Nicholas D. Pappas, III, M.D. Versus Hand Surgical Associates, Ltd. ( 2023 )

NICHOLAS D. PAPPAS, III, M.D. NO. 22-CA-407
VERSUS FIFTH CIRCUIT
HAND SURGICAL ASSOCIATES, LTD. COURT OF APPEAL
STATE OF LOUISIANA
ON APPEAL FROM THE TWENTY-FOURTH JUDICIAL DISTRICT COURT
PARISH OF JEFFERSON, STATE OF LOUISIANA
NO. 824-191, DIVISION "G"
HONORABLE E. ADRIAN ADAMS, JUDGE PRESIDING
March 29, 2023
JUDE G. GRAVOIS
JUDGE
Panel composed of Judges Susan M. Chehardy,
Jude G. Gravois, and Stephen J. Windhorst
AFFIRMED IN PART; GRANT OF DECLARATORY JUDGMENT
VACATED; REMANDED WITH INSTRUCTIONS
JGG
SMC
SJW
COUNSEL FOR PLAINTIFF/APPELLEE,
NICHOLAS D. PAPPAS, III, M.D.
Leslie W. Ehret
Benjamin M. Castoriano
David I. Courcelle
COUNSEL FOR DEFENDANT/APPELLANT,
HAND SURGICAL ASSOCIATES, LTD.
Philip A. Franco
Timothy M. Brinks
GRAVOIS, J.
Defendant/appellant, Hand Surgical Associates, Ltd. (“HSA”), appeals a
judgment rendered on April 7, 2022 in favor of plaintiff, Dr. Nicholas D. Pappas,
III, which granted a preliminary injunction and a declaratory judgment in favor of
Dr. Pappas, ruling that non-competition covenants contained in an Employment
Agreement the parties entered into on or about October 1, 2014 (with an effective
date of January 1, 2015) (the “Employment Agreement”) were unenforceable upon
Dr. Pappas’s resignation from HSA in 2021.
On appeal, HSA contends that the trial court erred in granting the
preliminary injunction in favor of Dr. Pappas, arguing that the judgment is not
supported by the provisions of the Employment Agreement. HSA also argues that
the trial court erred in granting the declaratory judgment in favor of Dr. Pappas,
finding the non-competition covenants to be unenforceable, when only the
preliminary injunction proceeding was properly before the court in the summary
proceeding conducted by the court. Finally, HSA argues that the trial court erred
in granting the preliminary injunction because (1) Dr. Pappas failed to show
irreparable injury, and (2) the court failed to require Dr. Pappas to furnish any
security for the preliminary injunction.1
For the following reasons, we affirm the trial court’s grant of a preliminary
injunction in favor of Dr. Pappas. However, we vacate that portion of the
judgment which grants a declaratory judgment in favor of Dr. Pappas. We further
remand the matter for the trial court to fix security for the issuance of the
preliminary injunction and for further proceedings consistent with this opinion.
1
As pointed out infra, in brief, Dr. Pappas concedes that he should furnish security for
the granting of the preliminary injunction.
22-CA-407 1
PROCEDURAL HISTORY
On January 7, 2022, Dr. Pappas filed a “Verified Petition for Declaratory
Judgment, Preliminary Injunction, Permanent Injunction and Damages” against
HSA, seeking (1) a judgment declaring the non-competition covenants contained in
the Employment Agreement are no longer in effect and unenforceable against him,
(2) preliminary and permanent injunctions prohibiting the enforcement of the non-
competition covenants, and (3) damages for his lost income resulting from HSA’s
attempt to enforce the non-competition covenants. Dr. Pappas also sought
attorney’s fees and costs. A hearing on the preliminary injunction was set for
February 7, 2022.
On February 2, 2022, HSA filed an exception of no cause of action,
asserting that the petition failed to state a cause of action because as a matter of
law, the non-competition covenants at issue herein continued in effect for a period
of two years following the end of Dr. Pappas’s employment with HSA in 2021. In
its exception, HSA argued that the clear terms of the Employment Agreement
stated that the non-competition clauses in the Employment Agreement were
“independent of any other provision” and that they “shall survive the termination
of this Agreement.”2 Plaintiff filed an opposition to the exception. A hearing on
the exception was set for the same date as the hearing on the preliminary
injunction, February 7, 2022.3
Following the hearing on February 7, 2022 on the preliminary injunction and
the exception, the trial court took the matter under advisement and gave the parties
2
Section 14.6 provides:
Physician agrees that these covenants shall be construed as agreements
independent of any other provision of this Agreement and shall survive the
termination of this Agreement. Physician further agrees that the existence of any
claim, complaint or cause of action by Physician against the Company shall not
constitute a defense to the enforcement by the Company of these covenants.
3
The exception of no cause of action was denied and is not assigned as error in this
appeal.
22-CA-407 2
time to file post-trial briefs. The trial court rendered a judgment on April 7, 2022,
containing the following decretal language:
IT IS HEREBY ORDERED, ADJUDGED AND DECREED
that the Verified Petition for Declaratory Judgment and Preliminary
Injunction, filed by the plaintiff, Nicholas D. Pappas, III, M.D., and
against the defendant, Hand Surgical Associates, LTD, be and is
hereby, GRANTED.
IT IS FURTHER ORDERED, ADJUDGED, AND
DECREED that the Noncompetition Provision set forth in Section 14
of the Employment Agreement is unenforceable.
IT IS FURTHER ORDERED, ADJUDGED, AND
DECREED that the determination of Attorney’s Fees and Court
Costs that the prevailing party may recover under Section 16.4 of the
Employment Agreement, be and is hereby RESERVED for future
resolution.4
(Emphasis in original.)
FACTS
Dr. Pappas, a board certified hand surgeon, entered into the Employment
Agreement with HSA on or about October 1, 2014 (with an effective date of
January 1, 2015), which was attached to his verified petition and introduced into
evidence at the hearing on February 7, 2022. The Employment Agreement
contained sixteen “Sections,” setting forth various employment terms and
conditions, such as compensation, benefits, insurance, and other employment
matters not at issue in this appeal. Section 13 of the Employment Agreement
provided for conditions precedent to the termination of the agreement. Section 14
of the Employment Agreement, containing numerous sub-parts, sets forth the non-
competition covenants between the parties that are at issue here.
Pursuant to the Employment Agreement, Section 4.1, Dr. Pappas performed
services at LSU two days per week. In late 2017, Dr. Pappas told HSA that he
wanted to discontinue his work arrangement with LSU. The parties agreed that
4
Section 16.3, rather than Section 16.4, provides for attorney’s fees and court costs to the
prevailing party.
22-CA-407 3
this would happen in July of 2018. Dr. Pappas points out that a clause in Section
13 of the Employment Agreement (specifically Section 13.1.5, quoted infra in
footnote 9) states that the Employment Agreement would automatically terminate
upon the expiration or termination of HSA’s agreement with LSU. It is Dr.
Pappas’s position that upon termination of HSA’s agreement with LSU, he entered
into a new, unwritten, at-will employment agreement with HSA in which he
accepted a reduced salary of $300,000.00 per year5 and the terms of his
employment changed in that he no longer had any obligation to perform services at
LSU.
On October 22, 2021, Dr. Pappas resigned from HSA. The resignation was
preceded by some events, which included HSA’s furloughing of Dr. Pappas
without pay in early 2020 during the beginning stages of the COVID-19 pandemic
quarantine, an increased call schedule that he found onerous, and Dr. Pappas’s
taking medical leave in 2021 to recuperate from hand surgery. Dr. Pappas testified
that he was informed that HSA would “vigorously” litigate the non-competition
covenants. He testified at the hearing that while two surgical groups were
interested in offering him employment as a hand surgeon in the restricted area,6
they would not offer him a position until the risk of litigation with HSA was
resolved. He testified that because he had a young family, a newly purchased
home, and had left previous, more lucrative employment out of state to return to
the New Orleans area to be near family, he filed this suit against HSA, feeling that
he would suffer irreparable injury if the non-competition covenants contained in
5
Dr. Pappas’s previous salary under the Employment Agreement was $350,000.00 per
year.
6
The Employment Agreement provides that the restricted area is the following parishes
of Louisiana: Jefferson, Orleans, St. Charles, St. Bernard, Tangipahoa, St. Tammany,
Terrebonne, Lafourche, and Plaquemines.
22-CA-407 4
the Employment Agreement were enforced to preclude him from employment in
the restricted area.
ASSIGNMENTS OF ERROR
Improper grant of preliminary injunction
In his petition, Dr. Pappas sought a preliminary injunction against HSA,
preventing it from enforcing the non-competition covenants contained in the
Employment Agreement pending a full resolution of his request for a declaratory
judgment and a permanent injunction, asserting that the non-competition covenants
were unenforceable. On appeal, HSA argues that the trial court erred in granting
the preliminary injunction sought by Dr. Pappas against HSA in this case.
A preliminary injunction is essentially an interlocutory procedural device
designed to preserve the status quo between the parties pending a trial on the
merits. Wechem, Inc. v. Evans, 18-743 (La. App. 5 Cir. 5/30/19), 274 So.3d 877,
884, writ denied, 19-01176 (La. 10/15/19), 280 So.3d 600. The primary purpose of
injunctive relief is to prevent the occurrence of future acts that may result in
irreparable injury, loss, or damage to the applicant. Id. A preliminary injunction is
a summary proceeding and merely requires a prima facie showing of a good
chance to prevail on the merits. McCord v. West, 07-958 (La. App. 5 Cir. 3/25/08),
983 So.2d 133, 140, citing Bank One, Nat. Ass’n v. Velten, 04-2001 (La. App. 4
Cir. 8/17/05), 917 So.2d 454. In making a prima facie showing, the plaintiff is
required to offer less proof than is necessary in an ordinary proceeding for a
permanent injunction. Vartech Sys., Inc. v. Hayden, 05-2499 (La. App. 1 Cir.
12/20/06), 951 So.2d 247, 255, n.8, citing State through Louisiana State Bd. of
Examiners of Psychologists of the Dep’t of Health and Human Services v.
Atterberry, 95-0391 (La. App. 1 Cir. 11/9/95), 664 So.2d 1216, 1220.
The principal demand is determined on its merits only after a full trial under
ordinary process, even though the hearing on the summary proceedings to obtain
22-CA-407 5
the preliminary injunction may touch upon or tentatively decide merit issues.
McCord v. West, 983 So.2d at 140, citing Smith v. West Virginia Oil & Gas Co.,
373 So.2d 488, 494 (La. 1979). Accordingly, the fact that a preliminary injunction
is granted in one litigant’s favor does not preclude a different result on the merits.
Id.Although the judgment on a preliminary injunction is interlocutory, a party
aggrieved by a judgment either granting or denying a preliminary injunction is
entitled to an appeal. La. C.C.P. art. 3612.7 Appellate review of a trial court’s
issuance of a preliminary injunction is limited. The issuance of a preliminary
injunction addresses itself to the sound discretion of the trial court and will not be
disturbed on review unless a clear abuse of discretion has been shown. Neill Corp.
v. Shutt, 20-0269 (La. App. 1 Cir. 1/25/21), 319 So.3d 872, 878, citing Hill v.
Jindal, 14-1757 (La. App. 1 Cir. 6/17/15), 175 So.3d 988, 1002, writ denied, 15-
1394 (La. 10/23/15), 179 So.3d 600.
Non-competition agreements are regulated by La. R.S. 23:921. A non-
compete agreement is a contract between the parties who enter it, and is to be
construed according to the general rules of contract interpretation. Smith v. Com.
Flooring Gulf Coast, L.L.C., 19-0502 (La. App. 4 Cir. 10/9/19), 2019 WL
5073582, at *5. The common intent of the parties is used to interpret a contract.
Restored Surfaces, Inc. v. Sanchez, 11-529 (La. App. 5 Cir. 12/28/11), 82 So.3d
524, 528; La. C.C. art. 2045. When the words of a contract are clear and explicit
and lead to no absurd consequences, no further interpretation may be made in
search of the parties’ intent. Id.; La. C.C. art. 2046. A contract or document is
7
La. C.C.P. art. 3612(B) provides:
An appeal may be taken as a matter of right from an order or judgment relating to
a preliminary or final injunction, but such an order or judgment shall not be
suspended during the pendency of an appeal unless the court in its discretion so
orders.
22-CA-407 6
ambiguous when its written terms are susceptible to more than one interpretation,
there is uncertainty as to its provisions, or the parties’ intent cannot be ascertained
from the language used. All Am. Healthcare, L.L.C. v. Dichiara, 18-432 (La. App.
5 Cir. 12/27/18), 263 So.3d 922, 928.
Louisiana has a strong public policy disfavoring non-competition
agreements between employers and employees. This policy is based on the state’s
desire to prevent an individual from contractually depriving himself of the ability
to support himself and consequently becoming a public burden. Such agreements
are in derogation of the common right, and must be strictly construed against the
party seeking their enforcement. USI Ins. Servs., LLC v. Tappel, 09-149 (La. App.
5 Cir. 11/10/09), 28 So.3d 419, 423-24, writ denied, 09-2697 (La. 2/26/10), 28
So.3d 271. (Internal citations omitted.) Ambiguous terms in employment
agreements and non-competition clauses found therein will be construed against
the employer who drafted them. Id. at 425.
Though this case concerns non-competition covenants, the parties placed at
issue more generally the meanings of various provisions in the entire Employment
Agreement, rather than whether the terms of the non-competition covenants
contained therein complied with La. R.S. 23:921. In other words, the parties do
not dispute the application or validity of the particular defined terms of the non-
competition covenants (i.e., “Restricted Activity,” “Restricted Area,” “Restricted
Period”8), but rather disagree as to whether the Employment Agreement was
8
Section 14.1.2 provides:
Physician also covenants that he/she shall not directly or indirectly engage in any
Restricted Activity within the Restricted Area during the Restricted Period. For
the avoidance of doubt, the covenant described in this Section 14.1.2 shall not
apply in areas outside of the Restricted Area.
Section 14.1.3 provides:
As used herein, “Restricted Period” means the period of two (2) years following
the date of termination of Physician’s employment with the Company
(“Termination Date”).
22-CA-407 7
terminated in July of 2018, when HSA’s agreement with LSU terminated, and
what specific terms governed Dr. Pappas’s continued employment at HSA after
termination of the Employment Agreement as a result of termination of HSA’s
agreement with LSU.
It is Dr. Pappas’s position that as per the explicit terms of the Employment
Agreement, Section 13.1.5, the Employment Agreement automatically terminated
upon termination of HSA’s agreement with LSU in July of 2018,9 and that
thereafter, he was employed pursuant to a new, unwritten, at-will employment
agreement. He argues that other provisions contained in the Employment
Agreement referencing his “employment,” such as the non-competition covenants
found in Section 14, and specifically Section 14.1.2, necessarily mean that his
employment under the Employment Agreement ceased in July of 2018 upon
termination of HSA’s agreement with LSU. He argues that review of the
Employment Agreement in its entirety clearly establishes that the parties did not
contemplate in the Employment Agreement Dr. Pappas’s remaining employed at
HSA after termination of the Employment Agreement. In other words, multiple
provisions in the Employment Agreement expressed the parties’ expectation that
termination of the Employment Agreement and the ending of Dr. Pappas’s
employment with HSA would be co-extensive,10 and the Employment Agreement
9
Section 13.1, entitled “Termination,” provides:
Either party may terminate this Agreement at will at any time, with or without
cause, by providing the other party with thirty (30) days written notice thereof. In
addition, this Agreement shall automatically terminate upon the occurrence of any
of the following events:
***
13.1.5 Upon the expiration or termination of the LSU Agreement; provided,
however, that the Company shall notify Physician of the termination of the
LSU Agreement promptly upon the Company learning of such
termination.
(Emphasis added.)
10
This position is based in part upon the “wind up” provision in Section 13.2 that the
parties did not initiate or follow upon termination of the LSU Agreement.
22-CA-407 8
does not provide specific terms for the scenario of Dr. Pappas’s continued
employment at HSA after termination of the Employment Agreement.
In response, it is HSA’s position that the Employment Agreement was
simply orally amended by the parties in July of 2018 only as to Dr. Pappas’s salary
and his obligation to provide services to LSU (and thus was not terminated in July
of 2018), and thus the non-competition covenants contained in the Employment
Agreement remained enforceable for two years after Dr. Pappas ended his
employment with HSA in October of 2021. Alternatively, HSA argues that the
non-competition covenants contained in the Employment Agreement survived the
2018 termination of the Employment Agreement, as per Section 14.6 (quoted
supra in footnote 2), and remained enforceable for two years after Dr. Pappas’s
resignation from employment at HSA in October of 2021. HSA argues that Dr.
Pappas’s interpretation of the Employment Agreement leads to the absurd result
that the non-competition covenants were only effective until July of 2020 and
expired during the term of Dr. Pappas’s continued employment with HSA and
prior to the ending of his employment at HSA in October of 2021.
This Court has carefully reviewed the entire record and the transcript of the
February 7, 2022 hearing. Two witnesses testified: Dr. Pappas and Dr. Eric
George, the principal owner of HSA. Each testified regarding their impressions of
the meaning and effect of certain provisions of the Employment Agreement. The
Employment Agreement was introduced into evidence, as were numerous emails
between the parties showing their communications at different times while Dr.
Pappas worked at HSA, concerning Dr. Pappas’s request to end the LSU
agreement, the events and consequences of the 2020 furlough of Dr. Pappas, and
Dr. Pappas’s taking medical leave from HSA during 2021, among other things.
Upon review, we find that the record as a whole supports a determination that
when HSA’s agreement with LSU terminated in July of 2018, the Employment
22-CA-407 9
Agreement automatically terminated according to the explicit terms of Section
13.1.5 thereof. Dr. George even admitted as much on the stand in his testimony at
the hearing. We also find that the Employment Agreement as a whole was written
to view termination of the Employment Agreement and termination of Dr.
Pappas’s employment with HSA as co-extensive events, which did not in fact
occur, as Dr. Pappas remained employed by HSA after HSA’s agreement with
LSU was terminated in July of 2018, but under different salary and working
conditions. Therefore, the parties’ intent regarding what specific terms would
govern Dr. Pappas’s continued employment at HSA after July of 2018 cannot be
determined from the text of the Employment Agreement.
Regarding the survival provisions appertaining to the non-competition
covenants contained in the Employment Agreement, Dr. Pappas does not contest
that the non-competition covenants survived for a period of two years following
termination of the Employment Agreement as a result of termination of HSA’s
agreement with LSU in July of 2018 (i.e., from July of 2018 to July of 2020), but
no further. As such, Dr. Pappas argues that the non-competition covenants were
no longer enforceable against him as of July of 2020, which is before his
employment at HSA ended and before he filed this suit. Upon review, in light of
our findings herein that the Employment Agreement terminated in July of 2018
and that the Employment Agreement did not contemplate Dr. Pappas’s continuing
to work at HSA after termination of the Employment Agreement under different
terms and conditions, as set forth above, we cannot say, at this juncture, that we
disagree with Dr. Pappas’s arguments in this regard.
As stated above, a prima facie case is something less than a preponderance
of the evidence. Upon review, we find that the record as a whole, at this juncture,
supports the trial court’s finding that Dr. Pappas has presented a prima facie case
in support of his request for a preliminary injunction and thus is entitled to a
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preliminary injunction against HSA, preventing the enforcement of the non-
competition covenants contained in the Employment Agreement pending
determination of the merits of the case. Thus, we find that the trial court did not
abuse its discretion in granting the preliminary injunction. The declaratory
judgment and the permanent injunction should be determined in ordinary
proceedings after a trial on the merits and by a preponderance of the evidence.
This assignment of error is without merit.
Improper grant of declaratory judgment
Next, HSA argues that the trial court erred as a matter of law by rendering a
declaratory judgment, finding the non-competition covenants unenforceable,
because a declaratory judgment determination employs ordinary proceedings,
when the only matter set for hearing was the preliminary injunction, which is a
summary proceeding.11
HSA is correct in its argument that preliminary injunctions are heard in
summary proceedings, declaratory actions proceed by ordinary process, and these
matters may only be cumulated and heard together upon express agreement of the
parties. Singleton v. E. Baton Rouge Par. Sch. Bd., 22-0667 (La. App. 1 Cir.
9/16/22), 353 So.3d 164, 173-74. As the court said therein:
A preliminary injunction is essentially an interlocutory order issued in
summary proceedings incidental to the main demand for permanent
injunctive relief. Dalke v. Armantono, 2009-1954 (La. App. 1st Cir.
5/7/10), 40 So.3d 981, 987. In some cases, the merits of an action
may be decided during an interlocutory proceeding; this is only when
the parties have expressly agreed to submit the case for final decision
at the hearing on the rule for a preliminary injunction. Zachary
Mitigation Area, LLC v. Tangipahoa Parish Council, 2016-1675 (La.
App. 1st Cir. 9/21/17), 231 So.3d 687, 692.
Id. at 173, n.21.
11
We recognize that the exception of no cause of action was set and heard at the same
hearing, but the exception practice is not germane to the assignment of error on appeal and thus
is not discussed herein.
22-CA-407 11
The record is clear that only the preliminary injunction, and not the
declaratory judgment action, was set for hearing on February 7, 2022, and that the
parties did not agree, expressly or otherwise, to expand the hearing to include the
merits of the action (declaratory relief and permanent injunction). First, this is
evidenced by the Rule to Show Cause found at p. 13 of the record, which sets the
request for preliminary injunction (and no other request for relief) for hearing on
February 7, 2022. This is also evidenced by the Rule to Show Cause found on p.
36 of the record, which sets the peremptory exception of no cause of action for
hearing “on the same date as the preliminary injunction hearing scheduled for
February 7, 2022 … .”
At the hearing on February 7, 2022, the transcript reflects that when the case
was called, the judge specifically said “We are here today in reference to the
exceptions [sic] of no cause of action and a petition for an injunction.” Prior to
plaintiff’s counsel calling a witness at the hearing, the judge asked: “Are you on a
declaratory judgment -- preliminary injunction? That’s what I’m asking. What are
you arguing at this point for the record?” Counsel for plaintiff answered:
“Preliminary injunction, your honor.”
Later near the end of the hearing, Mr. Franco, counsel for defendant HSA, in
response to the judge’s question as to whether he had any objection to calling Dr.
Pappas as a rebuttal witness, said “Yes, sir. There’s objections. This is a
preliminary injunction hearing. We’ve heard things at [sic] nauseam. And I think
they’ve put on their case.” Moments later, the judge stated that he would take the
matter under advisement and allowed both parties to file post-trial briefs.
Dr. Pappas’s post-trial brief clearly states in the first paragraph that the post-
hearing memorandum was submitted in support of his application for a
“preliminary injunction.” Dr. Pappas’s brief concludes with the statement that he
“has made a prima facie showing he will prevail on the merits, and he has shown
22-CA-407 12
he will suffer irreparable injury if the Court does not enter the requested
preliminary injunction. Dr. Pappas therefore respectfully requests the Court: (1)
enter a preliminary injunction prohibiting Defendant, Hand Surgical Associates,
Ltd. (“HSA”), from enforcing the noncompetition provision contained in his long-
expired 2014 Employment Agreement with HSA, and (2) award him his
reasonable attorney’s fees and costs incurred in obtaining the requested
preliminary injunction.”
HSA filed a post-trial brief “in opposition to the motion for preliminary
injunction,” arguing that Dr. Pappas was not entitled to a preliminary injunction
because he had failed to show that he would sustain irreparable injury absent the
injunction, and also failed to make a prima facie showing that he would prevail on
the merits of the case.
The above record excerpts clearly show that only the preliminary injunction
was before the trial court on February 7, 2022. The parties clearly did not
expressly agree to hear or decide the request for a declaratory judgment, and at all
points, the parties were clear that only the preliminary injunction request had been
heard.
Specific language in the judgment of April 7, 2022, however, indicates that
the trial court ruled on the request for declaratory judgment, in addition to the
request for preliminary injunction. In the judgment’s first paragraph, the court
states:
On February 7, 2022, this matter came before this Court for
hearing on a Verified Petition/or Declaratory Judgment, Preliminary
Injunction, Permanent Injunction, and Damages filed by the plaintiff,
Nicholas D. Pappas, III, M.D., and against the defendant, Hand
Surgical Associates, LTD.
Further, the judgment’s decretal language states:
IT IS HEREBY ORDERED, ADJUDGED AND DECREED
that the Verified Petition for Declaratory Judgment and Preliminary
Injunction, filed by the plaintiff, Nicholas D. Pappas, III, M.D., and
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against the defendant, Hand Surgical Associates, LTD, be and is
hereby, GRANTED.
IT IS FURTHER ORDERED, ADJUDGED, AND
DECREED that the Noncompetition Provision set forth in Section 14
of the Employment Agreement is unenforceable.
(Emphasis in original.)
Comparing the language employed by the trial court in the introductory
paragraph of the judgment (“… this matter came before this Court for hearing on a
Verified Petition/or Declaratory Judgment, Preliminary Injunction, Permanent
Injunction, and Damages”) with the decretal language (“IT IS HEREBY
ORDERED, ADJUDGED AND DECREED that the Verified Petition for
Declaratory Judgment and Preliminary Injunction, … is hereby, GRANTED.”)
strongly suggests that the trial court granted the declaratory judgment, when that
action was not properly before the court at that time procedurally, or by express
agreement of the parties, as discussed above. Accordingly, finding merit to this
assignment of error, we vacate the declaratory judgment granted by the trial court
in its April 7, 2022 judgment.
Lack of showing of irreparable injury
Next, HSA argues that the trial court erred in finding that Dr. Pappas would
suffer irreparable injury if the preliminary injunction was not granted.
In general, a party seeking the issuance of a preliminary injunction must show that
he will suffer irreparable injury if the injunction does not issue. USI Ins. Servs.,
LLC v. Tappel, supra, 28 So.3d at 424.
Irreparable injury means the petitioner cannot adequately be compensated in
money damages or suffers injuries which cannot be measured by pecuniary
standards. Bernhard MCC, LLC v. Zeringue, 19-529 (La. App. 5 Cir. 9/9/20), 303
So.3d 372, 377, writ denied, 20-01172 (La. 12/8/20), 306 So.3d 434. As pointed
out previously, the primary purpose of injunctive relief is to prevent the occurrence
of future acts that may result in irreparable injury, loss, or damage to the applicant.
22-CA-407 14
Wechem, Inc. v. Evans, supra, 274 So.3d at 884. The trial court has great
discretion in determining whether a preliminary injunction is warranted; thus, the
trial court’s ruling will not be disturbed on appeal absent a clear abuse of
discretion. Bernhard MCC, LLC v. Zeringue, supra, 303 So.3d at 378.
Upon review, we find no abuse of the trial court’s discretion in finding that
Dr. Pappas proved irreparable injury pending trial on the merits of the injunction.
Dr. Pappas testified that he works in a highly specialized field with limited
opportunities for employment, and with no guarantee that jobs would be available
elsewhere. Dr. Pappas testified that he left a more lucrative job in South Carolina
in order to move back to the New Orleans area to be with family, and enforcing the
non-competition covenants against him would likely require moving his family,
which now includes a young child, away from the restricted area in order to find
employment, a factor that cannot be compensated with money. Dr. Pappas further
argues that while defendant asserted that he could find a job in St. John the Baptist
Parish, which is nearby and not within the restricted area defined by the non-
competition covenants, HSA presented no evidence that a job in Dr. Pappas’s
highly specialized field was in fact available there. This assignment of error is
without merit.
Security for issuance of preliminary injunction
Finally, HSA argues that the trial court erred in failing to fix security after
issuance of the preliminary injunction, which requires this Court to vacate the
preliminary injunction and remand the matter for the fixing of security.
As noted earlier, in brief, Dr. Pappas concedes that La. C.C.P. art. 361012
requires that the applicant furnish security after the issuance of a preliminary
12
La. C.C.P. art. 3610 provides, in pertinent part:
A temporary restraining order or preliminary injunction shall not issue unless the
applicant furnishes security in the amount fixed by the court, except where
security is dispensed with by law. The security shall indemnify the person
22-CA-407 15
injunction. He asks that this Court maintain the preliminary injunction, and simply
remand the matter for the trial court to fix security therefor.
HSA argues, however, that this Court has consistently held that “when the
trial court’s judgment does not set the amount of security to be furnished, the better
approach is to vacate the injunction,” citing Advanced Collision Servs., Inc. v.
State, Dep’t of Transp., 93-470 (La. App. 5 Cir. 1/25/94), 631 So.2d 1245, 1247,
and Holley v. Holley, 17-325 (La. App. 5 Cir. 11/20/17), 232 So.3d 717, 727.13
Upon review, we find that these cases cited by HSA are distinguishable from
the instant case. In Holley v. Holley, 232 So.3d at 727, this Court reversed the
grant of a preliminary injunction not only for the failure of the trial court to set a
bond, but also after finding that the trial court committed errors of law in the
application of the Louisiana Relocation Act, La. R.S. 9:355.1, et seq., therefore
providing separate and independent grounds to reverse the grant of the preliminary
injunction. Further, in Advanced Collision Servs., Inc. v. State, Dep’t of Transp.,
631 So.2d at 1247, this Court likewise found an additional, independent basis upon
which the trial court erred in granting the preliminary injunction. Thus, a remand
for setting security on an otherwise reversed preliminary injunction would have
been meaningless.
In the instant case, it is possible that the trial court did not order plaintiff to
furnish security for the preliminary injunction because the trial court additionally
granted the declaratory judgment. We have, however, vacated the declaratory
judgment. Under these circumstances, given that we affirm the grant of the
wrongfully restrained or enjoined for the payment of costs incurred and damages
sustained. …
13
In brief, HSA represents this quote as coming from Holley v. Holley, supra ((“While
other circuits have held that … a remand may be appropriate, … this Circuit has consistently
found that the language provided in La. C.C.P. art. 3610, requiring security for the issuance of a
preliminary injunction, is mandatory.”)). However, that language is found in Cochran v. Crosby,
411 So.2d 654, 655 (La. App. 4 Cir. 1982), which is cited by Advanced Collision Servs., Inc. v.
State, Dep’t of Transp., 631 So.2d at 1247, not by Holley v. Holley.
22-CA-407 16
preliminary injunction, we find that vacating the preliminary injunction on the
basis of the security issue alone is not required, and that a remand simply for fixing
of security best serves the interests of justice and the efficient administration of
justice. Accordingly, this assignment of error has merit. We decline to vacate the
preliminary injunction on this ground; however, we remand the matter for the trial
court to fix security for issuance of the preliminary injunction. See Liberty Bank &
Tr. Co. v. Dapremont, 00-2146 (La. App. 4 Cir. 12/12/01), 803 So.2d 387, 392.
See also Ard v. GrrlSpot, LLC, 19-0312 (La. App. 4 Cir. 10/23/19), 2019 WL
5432098.
DECREE
For the foregoing reasons, the judgment of the trial court granting the
preliminary injunction against HSA is affirmed; the judgment of the trial court
granting the declaratory judgment is vacated; and the matter is remanded for the
trial court to fix security for the issuance of the preliminary injunction and for
further proceedings consistent with this opinion.
AFFIRMED IN PART; GRANT OF
DECLARATORY JUDGMENT VACATED;
REMANDED WITH INSTRUCTIONS
22-CA-407 17
SUSAN M. CHEHARDY CURTIS B. PURSELL
CHIEF JUDGE CLERK OF COURT
SUSAN S. BUCHHOLZ
FREDERICKA H. WICKER
CHIEF DEPUTY CLERK
JUDE G. GRAVOIS
MARC E. JOHNSON
ROBERT A. CHAISSON LINDA M. WISEMAN
STEPHEN J. WINDHORST
FIRST DEPUTY CLERK
JOHN J. MOLAISON, JR.
CORNELIUS E. REGAN, PRO TEM FIFTH CIRCUIT
MELISSA C. LEDET
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22-CA-407
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