Raymundo v. Hammond Clinic Ass'n

• Decision Date: 31 May 1983
• Docket Number: No. 583,583
• Citation: 449 N.E.2d 276
• Parties: 1983-1 Trade Cases P 65,412 Luciano C. RAYMUNDO, Defendant-Appellant, v. HAMMOND CLINIC ASSOCIATION, Plaintiff-Appellee. S 188.
• Court: Indiana Supreme Court

Page 276

449 N.E.2d 276

1983-1 Trade Cases P 65,412

Luciano C. RAYMUNDO, Defendant-Appellant, v. HAMMOND CLINIC ASSOCIATION, Plaintiff-Appellee.

No. 583 S 188.

Supreme Court of Indiana.

May 31, 1983.

Fred M. Cuppy, Gerald K. Hrebec, George W. Carberry, Merrillville, for defendant-appellant.

Robert F. Peters, Lucas, Clifford & Holcomb, Merrillville, for plaintiff-appellee.

PRENTICE, Justice.

This cause is before us upon the petition of the Hammond Clinic Association (Plaintiff-Appellee), hereinafter called "Clinic," to transfer the cause from the Court of Appeals, Third District, which reversed the trial court's grant of summary judgment in favor of the Clinic. Said decision of the Court of Appeals is found at Raymundo v. Hammond Clinic Association, (1980) Ind.App., 405 N.E.2d 65. The Petition to Transfer is now granted pursuant to Ind.R.App.P. 11(B)(2)(c) in that said decision is in conflict with the decision and opinion rendered by said court in Podgorny v. Great Central Ins. Co., (1974) 160 Ind.App. 244, 253, 311 N.E.2d 640, 647 which correctly held that affidavits in support or opposition to motions for summary judgment "must be made on personal knowledge, shall show that the affiant is competent to testify to the matters included, and must set forth such facts as would be admissible in evidence. The assertion of conclusions of law or opinions by one not qualified to testify to such, by affidavit, will not suffice. " (Emphasis added).

Said decision of the Court of Appeals also contravenes a ruling precedent of this Court in that it reversed the judgment of the trial court upon a record which omitted matter material to the judgment, whereas it is the responsibility of the appellant to present a record that reveals the error complained of. Stubblefield v. State, (1979) 270 Ind. 421, 422, 386 N.E.2d 665, 667; Jackson Civil Twp. v. Darrow, (1922) 192 Ind. 136, 143, 134 N.E. 779, 782. The review of the grant or denial of a motion for summary judgment is not unlike a review on a claim of insufficient evidence. "When the sufficiency of the evidence is challenged, the burden is upon the [appellant] to convince the reviewing court that the evidence is insufficient. The court cannot come to such a conclusion from a record that omits a portion of the evidence for the obvious reason that the omitted evidence may furnish the missing link, as it apparently did in the instant case." Cato v. State, (1979) Ind., 396 N.E.2d 119, 121. Accord Swiggett v. Swiggett, (1958) 237 Ind. 541, 543, 147 N.E.2d 220, 221 (per curiam).

The trial court granted the Clinic's motion for summary judgment and awarded liquidated damages in the sum of $25,000.00 upon a record of agreed facts revealing that Dr. Raymundo, after contracting for a five (5) year term as a partner and not to compete in the Clinic's service area, in the event he withdrew, had breached both the term of service and the covenant not to compete, after two and one half years of service as an orthopedic physician and surgeon and had commenced the practice of such specialty in competition with the Clinic. The Court of Appeals erroneously reversed the judgment of the trial court. The aforesaid decision and opinion of the Court of Appeals is now ordered vacated.

The Clinic, a partnership of more than fifty (50) physicians and surgeons located in Munster, Lake County, Indiana, services the general area of Hammond, which Munster adjoins. Dr. Raymundo (Defendant-Appellant), a physician and surgeon engaging in the practice of orthopedic medicine and surgery in the same general area as the Clinic, also has his office in the Town of Munster.

The Clinic was organized in 1958. In 1968, the association agreement was amended to include a covenant by all partners, except those designated as "full partners", not to compete. Said covenant is as follows:

"D. In the event that any member of the Association, other than a member who receives 100% of the compensation paid to a full Partner, shall withdraw from the Association as provided for in this Article, then and in that event said Party covenants and agrees that he shall not, for a period of two (2) years from the effective date of his withdrawal from the Association, carry on or engage directly or indirectly in the practice of medicine within a 25-mile radius of the City of Hammond, Indiana, provided, however, that said 25-mile radius shall be confined to the State of Indiana and the cities of Calumet City and Lansing, Illinois."

Dr. Raymundo came to the Clinic, as an employee in late 1971, after having completed his advanced training in the State of Michigan. He had no prior experience in Indiana and was not acquainted in the medical community of the area. After working with the Clinic, as an employee/physician, for approximately one year, he was invited to become a partner, and on December 30, 1971, the parties executed an agreement effecting such change of status, effective January 1, 1972. Under such agreement, Dr. Raymundo was to be remunerated, for the first seven months as a partner at the rate of 50% of the remuneration paid to full partners. His remuneration was then to be increased to 55% for the first full year thereafter, 65% for the second full year, 85% for the third year, and 100% for the years thereafter.

The agreement further made reference to the aforementioned covenant not to compete, which by its terms would operate to restrict Dr. Raymundo for the first three and one-half years of his tenure, as a partner, and provided for liquidated damages, as follows:

"6. In the event that the Second Party shall violate the provisions contained in Paragraph D of Article XVI of the Articles of Association of the Hammond Clinic, as set forth in Supplemental Agreement No. 20, then and in that event the Parties agree that the Second Party shall pay to the First Party as liquidated damages for the breach of said provisions the sum of Twenty-five Thousand Dollars ($25,000.00) if the breach occurs during the first twelve (12) months of the two (2) year period and the sum of Fifteen Thousand Dollars ($15,000.00) if the breach occurs during the second twelve (12) months of the two (2) year period. [R. 33-4]

Dr. Raymundo practiced as a Clinic partner from January 1, 1972 until July 10, 1974, at which time his remuneration was 65% of that of a full partner; and on that date he withdrew from the Clinic and began his independent practice within the protected area. The Clinic filed suit against him in three paragraphs--(1) to enjoin his continued practice in the restricted area, (2) for liquidated damages for breach of the covenant not to practice in such area, and (3) for an accounting of and to recover money allegedly collected and wrongfully withheld from the Clinic prior to his withdrawal. However, we are here concerned only with the paragraph seeking damages, paragraph No. (1) having become moot with the passage of time, during the pendency of the action in the trial court, and paragraph No. (3) not yet having progressed to judgment.

As to Paragraph No. (2), the count for liquidated damages, the trial court sustained the Clinic's motion for summary judgment and awarded damages in the liquidated amount with interest and costs. By its motion to correct errors and the pending appeal from an adverse ruling thereon, Dr. Raymundo assigns errors presenting the following issues:

(1) Was the covenant not to compete unenforceable, as a matter of law, by reason of being overly broad and in restraint of trade or as being inimical to the public interest?

(2) Was there any genuine issue of fact material to the determination of Dr. Raymundo's liability?

I

Dr. Raymundo contends that the covenant not to compete is violative of Indiana's Anti-Restraint of Trade Statute, Ind.Code Sec. 24-1-2-1 (Burns 1973) (since amended) then in effect. The case law, however, is against him. Bennett v. Carmichael Produce Co., (1917) 64 Ind.App. 341, 115 N.E. 793. Bennett demonstrates that a non-competition agreement is not violative of the statute simply because it may, coincidentally, effect some restraint. Rather, the statute was intended to prohibit contracts in general restraint. Here, as in Bennett, the covenant did nothing more than protect the Clinic's goodwill against piracy by a mutinous partner.

Dr. Raymundo has cited a number of cases from other jurisdictions holding such covenants as his to be in violation of the statute; however, each of such cases was decided upon the basis of unique statutory language which is quite different from that of the Indiana Statute.

With respect to Dr. Raymundo's claim that the covenant is inimical to the public interest and unenforceable as a matter of public policy, he has not supported his claim with cogent argument or authority as to why a physician's agreement not to compete should be treated differently, as a matter of public policy, than that of other business or professional people. His comments that it is in the public interest for physicians, as a group, to determine their code of conduct and ethical standards, that enforcement of such covenants may inflict a hardship upon the covenantor and that the public may thereby be denied medical services are unpersuasive in the light of the public interest in the freedom of individuals to contract.

" * * * In the absence of a showing that any particular contract brought before the court is contrary to what the constitution, the legislature or the judiciary have declared to be the public policy, it is necessary in order to have the court hold it void on the ground of public policy, to show clearly that such contract has a tendency to injure the public, or is against the public good or is inconsistent with sound policy and good morals as to the consideration or as to the thing to be done or not to be done. Whether or not a contract is against public policy is a question of law for the court to determine from all of the circumstances in a particular case. The...