Dick v. Geist

• Decision Date: 09 January 1985
• Docket Number: No. 14310,14310
• Citation: 107 Idaho 931,693 P.2d 1133
• Parties: Carole N. DICK, Patrick Desmond, Robert S. Lobb, Jr., Jane Bennett Munro, Russell Newcomb, Donald G. Pica, Jerome R. Rees, Charles W. Schabacker, J. Laird Seaich, S.J. Smith, George W. Warner, and Joseph A. Weinberg, dba Twin Falls Clinic, Plaintiffs-Appellants, v. Harold R. GEIST, and Paul V. Miles, Defendants-Respondents.
• Court: Idaho Court of Appeals

Page 1133

693 P.2d 1133

107 Idaho 931

Carole N. DICK, Patrick Desmond, Robert S. Lobb, Jr., Jane Bennett Munro, Russell Newcomb, Donald G. Pica, Jerome R. Rees, Charles W. Schabacker, J. Laird Seaich, S.J. Smith, George W. Warner, and Joseph A. Weinberg, dba Twin Falls Clinic, Plaintiffs-Appellants, v. Harold R. GEIST, and Paul V. Miles, Defendants-Respondents.

No. 14310.

Court of Appeals of Idaho.

Jan. 9, 1985.

Robert W. Stephan of Stephan, Slavin, Eaton & Stephan, Twin Falls, for plaintiffs-appellants.

Edward L. Benoit, of Benoit, Alexander & Sinclair, Twin Falls, for defendants-respondents.

SWANSTROM, Judge.

The plaintiffs, all doctors of medicine, are members of an unincorporated association called the Twin Falls Clinic. The defendants, Dr. Harold Geist and Dr. Paul Miles, were also members of the Clinic until they resigned in July 1979. After their resignations, Geist and Miles continued to practice pediatrics and neonatology in Twin Falls. The plaintiffs brought this suit to enforce a restrictive covenant in the agreement signed by Geist and Miles when they became members of the Clinic. Initially, the plaintiffs also sought special and punitive damages for the alleged breach of the restrictive covenant.

The district court issued a temporary restraining order on August 31, 1979. After a hearing on September 10, the court dissolved the temporary restraining order and denied the plaintiffs' request for a preliminary injunction--no action, however, was taken on the claim for damages. A judgment was entered and the plaintiffs moved for permission to appeal by certification. This motion was denied. The parties then stipulated that the claim for damages should be dismissed and the court issued a final judgment. The plaintiffs brought this appeal.

The issue on appeal is whether a permanent injunction, enjoining Geist and Miles from practicing medicine in accordance with the terms of the restrictive covenant, should have been or should now be issued. Geist and Miles filed a motion to dismiss the appeal as moot. They argue that the restrictive covenant, which was to apply for two years from the date of disassociation, expired in July 1981 and the plaintiffs are therefore not entitled to injunctive relief. We deny the motion to dismiss and affirm the district court's denial of a preliminary injunction.

Our Supreme Court has held that an appeal may be dismissed "when it appears that only a moot question is involved." Downing v. Jacobs, 99 Idaho 127, 127-28, 578 P.2d 243, 243-44 (1978) (involving a covenant not to compete which had lapsed). The court, however, has also held that "[w]here issues of substantial public interest are presented by an appeal, it should not be dismissed as moot." Robinson v. Bodily, 97 Idaho 199, 200, 541 P.2d 623, 624 (1975). The Robinson court noted that similar issues were likely to arise again and that the facts of the case were such that the issues presented had not been fully resolved by subsequent events. Id. See also School District No. 351 Oneida County v. Oneida Education Association, 98 Idaho 486, 567 P.2d 830 (1977). We believe that the instant case presents an issue of substantial public interest--i.e., under what circumstances will a physician be enjoined from practice in accordance with a restrictive covenant. It is also an issue which is likely to arise again, both as to the Twin Falls Clinic and as to other clinics engaged in similar employment practices. See Marshall v. Covington, 81 Idaho 199, 339 P.2d 504 (1959) (also involving a restrictive covenant and the Twin Falls Clinic). We will therefore address the merits of the appeal even though "as a practical matter we are unable to grant appellant[s] any relief." Robinson v. Bodily, 97 Idaho at 200, 541 P.2d at 624. ¹

The Idaho Supreme Court has adopted the general rule that restrictive covenants

will be enforced when they are reasonable, as applied to the covenantor, the covenantee, and the general public; they are not against public policy, and any detriment to the public interest in the possible loss of the services of the covenantor is more than offset by the public benefit arising out of the preservation of the freedom of contract.

Marshall v. Covington, 81 Idaho at 203, 339 P.2d at 506. The restrictive covenant in the present case provided:

ARTICLE XIX--MEMBERS RESTRICTED IN RIGHT TO RE-ENGAGE IN PRACTICE

Each Member of this Association (whether now a Member or afterwards becoming a Member) does hereby agree that in the event of his separation from this Association, in any manner or for any cause, he shall not practice medicine or surgery within a radius of twenty-five (25) miles from Twin Falls, Idaho, for a period of two (2) years following such separation. The Executive Committee shall have authority in its discretion to waive the restrictions of this Article in any case. Members who have ten (10) years' active practice in the Association and have attained the age of sixty-five are not bound by this restriction.

The district court held that

the restrictions contained in the Articles of Association providing for non-competition of former members who resign within an area of 25 miles of Twin Falls for a period of two years are valid and enforceable contractual provisions. The area contained in such restriction is not unreasonable; and the time limitation provides a reasonable period of time.

The court, however, also concluded that the detriment to the public interest in the loss of Geist and Miles' services outweighed the benefit derived from enforcing the covenant. The court thus refused to grant injunctive relief. It is this conclusion which is challenged by appellants and which we must address on appeal. We will assume without deciding, for purposes of this opinion, that all other requirements for the issuance of an injunction have been met.

From the record we summarize the following evidence supporting the findings and conclusions of the trial court. Much of this evidence is uncontradicted. Before Geist and Miles left the Clinic there were eight pediatricians in Twin Falls--four within the Clinic and four outside the Clinic. One of those within the Clinic left Twin Falls, sometime after Geist and Miles resigned, in order to pursue his career in Connecticut. Therefore, without Geist and Miles, Twin Falls would have had the services of only five pediatricians. There was conflicting testimony in the record regarding the need of Twin Falls for pediatricians; but, no fewer than six doctors testified that five pediatricians were not sufficient to provide the necessary care in Twin Falls and the surrounding area.

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