Salahadin M. Gharad M.D. v. St. Claire Medical Center, Inc.

RENDERED: OCTOBER 23, 2014
TO BE PUBLISHED
-l -
,Supretur Court of 1P R:illurk
2014-SC-000470-I u u ut
DATE tt-Lk-v- ,
SALAHADIN M. GHARAD, M.D. MOVANT
ON REVIEW FROM COURT OF APPEALS
V. CASE NO. 2014-CA-000696-I
ROWAN CIRCUIT COURT NO. 14-CI-00001
ST. CLAIRE MEDICAL CENTER, INC. RESPONDENT
OPINION AND ORDER
DENYING INTERLOCUTORY RELIEF
St. Claire Medical Center operates a hospital in Morehead, Kentucky,
serving a nine-county region in and around Morehead. St. Claire terminated
an employment agreement with Salahadin M. Gharad, M.D., a cardiologist.
Gharad then sued St. Claire for wrongful termination in which he seeks, among
other relief, a declaration that the noncompetition provision of the employment
agreement—prohibiting the performance of medical services in the hospital's
nine-county service area for a period of two years after termination—is
unenforceable.
The trial court granted Gharad a temporary injunction, which prevented
St. Claire from enforcing the noncompetition provision. St. Claire then sought
to dissolve the temporary injunction by filing a motion for temporary relief in
the Court of Appeals under Kentucky Rules of Civil Procedure (CR) 65.09. The
Court of Appeals granted temporary relief to St. Claire and dissolved the
temporary injunction. The Court of Appeals found that the trial court abused
its discretion by temporarily enjoining enforcement of the noncompetition
provision at issue because Gharad failed to establish he would suffer
irreparable injury, a prerequisite for the granting of an injunction.
Gharad now requests this Court to grant him interlocutory relief from the
order of the Court of Appeals and restore the trial court's temporary injunction.
We deny interlocutory relief because we agree that Gharad has failed to make
the requisite showing of irreparable injury.
At this juncture, the underlying facts of Gharad's dispute with St. Claire
are immaterial to our determination. Suffice it to say, Gharad and St. Claire
present differing views of not only Gharad's performance and conduct while
employed by St. Claire but also whether St. Claire terminated Gharad with or
without cause. The only issue before us is whether the trial court abused its
discretion in granting a temporary injunction against St. Claire.
Our review is limited under CR 65.09. As we have repeatedly
emphasized, only those cases presenting "extraordinary cause" are worthy of
our review. Of course, we have interpreted "extraordinary cause" to include
"abuse[] of discretion by the courts below[.]" 1
The appropriate standard for a trial court when reviewing a motion for a
temporary injunction is well settled. CR 65.04 mandates that a trial court
1 Price v. Paintsville Tourism Com'n, 261 S.W.3d 482, 483 (Ky. 2008).
2
deny injunctive relief unless it finds: "(1) that the movant's position presents 'a
substantial question' on the underlying merits of the case . . . ; (2) that the
movant's remedy will be irreparably impaired absent the extraordinary relief;
and (3) that an injunction will not be inequitable[.]" 2
The trial court went through the proper analytical steps and determined
that Gharad satisfied all the requirements. Notably for purposes of the motion
before this Court, the trial court found Gharad was irreparably injured because
he would suffer loss of income and damage to his reputation. Furthermore, the
trial court found St. Claire's enforcement of the noncompetition provision
would render Gharad unable to revive his practice in the provision's designated
nine-county area. Finally, the trial court found disallowing Gharad's patients'
ability to continue to treat with him, if they so desired, constituted irreparable
injury.
Try as he might, Gharad is simply unable to distinguish materially his
action from our decision in Price v. Paintsville Tourism Comm'n. Of course,
Price did not involve a noncompetition provision like Gharad challenges here.
In Price, we adopted the federal approach that "despite individual hardship[,]
the loss of one's job and one's income pending disposition of a wrongful
termination case does not amount to 'irreparable injury' justifying a temporary
injunction."3 Surely, "extraordinary circumstances surrounding a discharge
could, conceivably, amount to irreparable injury so as to justify an injunction,
2 Id. at 484.
3 Id. This approach is also the majority approach among the states.
3
but in the ordinary case, . . . loss of income or damage to reputation" 4 is
inadequate. Gharad's discharge does not involve any "extraordinary
circumstances."
The physician-patient relationship, in and of itself, does not make
Gharad's discharge "extraordinary." Aside from the possible impact on
Gharad's current patients, Gharad's discharge is, at its core, a dispute between
an employer and employee over whether the employee's termination was
appropriate. We emphasize "possible" because there is no guarantee that
Gharad's patients will, in actuality, be negatively affected. Indeed, as the Court
of Appeals highlighted, the noncompetition provision at issue does not restrict
Gharad's practice of medicine or treatment of any specific patient. 5 The
noncompetition provision only limits—for two years—the geographical area
within which Gharad may offer medical services. Gharad's current patients are
free, as is their right, to continue seeing Gharad, provided his practice is
outside the geographic area designated in the St. Claire employment
agreement.
In any event, this Court, in virtually the identical context, has previously
noted, ``Where is no basic public policy against such covenants, particularly
when[, as here,] they involve professional services." 6 We offer no position on
4 Id. (citing Sampson v. Murray, 415 U.S. 61, 91-92 (1974)).
5 The Court of Appeals was also correct in noting that the impact on patients
would not provide irreparable injury to Gharad. Instead, any harm done to Gharad's
patients by the enforcement of the noncompetition provision would be accounted for in
weighing whether the injunction would be inequitable.
6 Lareau v. O'Nan, 355 S.W.2d 679, 681 (Ky. 1962).
4
whether the instant provision is enforceable against Gharad or whether we
should depart from our historic approval of noncompetition covenants involving
physicians because it is unnecessary for the resolution of this motion. Instead,
we note our precedent as evidence that, contrary to Gharad's argument and the
trial court's determination, "extraordinary circumstances" are missing from
this challenged discharge.
The "usual consequences of the loss of employment" 7 are not injuries
irreparable in nature. Typically, "reinstatement and/or back pay at the
conclusion of proceedings is an adequate remedy rendering pretrial injunctive
relief unnecessary and improper." 8 In finding irreparable injury present, the
trial court's decision was "unsupported by sound legal principles" 9 and, as a
result, constituted an abuse of discretion. Sure, the noncompetition provision
at issue may make calculating damages more difficult; but, given the record in
this case, it is not impossible. The fact that damages are calculable means
Gharad's alleged injury is not irreparable.
Before concluding, we pause to discuss a matter both parties appear to
believe to be presented to this Court. Both parties have provided us with
arguments regarding the trial court's supposed determination that, as a matter
of law, the noncompetition provision at issue is enforceable. As an initial
matter, we do not read the trial court's opinion and order to say that. Instead,
7 Price, 261 S.W.3d at 485.
8 Id.
9 Commonwealth v. English, 993 S.W.2d 941, 945 (Ky. 1999).
5
we simply understand the trial court's order to find that Gharad has presented
a substantial question regarding the enforceability of the noncompetition
provision. But in the event some lingering concern remains, we emphasize—as
we did in Price—that the order of the Court of Appeals dissolving the temporary
injunction vacated the trial court's opinion and order in its entirety.
Because Gharad has failed to show "extraordinary cause," his motion for
interlocutory relief from the order of the Court of Appeals is DENIED.
IT IS SO ORDERED.
All sitting. All concur.
ENTERED this 23rd day of October, 2014.
JUSTICE JOHN D. MINTO , J
6