| Radiology Assoc. of Poughkeepsie, PLLC v Drocea |
| 2011 NY Slip Op 06830 [87 AD3d 1121] |
| September 27, 2011 |
| Appellate Division, Second Department |
| Radiology Associates of Poughkeepsie, PLLC,Respondent, v Charles W. Drocea, M.D., Appellant, et al.,Defendant. |
—[*1] Tarshis, Catania, Liberth, Mahon & Milligram, PLLC, Newburgh, N.Y. (Hobart J. Simpsonof counsel), for respondent.
In an action, inter alia, for injunctive relief and to recover damages for breach of anoncompetition clause in an employment agreement, the defendant Charles W. Drocea appeals,as limited by his brief, from so much of an order of the Supreme Court, Dutchess County(Sproat, J.), dated July 13, 2010, as granted the plaintiff's motion for a preliminary injunction anddenied those branches of his cross motion which were for summary judgment dismissing the firstand second causes of action alleging breach of the noncompetition clause of the employmentagreement and the third cause of action alleging breach of fiduciary duty.
Ordered that the order is modified, on the facts and in the exercise of discretion, by deletingthe provision thereof granting the plaintiff's motion for a preliminary injunction and substitutingtherefor a provision denying that motion; as so modified, the order is affirmed insofar asappealed from, without costs or disbursements.
In November 2003 the plaintiff, Radiology Associates of Poughkeepsie, PLLC, and thedefendant Charles W. Drocea, entered into a written employment agreement for a three-year termfrom January 5, 2004 through December 31, 2006, "unless terminated sooner as provided inParagraph 11" of the agreement. Insofar as is relevant, paragraph 11 allowed termination byeither party without cause upon 90 days' notice within the first 12 months of the three-year termor by mutual agreement of the parties in writing at any time within the three-year term. Thecontract also provided for automatic renewal subsequent to the initial three-year term forsuccessive one-year terms unless either party gave notice of an intent not to renew 90 days priorto the end of the current term. The agreement contained a noncompetition clause which barredDrocea, for the duration of the agreement and for 12 months after its termination, from providingradiological services at, or within five miles of, any "practice site," defined as a facility whereDrocea "regularly spent a significant portion of time rendering services on behalf of" theplaintiff. The clause provided that Drocea would be "deemed to have spent a significant portionof time" at a practice site if he "regularly spends thirty (30%) percent or more of his Employmenton a regular basis" at such site.
By letter dated September 23, 2005, Drocea stated that it was necessary to resign, and byletter dated January 18, 2006, he stated "I rescind my resignation . . . datedSeptember 23, 2005." [*2]During this entire period, andthereafter, he continued to work for the plaintiff under the contract terms. For certain days withina period spanning July 2009 through April 9, 2010, the plaintiff assigned Drocea to performservices for the defendant Mid-Hudson Medical Group (hereinafter MHMG), with which theplaintiff had a separate professional services agreement. By letter dated January 7, 2010, Droceastated that he would be ending his employment with the plaintiff, effective April 9, 2010, in orderto seek employment with MHMG.
In April 2010 the plaintiff commenced this action against Drocea and MHMG. Under thefirst cause of action asserted against Drocea, the plaintiff alleged breach of the noncompetitionclause and sought to enjoin Drocea from providing professional services to MHMG or any otherfacility with which the plaintiff had a business relationship until January 1, 2012. The second andthird causes of action sought to recover damages from Drocea for his alleged breach of thenoncompetition clause and breach of fiduciary duty, respectively. The plaintiff subsequentlymoved for a preliminary injunction pending the duration of this action. Drocea cross-moved forsummary judgment dismissing the complaint insofar as asserted against him. The Supreme Courtgranted the motion and denied the cross motion. Drocea appeals from so much of the order asgranted the plaintiff's motion and denied those branches of his cross motion which were forsummary judgment dismissing the first three causes of action in the complaint.
In support of a motion for a preliminary injunction, the movant must demonstrate (1) alikelihood of ultimate success on the merits, (2) irreparable injury absent the granting of thepreliminary injunction, and (3) a balancing of equities in favor of the movant's position (see Family-Friendly Media, Inc. v RecorderTel. Network, 74 AD3d 738, 739 [2010]; Glorious Temple Church of God in Christ v Dean Holding Corp., 35AD3d 806, 807 [2006]). "A party seeking the drastic remedy of a preliminary injunctionmust establish a clear right to that relief under the law and the undisputed facts" (Omakaze Sushi Rest., Inc. v Ngan KamLee, 57 AD3d 497, 497 [2008]).
Here, to establish a likelihood of success on its cause of action alleging breach of contract,the plaintiff was required to demonstrate that the employment agreement was in effect betweenthe parties at the time of the alleged breach and that Drocea breached the noncompetition clause.Initially, the plaintiff established that the employment agreement continued in effect through theend of calendar year 2010 and, thus, the noncompetition clause continued in effect for a period of12 months thereafter, through calendar year 2011. Drocea contends that he was an employee atwill, since he effectively terminated the employment agreement by letter dated September 23,2005, and further contends that his letter dated January 18, 2006, was ineffective in rescindinghis resignation. However, the provisions in the agreement with respect to the manner in whichDrocea was permitted to terminate the agreement during the initial employment term or anysubsequent renewal term are clear and unambiguous and must be enforced according to theirplain meaning (see Goldman v WhitePlains Ctr. for Nursing Care, LLC, 11 NY3d 173, 176 [2008]; Greenfield v PhillesRecords, 98 NY2d 562, 569 [2002]). Contrary to Drocea's contention, his attemptedunilateral termination of the agreement during the initial three-year employment term, by virtueof his letter dated September 23, 2005, was ineffective because it was not an authorized methodof termination pursuant to paragraph 11. The agreement automatically renewed for successiveone-year renewal terms commencing on January 1 of each calendar year. Once a renewal termhad commenced, unilateral termination of the agreement was permitted only by written noticeprovided 90 days prior to the end of the renewal term. Since the renewal term for 2010 hadcommenced, Drocea's resignation by letter dated January 7, 2010, was not effective untilDecember 31, 2010, notwithstanding his desire to terminate on April 9, 2010.
The plaintiff, however, failed to establish that Drocea breached the noncompetition clause.The plaintiff submitted evidence of the number of days it had assigned Drocea to performservices at MHMG during the approximate nine-month period from July 2009 through April 9,2010. Based on the plaintiff's calculation from this evidence, Drocea spent 43% of his time atMHMG during that period. In opposition to the plaintiff's motion and in support of his crossmotion for summary judgment, Drocea presented evidence that he rendered no services atMHMG from January 5, 2004 until July 20, 2009, and calculated the time he spent at MHMG onan hourly basis during calendar year 2009 as 16%, and during the period of April 1, 2009 throughApril 9, 2010, as 26%. Accordingly, a question of fact exists as to whether MHMG is a "practicesite" at which Drocea[*3]"regularly" spent "30% . . .or more of his Employment on a regular basis" as defined in the parties' agreement. While issuesof fact alone will not justify denial of a motion for a preliminary injunction (see CPLR6312 [c]), these issues subvert the plaintiff's likelihood of success on the merits in this case tosuch a degree that it cannot be said that the plaintiff established a clear right to relief (see Matter of Advanced Digital Sec.Solutions, Inc. v Samsung Techwin Co., Ltd., 53 AD3d 612, 613 [2008]; Milbrandt & Co. v Griffin, 1 AD3d327, 328 [2003]).
In support of his cross motion for summary judgment, Drocea met his prima facie burden ofshowing that MHMG was not a "practice site" within the meaning of the parties' agreement. Inopposition, the plaintiff raised a triable issue of fact. Accordingly, the Supreme Court properlydenied those branches of the cross motion which were for summary judgment dismissing the firstand second causes of action alleging breach of the covenant not to compete, and the third causeof action alleging breach of fiduciary duty. Dillon, J.P., Angiolillo, Dickerson and Cohen, JJ.,concur.