Mountain Comprehensive Health Corp. v. Gibson
| Decision Date | 13 March 2015 |
| Docket Number | NO. 2013-CA-000373-MR,2013-CA-000373-MR |
| Parties | MOUNTAIN COMPREHENSIVE HEALTH CORPORATION APPELLANT v. CRYSTAL GIBSON APPELLEE |
| Court | Kentucky Court of Appeals |
NOT TO BE PUBLISHED
APPEAL FROM LETCHER CIRCUIT COURT
Mountain Comprehensive Health Corporation (Mountain Comprehensive) appeals from the Letcher Circuit Court's February 6, 2013,award of summary judgment in favor of Crystal Gibson. After having carefully reviewed the record, we reverse.
Gibson, trained in the area of OB/GYN care, was employed as a physician's assistant with Mountain Comprehensive at its Whitesburg Clinic. Physician's assistants are required to work under the supervision of a physician. Throughout the duration of her employment, Gibson worked under Dr. Wade Baker. Gibson was employed under a series of employment agreements beginning June 4, 2003. The Employment Agreement (Agreement) at issue was executed on April 3, 2009. The Agreement provided in part:
XIV. TERMS OF EMPLOYMENT
This agreement shall remain in full force and effect for a period of Three (3) years from and after the Physician Assistant's practice start date.
The Agreement further required Gibson to provide 180 days notice of her intention not to renew for another three-year term. Absent such notice, the Agreement would automatically renew. The Agreement also included the following provision:
Providing the required 180 days' notice, Gibson advised Mountain Comprehensive on October 3, 2011, she would not renew her contract when it expired. Gibson decided not to renew after she learned Dr. Baker was leaving Mountain Comprehensive in September 2012. Gibson's last day of employment with Mountain Comprehensive was April 2, 2012.
On July 2, 2012, Gibson began working in a management position for Whitesburg Women's Clinic, the facility where Dr. Baker would be working. Whitesburg Women's Clinic is located approximately one mile from Mountain Comprehensive's Whitesburg Clinic. On October 1, 2012, Gibson began treating patients under Dr. Baker's supervision.
Gibson filed a Petition for Declaration of Rights on July 2, 2012, requesting the court to declare the restrictive covenant in the Agreement null and void. On September 14, 2012, Gibson filed a motion for summary judgment, arguing the restrictive covenant was unenforceable due to a force majeure clause, and for its failure to specify a reasonable geographic restriction. Mountain Comprehensive filed a motion for temporary injunction on September 19, 2012.
A hearing on both motions was held on September 27, 2012. Initially, Judge Samuel T. Wright overruled Gibson's motion for summary judgment. However, following a break during the temporary injunction hearing, Judge Wright announced he would recuse himself from this matter due to a prior contractual relationship with a party connected to Gibson. Judge Steven Combs was appointed as special judge on November 21, 2012.
After Gibson renewed her motion for summary judgment on December 4, 2012, a hearing was held on January 18, 2013. Sustaining her motion, the trial court entered Findings of Fact, Conclusions of Law, and Final Judgment on February 11, 2013. Finding the restrictive covenant unenforceable, the trial court determined the Agreement expired by its own terms on April 2, 2012.
In addition, the trial court found the Agreement was unenforceable pursuant to a force majeure clause. Finding Dr. Baker's decision to leave Mountain Comprehensive a factor outside Gibson's control, the trial court determined Gibson would not have been able to perform as an OB/GYN physician's assistant because Mountain Comprehensive would no longer have an OB/GYN at the Whitesburg Clinic. The trial court further determined the restrictive covenant was void for a variety of public policy reasons, in that it contained an unreasonable geographic restriction, served no legitimate business purpose, and would create issues of continuity of care for numerous patients. The trial court also found Mountain Comprehensive waived its right to enforce the restrictive covenant based on a previous pattern of non-enforcement of covenants with other employees. This appeal followed.
The standard of review on appeal of a grant of summary judgment is "whether the trial court correctly found that there were no genuine issues as to any material fact and that the moving party was entitled to judgment as a matter oflaw." West Kentucky Rural Electric Cooperative Corp v. City of Bardwell, 362 S.W.3d 351, 355 (Ky. App. 2011) (quoting Scifres v. Kraft, 916 S.W.2d 779, 781 (Ky. App. 1996)). We review the record in the light most favorable to the non-moving party and resolve any doubts in its favor. Steelvest, Inc. v. Scansteel Service Center, Inc., 807 S.W.2d 476, 480 (Ky. 1991). Since a summary judgment involves no fact-finding, this Court's review is de novo. Blevins v. Moran, 12 S.W.3d 698, 700 (Ky. App. 2000). Movant bears the initial burden of convincing the court by evidence of record that no genuine issue of fact is in dispute. The burden then shifts to the party opposing summary judgment to present "at least some affirmative evidence showing that there is a genuine issue of material fact for trial." Steelvest, 807 S.W.2d. at 482. As this matter involves a restrictive covenant, this Court has held:
an agreement in restraint of trade is reasonable if, on consideration of the subject, nature of the business, situation of the parties and circumstances of the particular case, the restriction is such only as to afford fair protection to the interests of the covenantee and is not so large as to interfere with the public interests or impose undue hardship on the party restricted.
Hammons v. Big Sandy Claims Service, Inc., 567 S.W.2d 313, 315 (Ky. App. 1978) (quoting Ceresia v. Mitchell, 242 S.W.2d 359 (Ky. 1951). Generally, restrictive covenants are held valid, and not against public policy, unless the particular circumstances of the case would cause serious inequities to result. Daniel Boone Clinic, P.S.C., v. Dahhan, 734 S.W.2d 488, 489 (Ky. App. 1987)(citing Lareau v. O'Nan, 355 S.W.2d 679 (Ky. 1962); Hall v. Willard & Woolsey, P.S.C., 471 S.W.2d 316 (Ky. 1971)).
On appeal, Mountain Comprehensive argues the trial court erroneously granted Gibson's motion for summary judgment. First, Mountain Comprehensive claims the trial court improperly held the restrictive covenant was unenforceable because the employment agreement expired on April 2, 2012. Mountain Comprehensive argues this reading ignores the plain wording of the restrictive covenant, which states the covenant remained in effect one year after termination of Gibson's employment. Mountain Comprehensive argues the trial court's reading of the employment contract failed to construe the employment contract as a whole and give effect to all of its parts. We agree.
A contract must be enforced as it is written if there is no ambiguity. McMullin v. McMullin, 338 S.W.3d 315, 320 (Ky. App. 2011). "Any contract or agreement must be construed as a whole, giving effect to all parts and every word in it if possible." City of Louisa v. Newland, 705 S.W.2d 916, 919 (Ky. 1986). While the Agreement in this matter provided a term of three years if not renewed, the restrictive covenant expressly provided rights and obligations with a specified term outlasting expiration of the Agreement. Giving effect to all parts of the contract, the restrictive covenant expressly provides it survives termination of the Agreement, remaining in effect one additional year.
Our reading of the Agreement finds support in Daniel Boone Clinic, which involved a restrictive covenant lasting one and one-half years "following termination of employment." Holding the term "termination" meant ending, however accomplished, the Court determined the restrictive covenant was enforceable because termination occurred as a result of expiration of the contract. Daniel Boone Clinic, 734 S.W.2d at 490. Thus, the Court held the covenant survived one and one-half years beyond expiration. Id. Applying such reasoning to the Agreement in the instant matter, the restrictive covenant remained in effect one year following the April 2, 2012, expiration of the Agreement. Therefore, the trial court erred in finding the covenant unenforceable by expiration.
Next, Mountain Comprehensive argues the trial court erred in granting summary judgment by finding the restrictive covenant unenforceable by operation of a force majeure clause in the Agreement. The Agreement provides:
The trial court found Dr. Baker's departure from Mountain Comprehensive would leave Gibson without a supervising OB/GYN physician. The court found this created a force majeure circumstance outside Gibson's control which could not have been prevented with reasonable diligence.
On appeal, Mountain Comprehensive argues there were genuine issues of material fact concerning...
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