Davis v. Zeh, 2018-1073

• Decision Date: 29 November 2018
• Docket Number: 2018-1073
• Citation: 112 N.Y.S.3d 438 (Table),62 Misc.3d 1202 (A)
• Parties: Jonathan H.F. DAVIS, DVM, Plaintiff, v. Matthew R. ZEH, DVM, Defendant.
• Court: United States State Supreme Court of Delaware

62 Misc.3d 1202 (A)

112 N.Y.S.3d 438 (Table)

Jonathan H.F. DAVIS, DVM, Plaintiff,

v.Matthew R. ZEH, DVM, Defendant.

2018-1073

Supreme Court, New York, Delaware County.

Decided November 29, 2018

For the plaintiff, Joseph A. Ermeti, Esq.

For the defendant, Carlo A. C. de Oliveira, Esq.

Richard D. Northrup Jr., J.

This matter comes before the court on Plaintiff's motion by order to show cause for a preliminary injunction and temporary restraining order prohibiting Defendant from practicing veterinary medicine within 40 miles of Plaintiff's Valley Veterinary Associates clinic ("VVA").

In determining this motion, the court considered the pleadings and the following documents:

1. Plaintiff's proposed order to show cause with annexed exhibits, including Plaintiff's affidavit and the affirmation of Joseph Ermeti, Esq., attorney for Plaintiff;

2. Plaintiff's brief;

3. Defendant's Affidavit and Memorandum of Law;

4. Affidavit of Carlo A.C. de Oliveira, Esq., attorney for Defendant;

5. Letter from Attorney Ermeti, dated November 26, 2018;

6. Letter from Attorney de Oliveira, dated November 29, 2018.

Background

Plaintiff is a veterinarian and is the sole proprietor of VVA. Defendant, a veterinarian, entered into an employment contract with Plaintiff on April 8, 2016. Defendant agreed at paragraph 9 of the agreement,

"not to own, manage, operate, control, be employed by, participate, or be connected in any manner with the ownership, management, operation, or control of any business or professional including that of a mobile practice that shall have the effect of competing with [VVA] by providing veterinary medical or any other services substantially similar to those of the Hospital."

The restriction was to be in effect for a period of five years from Defendant's termination from employment and applied within a 40-mile radius of VVA. According to Plaintiff, Defendant was terminated from employment by Plaintiff on March 16, 2018. Plaintiff alleges that Defendant breached VVA's employment manual by engaging in inhumane and cruel treatment of dogs at the VVA facility and by verbally abusing VVA employees. Defendant claims that he was terminated on March 12, 2018 after Plaintiff told Defendant that he was being terminated and attempted to pay Defendant $30,000.00 in exchange for Defendant signing a release of liability that incorporated by reference the non-compete clause from paragraph 9 of the employment contract.

On June 11, 2018, Defendant opened his own practice, Davenport Veterinary Clinic P.C. ("DVC"), located between Davenport and Stamford. It is undisputed that DVC's location is less than 40 miles from VVA's facility.

Hence, Plaintiff claims that Defendant has breached the restrictive covenant in the employment contract and is causing permanent harm to VVA by taking clients and good will. In addition to a permanent injunction, Plaintiff seeks a preliminary injunction during the pendency of this action and a temporary restraining order. By order to show cause dated November 9, 2018, this court granted Plaintiff's request for a temporary restraining order.

Discussion

"The party seeking a preliminary injunction must demonstrate a likelihood of success on the merits, irreparable injury if temporary relief is not granted, and that a balancing of the equities favors the movant" ( Battenkill Veterinary Equine P.C. v. Cangelosi , 1 AD3d 856, 857 [3d Dept 2003] ). "The purpose of a preliminary injunction is to maintain the status quo pending determination of the action. The decision to grant or deny a preliminary injunction rests in the sound discretion of the Supreme Court" ( Automated Waste Disposal, Inc. v. Mid-Hudson Waste, Inc. , 50 AD3d 1072, 1073 [2d Dept 2008] [internal quotation marks and citations omitted] ).

Likelihood of Success

Covenants restricting professionals from competing with a former employer are common and generally enforceable as long as the restriction "(1) is no greater than is required for the protection of the legitimate interest of the employer, (2) does not impose undue hardship on the employee, and (3) is not injurious to the public. A violation of any prong renders the covenant invalid" ( BDO Seidman v. Hirshberg , 93 NY2d 382, 388—89 [1999] ; see also Gelder Med. Grp. v. Webber , 41 NY2d 680, 683 [1977] ). Here, Plaintiff has failed to establish either the first or second prongs. Plaintiff cites to both Gelder and Battenkill to support the reasonableness of the covenant. While the court in Battenkill did find that the employer's three-year, 35-mile restriction was reasonable in scope, Plaintiff fails to mention that the covenant was also limited in that it only prohibited the practice of equine veterinary medicine, leaving the employee free to pursue her profession in any other kind of veterinary medicine (Battenkill at 858). The covenant here is broader in both time and range and is unlimited as to scope of practice. Plaintiff has made no showing that these terms are "no greater than required" to prevent unfair competition. Similarly, as to the hardship imposed on the employee, in Gelder , the employee had no roots in the area in which the employer was established and had repeatedly moved from practice to practice across the country (Gelder at 685). By contrast, here, Defendant did not move to the region for the sole purpose of joining Plaintiff's practice but had already been practicing at other clinics within Plaintiff's practice area before joining the clinic. Defendant and his family are independently invested in the area and he thus has a much greater interest than Dr. Gelder did in being able to practice his profession locally.

Even if the court were to find the covenant to be reasonable, however, there remains a serious question as to its enforceability against Defendant. Where, "the employer terminates the employment relationship without cause ... his action necessarily destroys the mutuality of obligation on which the covenant rests" ( Post v. Merrill Lynch, Pierce, Fenner & Smith, Inc. , 48 NY2d 84, 89 [1979] ). It is not at all clear from Plaintiff's own...