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Date: 07-10-2022
Case Style:
JOSEPH SPINE, P. A. vs ANDREW MOULTON, M. D.
Case Number: 21-0781
Judge:
Craig Villanti
Court:
DISTRICT COURT OF APPEAL OF FLORIDA
SECOND DISTRICT
> On Appeal From The Circuit Court for
Pinellas County
Thomas M. Ramsberger
Judge
Plaintiff's Attorney:
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Defendant's Attorney:
Robert V. Williams and Whynter KJA Morgan-Neal of Burr and
Forman, LLP
Description:
Tampa., Florida - Employment Law lawyer represented Appellant with breaching certain restrictive covenants in an employment agreement.
Joseph Spine, P.A., appeals the trial court's February 10,
2021, nonfinal order denying its motion for a temporary injunction
enjoining Dr. Andrew Moulton from breaching certain restrictive
covenants in an employment agreement. We have jurisdiction. See
Fla. R. App. P. 9.030(b)(1)(B). For the reasons set forth below, we
reverse the order on appeal and remand with instructions for
proceedings consistent with this opinion.
I.
Joseph Spine is a medical practice that treats patients with
spinal disorders. Dr. Moulton is a physician who specializes in the
treatment of spinal disorders. The parties entered into an
employment agreement (the Agreement) in December 2017, wherein
Dr. Moulton became employed by Joseph Spine and consequentially
agreed to be bound by certain restrictive covenants. Specifically,
Dr. Moulton agreed to not compete directly or indirectly within the
"restricted territory,"1
or to engage in, be employed by, or consult
with any business that competes with Joseph Spine, for a period of
twenty-four months after termination from the practice (the
restricted period). Pursuant to the Agreement, Dr. Moulton was
1
The restricted territory is defined in the Agreement as a
fifteen-mile radius "as the crow flies" surrounding Joseph Spine's
office locations and all healthcare facilities in which Joseph Spine
provides medical services.
3
also prohibited from soliciting business from any patients or
specific prospective patients, referral sources, employees, or
independent contractors of Joseph Spine during the restricted
period. Dr. Moulton further agreed to terminate his provider
privileges at any facilities located within the restricted territory.
The parties amended the Agreement twice after its execution to
reflect changes to Dr. Moulton's compensation plan, but the
restrictive covenants remained the same in each version of the
Agreement. During the time Dr. Moulton was employed by Joseph
Spine, he primarily saw patients in the Safety Harbor office location
and performed most surgeries at Mease Countryside Hospital and
the Dunedin Surgery Center. Prior to his employment with Joseph
Spine, Dr. Moulton did not have staff privileges at Mease. Joseph
Spine alleges that it facilitated Dr. Moulton obtaining privileges at
Mease and paid the requisite application fee.
Joseph Spine claims that in May 2020, Dr. Moulton told Dr.
Samuel Joseph, Joseph Spine's founder, that he intended to open a
new spinal medical practice in Safety Harbor, in close proximity to
4
Joseph Spine's Safety Harbor location.2
Joseph Spine alleges that
during the same conversation, Dr. Moulton told Dr. Joseph that he
and his wife, Jenna Bonelli, who is also a former employee of
Joseph Spine, had obtained the names of patients from Joseph
Spine's database and intended to "compete" with Joseph Spine.
This conversation allegedly occurred on May 6, 2020. Dr. Moulton
was terminated from his employment on May 7, 2020. It was later
revealed that in March 2020, Dr. Moulton and Ms. Bonelli had
formed a medical practice named All Spine Care, LLC, which is
located within two miles of Joseph Spine's Safety Harbor office
location.
Dr. Moulton denies Joseph Spine's recounting of the
termination of employment, claiming instead that the parties had
verbally mutually agreed to Dr. Moulton exercising his option to
"buy out" of the restrictive covenants for $500,000 in accordance
with a provision in the Agreement, but that he was abruptly fired
2
Joseph Spine has four offices within the Tampa Bay region.
For purposes of the temporary injunction, Joseph Spine requested
that the trial court enjoin Dr. Moulton from providing medical
services and seeing patients within the restricted territory
surrounding the Safety Harbor office location.
5
the following day. The buyout provision of the Agreement specified
that Dr. Moulton would be released from the restrictive covenants
upon payment of $500,000 within thirty days of his termination of
employment. It is undisputed that this payment by Dr. Moulton to
Joseph Spine did not occur.
Joseph Spine filed a two-count lawsuit against Dr. Moulton in
May 2020, requesting that the trial court enjoin Dr. Moulton from
violating the restrictive covenants and seeking damages from Dr.
Moulton's breach of the Agreement. In July 2020, Joseph Spine
filed its motion for a temporary injunction. The trial court held
three hearings on the motion, in November and December of 2020,
and in February 2021. Joseph Spine alleged that Dr. Moulton saw
eighty-two of its patients since his departure from the practice. Dr.
Moulton testified that he had treated all of those patients during his
employment with Joseph Spine and that all had come to him
following his departure to continue their treatment. Dr. Joseph
acknowledged during his testimony that the eighty-two patients had
been treated by Dr. Moulton while at Joseph Spine but denied that
it was "necessary" for Dr. Moulton to provide their follow-up care
6
because the other physicians employed by Joseph Spine were
capable of providing the necessary follow-up care.
Dr. Joseph alleged that Dr. Moulton personally contacted
three Joseph Spine patients about transferring their care to his new
practice. Only one patient, Mr. Joseph Albino, testified at the
hearing. Dr. Moulton acknowledged calling Mr. Albino regarding
his departure from Joseph Spine and offering Mr. Albino continuing
care, but he said that he did so because Mr. Albino was scheduled
for surgery. Dr. Moulton also said that he called somewhere
between six and twelve patients who were scheduled for surgery to
alert them that he was leaving the practice. Mr. Albino, however,
denied he was scheduled for surgery at the time Dr. Moulton
contacted him. He did not follow Dr. Moulton to his new practice
and instead had his surgery with Joseph Spine.
Dr. Moulton further testified that of all of the Joseph Spine
patients that he had seen while on call at Mease, none had become
patients of All Spine. Dr. Moulton claimed that in their discussions
prior to Dr. Moulton's departure, he and Dr. Joseph discussed Dr.
Moulton continuing his services for a portion of patients seen under
letters of protection, wherein Joseph Spine would receive Dr.
7
Moulton's collectibles in exchange for the release of restrictive
covenants. It is undisputed that Dr. Moulton continued to see
patients of Joseph Spine for follow-up care following his
termination, care for which the compensation was paid to Joseph
Spine. The parties also agree that Joseph Spine paid to Dr.
Moulton his collectibles for ninety days following Dr. Moulton's
termination. Dr. Joseph denies that he agreed to revise the "buyout
terms" of the Agreement from the $500,000 amount stated in the
contract to $1.5 million in receivables.
The trial court specified in its findings of fact that Joseph
Spine did not meet its burden of establishing three of the four
required elements necessary to support a temporary injunction: (1)
irreparable harm; (2) an inadequate remedy at law; and (3) that an
injunction against Dr. Moulton would serve the public interest. The
trial court stated during the hearing that in making its ruling, it
considered Joseph Spine's entitlement to a presumption of
irreparable harm by virtue of section 542.335(1)(j), Florida Statutes
(2021), but that it was not certain the presumption afforded to
Joseph Spine would "carry the day." Ultimately, the trial court
8
found that Joseph Spine failed to meet its burden of proof that it
suffered irreparable harm.
II.
The standard of appellate review of a trial court's order on a
temporary injunction is a hybrid. Surgery Ctr. Holdings, Inc. v.
Guirguis, 318 So. 3d 1274, 1277 (Fla. 2d DCA 2021). "To the extent
the trial court's order is based on factual findings, we will not
reverse unless the trial court abused its discretion; however, any
legal conclusions are subject to de novo review." Id. (quoting REV
Recreation Grp., Inc. v. LDRV Holdings Corp., 259 So. 3d 232, 235
(Fla. 2d DCA 2018)). "Where the trial court's temporary injunction
concerns matters within the trial court's discretion, '[a]n appellant
who challenges the trial court's order [on a motion for temporary
injunction] has a heavy burden; the trial court's ruling is presumed
to be correct and can only be reversed where it is clear the court
abused its discretion.' " Id. at 1277 (first alteration in original).
To prevail on a motion for temporary injunction, the movant
must demonstrate "(1) irreparable harm to the moving party unless
the injunction issues, (2) unavailability of an adequate legal
remedy, (3) a substantial likelihood of success on the merits, and
9
(4) that the public interest is supported by the entry of the
injunction." Atomic Tattoos, LLC v. Morgan, 45 So. 3d 63, 64–65
(Fla. 2d DCA 2010).
Section 542.335(1)(j) confers a presumption of irreparable
injury where there is a violation of a valid restrictive covenant. See
Variable Annuity Life Ins. Co. v. Hausinger, 927 So. 2d 243, 244
(Fla. 2d DCA 2006). This presumption is rebuttable. See Surgery
Ctr. Holdings, 318 So. 3d at 1280; Ansaarie v. First Coast
Cardiovascular Inst., P.A., 252 So. 3d 287, 292 (Fla. 1st DCA 2018).
Notwithstanding the parties' differing accounts of the facts
surrounding Dr. Moulton's termination, it is undisputed that Dr.
Moulton opened a spinal medical practice within two miles of
Joseph Spine's Safety Harbor location and that he treated Joseph
Spine patients following his departure. And in fact, Dr. Moulton
acknowledges that he did so, which clearly establishes violation of
the restrictive covenants. Thus, the statutory presumption of
irreparable injury arose. See Surgery Ctr. Holdings, 318 So. 3d at
1280 (reversing order denying temporary injunction against
defendant physicians where "the evidence showed that three
doctors are treating former patients in violation of the prohibition
10
against solicitation in the [employment] agreements"). However, the
trial court concluded that Joseph Spine failed to establish
irreparable injury. This was error.
In the face of a clear violation of a valid restrictive covenant,
the trial court must apply the presumption afforded in section
542.335.3
Id.; see also Medco Data, LLC v. Bailey, 152 So. 3d 105,
107 (Fla. 2d DCA 2014) ("[B]ecause Medco Data was entitled to a
presumption of irreparable injury based on the findings the court
had already made, the court was required to apply the presumption
pursuant to subsection (1)(j), shifting the burden to the defendants
to establish its absence."). In other words, if the trial court finds
that the restrictive covenants are enforceable and have been
3
Section 542.335(1) provides that "contracts that restrict or
prohibit competition during or after the term of restrictive
covenants, as long as such contracts are reasonable in time, area,
and line of business, is not prohibited." Additionally, "a court shall
presume reasonable in time any restraint 6 months or less in
duration and shall presume unreasonable in time any restraint
more than 2 years in duration." § 542.335(1)(d)(1). While the
record does not indicate the trial court made a specific finding that
the restrictive covenants at issue here are "reasonable," the twoyear time period, geographic area, and line of business restricted
appear to be reasonable based upon Florida caselaw. See, e.g.,
Ansaarie, 252 So. 3d at 292 (affirming temporary injunction against
physician restricted from practicing within a five-mile radius of
former employer's practice for two years).
11
violated, it is non-negotiable that the statutory presumption of
irreparable injury be applied. The burden is then placed on the
person who violated the restrictive covenant "to establish the
absence of such injury." See Variable Annuity Life Ins. Co., 927 So.
2d at 245.
The trial court did not articulate why it found that Joseph
Spine failed to establish irreparable injury or, as seems more likely
from our review of the proceedings below, that it inferred that Dr.
Moulton successfully rebutted that presumption. The record
provides us with reason to believe that at least one likely reason
was Dr. Joseph's testimony regarding the economic impact Joseph
Spine incurred due to Dr. Moulton's breach. Dr. Joseph testified
that the revenue at his Safety Harbor office, where Dr. Moulton
primarily saw patients, remained "stable" following Dr. Moulton's
departure, although Dr. Joseph clarified that he suffered no loss in
revenue because he and the other physicians at his practice
"worked harder" to account for the loss of business after Dr.
Moulton left. The trial court also heard testimony that although Dr.
Moulton contacted a handful of Joseph Spine patients following his
departure from the practice, the parties disputed the purpose of the
12
contact and none of the patients in question left Joseph Spine to
become patients of All Spine.4
Whether or not this theory bears any
weight, the trial court was obligated to articulate in the record the
support for its conclusion that Dr. Moulton successfully rebutted
the statutory presumption of section 542.335. Id.
Further, despite Dr. Joseph's testimony regarding his
practice's relative economic stability following Dr. Moulton's breach,
the trial court received other evidence that Dr. Moulton's competing
medical practice and his refusal to terminate privileges at Mease
significantly affected new patient referrals to Joseph Spine,
representing loss of future revenue and referral sources that cannot
be quantified. "The question of whether an injury is 'irreparable'
turns on whether there is an adequate legal remedy available."
Surgery Ctr. Holdings, 318 So. 3d at 1282 (quoting Corp. Mgmt.
Advisors, Inc. v. Boghos, 756 So. 2d 246, 247-48 (Fla. 5th DCA
2000)). "[C]ovenants not to compete[] by their nature lend
4
Dr. Moulton claimed that he contacted the patients on whom
he had recently performed surgery in an effort to provide continuity
of care. Dr. Joseph testified that he and the remaining physicians
at Joseph Spine were capable of providing postoperative care and
that the contact was unnecessary and violative of the Agreement.
13
themselves principally to enforcement by injunction because of the
difficulty of arriving at a dollar figure for the actual damage done as
the result of the breach." Id. (quoting Boghos, 756 So. 2d at 247-
48). In finding that Dr. Moulton met his burden of rebutting
irreparable injury, the trial court in effect concluded that Joseph
Spine has another legal remedy at its disposal other than injunctive
relief—a remedy that is not apparent to this court.
III.
Another likely factor in the trial court's conclusion that the
presumption of irreparable injury was rebutted was Dr. Moulton's
contention that Joseph Spine placed a dollar figure on its damages
in the form of the buyout provision of the Agreement. Dr. Moulton
claims the buyout provision is actually a liquidated damages clause
in disguise. "Damages are liquidated when the proper amount to be
awarded can be determined with exactness from the cause of action
as pleaded; i.e., from a pleaded agreement between the parties, by
an arithmetical calculation or by application of definite rules of
law." Szucs v. Qualico Dev., Inc., 893 So. 2d 708, 712 (Fla. 2d DCA
2005) (quoting Bowman v. Kingsland Dev. Corp., 432 So. 2d 660,
662-63 (Fla. 5th DCA 1983)). Liquidated damages are
14
distinguishable from alternative methods of performing an
agreement, i.e., the payment of a specific amount to alleviate one's
obligation of performance of another duty under the agreement.
See Bradley v. Health Coalition, Inc., 687 So. 2d 329, 332 (Fla. 3d
DCA 1997) (citing Restatement (Second) of Contracts § 361 cmt. b
(1981)).5
We conclude that the buyout provision of the Agreement
is an alternative method of performance, and nothing in the record
provides a reasonable basis leading us to believe that Dr. Moulton
alleviated himself of the restrictive covenants by alternative
performance of the Agreement—here, the payment of $500,000
within thirty days of his departure from the practice.6
5
Comment b provides: "Provision for alternative performance
distinguished. Although parties who merely provide for liquidated
damages are not taken to have fixed a price for the privilege not to
perform, there is no reason why parties may not fix such a price if
they so choose. If a contract contains a provision for the payment
of such a price as a true alternative performance, specific
performance or an injunction may properly be granted on condition
that the alternative performance is not forthcoming. But if the
obliger chooses to pay the price, equitable relief will not be granted."
Additionally, even assuming the parties verbally agreed to a
modified buyout, such a modification was required by the terms of
the Agreement to be in writing and signed by the parties, which was
not the case here.
6
Dr. Moulton testified that the parties verbally discussed
modifying the terms of the buyout provision so that Joseph Spine
15
IV.
The most specific findings of the order on appeal pertained to
the public policy impact of a temporary injunction against Dr.
Moulton, and the trial court expressed concern at the hearings
below that enforcing the restrictive covenants would adversely affect
patients' continuity of care, freedom in choosing their physicians,
the bearing of risk between physicians after surgery, and the
proximity of follow-up care for patients relative to where their
procedures were performed.7
A trial court that refuses to enforce a
restrictive covenant based on public policy concerns must specify in
its findings the compelling reasons why enforcement is not in the
public interest. See TransUnion Risk and Alt. Data Sols., Inc. v.
Reilly, 181 So. 3d 548, 551 (Fla. 4th DCA 2015) ("Under section
would receive payment owed to Dr. Moulton for services rendered
under letters of protection in lieu of the $500,000, but nothing else
in the record supports Dr. Moulton's contention, and Dr. Joseph
denies the conversation ever occurred. It is undisputed that Dr.
Moulton did not pay $500,000 to Joseph Spine within thirty days of
his termination, as required by the terms of the buyout provision.
7
This point seems to be a nonfactor considering the proximity
of the Joseph Spine Safety Harbor office, Dr. Moulton's Safety
Harbor office, and Mease, which are all within approximately two
miles of each other.
16
542.335(1)(i), a trial court must specifically articulate an overriding
public policy reason if it refuses to enforce a non-compete covenant
based on public policy grounds."). Here, the trial court found in the
order on appeal only that "specifically, as it relates to this case, a
temporary injunction would interfere with a patient's right to
receive post-surgical care performed by [Dr. Moulton]."
Dr. Moulton urges us that continuity of care is an "overriding
public policy reason," and points to Mr. Albino as an example of a
patient who was dissatisfied with his care at Joseph Spine and
elected to leave that practice. There are two problems with Dr.
Moulton's argument: first, the record reflects that he had not
actually performed surgery on Mr. Albino at the time of his
termination and departure from Joseph Spine. Instead, Dr.
Moulton called Mr. Albino to advise him that he would no longer be
employed with Joseph Spine and suggested that he could still
perform the surgery if Mr. Albino wished to proceed. Second,
despite the trial court's findings that its public policy concerns were
limited to "this case, with these facts," the record does not indicate
any unique or special circumstances distinguishing continuity of
care with the patients affected here from other patients who are
17
generally affected by restrictive covenants enforced against
physicians practicing in Florida. In fact, Joseph Spine argues that
the Fifth District has flatly rejected the position that because
covenants against a physician interfere with a patient's right to
patronize a particular physician within a specific geographic area,
they are "facially 'contrary to public health, safety, and welfare.' "
See Jewett Orthopaedic Clinic, P.A. v. White, 629 So. 2d 922, 925
(Fla. 5th DCA 1993), superseded by statute § 542.33, Fla. Stat.
(1990), as recognized in King v. Jessup, 698 So. 2d 339, 340-41
(Fla. 5th DCA 1997). But see § 542.335(1)(j), Fla. Stat. (1996)
(creating rebuttable presumption of irreparable injury in presence of
valid restrictive covenants). While Joseph Spine somewhat
mischaracterizes the Fifth District's dicta in Jewett, it is true that
our sister court observed that the 1990 amendment to section
542.33 reflected that "the legislature intended to codify prior case
law . . . which recognized that courts are not bound to enforce a
covenant against a physician . . . when enforcement would be
inimical to the public health, safety or welfare" but also recognized
that there may be times when enforcement of a restrictive covenant
against a physician may cause harm to patients and the public.
18
Jewett, 629 So. 2d at 925; see also Lloyd Damsey, M.D., P.A. v.
Mankowitz, M.D., 339 So. 2d 282 (Fla. 3d DCA 1976) (affirming
denial of injunction against surgeon where trial court found that
restricting surgeon from practicing in geographic area that had
shortage of surgeons would have adverse impact on the public);
Surgery Ctr. Holdings, 318 So. 3d at 1282 ("[A]n injunction cannot
be denied on this basis unless the trial court specifically articulates
the public policy and how the public policy outweighs the need for
the injunction.").
Section 542.335(1)(i), which controls restrictive covenants
entered into after July 1, 1996, requires a trial court to explain why
a patient's continuity of care "substantially outweighs" Florida's
long-established precedent of protecting legitimate business
interests. Here, the trial court's brief mention of protecting
patients' continuity of care does not explain why this concern
substantially outweighs enforcement of the restrictions against Dr.
Moulton. Dr. Moulton failed to present evidence that patients in
this geographic area are underserved or otherwise unable to obtain
the healthcare he provides.
Outcome: Because Joseph Spine was entitled to a presumption of
irreparable injury and there is inadequate evidence supporting a
finding that Dr. Moulton successfully rebutted that presumption,
the trial court's denial of Joseph Spine's motion for a temporary
injunction was error. It is also clear that Joseph Spine had no
other adequate remedy at law than the injunctive relief it sought.
Accordingly, we reverse the order on appeal and remand to the trial
court for entry of a temporary injunction against Dr. Moulton.
Reversed and remanded with instructions.
Plaintiff's Experts:
Defendant's Experts:
Comments: