Bergh v. Stephens, G-204

• Citation: 175 So.2d 787
• Decision Date: 25 May 1965
• Docket Number: No. G-204,G-204
• Parties: Marcus B. BERGH, Appellant, v. Hinson L. STEPHENS, Appellee.
• Court: Florida District Court of Appeals

Page 787

175 So.2d 787

Marcus B. BERGH, Appellant, v. Hinson L. STEPHENS, Appellee.

No. G-204.

District Court of Appeal of Florida, First District.

May 25, 1965.

Rehearing Denied June 22, 1965.

Reinstine, Reinstine & Panken, Jacksonville, for appellant.

Kurz, Toole, Maness & Martin, Jacksonville, for appellee.

CARROLL, DONALD K., Judge.

The defendant in a suit for a declaratory decree has taken this interlocutory appeal from a summary decree entered by the Circuit Court for Clay County declaring void a restrictive covenant in a professional employment contract.

The correctness of this declaration is the question for determination in this appeal.

The plaintiff and the defendant, residents of Orange Park, Clay County, Florida, are both licensed physicians and surgeons engaged in the practice of their profession in Orange Park, the defendant making his principal office at a facility in Orange Park known as the Pureal Hospital. From July 1, 1961, until on or about August 6, 1964, the plaintiff was employed by the defendant in the practice of medicine at the said hospital under certain written employment contracts. On the latter date the plaintiff ceased to perform his duties and responsibilities because of what the plaintiff alleges to be the breaches of the contracts by the employer.

The provision of the said contracts concerning which the plaintiff seeks a declaration provides as follows:

'I will not upon completion of this association engage in competitive practice of medicine for a period of five years within a distance of ten miles of the Pureal Hospital.'

The plaintiff's complaint is in three counts. In Count I he claims damages against the defendant for breach of contract. Count II sounds in tort for malicious interference with the plaintiff's rights under the contracts: In Count III, which is an action for a declaratory decree pursuant to Chapter 87, Florida Statutes, F.S.A., the plaintiff seeks a declaration of his rights to engage in the practice of medicine in Orange Park, Green Cove Springs, both in the said Clay County, or elsewhere. The court granted the defendant's motion to dismiss Count II but denied his motion to dismiss Counts I and III. After the defendant filed his answer and counterclaim to Counts I and III, the plaintiff filed a motion for a summary final judgment as to Count III of his complaint, pursuant to Rule 1.36 of the Florida Rules of Civil Procedure, 30 F.S.A., on the ground that the pleadings, together with an affidavit of the plaintiff, affirmatively show that there is no genuine issue as to any material fact and that he is entitled to a judgment declaring that the said contracts are each void under the provisions of Section 542.12, Florida Statutes, F.S.A., insofar as they 'attempt to prohibit or restrain the plaintiff from exercising his lawful profession as a medical doctor and that plaintiff is free to pursue the practice of medicine at any time or place in or out of Clay County,' notwithstanding the provisions of the said contracts.

In the decree appealed from herein the court granted the plaintiff's said motion for summary judgment as to Count III, granted 'a Summary Judgment, interlocutory in character, on plaintiff's said motion,' and held that the restrictive provisions of the said contracts 'are, to that extent only, hereby declared null and void and of no effect under the provisions of Section 542.12, Florida Statutes.' In the said decree the court also ruled that the issues raised by Count I of the plaintiff's complaint and the defendant's answer, 'shall be tried and disposed of without regard to the Summary Decree herein granted as to Court III.'

Section 542.12, Florida Statutes, F.S.A., which was enacted by the Legislature as Sections 1 through 4, inclusive, of Chapter 28048, Laws of Florida, Acts of 1953, provides as follows:

'Contracts in restraint of trade invalid; exceptions.----

'(1) Every contract by which anyone is restrained from exercising a lawful profession, trade or business of any kind, otherwise than is provided by subsection (2) and (3) hereof, is to that extent void.

'(2) One who sells the good will of a business, or any shareholder of a corporation selling or otherwise disposing of all of his shares in said corporation, may agree with the buyer, and one who is employed as an agent or employee may agree with his employer, to refrain from carrying on or engaging in a similar business and from soliciting old customers of such employer within a reasonably limited time and area, so long as the buyer or any person deriving title to the good will from him, and so long as cuch employer continues to carry on a like business therein. Said agreements may, in the discretion of a court of competent jurisdiction be enforced by injunction.

'(3) Partners may, upon or in anticipation of a dissolution of the partnership, agree that all or some of them will not carry on a similar business within a reasonably limited time and area.

'(4) This section does not apply to any litigation which may be pending, or to any cause of action which may have accrued, prior to May 27, 1953.'

The restrictive provisions in the contracts between the plaintiff and the defendant in the case at bar fall squarely within the class of contracts declared by subsection (1) of the just-quoted statute to be 'to that extent void,' unless those contracts come within the exceptions described in subsections (2) and (3). Since those contracts cannot qualify as among the partnership contracts contemplated in subsection (3), the conclusion is inevitable that those contracts are void to the extent of the restrictive provisions unless those contracts are held to fall in the exceptional contracts described in subsection (2).

In our opinion, the restrictive provisions in the said contracts, purporting to restrict the plaintiff from engaging in the 'competive practice of medicine for a period of five years within a distance of ten miles of the Pureal Hospital,' are null and void under subsection (1) of Section 542.12 and are not excepted from the effect of that subsection by virtue of either subsection (2) or subsection (3).

The main contention of the appellant in its appellate brief, however, is that the 'restrictive covenant contained in the employment contract here falls squarely within' the following exception in subsection (2) of Section 542.12:

'* * * one who is employed as an agent or employee may agree with his employer, to refrain from carrying on or engaging in a similar business and from soliciting old customers of such employer within a...