Medical Specialists, Inc. v. Sleweon

652 N.E.2d 517, 1995 WL 350857
CourtIndiana Court of Appeals
DecidedJune 13, 1995
Docket45A04-9412-CV-489
StatusPublished
Cited by25 cases

This text of 652 N.E.2d 517 (Medical Specialists, Inc. v. Sleweon) 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
Medical Specialists, Inc. v. Sleweon, 652 N.E.2d 517, 1995 WL 350857 (Ind. Ct. App. 1995).

Opinion

OPINION

DARDEN, Judge.

STATEMENT OF THE CASE

Medical Specialists, Inc. (Specialists) appeals from the trial court's order declaring the covenant not to compete between Specialists and Dr. Thomas Sleweon (Dr. Sleweon) to be unenforceable, and denying Specialists request to enjoin Dr. Sleweon from competing with Specialists.

We reverse and remand.

ISSUE

Whether the trial court erred in declaring the covenant not to compete to be unenforceable and in denying Specialists' request for a permanent injunction.

FACTS

For the most part, the facts are uncontro-verted. Dr. Alexander Stemer, Specialists' president, is an internal medicine doctor with sub-specialty training in infectious diseases. The practice of internal medicine and the practice of infectious disease medicine are not necessarily mutually exclusive in that a particular patient's condition may require resolution of related problems. After completing his medical education, Dr. Stemer located his infectious disease practice in Lake County in 1976. Dr. Jao, who practiced the specialty on a part-time basis, was the only other infectious disease doctor in the area, and he continues to practice infectious disease medicine on a part-time basis.

Essentially, a successful infectious disease practice requires patient referrals from other doctors. For example, if a surgery patient on a respirator develops an infection, the surgeon would contact the infectious disease *519 doctor for a consultation. Therefore, in an effort to establish links with other doctors, Dr. Stemer obtained privileges at every hospital in the area. He lectured medical students, residents, and doctors on the importance of infectious disease services. He was appointed to many committees at the various hospitals and attended over 200 hours of meetings a year. His typical weekday began at 6:00 a.m. and ended around 9:00 p.m., including hospital rounds and office hours. He made rounds on Saturdays until about 4:30 p.m., and tried to be home by noon on Sundays. Additionally, he was on-call twenty-four hours a day continually for three years.

As his practice grew, Dr. Stemer added new doctors in the areas of infectious disease, pulmonology, and rheumatology, thus creating Medical Specialists. Specialists' office, which essentially provides one-stop shopping for its patients, is located in Munster. Specifically, Specialists' employees help AIDS patients with assistance programs, and furnish access to drugs for indigent patients through pharmaceutical companies' indigent programs. Specialists' office provides laboratory, X-ray, and medication delivery facilities, as well as covered parking to facilitate office access for wheelchair-bound and oxygen-dependent patients. Significantly, Specialists also coordinates Medicaid taxicab services for indigent patients.

Dr. Stemer's hospital involvement led Methodist Hospital to request his services in hospital administration. For a fee, Dr. Stemer agreed to provide epidemiology services to Methodist Hospital-Northlake in Gary and Methodist-Southlake in Merrill-ville. His main responsibility was to assist the hospitals in the accreditation process.

The epidemiology work demanded a great amount of time, however, making it difficult for Dr. Stemer to care for patients at other hospitals. He therefore hired Dr. Pegwell to perform the epidemiology work as well as to treat patients. She provided coverage at Methodist-Northlake in Gary, Methodist, Southlake in Merrillville, St. Mary Medical Center in Hobart and St. Mary Medical Center in Gary. Methodist-Northlake doctors noted that Specialists' infectious disease service at Methodist-Northlake improved under Dr. Pegwell's tenure.

Five years later, in June of 1998, Dr. Peg-well moved from the area. Before she left, however, Methodist Hospital requested that Dr. Stemer hire a black doctor to replace Dr. Pegwell, and Dr. Stemer agreed. Specialists hired a recruiting firm and spent $26,000.00 in the effort to locate and hire Dr. Sleweon. Dr. Sleweon, who is from New Jersey, had no contact with Indiana prior to being hired by Specialists. To further improve infectious disease services in Gary by cutting down on travel time between hospitals, Dr. Stemer decided to place another doctor at Methodist-Southlake and to assign Dr. Sleweon to Methodist-Northlake, St. Catherine's in East Chicago, and St. Mary's in Hobart.

Usually, the patients' hospital and doctor bills at Methodist-Northlake are paid by Medicare, Medicaid, or an indigent program. Thus, regardless of the number of infectious disease patients Specialists care for, it usually costs more to treat them than Specialists collects. In order to expand the patient base at Methodist-Northlake, to keep Specialists' financial loss to a minimum, and to provide better patient care, Dr. Stemer turned over the patient load to Dr. Sleweon upon his arrival so as to enable Dr. Sleweon to develop good working relationships with referring doctors. Because the infectious disease practice at St. Catherine's and St. Mary's is small, compared to the demand for services at Methodist-Northlake, Dr. Stemer hoped Dr. Sleweon would be able to spend most of his time at Methodist-Northlake taking referrals. By providing a nearly full-time doe-tor at Methodist-Northlake, Dr. Stemer hoped to appease the Methodist-Northlake administration, who wanted more access to an infectious disease doctor. Finally, Dr. Stemer testified that an additional doctor would improve Specialists' call schedule for vacations, weekends, and holidays.

Dr. Sleweon, who is not yet board certified in infectious disease, signed a one-year contract with Specialists which provided him with a yearly salary of $110,000.00. Additionally, Specialists agreed to provide Dr. Sleweon with malpractice insurance, medical insurance, disability insurance, and life insur *520 ance. Specialists also agreed to pay the entire cost of Dr. Sleweon's attendance at one medical conference, as well as for Dr. Sleweon's medical license, hospital staff privileges, and an automobile allowance of $5,000.00. The contract also contained the following covenant not to compete:

The parties agree that for a period of two (2) years from and after termination of this Agreement, the Doctor covenants and agrees not to own manage, operate, control or be employed by, participate in or render services to or to be connected in any manner with the ownership, management, operation or control of any medical practice, whether said medical practice be maintained as an individual proprietorship, joint venture, partnership, private foundation, corporation or otherwise for a period of two (2) years from the date of termination, and within a radius of ten (10) miles of the hospitals at which Corporation renders patient services.

(R. 788). Specialists provides services to patients at the following ten hospitals in Lake, LaPorte, and Porter Counties: St. Catherine in East Chicago, Community Hospital in Munster, Methodist Hospital-North-lake in Gary, Methodist Hospital-Southlake in Merrillville, St. Margaret Mercy-North in Hammond, St. Margaret Merey-South in Dyer, St. Anthony Hospital in Crown Point, St. Mary Medical Center in Hobart, Porter Memorial Hospital in Valparaiso, and La-Porte Hospital in LaPorte.

Dr.

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

Related

Harlan Laboratories, Inc. v. Campbell
900 F. Supp. 2d 99 (D. Massachusetts, 2012)
Mercho-Roushdi-Shoemaker-Dilley Thoraco-Vascular Corp. v. Blatchford
900 N.E.2d 786 (Indiana Court of Appeals, 2009)
Dearborn v. Everett J. Prescott, Inc.
486 F. Supp. 2d 802 (S.D. Indiana, 2007)
Glenn v. Dow AgroSciences, LLC
861 N.E.2d 1 (Indiana Court of Appeals, 2007)
Central Indiana Podiatry, P.C. v. Krueger
859 N.E.2d 686 (Indiana Court of Appeals, 2007)
Intermountain Eye & Laser Centers, P.L.L.C. v. Miller
127 P.3d 121 (Idaho Supreme Court, 2005)
Sharvelle v. Magnante
836 N.E.2d 432 (Indiana Court of Appeals, 2005)
Idbeis v. Wichita Surgical Specialists, P.A.
112 P.3d 81 (Supreme Court of Kansas, 2005)
Product Action International, Inc. v. Mero
277 F. Supp. 2d 919 (S.D. Indiana, 2003)
Credentials Plus, LLC v. Calderone
230 F. Supp. 2d 890 (N.D. Indiana, 2002)
Field v. Lamar
822 So. 2d 893 (Mississippi Supreme Court, 2002)
Duneland Emergency Physician's Medical Group, P.C. v. Brunk
723 N.E.2d 963 (Indiana Court of Appeals, 2000)
DUNELAND EMERGENCY PHY. MED. GROUP, PC v. Brunk
723 N.E.2d 963 (Indiana Court of Appeals, 2000)
MEAC v. State
19 S.W.3d 803 (Court of Appeals of Tennessee, 1999)
Edward Dunbar Field v. Wayne T. Lamar
Mississippi Supreme Court, 1999
Valley Medical Specialists v. Farber
982 P.2d 1277 (Arizona Supreme Court, 1999)
Sleweon v. Burke, Murphy, Constanza & Cuppy
712 N.E.2d 517 (Indiana Court of Appeals, 1999)

Cite This Page — Counsel Stack

Bluebook (online)
652 N.E.2d 517, 1995 WL 350857, Counsel Stack Legal Research, https://law.counselstack.com/opinion/medical-specialists-inc-v-sleweon-indctapp-1995.