Moore v. Dover Veterinary Hospital, Inc.

367 A.2d 1044, 116 N.H. 680, 1976 N.H. LEXIS 447
CourtSupreme Court of New Hampshire
DecidedNovember 30, 1976
DocketNo. 7368
StatusPublished
Cited by10 cases

This text of 367 A.2d 1044 (Moore v. Dover Veterinary Hospital, Inc.) is published on Counsel Stack Legal Research, covering Supreme Court of New Hampshire primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Moore v. Dover Veterinary Hospital, Inc., 367 A.2d 1044, 116 N.H. 680, 1976 N.H. LEXIS 447 (N.H. 1976).

Opinion

Per curiam.

Dr. Joseph Moore, of Durham, a veterinarian, in[681]*681stituted this suit for declaratory judgment seeking to have declared unenforceable a restrictive covenant entered into with his former employer, the Dover Veterinary Hospital, Inc., of Dover. Under the covenant, Dr. Moore promised not to compete with the hospital in any part of the area within a 20-mile radius of the hospital for a period of five years from the date of termination of his employment. The matter was heard before a Master (Charles T. Gallagher, Esq.) who made written findings and recommended that the covenant be held enforceable. This recommendation was approved by the Trial Court (Dunfey, J.), which reserved and transferred plaintiff’s exceptions.

Dover Veterinary Hospital, Inc., is a close corporation of which Dr. Edward Lemos is the sole stockholder, chief executive officer, president, and treasurer. Dr. Lemos and his wife both function as corporation directors. Dr. Lemos began practice in Dover in 1958 as a sole proprietor and did not form the corporation until 1967. The business grew both in size and in its reputation for animal care, until it became one of only approximately forty animal hospitals in the United States certified by the American Animal Hospital Association.

The largely undisputed evidence showed that since 1962, Dr. Lemos had successively employed several veterinarians as associates at the hospital. Typically, they were recent graduates of veterinary schools. All signed contracts containing restrictive covenants and permitting termination of the employment relationship by either party without cause upon thirty-days notice. The plaintiffs association with the defendant began with a period of summer employment while plaintiff was a veterinary student at the University of Pennsylvania Veterinary School of Medicine. This summer experience provided the basis for a “memorandum of agreement” between the parties made April 7, 1970. Under the agreement, the plaintiff promised to commence work at the Dover Hospital on or about July 1, 1970, at a starting salary of $825 per month. The agreement contained the previously mentioned restrictive covenant and provision for termination upon thirty-days notice. The plaintiff fully understood the nature of the restriction to which he had consented.

Plaintiffs employment with defendant lasted almost four years, until April 1, 1974. His tenure at the hospital was marked by continuing difficulties with the parties’ efforts to maintain a third veterinarian on the staff. Although not mentioned in the memorandum agreement, the prospect of a three-man practice, [682]*682with its beneficent impact on otherwise very long working hours, had been a matter of considerable importance to the plaintiff, and Dr. Lemos without offering any guarantee in this regard had assured him of his intention to maintain a three-man staff. Accordingly, when plaintiff began work at the hospital in July 1970, he found himself in company with a third veterinarian. However, Dr. Lemos dismissed this employee in September of that same year, judging him in some respects unsatisfactory as an employee. The loss of the third man caused the plaintiff concern, but he agreed that the dismissed employee was not a veterinarian with whom permanent association was desirable, and that eventual termination was thus inevitable. It was not until July of 1971 that a new third man was hired. His tenure was brief: He was dismissed in January of 1972 due to an apparent slowing in the economy of the country in general and the practice in particular. The practice later rebounded and once again there was movement towards hiring a third man. In the fall of 1973, Dr. Lemos interviewed and apparently decided on a new third man, but this decision was never effectuated, in part because plaintiff himself was not impressed with Dr. Lemos’ selection. No additional third man was employed before plaintiffs termination the following year.

Toward the end of plaintiffs tenure, the business of hiring a third man was sidelined by discussions with Dr. Lemos as to the possibility that the plaintiff would buy into the practice. These discussions never reached fruition, partly because Dr. Lemos insisted on maintaining decision-making control in any joint operation.

Shortly after it became evident that the discussions had failed, plaintiff left his employment at the hospital. He then filed this petition for declaratory judgment, seeking judicial approval of his intention “to practice veterinary medicine and surgery within a 20-mile radius of Dover, New Hampshire, under the trade name of ‘Strafford Animal Hospital’”. Plaintiff seeks this approval both on the ground that the restrictive covenant is unreasonable, and also on the ground that the entire agreement with Dover Hospital, Inc., is unenforceable by virtue of alleged contractual defects.

Initially, plaintiff contends that the defendant’s failure to maintain a three-man practice during the entire term of plaintiff’s employment constituted a material breach of contract, excusing the plaintiff from further contract compliance. The master ruled that this contention was unavailing, since it was found that plaintiff had acquiesced in the dismissal of both of the other employ[683]*683ees. The record is plain that plaintiff continued to perform and to receive performance by the defendant, and thus he cannot now claim that his obligations are extinguished. See John B. Robeson v. Gardens, 226 Md. 215, 172 A.2d 529 (1961); 3A A. Corbin, Contracts § 755 (1960).

Second, plaintiff contends that Dr. Lemos, as president of the hospital, was without authority to bind the corporation to the employment contract, and that the agreement never became enforceable. As noted previously, however, Dr. Lemos was sole stockholder, chief executive officer and a director of the corporation. Furthermore, Dr. Lemos’ wife was apparendy a corporate director during plaintiff’s tenure, and her conduct indicated acquiescence in the hiring decision. We thus agree with the conclusion of the master that plaintiff’s argument in this regard is an empty technicality. Holman-Baker Co. v. Pre-Design Co., 104 N.H. 116, 179 A.2d 454 (1962).

Plaintiff further contends that the evidence compelled the conclusion that employees of the defendant corporation were “forced” to quit because of its unreasonable employment practices, and that consequently the court should refuse to enforce the restrictive covenant “on general principles of equity.” The master found, to the contrary, that plaintiff’s termination was occasioned by the failure of negotiations in which both parties had proceeded in good faith. We find no error in this conclusion.

We turn now to the merits of the restrictive covenant. By the covenant plaintiff agreed that for a period of five years from the date of termination of his employment he would not “compete with [his] employer ... in his own name or in association with any other person, either directly or indirectly, in the practice or business of veterinary medicine or surgery, or related practice or business, within the geographic area or territory described by a circle, the center of which shall be said Dover Veterinary Hospital and the radius of which is twenty (20) miles.”

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Bluebook (online)
367 A.2d 1044, 116 N.H. 680, 1976 N.H. LEXIS 447, Counsel Stack Legal Research, https://law.counselstack.com/opinion/moore-v-dover-veterinary-hospital-inc-nh-1976.