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Paradigm Health System, L.L.C. v. Faust

Court of Appeals of Louisiana, First Circuit

April 12, 2017

PARADIGM HEALTH SYSTEM, L.L.C.
v.
BARRY FAUST

         On Appeal from the Twenty-Second Judicial District Court In and for the Parish of St. Tammany State of Louisiana Trial Court No. 2015-14210, Div. D The Honorable Peter J. Garcia, Judge Presiding

          Vincent F. Wynne, Jr. Shannon K. Lowry Covington, Louisiana Attorneys for Plaintiff/ Appellant, Paradigm Health System, L.L.C.

          Bruce A. Cranner Ryan G. Davis Mandeville, Louisiana Attorneys for Defendant/ Appellee, Barry Faust, M.D.

          BEFORE: PETTIGREW, McDONALD, AND CALLOWAY [1] , JJ.

          CALLOWAY, J.

         Defendant, Paradigm Health System, L.L.C. (Paradigm), appeals a judgment denying preliminary injunctive relief, based upon the trial court's determination that the noncompetition provisions of Paradigm's employment agreement with Barry Faust, M.D. were invalid and unenforceable. For the reasons stated herein, we affirm.

         FACTS AND PROCEDURAL HISTORY

         Paradigm filed a declaratory judgment, petition for damages, and a request for injunctive relief against Dr. Faust, claiming that he breached the noncompetition clause of an employment agreement between the parties. In June of 2014, Paradigm and Dr. Faust entered into an employment agreement, which stated that for two years after termination of the employment, Dr. Faust could not, "engage in the practice of medicine or render any medical services to any business similar to those services provided by [Paradigm]...." Paradigm claims that Dr. Faust resigned his employment on April 23, 2015. At the time Paradigm filed the petition on October 16, 2015, Paradigm claimed that Dr. Faust was actively seeking employment in the parishes restricted by the noncompetition agreement, St. Tammany, Tangipahoa, and/or the restricted portions of Jefferson Parish. Paradigm sought injunctive relief to prevent Dr. Faust from violating the noncompetition agreement, as well as damages and a declaratory judgment declaring the restrictive covenants in the employment agreement to be valid and enforceable.

         In response, Dr. Faust denied that he resigned his employment, claimed he was terminated by Paradigm on April 21, 2015, and filed a reconventional demand asserting a claim for past wages. Dr. Faust filed a supplemental and amending reconventional demand claiming Paradigm breached the employment agreement by terminating him before he had worked for one year, and he also sought penalties and attorney's fees.

         The trial court held a hearing on the injunctive relief sought by Paradigm on March 8, 2015. The trial court heard oral argument and continued the matter for the parties to complete discovery. On May 17, 2015, the trial court heard the continuation of the request for injunctive relief.[2] The noncompetition agreement prohibited Dr. Faust from the following:

[E]ngage in the practice of medicine or render any medical services to any business similar to those services provided by [Paradigm], located in the Louisiana Parishes of St. Tammany, Jefferson (exception of city of Kenner, and Westbank) and Tangipahoa. The list of parishes and locations shall be expanded if the Company opens new offices in additional locales in which case [this section] shall apply to the new [Paradigm] offices. Violation of this provision shall result in liquidated damages of $400, 000.

         The trial court determined that the language of the noncompetition agreement was overly broad, since it restricted Dr. Faust from the "practice of medicine" without being limited to his field of pain management. The trial court also found that the noncompetition agreement was overly broad and unenforceable because it attempted to add "locales" where Paradigm might open offices in the future to the geographic limitation. The trial court denied the request for preliminary injunctive relief.

         The trial court signed a judgment on June 13, 2016, denying the preliminary injunctive relief, and Paradigm filed this appeal. This court issued a rule to show cause, as the judgment appeared to be a partial judgment and did not appear to address all the claims Paradigm had against Dr. Faust. Pursuant to that order, the trial court signed an amended judgment on October 25, 2016, designating the judgment as a final judgment pursuant to La. CC.P. art. 1915(B) and issuing a per curiam giving explicit reasons as to the ...


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