Sharvelle v. Magnante

836 N.E.2d 432, 2005 WL 2848929
CourtIndiana Court of Appeals
DecidedOctober 25, 2005
Docket79A02-0501-CV-14
StatusPublished
Cited by12 cases

This text of 836 N.E.2d 432 (Sharvelle v. Magnante) 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
Sharvelle v. Magnante, 836 N.E.2d 432, 2005 WL 2848929 (Ind. Ct. App. 2005).

Opinion

OPINION

NAJAM, Judge.

STATEMENT OF THE CASE

Derek J. Sharvelle, M.D., P.C. {/h/a Lafayette Eye Center (collectively "LEC") appeals from the trial court's grant of summary judgment in favor of David O. Mag- *434 nante, M.D. in this declaratory judgment action. LEC presents several issues for our review:

1. Whether the trial court erred when it concluded that the parties' covenant not to compete is unenforceable.
2. Whether the trial court erred when it declined to enforce the parties' restrictions against solicitation.

We affirm in part, reverse in part, and remand with instructions. 1

FACTS AND PROCEDURAL HISTORY

Dr. Sharvelle is an ophthalmologist, and he began his practice in Lafayette in 1977. Dr. Sharvelle gradually expanded his practice, and in 1992, he constructed a new facility in Lafayette that consisted of several technician rooms, six examination rooms, and state-of-the-art ophthalmologic equipment ("LEC clinic"). In 1998, Dr. Sharvelle constructed a multi-specialty ambulatory surgery center next door to the LEC clinic. LEC has also opened satellite offices in Frankfort, Monticello, Craw-fordsville, Sheridan, and Noblesville, and it is affiliated with facilities in Kokomo, Indianapolis, and Ft. Wayne. LEC currently provides comprehensive eye care services to patients residing in seventy-eight counties in Indiana.

Dr. Magnante is board certified in ophthalmology and trained in plastic and reconstructive surgery. Originally from Massachusetts, Dr. Magnante was participating in a fellowship program in Ohio when LEC recruited him. In 1996, Dr. Magnante entered into a three-year employment contract with LEC. He was primarily responsible for running LEC's eye center in Crawfordsville.

In 1999, the parties entered into another three-year employment contract with automatic one-year renewals if notice of termination was not given. Under the terms of the contract, Dr. Magnante agreed to provide medical services to patients of LEC as a physician in the specialty of ophthalmology. Further, the parties' contract provides in relevant part:

10. Covenants.
10.1 Covenant not to Compete. During the time Employee is employed by the Corporation, and for a two (2) year period after Employee's employment with the Corporation has been terminated (by either party and for whatever reason), Employee will not directly or indirectly:
(a) enter into or attempt to enter into the "Restricted Business" (as defined below) in Hamilton, White, Howard, Clinton and Tippecanoe Counties in the State of Indiana and all counties contiguous to any of the listed counties ("Restricted Area");
(b) induce or attempt to persuade any former, current or future employee, agent, manager, consultant, director, or other participant in the Corporation's business to terminate such employment or other relationship in order to enter into any relationship with Employee, any business organization in which Employee is a participant in any capacity whatsoever, or any other business organization in competition with the Corporation's business;
(c) induce or attempt to persuade any former, current or future patient of the Corporation, or of any physician affiliated with the Corporation, to cease being a patient of the Corporation or such physician or to become a patient of any other medical facility or business organization in which Employee is a participant in any capacity *435 whatsoever, or of any other business organization in competition with the Corporation's business.
(d) use contracts, proprietary information, trade secrets, confidential information, patient lists, patient charts and records, customer lists, mailing lists, goodwill, or other intangible property used or useful in connection with the Corporation's business.
As used in this section 10.1 the term Corporation shall include the Corporation and any of its affiliates.
10.2 Indirect Activity. The term "indirectly," as used in Section 10.1 above, includes acting as a paid or unpaid director, member, officer, agent, representative, employee of, or consultant to any enterprise, or acting as a proprietor of an enterprise, or holding any direct or indirect participation in any enterprise as an owner, member, partner, limited partner, joint venturer, shareholder, or creditor.
10.3 Restricted Business. The term "Restricted Business" means health care of every nature and kind. Nevertheless, Employee may own not more than five percent of the outstanding equity securities of a corporation that is engaged in the Restricted Business if the equity securities are listed for trading on a national stock exchange or are registered under the Securities Exchange Act of 1984.
10.4 Severability. The covenants set forth in this section 10 shall be construed as a series of separate covenants, one for each county in which such restriction applies. If, in any judicial proceeding, a court of competent jurisdiction shall refuse to enforce any of the separate covenants deemed included in this Agreement, or shall find that the term or geographic seope of one or more of the separate covenants is unreasonably broad, the parties shall use their best good faith efforts to attempt to agree on a valid provision which shall be a reasonable substitute for the invalid provision. The reasonableness of the substitute provision shall be considered in light of the purpose of the covenants and the reasonable protectible interests of the Corporation and Employee. The substitute provision shall be incorporated into this Agreement. If the parties are unable to agree on a substitute provision, then the invalid or unreasonably broad provision shall be deemed deleted or modified to the minimum extent nee-essary to permit enforcement of all remaining provisions.
10.5 Waiver .... [Flor any breach by Employee of any covenant of this section 10 Employee shall pay to the Corporation $300,000 as liquidated damages, and it is declared and agreed by the parties that these sums shall, without proof, be deemed to represent the damages actually sustained by the Corporation by reason of the breach. The Corporation's right to recover liquidated damages for Employee's breach shall be in addition to every other remedy now or hereafter existing hereunder or at law or equity, including without limitation, the right to obtain injunctive relief; provided however if Employee wishes to conduct Restricted Business in the Restricted Area prior to the expiration of the two year period set forth herein, and pays to the Corporation the sum of $300,000 prior to conducting any such Restricted Business then the Corporation shall waive all restrictions set forth in this section 10 and shall forebear from seeking any other remedies.

Appellant's App. at 25-26 (emphasis added).

On December 1, 2003,“ LEC terminated Dr. Magnante's employment effective May *436 28, 2004. On May 30, 2004, LEC learned that Dr.

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Cite This Page — Counsel Stack

Bluebook (online)
836 N.E.2d 432, 2005 WL 2848929, Counsel Stack Legal Research, https://law.counselstack.com/opinion/sharvelle-v-magnante-indctapp-2005.