Jeffrey E. Duermitt v. Odyssey Healthcare, Inc. (mem. dec.) ( 2015 )

MEMORANDUM DECISION
Dec 31 2015, 10:04 am
Pursuant to Ind. Appellate Rule 65(D), this
Memorandum Decision shall not be regarded as
precedent or cited before any court except for the
purpose of establishing the defense of res judicata,
collateral estoppel, or the law of the case.
ATTORNEYS FOR APPELLANT ATTORNEYS FOR APPELLEE
James A. Piatt Steven C. Shockley
Joseph N. Williams Blake J. Burgan
Price Waicukauski & Riley, LLC Taft Stettinius & Hollister, LLP
Indianapolis, Indiana Indianapolis, Indiana
IN THE
COURT OF APPEALS OF INDIANA
Jeffrey E. Duermit, December 31, 2015
Appellant-Defendant, Court of Appeals Case No.
29A02-1503-PL-146
v.
Appeal from the Hamilton
Odyssey Healthcare, Inc., Superior Court
Appellee-Plaintiff. The Honorable Steven R.
Nation, Judge
Cause No. 29D01-1408-PL-
7983
Riley, Judge.
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STATEMENT OF THE CASE
[1] Appellant-Defendant, Jeffrey E. Duermit (Duermit), appeals the trial court’s
issuance of a preliminary injunction enforcing the terms of a non-competition
agreement in favor of Appellee-Plaintiff, Odyssey Healthcare, Inc. (Odyssey). 1
[2] We affirm. 2
ISSUE
[3] Duermit raises four issues on appeal, which we consolidate and restate as the
following single issue: Whether the trial court abused its discretion by granting
a preliminary injunction.
FACTS AND PROCEDURAL HISTORY
[4] Odyssey, a Delaware corporation with its principal place of business in Texas,
“provides end-of-life care services.” (Appellant’s App. p. 22). As “one of the
largest hospice care providers in the United States[,]” Odyssey conducts
business in Indiana and maintains offices in several Indiana cities. (Appellant’s
App. p. 22). The success of Odyssey’s business heavily depends on developing
and maintaining relationships with potential referral sources—i.e., “hospitals,
physicians, assisted living locations, long-term care facilities,” etc.—which have
1
Odyssey is a subsidiary of Gentiva Health Services, Inc. and conducts business in Indiana as Gentiva
Hospice. Throughout these proceedings, the parties have referred to Odyssey and Gentiva interchangeably.
In order to avoid confusion, we refer to the Appellee solely as “Odyssey.”
2
An oral argument was held in this case on December 8, 2015, at the Indiana Court of Appeals courtroom
in Indianapolis, Indiana. We commend the attorneys for their excellent advocacy.
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the potential to refer patients who need hospice services. (Transcript p. 22). In
2010, Odyssey hired Duermit as the executive director of its Indianapolis and
Avon offices. His duties entailed overseeing the day-to-day operations,
financial operations, and the hiring and recruiting of employees. Duermit was
also tasked with establishing relationships with referral sources.
[5] On May 27, 2010, as “a requirement of his . . . employment[,]” Duermit
entered into a Nonsolicitation and Nondisclosure Agreement (Non-Compete
Agreement) with Odyssey. (Appellant’s App. p. 185). Under the Non-
Compete Agreement, Duermit agreed that
for a period of twelve (12) months following [his] termination of
employment, whether such termination is by [Duermit] or
Odyssey, voluntary or involuntary, with or without cause, for
any reason or no reason . . . , [Duermit] shall not, directly or
indirectly, engage or participate, attempt to engage or participate,
or assist any person with engaging or participating . . . , in any
act which constitutes:
(a) soliciting, encouraging, convincing, assisting, or otherwise
facilitating or causing any person who was an Odyssey patient,
customer, referral source or supplier at any time during the
twelve (12) months preceding the termination of [Duermit’s]
employment to: eliminate, reduce, or otherwise affect the
business that they transact or may transact with Odyssey;
(b) entering into any employment, contractual, partnership,
corporate, consulting, or other business relationship or
transaction of any kind with any person who was an Odyssey
competitor at any time during the twelve (12) months preceding
the termination of [Duermit’s] employment with Odyssey;
(c) soliciting, encouraging, convincing, or otherwise assisting
any person who was an employee, consultant or contractor of
Odyssey during the twelve (12) months preceding the termination
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of [Duermit’s] employment with Odyssey to compete with
Odyssey, to perform services for or on behalf of any competitor
of Odyssey, to stop performing services for or on behalf of
Odyssey, to change or otherwise affect the quality or quantity of
their services to or on behalf of Odyssey, or to change the cost,
price, or any other term or condition of such services; or
(d) engaging in any business or other activity, whether as an
owner, manager, partner, employee, contractor, agent or other
capacity, which is competitive with Odyssey’s within a fifty (50)
mile radius of any Odyssey location at which [Duermit] was
employed, or over which [Duermit] had management or other
responsibility for (regardless of whether [Duermit] was physically
located at said location), during the twelve (12) month period
preceding the termination of [Duermit’s] employment from
Odyssey.
(Appellant’s App. p. 185).
[6] Additionally, pursuant to the Non-Compete Agreement, Duermit
“acknowledge[d] and agree[d] that, as a direct result of his . . . employment by
Odyssey, [he] [would] have access to, learn about, and become familiar with,
trade secrets of Odyssey and other confidential and proprietary information
belonging to Odyssey or relating to its business.” (Appellant’s App. p. 185).
The Non-Compete Agreement defined “Proprietary Information” as:
without limitation, all costs, expenses, revenue, income, and
other financial information and reports relating to Odyssey, its
patients, clients, suppliers and/or referral sources, any lists, files,
or other non-public business information relating to current or
potential patients, customers, referral sources, suppliers, contact
persons, or personnel, as well as[] any research, data, analysis,
concepts, strategies, plans, methods, training materials, policies,
and procedures developed, acquired, refined or otherwise utilized
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by Odyssey in carrying out its business and which has not been
publicly disclosed by Odyssey and is not readily ascertainable by
proper means.
(Appellant’s App. p. 185). Regarding Proprietary Information, Duermit agreed
that he would not
at any time, directly or indirectly, disclose, attempt or threaten to
disclose, allow to be disclosed, or assist any person with
obtaining, utilizing, or disclosing any Proprietary Information.
Moreover, in the event of termination, [Duermit] shall (a) not
remove or take Proprietary Information, or allow any of the
Proprietary Information to be taken[,] from[] Odyssey’s premises;
(b) not reproduce or duplicate in any manner, or allow to be
reproduced or duplicated, any Proprietary Information; and (c)
within one (1) business day of the termination of his . . .
employment by either party, or at Odyssey’s request, return to
Odyssey any and all Proprietary Information which is in
[Duermit’s] possession, custody, or control, including any
original, duplicate and/or any reproduction. . . .
(Appellant’s App. p. 185).
[7] On June 1, 2010, Duermit also signed a separate Confidentiality Agreement as
a condition of his employment with Odyssey. Similar to the Proprietary
Information provisions contained in the Non-Compete Agreement, the
Confidentiality Agreement stipulated that during the course of his employment,
Duermit would have access to “Certain Confidential Information of
Odyssey[,]” which it defined as
all information of or relating to Odyssey which is generally not
made available or disclosed to the public by Odyssey (including,
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but not limited to, present or prospective marketing or
community education policies or activities; patient census and
admissions; present and prospective products and services;
vendor prices and pricing policies; agreements and relationships
between Odyssey and its employees, contractors, consultants,
suppliers, patients, referral sources and third party payors;
potential new business opportunities for Odyssey; cost, profit and
other financial data; patient and referral lists of Odyssey;
medical, personal, financial and other records of or relating to
Odyssey’s patients, employees, contractors, consultants,
suppliers, referral sources or third party payors; company
practices, policies and procedures; and information and process
knowledge with respect to the manner in which Odyssey
conducts its business).
(Appellant’s App. p. 183). Duermit attested that “[u]pon his termination of
employment with Odyssey, all material containing any Confidential
Information in [his] possession or control (including copies thereof) shall be
returned promptly to Odyssey without request, and shall not be reproduced,
copied or retained by [him] in any fashion.” (Appellant’s App. p. 183).
Duermit additionally agreed that he would keep all Confidential Information
confidential during and after his employment. “[I]n the event of any breach or
threatened breach” of Duermit’s obligations under the Confidentiality
Agreement, Duermit acknowledged his understanding that
Odyssey shall be irreparably harmed and damaged and
accordingly, Odyssey shall, in addition to any other rights or
remedies it may have hereunder, at law or in equity, be entitled
to apply for and obtain a temporary restraining order without
notice and temporary and permanent injunctive relief to enforce
the [Confidentiality Agreement’s] provisions.
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(Appellant’s App. p. 183).
[8] On August 1, 2013, Odyssey terminated Duermit’s employment. That same
day, Duermit sent an email to Mike Rehfeldt (Rehfeldt), an employee of Heart
to Heart Hospice (Heart to Heart). Like Odyssey, Heart to Heart is in the
business of “[p]roviding care to individuals with end of life needs” in various
markets in Indiana, including the Indianapolis area. (Tr. p. 248). In the email
to Rehfeldt, Duermit attached his resume and included “a brief outline of some
of [his] accomplishments over the last few years.” (Odyssey’s Exh. 49, p. 1).
Particularly, Duermit detailed the revenue goal and actual revenue, along with
other financial and employee information, for the sites he managed at Odyssey.
Duermit indicated that he “would appreciate the opportunity to talk to
someone about the Indianapolis and surrounding market as I think I could help
achieve success here.” (Odyssey’s Exh. 49, p. 1). In turn, Rehfeldt forwarded
Duermit’s resume and email containing Odyssey’s financial information to
Heart to Heart’s president and chief operating officer, William Thurman (COO
Thurman), identifying Duermit as a candidate for Heart to Heart’s executive
director position in Indianapolis.
[9] Prior to his departure from Odyssey, Duermit used his Odyssey email account
to transmit a number of Odyssey documents to his personal email account, and
he subsequently saved those documents to his home computer. The Odyssey
documents that Duermit stored on his personal computer included: a 2011
Nursing Facility Services Agreement with Miller’s Merry Manor—an Odyssey
referral source; a 2010 One-Time Residential Services Agreement with Maple
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Park Village—another Odyssey referral source; a Growth Plan Summary from
2010 that contained information about Odyssey’s highest producing referral
sources; a Market Overview from 2011 containing information about referral
sources and an analysis on the company’s strengths, weaknesses, opportunities,
and threats; and numerous documents with demographic data which were
compiled from an internal Odyssey database called the Mapster database, for
which Odyssey had expended over $40,000 in licensing fees to create.
According to Odyssey, all of the documents that Duermit saved to his personal
computer are confidential and would not be shared with a competitor.
[10] On August 19, 2013, Duermit signed a Severance Agreement, pursuant to
which Odyssey agreed to pay him a severance package equivalent to six weeks
of his salary. The Severance Agreement stipulated that Duermit was “still
bound by the terms and conditions of the [Non-Compete Agreement].”
(Appellant’s Confidential App. p. 222). In addition, Duermit re-affirmed his
agreement “to keep confidential any proprietary information [he] may have
acquired about [Odyssey’s] business.” (Appellant’s Confidential App. p. 222).
[11] Although not directly related to the present case, at some point in 2013,
Odyssey filed several lawsuits in Michigan and Texas against Heart to Heart
after six former Odyssey employees began working for Heart to Heart,
purportedly in violation of their non-competition agreements. In the fall of
2013, representatives from Odyssey and Heart to Heart convened and
ultimately reached an oral settlement arrangement. The parties immediately
began operating under the oral arrangement, which was memorialized in a
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Settlement Agreement and General Release (Settlement Agreement) executed
on April 4, 2014.
[12] The Settlement Agreement “set up a framework moving forward for the parties
to resolve restrictive covenant [disputes] when employees of one entity move[]
to the other.” (Appellant’s App. p. 10). In part, the Settlement Agreement
provided that “[f]or a period of two (2) years from the date of execution of this
[Settlement] Agreement, Odyssey and Heart [t]o Heart agree that, upon either
Party’s decision to hire a Principal Employee,[ 3] the hiring Party shall provide
notice to the other Party of its intent to hire a Principal Employee.”
(Appellant’s Conf. App. p. 538). This notice required the party seeking to hire
an employee of the other to provide the name of the employee to be hired; the
position into which the employee would be hired; and the office, market, or
region where the employee would operate. Thereafter, “[u]pon receiving notice
of a Party’s intent to hire a Principal Employee, the Party receiving notice shall
provide . . . a statement whether the Principal Employee is subject to a
restrictive covenant and, if so, . . . a copy of any agreement(s) containing such
covenant(s).” (Appellant’s Conf. App. p. 539).
[13] Following his termination from Odyssey, even though Duermit had obtained
employment with a non-hospice care provider, Duermit remained in contact
3
The term “Principal Employee” was defined in the Settlement Agreement to consist of “salesperson[s],
clinical liaison[s], executive director[s], and any managerial or executive employee[s] operating at the
regional level or higher.” (Appellant’s Conf. App. p. 537).
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with the executives at Heart to Heart regarding his potential employment. On
December 20, 2013, Steve Mikuls (Mikuls), Heart to Heart’s national director
of operations, sent an email to COO Thurman setting forth the company’s
“plans for integrating and growing our newly-acquired operations in [Michigan]
and [Indiana].” (Odyssey’s Exh. 54, p. 1). The plan anticipated that “Duermit
will come on as an [a]rea [executive director] to oversee Marion and
[Indianapolis], and help us get established in Munster . . . . It will take
approximately $125[,000] to get [Duermit] on board. We’ll also need to be able
to offer [Duermit] a bonus plan.” (Odyssey’s Exh. 54, p. 1). Mikuls indicated
that Duermit was subject to a Non-Compete Agreement; as such, COO
Thurman would need “to clear the path to bring [Duermit] . . . on by calling
[Odyssey].” (Odyssey’s Exh. 54, p. 2).
[14] On February 18, 2014, Heart to Heart officially extended an offer to hire
Duermit as an area executive director. On February 21, 2014, pursuant to the
Settlement Agreement, Heart to Heart notified Odyssey of its intent to hire
Duermit. As Duermit had provided Heart to Heart with a copy of his Non-
Compete Agreement, Heart to Heart acknowledged to Odyssey that Duermit
“is under a twelve month non-compete with a restricted radius of [fifty] miles
from any site he was managing.” (Appellant’s App. p. 218). Heart to Heart’s
notice further explained that Duermit “responded to our [advertisement] for the
executive director position for our new site in Munster[,] Indiana[,] about 150
miles from the sites he managed for [Odyssey].” (Appellant’s App. p. 218).
Odyssey responded, “Your [sic] good to go . . . . No concerns with Jeff D.”
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(Appellant’s App. p. 218). On March 1, 2014, Duermit began his employment
at Heart to Heart.
[15] Subsequent to Duermit’s hire at Heart to Heart, Duermit forwarded the
Odyssey contracts with Miller’s Merry Manor and Maple Park Village, which
he had retained on his home computer, to three management-level employees
at Heart to Heart: Michelle Newton (Newton), the regional director of
operations; Gary Johnson (Johnson), the regional director of sales; and Mikuls.
Duermit also provided Johnson with a 2010 population map generated from
Odyssey’s Mapster database in order to assist Johnson with compiling Heart to
Heart’s third quarter sales plan.
[16] Despite Heart to Heart’s representation to Odyssey that Duermit would be
working in Munster, Duermit soon began engaging in various business
activities on behalf of Heart to Heart in and around the Indianapolis market. In
particular, in April of 2014, Duermit informed his management team—i.e.,
Mikuls, Johnson, and Newton—that he had secured an opportunity to give a
presentation at a hospital on the west side of Indianapolis regarding hospice
care. Mikuls advised him that such a “presentation would probably fall within
the restrictions of your [Non-Compete Agreement] with [Odyssey]” based on
the fact that he would appear to be soliciting business from Odyssey referral
sources. (Odyssey’s Exh. 24, p. 1). Nevertheless, Newton commended him for
“getting the appointment and presentation[,]” and Mikuls proposed sending a
Heart to Heart employee to present in lieu of Duermit in order “to keep
[Duermit] off the radar screen.” (Odyssey’s Exh. 24, p. 1).
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[17] The record also reveals that Duermit solicited or attempted to solicit several of
Odyssey’s long-time referral sources on behalf of Heart to Heart. On July 30,
2014, Duermit informed other Heart to Heart executives that he would
“continue to market” Miller’s Merry Manor in the Indianapolis area in order to
“create an opportunity to replace [Odyssey] as secondary in the referral chain.”
(Odyssey’s Exh. 23, p. 2). Similarly, Duermit informed his Heart to Heart
managers that “we look to have another new referral in [Indianapolis]”: Manor
Care Prestwick. (Odyssey’s Exh. 23, p. 2). Duermit stated that he would
“work with [the Indianapolis] team to see where we can take this.” (Odyssey’s
Exh. 23, p. 2). The evidence also establishes that in July of 2014, Duermit met
with Odyssey’s medical director, Dr. Steven Wright (Dr. Wright)—who is also
a referral source for Odyssey—in an effort to entice him to work for Heart to
Heart. After learning that Duermit had met with Dr. Wright on behalf of Heart
to Heart, Odyssey had to increase Dr. Wright’s “contract reimbursement for
services that he performs as a way to remedy the situation and his concerns.”
(Tr. p. 86).
[18] Furthermore, shortly after Duermit began working for Heart to Heart, three
Odyssey employees who had worked with Duermit at the Indianapolis and
Avon facilities communicated with Duermit about employment opportunities
at Heart to Heart: Robin Lightfoot (Lightfoot), Odyssey’s director of clinical
services; Leslie Patterson (Patterson), Odyssey’s nurse case manager; and Jenny
Davenport (Davenport), Odyssey’s admissions coordinator. Thereafter,
Duermit advocated for the employment of these individuals with his Heart to
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Heart management team. He also discussed possible salaries, benefits, and
other positive attributes of Heart to Heart with the candidates in an apparent
effort to persuade them to leave their employment with Odyssey. Despite
Odyssey’s efforts to negotiate and counter-offer to retain these employees,
between May and July of 2014, Lightfoot, Patterson, and Davenport all
resigned from Odyssey to commence working for Heart to Heart. Odyssey
explained that due to the simultaneous vacancy of three “key positions,” its
“resources have certainly been spread thin to cover their duties.” (Tr. p. 54).
Odyssey also described that the “effort, manpower, [and] cost [that] it’s taken to
recruit and fill those positions and then also to . . . train them to really be of
quality” has been “very strenuous.” (Tr. p. 54).
[19] On August 14, 2014, Odyssey filed a Complaint against Duermit, alleging, in
pertinent part, that Duermit violated the restrictive covenants of his Non-
Compete Agreement. In particular, Odyssey claimed that Duermit solicited
Odyssey patients, customers, referral sources, and suppliers; he solicited other
Odyssey employees to work in competition with Odyssey; he became employed
by Heart to Heart in a competitive capacity; and he engaged in competitive
business within fifty miles of the Odyssey locations where he was employed or
over which he had management responsibility. In addition, Odyssey accused
Duermit of using or disclosing Odyssey’s confidential, proprietary, and/or trade
secret information in violation of both his Non-Compete Agreement and the
Indiana Uniform Trade Secrets Act. As a result, Odyssey sought injunctive
relief, as well as actual damages, punitive damages, and attorney fees. In
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conjunction with its Complaint, Odyssey filed a specific Motion for Preliminary
Injunction to enjoin Duermit from violating his obligations under the Non-
Compete Agreement and from using or disclosing Odyssey’s trade secrets and
confidential information.
[20] On September 16, 2014, the trial court conducted a hearing on Odyssey’s
Motion for Preliminary Injunction. On February 13, 2015, the trial court issued
its Findings of Fact, Conclusions of Law, and Judgment granting the
preliminary injunction. In particular, the trial court concluded that Odyssey
“established a reasonable likelihood of success on the merits of its claims for
breach of the Non-Compete [A]greement and violation of the Trade Secrets
Act.” (Appellant’s App. p. 19). The trial court further determined that Odyssey
“has suffered irreparable harm and its remedies at law are inadequate. . . . The
harm [Odyssey] would suffer if a preliminary injunction were denied exceeds
the harm Duermit would suffer if it were granted[,] [and] [t]he issuance of the
requested injunction does not disserve the public interest.” (Appellant’s App.
pp. 19-20) (internal citations omitted).
[21] Accordingly, the trial court ordered that Duermit be “enjoined for a period of
164 days from the date of this Order from directly or indirectly[] engaging or
participating, attempt[ing] to engage or participate, or assisting any person with
engaging or participating . . . in any act which constitutes[:]” (1) soliciting
Odyssey’s patients, customers, referral sources, or suppliers to “eliminate,
reduce, or otherwise affect the business that they transact or may transact with
[Odyssey]”; (2) soliciting Odyssey’s employees, consultants, and contractors to
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either perform services for an Odyssey competitor or to cease performing
services on behalf of Odyssey; and (3) engaging in any business or other activity
which is competitive with Odyssey’s within a fifty-mile radius of any Odyssey
location where Duermit was employed or over which he had management or
other responsibilities within the twelve months preceding his termination.
(Appellant’s App. pp. 20-21). 4 The trial court also enjoined Duermit from
“directly or indirectly using, disclosing, attempting or threatening to disclose,
allowing to be disclosed, or assisting any person with obtaining, utilizing, or
disclosing any of [Odyssey’s] confidential and propriety information (as defined
in . . . the Non-Compete Agreement), including any trade secrets.”
(Appellant’s App. p. 21). Finally, the trial court ordered Duermit to “return to
[Odyssey] all of its confidential, proprietary, and/or trade secret information he
has in his possession, custody, or control” within five business days of the
Order. (Appellant’s App. p. 21).
[22] Duermit now appeals. Additional facts will be provided as necessary.
4
The trial court enjoined Duermit from engaging in these particular activities for a period of 164 days based
on the fact that, at the time Duermit began working for Heart to Heart, “there [were] 164 days left of the
[twelve-]month period set forth in the Non-Compete Agreement.” (Appellant’s App. p. 8). The Non-
Compete Agreement specified that the twelve-month restriction of competitive activities “shall be extended
by any period for which [Duermit] is in violation of any provision hereof.” (Appellant’s App. p. 186).
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DISCUSSION AND DECISION
I. Mootness
[23] At the outset, we note that the propriety of the preliminary injunction as it
pertains to the 164-day enjoinment of Duermit’s (1) solicitation of Odyssey’s
patients, customers, referral sources, and suppliers; (2) his solicitation of
Odyssey’s employees, consultants, and contractors; and (3) his engagement in
competitive business activity within fifty miles of certain Odyssey locations is
now moot. 5 The trial court issued its Order on February 13, 2015; therefore,
the 164-day period expired on July 27, 2015.
[24] In general, “we decline to address the merits of moot claims unless the matter is
of public interest and capable of repetition.” Gleeson v. Preferred Sourcing, LLC,
883 N.E.2d 164, 171 (Ind. Ct. App. 2008). In his appellate brief, Duermit does
not acknowledge the expiration of the enjoinment period and does not proffer
an argument as to why the matter should be addressed on its merits. At oral
argument, Duermit argued that the matter was not moot because he intended to
seek damages based on the erroneous issuance of an injunction. Nevertheless,
this court has previously recognized that
[i]njunctive actions based on noncompetition agreements . . .
raise some fairly significant policy concerns and are likely to
recur. Moreover, “full appellate review will often require more
time than the terms of the noncompetition agreement, so the
5
As the trial court did not establish a time-limit on the enjoinment period regarding Duermit’s use and
disclosure of Odyssey’s proprietary and confidential information, this issue is not moot.
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need for guidance to trial courts in the future dictates that we
address” [Duermit’s] arguments.
Id. (quoting Cent. Ind. Podiatry, P.C. v. Krueger, 882 N.E.2d 723, 727 (Ind. 2008)).
II. Standard of Review for Preliminary Injunction
[25] The decision to grant or deny a request for a preliminary injunction resides
soundly within the discretion of the trial court. Id. Thus, our court’s review is
limited to determining “whether there was a clear abuse of that discretion.” Id.
at 171-72. Additionally, in rendering its decision, the trial court is obligated to
issue special findings of fact and conclusions thereon. Ind. Trial Rule 52(A)(1).
Following the entry of such findings and conclusions, our role on appeal is
ultimately to determine whether the trial court’s findings support its judgment.
Gleeson, 883 N.E.2d at 171-72. Pursuant to Trial Rule 52(A), this court “shall
not set aside the findings or judgment unless clearly erroneous, and due regard
shall be given to the opportunity of the trial court to judge the credibility of the
witnesses.” We will find that the trial court’s factual findings are clearly
erroneous if “the record lacks evidence or reasonable inferences from the
evidence to support them.” Gleeson, 883 N.E.2d at 172. In turn, “[a] judgment
is clearly erroneous when a review of the record leaves us with a firm
conviction that a mistake has been made.” Id. We will consider the evidence
only in a light most favorable to the trial court’s judgment and will “construe
findings together liberally in favor of the judgment.” Id.
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[26] In order to succeed on a motion for a preliminary injunction, the moving
party—i.e., Odyssey—bears the burden of demonstrating the following by a
preponderance of the evidence:
(1) a reasonable likelihood of success at trial; (2) the remedies at
law are inadequate; (3) the threatened injury to the movant
outweighs the potential harm to the nonmoving party from the
granting of an injunction; and (4) the public interest would not be
disserved by granting the requested injunction.
Id. If the moving party fails to establish any of these requirements, we will find
that the trial court abused its discretion by granting a preliminary injunction.
Id. We have previously determined that “[t]he power to issue a preliminary
injunction should be used sparingly, and such relief should not be granted
except in rare instances in which the law and facts are clearly within the moving
party’s favor.” Id. (alteration in original).
III. Waiver of Restrictive Covenants/Release of Claims
[27] Although not specifically framed as such, Duermit appears to challenge the
issuance of the preliminary injunction on the grounds that Odyssey has failed to
demonstrate a “reasonable likelihood of success in this case.” Buffkin v. Glacier
Grp., 997 N.E.2d 1, 9 (Ind. Ct. App. 2013). Specifically, Duermit claims that
Odyssey waived its right to enforce the restrictive covenants set forth in his
Non-Compete Agreement, or otherwise released any claims against Duermit,
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based upon the terms of the Settlement Agreement reached between Odyssey
and Heart to Heart. 6
[28] The resolution of this issue requires an interpretation of contracts, and, here,
both the Non-Compete Agreement and the Settlement Agreement explicitly
state that they are governed in accordance with Texas law. When construing a
contract under Texas law, “the primary concern of the court is to ascertain the
true intentions of the parties as expressed in the instrument.” Coker v. Coker, 650
S.W.2d 391, 393 (Tex. 1983), reh’g denied. As under Indiana law, words are to
be given their plain meaning, and the entire contract must be examined “in an
effort to harmonize and give effect to all the provisions so that none will be
rendered meaningless.” TX. C.C., Inc. v. Wilson/Barnes Gen. Contractors, Inc.,
233 S.W.3d 562, 567 (Tex. App. 2007). “If a contract is worded so that it can
be given a certain or definite legal meaning or interpretation, then it is not
ambiguous and the court will construe the contract as a matter of law.” R.
Conrad Moore & Assocs., Inc. v. Lerma, 946 S.W.2d 90, 94 (Tex. App. 1997), reh’g
overruled; writ denied.
[29] In this case, neither party contends that the contracts at issue are ambiguous.
See id. Nevertheless, “the question of whether an agreement is ambiguous is a
question of law, and we may conclude an agreement is ambiguous even if the
6
With the exception of a few citations to Indiana case law regarding the standard of review utilized in
contract interpretation, Duermit has not otherwise supported his arguments in this section with citations to
relevant authority. Ind. Appellate Rule 46(A)(8)(a). It is only in his reply brief that Duermit provides any
citations for his argument regarding the release of Odyssey’s claims.
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parties do not plead ambiguity or argue the agreement contains an ambiguity.”
McCullough v. Scarbrough, Medlin & Assocs., Inc., 435 S.W.3d 871, 888 (Tex. App.
2014) (citing Coker, 650 S.W.2d at 394), review denied. If the language “is
susceptible to more than one reasonable interpretation, the contract contains an
ambiguity and a fact issue exists as to the parties’ intent.” Id. (citing Coker, 650
S.W.2d at 394).
1. Waiver of Restrictive Covenants
[30] Duermit does not challenge the reasonableness or enforceability of the Non-
Compete Agreement as it is written. See Marsh USA Inc. v. Cook, 354 S.W.3d
764, 771 (Tex. 2011) (“A noncompetition agreement is enforceable if it is
reasonable in time, scope and geography and, as a threshold matter, ‘if it is
ancillary to or part of an otherwise enforceable agreement at the time the
agreement is made.’”). Rather, he claims that Odyssey waived its right to
enforce the restrictive covenants contained therein based on the Settlement
Agreement between Odyssey and Heart to Heart. As the trial court found,
Heart to Heart hired Duermit under the protocol established by the Settlement
Agreement.
[31] Pursuant to the Settlement Agreement, “[u]pon receiving notice of a Party’s
intent to hire a Principal Employee, the Party receiving notice shall provide . . .
a statement whether the Principal Employee is subject to a restrictive covenant
and, if so, a copy of any agreement(s) containing such covenant(s).”
(Appellant’s Conf. App. p. 539). The trial court found that “Heart to Heart
accomplished two (2) goals via this framework: (1) avoid mass exodus of
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employees from one entity to the other; and[] (2) set up a process to obtain the
waiver of restrictive covenants prior to employment of current or former
[Odyssey] employees.” (Appellant’s App. p. 10). The Settlement Agreement
specified that “[t]he Parties understand and agree that any waiver of a
restrictive covenant agreement with respect to a specific individual shall not be
deemed a waiver of the restrictive covenant agreement with respect to any other
individual, whether or not in the same title or position.” (Appellant’s Conf.
App. p. 539).
[32] In the present case, Heart to Heart notified Odyssey of its intent to hire Duermit
as the executive director of its office in Munster, Indiana. In response, Odyssey
simply stated, “Your [sic] good to go” and noted no concerns with the
employment. (Appellant’s App. p. 218). According to Duermit, “there would
have been no reason for [this] exchange between Odyssey and Heart to Heart if
not to ensure that there was no longer a restrictive covenant in place.”
(Appellant’s Br. p. 16). 7 Duermit further insists that, in response to Heart to
7
During the preliminary injunction hearing, both Duermit and Heart to Heart’s COO Thurman testified that
it was their understanding that by consenting to Duermit’s employment with Heart to Heart, Odyssey had
fully waived the restrictive covenants in the Non-Compete Agreement. In addition, Duermit claimed that he
had never read the Non-Compete Agreement, Confidentiality Agreement, or Severance Agreement and was
therefore completely unaware of the terms thereof; rather, he stated that he blindly signed any documents as
directed by his employer. However, this testimony directly contradicted the numerous pieces of evidence
indicating that both Heart to Heart and Duermit understood that Duermit was subject to the restrictive
covenants until a year after his termination from Odyssey—i.e., August 1, 2014. Odyssey repeatedly used
Duermit’s deposition testimony to impeach Duermit regarding his clear knowledge of the terms of his Non-
Compete Agreement based on the fact that he had informed his Heart to Heart management team and others
about the Non-Compete Agreement and his inability to work in the Indianapolis market for a certain period
of time. Moreover, despite Heart to Heart and Duermit’s ostensible belief that Odyssey had waived
Duermit’s restrictive covenants, Heart to Heart stated that it nevertheless instructed Duermit to refrain from
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Heart’s notice, the Settlement Agreement required Odyssey to “affirmatively
disclose the existence of a restrictive covenant and also produce a copy of that
covenant.” (Appellant’s Reply Br. p. 3). By failing to do either of these things,
Duermit contends that Odyssey indicated that Duermit “was not covered by a
restrictive covenant.” (Appellant’s Reply Br. p. 3).
[33] On the other hand, Odyssey asserts that its “‘good to go’ approval of Duermit’s
employment by Heart to Heart” is insufficient to establish an “actual intent to
relinquish its right to enforce the [Non-Compete] Agreement against Duermit.”
(Appellee’s Br. p. 27). While it is well established that “[a]ny contractual right
can be waived[,]” a waiver requires the “intentional release, relinquishment, or
surrender of a known right.” R. Conrad Moore & Assocs., Inc., 946 S.W.2d at 93.
The “[i]ntentional relinquishment of a known right can be inferred from
intentional conduct which is inconsistent with claiming the contractual right.”
Id. “Waiver is largely a matter of intent, and for implied waiver to be found
through a party’s actions, intent must be clearly demonstrated by the
surrounding facts and circumstances.” Brannan Paving GP, LLC v. Pavement
Markings, Inc., 446 S.W.3d 14, 21 (Tex. App. 2013) (quoting Jernigan v. Langley,
111 S.W.3d 153, 156 (Tex. 2003)), review denied.
[34] According to Odyssey, such intent is absent from the facts of this case as
Odyssey’s “‘good to go’ [approval] was induced by [Heart to Heart’s] false and
working within fifty miles of the Indianapolis and Avon markets and from soliciting Odyssey employees to
work for Heart to Heart until August 1, 2014, as a gesture of “goodwill” toward Odyssey. (Tr. p. 279).
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misleading notice of Heart to Heart’s intent to hire Duermit.” (Appellee’s Br.
p. 27). In its notice to Odyssey, Heart to Heart specifically acknowledged that
Duermit was subject to a twelve-month Non-Compete Agreement, which
restricted him from working within a fifty-mile radius of the Indianapolis and
Avon offices he managed for Odyssey. As a result, Heart to Heart indicated
that Duermit was being hired for a position in Munster—150 miles away from
the sites Duermit managed for Odyssey. Therefore, Odyssey posits that its
“‘approval’ of Duermit’s employment more than [fifty] miles from Indianapolis
was entirely consistent with its intent to reserve the right to enforce Duermit’s
obligations if he breached them.” (Appellee’s Br. p. 29). We agree.
[35] We find that a review of the surrounding facts and circumstances does not
indicate that Odyssey waived Duermit’s restrictive covenants. See Brannan
Paving GP, LLC, 446 S.W.3d at 21. In its notice of intent to hire Duermit, Heart
to Heart essentially informed Odyssey that the scope of Duermit’s employment
would not violate the terms of his Non-Compete Agreement—i.e., Duermit
would be working more than fifty miles from the sites he managed for Odyssey.
Furthermore, it is clear that Heart to Heart was aware of the existence of and
familiar with the terms of Duermit’s Non-Compete Agreement at the time it
gave notice to Odyssey. Therefore, any consent Odyssey provided regarding
Duermit’s hire at Heart to Heart was based on Heart to Heart’s representation
that Duermit’s employment would conform to the terms of the Non-Compete
Agreement.
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2. Waiver of Right to Sue
[36] Duermit next claims that Odyssey waived its right to pursue any claims against
Duermit by failing to adhere to the following notice-and-cure provision of the
Settlement Agreement:
If either Heart [t]o Heart or Odyssey inadvertently hires a
Principal Employee prior to providing the requisite notice, [the
hiring Party] shall comply with the notice procedure stated above
within a reasonable period of time, but not later than [thirty] days
after discovery that the employment of the employee is subject to
this Section. Liability shall not be found, and damages shall not
be awarded, for breach of [the notification process] if the
breaching Party has made a documented effort to cure the breach
within [thirty] days of receiving notice of the breach.
(Appellant’s Conf. App. p. 539). Duermit insists that, prior to filing a lawsuit,
“Odyssey was required to provide notice to Heart to Heart of the perceived
breaches of Duermit” and was thereafter “required to provide the opportunity
for Heart to Heart to cure any defects in [Duermit’s] employment parameters.”
(Appellant’s Br. p. 17). More particularly, Duermit contends that Odyssey
failed to notify Heart to Heart “that it felt that [Duermit’s] area of operation
violated some perceived requirement”; “that it did not agree to a full waiver of
[Duermit’s] [Non-Compete Agreement]”; and “that it had issues with
Duermit’s actions after he became employed by Heart to Heart.” (Appellant’s
Br. p. 18). Consequently, Duermit posits that “Odyssey made these decisions
and now it must live with the consequences—Odyssey expressly waived its
right to sue Duermit without first providing notice and an opportunity to cure
any issues.” (Appellant’s Br. p. 18).
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[37] Odyssey, however, argues that when the entire provision is read in context, the
notice-and-cure provision “plainly governs only disputes between Odyssey and
Heart to Heart over the inadvertent hire of Principal Employees.” (Appellee’s
Br. p. 34). Again, we agree. In this case, Heart to Heart was aware of
Duermit’s status as a former Odyssey employee, and it provided Odyssey with
notice of its intent to hire Duermit as contemplated by the Settlement
Agreement. Thus, this is not a situation of an “inadvertent[] hire.”
(Appellant’s Conf. App. p. 539). Under Texas contract law, “courts must
consider the entire writing and give effect to all provisions of the contract within
the context of the entire agreement so that no provision is either rendered
meaningless or given dispositive effect in isolation.” Hayes v. Wells Fargo Bank, N.A.,
No. 01-06-00720-CV, 2007 WL 3038043, at *2 (Tex. App. Oct. 18, 2007)
(emphasis added), cert. denied, 555 U.S. 1012 (2008). As noted by Odyssey, the
provision at issue makes no reference to disputes between Odyssey and Heart to
Heart regarding the non-competition agreements of former employees; rather,
the plain language of the notice-and-cure provision establishes that it applies
only in situations where one entity inadvertently hires a former employee of the
other without providing the requisite notice. Accordingly, Odyssey has not
waived its right to pursue a lawsuit against Duermit by failing to adhere to the
notice-and-cure provision. Instead, we agree with the trial court that Odyssey
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satisfied its burden of demonstrating a reasonable likelihood of success on the
merits because Duermit breached the terms of his Non-Compete Agreement. 8
IV. Threatened Injury to Odyssey Versus Potential Harm to Duermit
[38] Lastly, Duermit claims that the trial court abused its discretion in granting the
preliminary injunction because “Odyssey failed to introduce any evidence that
it would suffer further harm if the preliminary injunction was not entered.”
(Appellant’s Br. p. 20). In order to merit a preliminary injunction, the moving
party must establish, in part, that the “remedies at law [are] inadequate, thus
causing irreparable harm pending resolution of the substantive action” and that
“the threatened injury to [the moving party] outweigh[s] the potential harm to
the [non-moving party] resulting from the granting of an injunction.” Curley v.
Lake Cnty. Bd. of Elections & Registration, 896 N.E.2d 24, 32 (Ind. Ct. App. 2008),
trans. denied. Here, the trial court specifically found that “[t]he harm [Odyssey]
would suffer if a preliminary injunction were denied exceeds the harm Duermit
would suffer if it were granted.” (Appellant’s App. p. 20).
[39] Duermit posits that “[t]he evidence that Odyssey presented—retention and
disclosure of ‘confidential’ documents; contact with Odyssey referral sources;
8
Duermit also claims that Odyssey released any claims regarding his retention of Odyssey’s confidential
documents based on the Mutual Release of Claims provision set forth in the Settlement Agreement.
However, as Odyssey points out, Duermit has not argued that the Mutual Release released Odyssey’s claims
arising from Duermit’s breach of the non-solicitation/non-competition provisions of the Non-Compete
Agreement. Because Odyssey has established a reasonable likelihood of succeeding on the merits at trial as
to Duermit’s violation of the Non-Compete Agreement, we need not address Duermit’s contention. For the
same reason, we need not address Duermit’s claim that Odyssey is not entitled to a preliminary injunction
because Odyssey failed to meet the minimum requirements to establish a claim under the Indiana Uniform
Trade Secrets Act.
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and communications with Odyssey employees—was all in the past. . . .
Odyssey did not introduce direct or circumstantial evidence that [Duermit]
threatened to further injure Odyssey after August 19, 2014 (the date the lawsuit
was filed).” (Appellant’s Br. pp. 20-22). He therefore argues that the injunction
was inappropriate because “[m]onetary damages awarded after the trial [would
be] an adequate remedy for those alleged misdeeds.” (Appellant’s Br. p. 21). It
is well established that “a party that suffers mere economic injury is not entitled
to injunctive relief because an award of post-trial damages is sufficient to make
the party whole.” Barlow v. Sipes, 744 N.E.2d 1, 6 (Ind. Ct. App. 2001), trans.
denied. It is the trial court’s “duty to determine whether the legal remedy is as
full and adequate as the equitable remedy.” Id.
[40] Contrary to Duermit’s assertion that the trial court erred because its “judgment
contains no factual determinations regarding the balancing of the harms, just a
bare bones recitation of the element[,]” the trial court made numerous
unchallenged findings regarding Duermit’s ongoing violations of his Non-
Compete Agreement and the Indiana Uniform Trade Secrets Act to support its
conclusion. (Appellant’s App. p. 21). Specifically, the trial court found that
Odyssey “has a legally protectable interest in maintaining the secrecy of its
confidential information and trade secrets and ensuring that the information is
not used by a former employee to compete” as well as “in the business
advantage created by the personal relationships Duermit had with [Odyssey’s]
referral sources” and “the personal relationships Duermit had with [Odyssey’s]
employees and in maintaining a stable workforce.” (Appellant’s App. pp. 16-
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17). Accordingly, the trial court concluded that Duermit “has violated, and
threatens to continue to violate,” the non-solicitation and non-disclosure
restrictions set forth in his Non-Compete Agreement, and that he “has violated,
and threatens to continue to violate[,]” Texas common law and the Indiana
Uniform Trade Secrets Act by misappropriating Odyssey’s confidential
information. (Appellant’s App. pp. 18-19).
[41] The evidence further establishes that, as of the date of the preliminary
injunction hearing, Duermit “still had not returned Odyssey’s proprietary
documents.” (Appellee’s Br. p. 48). In addition, Odyssey remarks that the trial
court noted no evidence that Duermit would be harmed in any manner by the
preliminary injunction; in fact, “the trial court allowed him to continue to earn
a living as an employee of Heart to Heart, as long as he operated more than
[fifty] miles from Indianapolis and did not attempt to raid Odyssey’s employees
or referral sources or to use or disclose Odyssey’s proprietary and trade-secret
information.” (Appellee’s Br. p. 50). Thus, we cannot say that the trial court
erred in determining that “these continuing breaches will cause or threaten to
cause irreparable harm and damage to [Odyssey] unless Duermit is enjoined.”
(Appellant’s App. p. 19).
CONCLUSION
[42] Based on the foregoing, we conclude that the trial court acted within its
discretion in issuing the preliminary injunction.
[43] Affirmed.
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[44] Najam, J. and Robb, J. concur
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