Kenneth Kesler, M.D. v. Indiana University Health Care Associates, INC.

CourtIndiana Court of Appeals
DecidedApril 25, 2024
Docket23A-PL-02111
StatusPublished

This text of Kenneth Kesler, M.D. v. Indiana University Health Care Associates, INC. (Kenneth Kesler, M.D. v. Indiana University Health Care Associates, 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
Kenneth Kesler, M.D. v. Indiana University Health Care Associates, INC., (Ind. Ct. App. 2024).

Opinion

FILED Apr 25 2024, 8:57 am

CLERK Indiana Supreme Court Court of Appeals and Tax Court

IN THE

Court of Appeals of Indiana Kenneth Kesler, M.D., Appellant-Plaintiff,

v.

Indiana University Health Care Associates, Inc., d/b/a/ Indiana University Health Physicians (IUHP), Appellee-Defendant.

April 25, 2024

Court of Appeals Case No. 23A-PL-2111

Appeal from the Marion Superior Court

The Honorable Heather A. Welch, Judge

Trial Court Cause No. 49D01-2307-PL-27885

Court of Appeals of Indiana | Opinion 23A-PL-2111 | April 25, 2024 Page 1 of 19 Opinion by Senior Judge Baker Judges Pyle and Felix concur.

Baker, Senior Judge.

Statement of the Case [1] Kenneth Kesler, M.D. sought a declaratory judgment, seeking relief from the

restraints contained in a noncompetition clause of the Employment Agreement

he entered into with Indiana University Health Care Associates, Inc. d/b/a

Indiana University Health Physicians (IUHP). IUHP responded by filing its

answer, verified counterclaim for declaratory judgment, and a request for a

temporary restraining order (TRO), preliminary injunction, and permanent

injunction. After a hearing, the trial court issued its order granting IUHP’s

request for a preliminary injunction and enjoined Dr. Kesler from treating

patients within the geographically restricted area provided in the

noncompetition clause in his Employment Agreement. Dr. Kesler brings this

interlocutory appeal from the court’s order. Concluding that the court’s order

did not reflect consideration of all competing interests in support of the result

reached, we reverse and remand.

Facts and Procedural History [2] Dr. Kesler is a board-certified thoracic surgeon who has developed a surgical

procedure to remove complex germ cell cancer tumors in the chest area.

Court of Appeals of Indiana | Opinion 23A-PL-2111 | April 25, 2024 Page 2 of 19 During his career, he has developed a group of around 156 referring physicians

who are primarily medical oncologists not employed by IUHP.

[3] In 2014, Kesler entered into an Employment Agreement with IUHP, which

took effect on January 1, 2015. The Employment Agreement contained a

restrictive covenant not to compete for a period of two years after the

termination of his employment with IUHP and within the defined geographical

thirty-mile range.

[4] Dr. Kesler provided IUHP with written notice of his intent to terminate the

Employment Agreement as of July 14, 2023. After that date, he was employed

by Community Health Network at Community North Hospital, a hospital

within the thirty-mile geographically restricted area. Within days of the

termination of his employment with IUHP, Dr. Kesler filed a declaratory

judgment action seeking relief from the restrictive covenant not to compete.

IUHP responded by filing its answer, verified counterclaim for declaratory

judgment, and a request for a TRO, preliminary injunction, and permanent

injunction.

[5] The trial court held a hearing on IUHP’s motion requesting a TRO and

preliminary injunction. During the hearing, IUHP presented argument and

relied on the verified pleadings and responses filed in the action. Among other

things, IUHP argued “it’s actually in the public interest to enforce—uh—the

contracts between the parties in this way [by enforcing the non-competition

clause].” Tr. Vol. II, p. 13. IUHP further claimed that “the suggestion that

Court of Appeals of Indiana | Opinion 23A-PL-2111 | April 25, 2024 Page 3 of 19 there’s harm to patients is really refuted by–uh—sort of by Dr. Kesler himself.

Um—you know—subject to his non-solicitate [sic], he agrees that patients can

and—we agree that patients can continue to treat with him if they choose—

uh—to relocate their care.” Id.

[6] Dr. Kesler offered exhibits and testimonial evidence. He testified about his

education, experience, training, employment, and referral network. He agreed

with the statement that there was no one at IUHP who performs the same

surgical procedure he does on the complex germ cell tumors in the chest. Over

ninety-five percent of his patients are new patients. Dr. Kesler’s counsel argued

that “there certainly is a strong public interest that Dr. Kesler be able to perform

these surgeries. At this time, the only place Dr. Kesler has surgical procedures

[sic]—perform these procedures is at Community Hospital.” Id. at 28. IUHP

responded that, “[w]e’re not limiting whether patients can treat with Dr. Kesler.

We are asking that the Court enforce the reasonable restrictive covenant on

where Dr. Kesler may situate his practice—uh—going forward if he’s providing

the same medical services.” Id. at 29.

[7] The trial court entered its order granting a preliminary injunction in favor of

IUHP, and enjoined Dr. Kesler from treating patients within the restricted

geographical area set out in the Employment Agreement.

Court of Appeals of Indiana | Opinion 23A-PL-2111 | April 25, 2024 Page 4 of 19 Discussion and Decision A. Confusion Apparent in the Record [8] Before we address the dispositive issue in this appeal, we pause to note the

confusion in the record as to what the appealed order really is. The trial court’s

order setting a hearing says it is considering a “Motion For Temporary

Restraining Order,” but makes reference in the order to IUHP’s “Motion for

Temporary Restraining Order and Preliminary Injunction” and concludes by

setting a “virtual hearing on the Motion for Temporary Restraining Order and

Preliminary Injunction.” Appellant’s App. Conf. Vol. II, p. 94 (emphasis added).

The record also shows that the parties believed they were attending a hearing

solely addressing the request for a temporary restraining order. See Tr. Vol. II,

p. 6. (“We know that this is a TRO hearing, not the full preliminary injunction

hearing.”) p. 7 (“TRO is to preserve the status quo until the–the preliminary

injunction hearing.”). The court announced at the beginning of the hearing that

“We’re here today on the Defendant’s motion for a temporary restraining

order.” Id. at 5. And the final line of the trial court’s order reads, “Either

counsel may petition the Court to schedule a preliminary injunction hearing.”

Appellant’s App. Conf. Vol. II, p. 22.

[9] However, immediately preceding that sentence, the trial court’s appealed order

says, “Based on the foregoing analysis, the Court hereby GRANTS IUHP’s

Motion for Temporary Restraining Order and Preliminary Injunction. Until this

controversy is resolved on the merits, Dr. Kesler is enjoined from violating the

noncompete in the Employment Agreement and treating patients within the 30- Court of Appeals of Indiana | Opinion 23A-PL-2111 | April 25, 2024 Page 5 of 19 mile radius of his Employment Agreement.” Id. (emphasis added). And in

setting out the “STANDARDS FOR ISSUANCE OF A TRO AND

PRELIMINARY INJUNCTION,” the trial court’s order mistakenly cites State

v. Econ. Freedom Fund, 959 N.E.2d 794, 803 (Ind. 2011), to set out the

requirements for obtaining a TRO. See id at 15. Freedom Fund, however, sets

out the requirements to obtain a preliminary injunction. 959 N.E.2d at 803. It

is Indiana Trial Rule 65(B)(1) which governs the requirements for a temporary

restraining order, namely, that “it clearly appears from specific facts shown by

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Kenneth Kesler, M.D. v. Indiana University Health Care Associates, INC., Counsel Stack Legal Research, https://law.counselstack.com/opinion/kenneth-kesler-md-v-indiana-university-health-care-associates-inc-indctapp-2024.