Sadler Clinic Association, P.A. v. Nora C. Hart

• Court: Court of Appeals of Texas
• Decided: January 14, 2010
• Docket: 09-09-00452-CV
• Status: Published

Opinion

In The

Court of Appeals

Ninth District of Texas at Beaumont

____________________

NO. 09-09-00452-CV

SADLER CLINIC ASSOCIATION, P.A., Appellant

V.

NORA C. HART, Appellee

On Appeal from the 9th District Court

Montgomery County, Texas

Trial Cause No. 09-08-07706 CV

MEMORANDUM OPINION

This is an interlocutory appeal from the trial court's denial of a temporary injunction. See Tex. Civ. Prac. & Rem. Code Ann. § 51.014(a)(4) (Vernon 2008). The case is currently set for trial on January 19, 2010.

Sadler Clinic Association, P.A. and Dr. Nora C. Hart entered into a "Physician Contract" on November 30, 2005. Hart resigned from her employment with the Clinic in March 2009. The Clinic sued Hart for breach of contract, and sought to enforce the contract's noncompete agreement and obtain a temporary injunction against Hart. After an evidentiary hearing, the trial court denied the request for temporary injunction.

"A temporary injunction is an extraordinary remedy and does not issue as a matter of right." Butnaru v. Ford Motor Co., 84 S.W.3d 198, 204 (Tex. 2002). The purpose of a temporary injunction "is to preserve the status quo of the litigation's subject matter pending a trial on the merits." Id.; Vaughn v. Intrepid Directional Drilling Specialists, Ltd., 288 S.W.3d 931, 936 (Tex. App.--Eastland 2009, no pet.); NMTC Corp. v. Conarroe, 99 S.W.3d 865, 868 (Tex. App.--Beaumont 2003, no pet.). To obtain a temporary injunction, the applicant must plead and prove three specific elements: (1) a cause of action against the defendant; (2) a probable right to the relief sought; and (3) a probable, imminent, and irreparable injury before the merits can be finally determined at trial. NMTC Corp., 99 S.W.3d at 867. In an interlocutory appeal from the denial of a temporary injunction based on a covenant not to compete, the appellate court addresses the enforceability of the covenant provisions only to the extent that they affect the analysis of whether the three elements required for issuance of a temporary injunction have been satisfied. See Tom James of Dallas, Inc. v. Cobb, 109 S.W.3d 877, 882-83 (Tex. App.--Dallas 2003, no pet.); see also Tex. Bus. & Com. Code Ann. § 15.50 (Vernon Supp. 2009).

The reviewing court considers the trial court's order granting or denying a temporary injunction under an abuse of discretion standard. Butnaru, 84 S.W.3d at 204. An appellate court does not substitute its judgment for the trial court's judgment unless the trial court's action was so arbitrary that it exceeded the bounds of reasonable discretion. Id. We review the evidence in the light most favorable to the trial court's order and indulge reasonable inferences in its favor. See EMSL Analytical, Inc. v. Younker, 154 S.W.3d 693, 696 (Tex. App.--Houston [14th Dist.] 2004, no pet.).

The applicant for temporary injunction must establish all three elements. Butnaru, 84 S.W.3d at 204. The trial court's order denied the temporary injunction on the ground that the Clinic did not show a probable right to relief, because "the geographical area of the noncompete provision is not reasonable as to Hart, a family practice doctor." For purposes of this appeal, however, we presume all findings necessary to support the trial court's order, and affirm the order if there is any legal theory sufficiently raised by the evidence to support it. Davis v. Huey, 571 S.W.2d 859, 862 (Tex. 1978); Thomas v. Beaumont Heritage Soc'y, 296 S.W.3d 350, 352 (Tex. App.--Beaumont 2009, no pet. ). Generally, if some evidence reasonably supports the trial court's decision, the trial court does not abuse its discretion. Butnaru, 84 S.W.3d at 211 (citing Davis, 571 S.W.2d at 862).

The applicant shows a probable right to the relief sought by alleging a cause of action and presenting evidence tending to sustain that cause of action. Vaughn, 288 S.W.3d at 936. As part of her contention that the Clinic did not establish a probable right to recovery, Hart argues the covenant not to compete is unreasonable and imposes a greater restraint than necessary. Section 15.50(a) of the Business and Commerce Code provides as follows:

(a) Notwithstanding Section 15.05 of this code, and subject to any applicable provision of Subsection (b), a covenant not to compete is enforceable if it is ancillary to or part of an otherwise enforceable agreement at the time the agreement is made to the extent that it contains limitations as to time, geographical area, and scope of activity to be restrained that are reasonable and do not impose a greater restraint than is necessary to protect the goodwill or other business interest of the promisee.

Tex. Bus. & Com. Code Ann. § 15.50(a). A noncompete agreement is unenforceable unless it meets the reasonableness standards of section 15.50; the statute expressly provides the restriction must not impose a greater restraint than is necessary to protect the goodwill or other business interest of the employer. See John R. Ray & Sons, Inc. v. Stroman, 923 S.W.2d 80, 85 (Tex. App.--Houston [14th Dist.] 1996, writ denied); see also Tex. Bus. & Com. Code Ann. § 15.50(a). Here, the covenant not to compete provides that the physician cannot compete with the Clinic "within a twenty-two (22) mile radius of Clinic's main facility at 508 Medical Center Blvd., Conroe, Texas 77304." The Clinic contends the scope of the noncompete agreement is reasonable as a matter of law, but, if not reasonable, the geographical restriction should have been reformed and enforced by the trial court through a temporary injunction.

The trial court heard evidence regarding the geographical restriction. We note that, among other witnesses, a member of the physician team that decided upon the 22-mile radius testified the mileage radius was "set up" approximately twenty years ago; he indicated the team looked at common practice, geography, and patient flow. The witness indicated that the Clinic had thought about changing the radius, but decided against it. The trial judge commented that the population had almost doubled. The trial court also considered the effect of the 22-mile radius on someone who would have to travel a greater distance should he or she choose to continue as Hart's patient. See generally Coastal Marine Serv. of Tex., Inc. v. City of Port Neches, 11 S.W.3d 509, 515 (Tex. App.-- Beaumont 2000, no pet.) (citing Storey v. Central Hide & Rendering Co., 148 Tex. 509, 226 S.W.2d 615, 618-19 (1950)). Hart, a family practice physician, was scheduled to open a solo practice in October 2009, a few weeks after the hearing. At the time of the hearing, the Clinic had 105 physicians and 10 locations.

Hart also argues the Clinic did not meet its burden to demonstrate a probable, imminent, and irreparable injury. The Clinic maintains it did. The trial court held the temporary injunction hearing on September 18 and 21, 2009. The court signed the order denying the temporary injunction on October 2, 2009, and scheduled the trial for January 19, 2010. Hart's office will have been open a little over three months prior to the January 2010 trial date. The Clinic's evidence of probable, imminent, and irreparable harm was essentially its conclusion that the Clinic would "unravel" if the trial court did not grant a temporary injunction; and dissemination of the Clinic's confidential information would cause the Clinic harm. There was no specific evidence of Hart's dissemination of confidential information, of a decline in Clinic revenues since Hart left the Clinic, of Hart's solicitation of any Clinic physicians to join her in her practice, of Hart's capitalization on Clinic vendor or insurance opportunities, of any Clinic difficulty in obtaining financing, or of the exit of any other physicians from the Clinic.

There was evidence that Amy Hamilton, a former Clinic physician assistant, was joining Hart in Hart's new office. Hart testified she did not solicit Hamilton to join in Hart's practice; Hamilton approached her about the matter.

A temporary injunction is an equitable remedy prior to trial; a trial court balances the equities and weighs the respective conveniences and hardships of the parties at that time. NMTC Corp., 99 S.W.3d at 868; Universal Health Servs., Inc. v. Thompson, 24 S.W.3d 570, 578 (Tex. App.--Austin 2000, no pet.). Because a temporary injunction is a pre-trial remedy, the merits have not yet been finally determined, and the court may consider the possible effects of error in granting or denying the temporary relief. See NMTC Corp., 99 S.W.3d at 868-69. In balancing the equities, the trial court could consider whether the impact on the Clinic of an erroneous failure to grant the temporary injunction would be slight or significant, and whether the impact on Hart would be slight or significant if the temporary injunction were erroneously granted. See id.; Coastal Marine Serv. of Tex., Inc., 11 S.W.3d at 515. This determination, necessarily made before the merits have been determined at trial, is not one an appellate court will overturn unless the decision exceeds the bounds of reasonable discretion. See Butnaru, 84 S.W.3d at 204. Although the Clinic may be able to establish the enforceability of the noncompete agreement at trial, we cannot conclude from the record in this case that the trial court abused its discretion in denying the Clinic's request for a temporary injunction.

The Clinic also asks this Court to reform the geographic limitation. Because we need not determine the merits of the noncompete agreement in this interlocutory appeal, we do not reform the agreement in this appeal. See Loye v. Travelhost, Inc., 156 S.W.3d 615, 619 (Tex. App.--Dallas 2004, no pet.) (Appeal of an order denying temporary injunction "does not present for appellate review the ultimate question of whether the covenant is enforceable[.]"); McNeilus Cos., Inc. v. Sams, 971 S.W.2d 507, 508, 511 (Tex. App.--Dallas 1997, no pet.) (Statute authorizing interlocutory appeal does not encompass an appeal of a refusal to reform a noncompetition agreement.). We overrule issues one, two, and three.

In issue four, the Clinic asserts that the trial court's order is void because "it fails to contain (i) findings in support of injunction relief, and (ii) a trial setting." However, the order does include a trial setting of January 19, 2010, and does include the trial court's reason for denying the relief. Furthermore, Rule 683 applies to orders granting injunctive relief. See Tex. R. Civ. P. 683.

The order denying the temporary injunction does provide that "in accordance with the agreement of Dr. Nora C. Hart, Dr. Nora C. Hart shall not hire or employ any current Sadler Clinic employees. Dr. Hart may continue to employ Amy Hamilton." Hart has not challenged the order instructing her not to hire any current employees, and, given the pending trial setting, any issue concerning an alleged violation of the order may first be addressed to the trial court.

The Clinic nevertheless argues the trial court's order is void, and there is no evidence to exempt Amy Hamilton, a former physician assistant of the Clinic, from the order. We interpret this argument as essentially asserting that, despite the language of the order, the trial court effectively denied the requested relief by failing to comply with Rules 683 and 684. See Tex. R. Civ. P. 683, 684.

Although the hearing reflects the trial judge stated that "the injunction is granted in part and denied in part," there was no written order clearly granting a temporary injunction. We have addressed the decision to deny the temporary injunction in issues one, two, and three. We overrule issue four.

The trial court's order is affirmed.

AFFIRMED.

___________________________

DAVID GAULTNEY

Justice

Submitted on January 4, 2010

Opinion Delivered January 14, 2010

Before McKeithen, C.J., Gaultney and Horton, JJ.