Norlund v. Faust

675 N.E.2d 1142, 12 I.E.R. Cas. (BNA) 839, 1997 Ind. App. LEXIS 51, 1997 WL 40906
CourtIndiana Court of Appeals
DecidedFebruary 4, 1997
Docket27A02-9512-CV-753
StatusPublished
Cited by73 cases

This text of 675 N.E.2d 1142 (Norlund v. Faust) 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
Norlund v. Faust, 675 N.E.2d 1142, 12 I.E.R. Cas. (BNA) 839, 1997 Ind. App. LEXIS 51, 1997 WL 40906 (Ind. Ct. App. 1997).

Opinions

OPINION

SULLIVAN, Judge.

Appellants, Dr. Ronald Norlund (R. Nor-lund), Dr. Dawn Norlund (D. Norlund) and Indiana Cataract and Laser, P.C. (ICL) appeal the trial court’s December 8, 1995, findings, conclusions and order granting a preliminary injunction against them on behalf of appellees, Dr. Joseph Faust (Faust) individually and d/b/a Faust Eye Center (Eye Center) and Faust Eye Center, P.C. (Faust, P.C.).

Appellants present five issues for review which this court restates as follows:

1. Whether the trial court erred in finding that the actions of appellants breached the covenant not to compete;
2. Whether the trial court erred by enforcing a covenant not to compete which was in contravention of an Indiana statute;
3. Whether the trial court erred in allowing Faust Eye Center, P.C. to enforce the terms of the agreement entered into by Faust Eye Center;
4. Whether the trial court erred in finding the terms of the covenant not to compete reasonable as against appellant, R. Norlund; and,
5. Whether the trial court erred in finding the terms of the covenant not to compete reasonable as against appellants, D. Norlund and ICL.

Pursuant to Trial Rule 52(A), the trial court entered findings and conclusions.

[1146]*1146According to those findings, Appellant R. Norlund is a licensed optometrist who lives in Marion, Indiana. His wife, Appellant D. Norlund, is also a licensed optometrist. R. Norlund is well-known professionally in northern Indiana; he received his degree from Indiana University School of Optometry and completed a residency at the Bascom-Palmer Eye Institute Center in Florida. R. Norlund is active in numerous optometric societies, associations and committees in northern Indiana. Although D. Norlund is a qualified optometrist in her own right, R. Norlund’s skills are superior to those of his wife — a fact well-known to the northeastern Indiana optometric community.

Appellee Faust is an ophthalmologist previously d/b/a Faust Eye Center. In December 1993, Faust incorporated as Faust Eye Center, P.C. Faust Eye Center derived most of its business from the general public prior to 1991. In 1991, Faust decided that he would focus on obtaining business through referrals from optometrists. He felt that he could create an amiable relationship between himself and optometrists who would refer their patients to him for secondary eye care. In order to facilitate the relationship between himself, an ophthalmologist, and the optometrists, Faust decided to hire a highly-skilled high-profile optometrist. That person would perform duties as a medical optometrist and as a optometric liaison, building referral relationships with other area optometrists.

R. Norlund learned of Faust’s plan and wrote Faust about the employment opportunity. R. Norlund noted that he had the medical skills as well as the outgoing personality to fulfill the needs of this new position.

Shortly after R. Norlund’s letter to Faust in May, 1991, the parties began negotiating a contract. During the negotiations, R. Nor-lund’s legal counsel wrote to Faust’s counterpart noting that the contract which they were contemplating would be in violation of I.C. 25-1-9-5. The statute makes it illegal for an optometrist to accept employment from anyone other than another optometrist or a corporation formed by an optometrist. Faust offered to alter the agreement so as not to render it in contravention of the statute, but, “[u]ltimately, R. Norlund chose not to ... alter the agreement.” Record at 404.

The parties entered into an Employment Agreement on or about July 27, 1991. Pursuant to the Employment Agreement, the duties of R. Norlund were defined as follows: “Section 2 Duties...

(i) serving as an Optometric Liaison including, but not limited to, building a relationship for the Eye Center with potential referring optometrists for non-primary care ocular services (which would include diagnosis and management of ocular disease and ocular surgery) to be performed by the Eye Center, management of the referral relationship and providing education and assistance to potential referring optometrists;
(ii) serving as a Medical Optometrist including, but not limited to, diagnosis and management of ocular disease for patients of the Eye Center; and
(in) [s]uch additional or different duties as may be prescribed, from time to time, by the Eye Center.”

Record at 583.

The Agreement also contained a covenant not to compete which provided in relevant part:

Section 7 Post Employment Covenant Not to Compete. For a period of two (2) years after the termination of this Agreement for any reason by either party, whether voluntarily or involuntarily, including by expiration of its term:
(i) Dr. Norlund shall not contact, directly or indirectly, any Referring Optometrist with regard to ocular care services or techniques or with regard to former, current or potential patients of the Referring Optometrist (a “Referring Optometrist” is an optometrist who has referred patients to the Eye Center while Dr. Norlund was employed by the Eye Center);
(ii) Dr. Norlund shall not discuss with a Referring Optometrist (whether the discussion is initiated by him or by the Referring Optometrist) any ocular care services or techniques or any [1147]*1147former, current or potential patients of the Referring Optometrist;
(iii) Dr. Norlund shall not perform any services as an Optometric Liaison (viz. services substantially similar to those described in clause (i) of Section 2) for, or in association in any way with, any ophthalmologist in the counties specified on Exhibit A.
(iv) Dr. Norlund shall not perform any services as a Medical Optometrist (viz. services substantially similar to those described in clause (ii) of Section 2) for, or in association in any way with, any ophthalmologist in the counties specified on Exhibit A.

Record at 587.

R. Norlund began his employment with Faust in July 1991. During the time of R. Noland’s employ, Faust’s optometric referrals increased from 20% to 80-90% of his business. This increase was due to R. Nor-lund’s activities developing the network on behalf of and funded by Faust. The network grew throughout northeastern and central Indiana, and in fact, in 1994,122 optometrists in the area referred patients to Faust Eye Center for treatment.1

On December 30,1998, Faust incorporated Faust Eye Center as Faust Eye Center, P.C. Prior to incorporation, the Eye Center had been a sole proprietorship. Subsequent to incorporation, Faust was the sole shareholder, officer and director of Faust Eye Center, P.C. After the change, R. Norlund continued to work for and received compensation from the Eye Center in the same manner.

In late 1993 or early 1994, R. Norlund expressed interest in renegotiating his contract with Faust. Negotiations commenced and lasted throughout 1994 and early 1995. By May 1995, it became doubtful that the parties would reach an agreement; therefore, Faust issued a written notice of nonre-newal of R. Norlund’s employment agreement on May 23,. 1995.

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Cite This Page — Counsel Stack

Bluebook (online)
675 N.E.2d 1142, 12 I.E.R. Cas. (BNA) 839, 1997 Ind. App. LEXIS 51, 1997 WL 40906, Counsel Stack Legal Research, https://law.counselstack.com/opinion/norlund-v-faust-indctapp-1997.