cause of Action (Breach of Fiduciary Duties) 16 Fifth Cause of Action (Breach of Covenant of Good Faith and Fair Dealing) 17 Am. Compl. at 12-15.
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Fl SUPER! COUR1 OF GUAM 1 1618 .JUN 13 !? 8: q I 2 cl £RK 0 F~ ~0 URT 3
6 IN THE SUPERIOR COURT OF GUAM
7 ISLAND EYE CENTER, INC. dba ISLAND ) Civil Case No. CV0026-17 8 ) EYE AND RETINA CENTER, ) 9 ) Plaintiff, ) DECISION AND ORDER 10 ) vs. ) ) 11 ) PETER N. LOMBARD, M.D., ADVANCED ) 12 EYECARE LLC dba LOMBARD HEALTH, ) DESIREE NEDEDOG, JOHN and JONE DOES ) 13 1 through 20, ) ) 14 ) Defendants. ) 15 ______________________________) 16 I. STATEMENT OF THE CASE. 17 This matter came before the Honorable Michael J. Bordallo on Plaintiff's Motion for 18 Partial Summary Judgment, taken under advisement on April 6, 2018. Attorney Daniel J. 19 Berman represents Plaintiff Island Eye Center, Inc. dba Island Eye and Retina Center ("Island
20 Eye"). Attorney Delia Lujan Wolff represents Defendants Peter N. Lombard, M.D. ("Lombard"), Advanced Eyecare LLC dba Lombard Health ("Lombard Health") and Desiree 21 Nededog ("Nededog") (collectively "Defendants"). After having received and reviewed the 22 papers, arguments and the file herein, the Court hereby DENIES Plaintiff's Motion for Partial 23 Summary Judgment. 24
Page 1 of6 1 II. BACKGROUND.
2 This matter arises out of Island Eye's January 17, 2017 Complaint. 1 On March 20, 2017, Island Eye amended its Complaint and asserted the following seven causes of action: ( 1) 3 Common Law Misappropriate of Trade Secrets; Unfair Competition against all Defendants; (2) 4 Civil Conspiracy against all Defendants; (3) Breach of Contract: Non-Solicitation against 5 Lombard; (4) Breach of Fiduciary Duties against Lombard and Nededog; (5) Breach of 6 Covenant of Good Faith and Fair Dealing against Lombard; (6) Breach of Contract: Non- Competition against Lombard; and (7) Injunctive Relief against all Defendants. Am. Compl. at 7 10-19. The Request for Relief seeks monetary damages, punitive damages, injunctive relief, 8 attorneys' fees and costs, and any other relief deemed appropriate. Id. at 19. 9 On April 6, 2018, Island Eye filed a Motion and Memorandum for Partial Summary 10 Judgment, seeking summary judgment on the causes of action for breach of contract.
11 Defendants Peter N. Lombard, M.D., Advanced Eyecare LLC dba Lombard Health, and Desiree Nededog filed an Opposition on May 11, 2018. Island Eye filed its Reply on June 1, 12 2018. 13 III. ISSUES. 14 1. Whether Island Eye is entitled to summary judgment on its claims of breach of
15 contract. IV. FACTS. 16 1. On August 9, 2010, and by extension on November 17, 2011, Lombard entered into 17 a services/employment contract with Island Eye. Am. Compl. at 2. 18 2. From August 9, 2010, to February 28, 2013, Lombard served as a licensed medical 19 doctor for Island Eye. Id. 3. On January 31, 2013, Lombard executed and recorded, with the Department of 20 Revenue and Taxation, Articles of Organization for an LCC called Advanced 21 Eyecare. Def's Opp. at 3. 22 1 The initial Complaint asserted the following eight causes of action: (1) Breach of Contract: Non-Solicitation 23 against Lombard and Lombard Health; (2) Breach of Contract: Non-Competition against Lombard and Lombard Health; (3) Breach of Fiduciary Duties against Lombard and Lombard Health; (4) Breach of Covenant of Good 24 Faith and Fair Dealing against Lombard and Lombard Health; (5) Intentional Interference with Prospective Economic Advantage or Tort against all Defendants; (6) Unfair Competition - Common Law Misappropriation of 25 Trade Secrets against all Defendants; (7) Civil Conspiracy against all Defendants; and (8) Injunctive Relief against all Defendants. Compl. at 3-13. 26
Page 2 of6 1 4. Lombard's contract to render medical services on behalf of Island Eye ended on
2 February 28, 2013. Am. Compl. at 2. 5. According to the Amended Complaint, Island Eye has developed a number of "trade 3 secrets" including its client list, various procedures, unique treatment protocols, 4 forms, litigation and claim experiences, and insurance relationships that are the 5 product of over twenty years of business. Am. Compl. at 4-6. Island Eye
6 Employees, including Lombard, were exposed to this information during employment. Id. at 6-7. 7 6. On September 5, 2017, this Court issued a Decision and Order dismissing Island 8 Eye's Sixth Cause of Action (Breach of Contract: Non-Competition against 9 Lombard). Dec. and Ord. (Sep. 5, 2017). In that Decision, the Court ruled that 10 Section 17 of Lombard's contract with Island Eye Center, a non-competition clause,
11 was facially void due to its overbreadth.
12 v. PRINCIPLES OF LAW. 13 Summary Judgment Rule 56 of the Guam Rules of Civil Procedure regulates when a court may grant 14 summary judgment. Guam R. Civ. P. 56. Summary Judgment is appropriate if the pleadings, 15 deposition, interrogatories, and admissions on file together with the affidavits, if any, show that 16 there is no genuine issue as to any material fact and that the moving party is entitled to 17 judgment as a matter of law. Guam R. Civ. P. 56(c), Izuka Corp. v. Kawasho International,
18 (Guam), Inc., 1997 Guam 10
22 Celotex Corp. v. Catrett, 477 U.S. 317,323 (1986) (citations omitted). In rendering its decision on a motion for summary judgment, a court must draw 23 inferences and view the evidence in a light most favorable to the non-moving party. Bank of 24 Guam v. Flores, 2004 Guam 25. If, however, the movant can demonstrate that there are no 25 genuine issues of material fact, the non-movant cannot merely rely on allegations contained in 26
Page 3 of6 1 the pleading but must produce at least some significant probative evidence to support the
2 pleading, Edwards v. Pacific Financial Corporation, 2000 Guam 27
8 Complaint, two are for breach of contract. These are the Third Cause of Action (Breach of Contract: Non Solicitation) and Sixth Cause of Action (Breach of Contract: Non-Competition 9 against Lombard). This Court dismissed the Sixth Cause of Action on September 5, 2017, 10 leaving the Third Cause of Action as the only cause of action for breach of contract. The Court 11 notes that the Third Cause of Action is against Defendant Lombard only. In its Reply brief,
12 Island Eye asserts that "breaches of the Duty of Loyalty, Covenant of Good Faith and Fair Dealing and Fiduciary Duties are a breach of contract," and the present motion therefore seeks 13 summary judgment on all related causes of action. PI's Reply at 1-2. The causes of action to be 14 determined are as follows: 15 Third Cause of Action (Breach of Contract: Non-solicitation) Fomih Cause of Action (Breach of Fiduciary Duties) 16 Fifth Cause of Action (Breach of Covenant of Good Faith and Fair Dealing) 17 Am. Compl. at 12-15.
18 Despite this Court already ruling the non-compete clause of Lombard's employment contract facially void, Island Eye argues that it is entitled to summary judgment based on 19 common law breach of contract. Island Eye is therefore left to argue that Lombard, during the 20 course of his employment with Island Eye, competed directly with Isl<:md Eye by forming an 21 LLC and poaching Island Eye's employees. 22 Common law does not provide a cause of action for breach of fiduciary duty after an employment contract has ended. Island Eye must show that Defendants' actions went beyond 23 merely planning a future competitive enterprise. "Every agent owes his principal the duty of 24 undivided loyalty. During the course of his agency, he may not undertake or participate in 25 activities adverse to the interests of his principal. In the absence of an agreement to the 26
Page 4 of6 1 contrary, an agent is free to engage in competition with his principal after termination of his
2 employment but he may plan and develop his competitive enterprise during the course of his agency only where the particular activity engaged in is not against the best interests of his 3 principal." Sequoia Vacuum Sys. v. Stransky, 229 Cal. App. 2d 281, 287 (Ct. App. 1964). The 4 Court will now address whether Island Eye has met the necessary burden to warrant the 5 granting of summary judgment pertaining to the three causes of action for breach of contract. 6 Third Cause of Action (Breach of Contract: Non-solicitation) 7 While conceding that he set up an LLC prior to the expiration of his contract with Island 8 Eye, Lombard denies contacting any Island Eye employees regarding potential employment
9 opportunities prior to February 28, 2013. In its Amended Complaint, Island Eye claims that Lombard breached his contract by 10 soliciting Island Eye employees, but the instances alleged all occurred in 2015, over two years 11 after the termination of Lombard's employment contract with Island Eye. Island Eye has failed 12 to demonstrate that Lombard recruited Island Eye employees at a time when he owed a duty of
13 loyalty to Island Eye. The Court therefore denies summary judgment on this cause of action. Fourth Cause of Action (Breach of Fiduciary Duties) 14 Island Eye's claim for Breach of Fiduciary Duties alleges that Defendants Lombard and 15 Nededog breached their duties of loyalty to Island Eye by soliciting employees who "possess, 16 know and well understand the Island Eye patient listing and Trade Secrets, confidential 17 information, health insurance relationships, protocols and methods of specialized ophthalmic 18 care and treatment of the eye and vision with the ultimate goal of establishing a competing
19 Surgical Eye and planned LASIK treatment center." Am. Compl. at 13-14. Island Eye argues that Defendants Lombard and Nenedog took "affirmative steps to solicit the Prior Island Eye 20 Employees and establish a competitive corporation." Id. As with the Third Cause of Action for 21 non-solicitation, this Comt finds that Lombard's denial of recruiting Island Eye employees 22 during his employment with Island Eye constitutes a genuine issue of material fact.
23 Further, Lombard's formation of an LLC does not alone constitute a violation of fiduciary duty. "The mere fact that the officer makes preparations to compete before he resigns 24 his office is not sufficient to constitute a breach of duty." Bancroft-Whitney Co. v. Glen, 64 25 Cal. 2d 327, 346, 411 P.2d 921 (1966). "This principle has been specifically applied to hold 26
Page 5 of6 1 that an employee's mere formation of a potentially competing corporation does not breach a
2 duty to his employer." Mamou v. Trendwest Resorts, Inc., 165 Cal. App. 4th 686, 719 (2008). For the reasons stated, the Court hereby denies summary judgment on this cause of action. 3 Fifth Cause of Action (Breach of Covenant of Good Faith and Fair Dealing) 4 Island Eye's claim for Breach of Covenant of Good Faith and Fair Dealing alleges that 5 Defendant Lombard, due to his employment with Island Eye, "owed a duty to Island Eye to 6 disclose the ownership interest he had taken and created in Lombard Health, while employed 7 by Island Eye, and disclosed [sic] his plan and intention to take Trade Secrets, solicit Island
8 Eye employees, establish a competing Surgical Eye and planned LASIK treatment center, and to immediately compete against Island Eye, and as well to refrain from any self-dealing with 9 regard to the establishment of Lombard Health, all of which have occurred at the expense of 10 Island Eye." Am. Compl. at 15. 11 Lombard has conceded that he registered his LLC while still employed by Island Eye.
12 Lombard has denied taking any further actions to compete with Island Eye until after his employment had terminated. The Court does not find that the registering of an LLC, without 13 further action, constitutes a breach of loyalty to Island Eye. 14 The Court finds that Island Eye's allegations regarding breach of duty of loyalty are 15 overly broad and lack the factual specificity needed for the Court to grant summary judgment. 16 For this reason, the Court denies summary judgment on this cause of action.
17 VII. CONCLUSION AND ORDER 18 Based on the forgoing, the Court finds that summary judgment is not appropriate at this 19 time. Plaintiff's motion is DENIED.
21 SO ORDERED, this j Y 1/'.day of ~ 2017. 22 .. ·-·~· "CW:: VIA COU~T 23 'that a r\'1 W!IS! 24 •/g t;?;ur?'J() 25 ··;c_~~ Judge, Superior Court of Guam
26 ~ Page 6 of6