Comprehensive Women's Health Services v. Grube, T.

J-A26021-14
NON-PRECEDENTIAL DECISION - SEE SUPERIOR COURT I.O.P. 65.37
COMPREHENSIVE WOMEN’S HEALTH IN THE SUPERIOR COURT OF
SERVICES, P.C. PENNSYLVANIA
Appellant
v.
TIMOTHY G. GRUBE, D.O.
Appellee No. 268 MDA 2014
Appeal from the Order Entered January 31, 2014
In the Court of Common Pleas of Schuylkill County
Civil Division at No(s): S-22-2014
BEFORE: BOWES, J., MUNDY, J., and JENKINS, J.
MEMORANDUM BY MUNDY, J.: FILED DECEMBER 17, 2014
Appellant, Comprehensive Women’s Health Services, P.C. (the
Corporation), appeals from the January 31, 2014 order denying its motion
for preliminary injunction against Appellee, Timothy G. Grube, D.O. (Dr.
Grube), as a remedy for his breach of the parties’ employment contract.1
After careful review, we affirm.
The trial court summarized the factual history of this case as follows.
[Dr. Grube] is employed as a doctor with [the
Corporation] since July of 2000. The Corporation
was formed by [Robert M. Zimmerman, Jr., D.O. (Dr.
Zimmerman)] on May 21, 1993. The Corporation
employs two other obstetricians/gynecologists and
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1
Pennsylvania Rule of Appellate Procedure 311(a)(4) provides that “[a]n
order that grants or denies … an injunction,” is subject to an appeal as of
right. Pa.R.A.P. 311(a)(4).
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they are [Dr. Zimmerman] and David P. Krewson,
D.O. (“Dr. Krewson”). Dr. Grube was employed as
an associate with the Corporation from July 2000 to
2004.
Sometime in 2004[,] Dr. Zimmerman, Dr.
Krewson, and Dr. Grube (collectively “the doctors”)
began to look for a larger building to serve the
expanding business of the Corporation. The doctors
also agreed in 2004 that Dr. Grube would be a
shareholder in the Corporation and a one-third
owner of ZKG Realty. ZKG Realty was a limited
liability company that was formed by the doctors on
August 31, 2004 to purchase the real estate and
lease it to the Corporation. On May 17, 2005, ZKG
Realty purchased a property known as 171 Red
Horse Road, Pottsville, Pennsylvania. When ZKG
purchased the property[,] the doctors borrowed
approximately 2.9 million dollars for the acquisition
of the building and for renovations to the building.
The mortgage on the new building was for 20 years
and each doctor had to execute personal guarantees.
The doctors also entered into an employment
agreement dated January 1, 2005[,] that outlined
the terms of each doctor’s employment with the
Corporation. The employment agreement contained
a restrictive covenant in paragraph 10(a) and
10(b)[,] which prohibited any doctor from opening a
competing obstetric or gynecological practice within
15 miles of the Corporation for 3 years. The
restrictive covenant also prohibited any of the
doctors from soliciting patients of the Corporation
and from inducing employees of the Corporation
from leaving employment with the Corporation.
Paragraph 10(b) of the restrictive covenant also
provided that if an employee does not comply with
the conditions contained in this sub-paragraph 10(b),
then [the] employee shall not be entitled to receive
deferred compensation pursuant to paragraph 9, and
[the] employee shall return to the Corporation any
amount of deferred compensation paid to the
employee. [The] Corporation’s right not to pay or to
discontinue payment of deferred compensation
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pursuant to this sub-paragraph 10(a), and to receive
back from [the] employee any deferred
compensation paid pursuant to paragraph 9, shall be
[the] Corporation’s sole remedy for [the] employee’s
failure to comply with all the conditions contained in
this sub-paragraph 10(a).
On or about August 19, 2013, Dr. Grube gave
written notice pursuant to paragraph 3(b) of the
employment agreement that he would be resigning
from the Corporation effective July 1, 2014. Several
weeks after his written resignation, Dr. Grube orally
informed Dr. Zimmerman and Dr. Krewson that his
last day of work with the Corporation would be
December 31, 2013. Dr. Grube was aware that his
employment agreement had a restrictive covenant
and it prohibited him from practicing within 15 miles
of the Corporation for 3 years.
Dr. Grube purchased an office building at 219
South Balliet Street, Frackville, Pennsylvania, and
Dr. Grube testified that he planned to open a new
business[,] Grube Gynecology[,] at that address.
The proposed office of Grube Gynecology at 219
South Balliet Street, Frackville, Pennsylvania, is
approximately 10 to 12 miles from the Corporation’s
office and the Pottsville Hospital and would be in
violation of the restrictive covenant that prohibits a
practice within 15 miles. Dr. Grube has promised
employment to at least 3 employees who were
employed by the Corporation. In January 2014,
after leaving his employment with the Corporation,
Dr. Grube placed advertisements for current and
future patients for Grube Gynecology both online and
in the Pottsville Republican newspaper. []
Trial Court Opinion, 4/2/14, at 2-4.
On January 7, 2014, the Corporation filed a complaint, seeking an
injunction against Dr. Grube for breach of contract and breach of fiduciary
duty. Contemporaneously, the Corporation filed a motion for a preliminary
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injunction, “which enforces the restrictive covenant in the [e]mployment
[c]ontract between [t]he Corporation and [Dr. Grube] … for a period of three
years, but at the very least, until July 1, 2014….” The trial court conducted
a hearing on the motion for preliminary injunction on January 14, 2014. On
January 31, 2014, the trial court entered an order denying the Corporation’s
motion for preliminary injunction, together with an opinion containing its
findings of fact and legal conclusions. The Corporation filed a timely notice
of appeal on February 7, 2014.2
On appeal, the Corporation raises the following issues for our review.
A. Did the trial court commit an abuse of
discretion by finding that [Dr.] Grube’s failure
to abide by the notice provision of his
employment contract did not immediately and
irreparably harm the [C]orporation?
B. Did the trial court commit an abuse of
discretion by not enjoing [sic] [Dr.] Grube’s
unlawful competition despite finding that the
[C]orporation proved all elements required for
a preliminary injunction?
C. [Did t]he trial court commit[] an abuse of
discretion (1) by finding the employment
agreement clear and unambiguous when both
[the Corporation] and [Dr. Grube] offered
reasonable, contradictory readings of the
employment agreement, which rendered the
employment agreement ambiguous, thus
allowing [the Corporation] to introduce parol
evidence to prove the employment
agreement’s terms and meanings and (2) by
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2
The Corporation and the trial court have complied with Pennsylvania Rule
of Appellate Procedure 1925.
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ignoring the ample extrinsic evidence offered
by [the Corporation] to prove the existence of
a valid restrictive covenant, which was the
most reasonable, probable and natural reading
of the employement [sic] agreement, and,
therefore, is the preferred reading under
Pennsylvania law[?]
Corporation’s Brief at 4.
Our standard of review of a challenge to a trial court’s order refusing a
preliminary injunction is well settled.
[O]n an appeal from the grant or denial of a
preliminary injunction, we do not inquire into the
merits of the controversy, but only examine the
record to determine if there were any apparently
reasonable grounds for the action of the court below.
Only if it is plain that no grounds exist to support the
decree or that the rule of law relied upon was
palpably erroneous or misapplied will we interfere
with the decision of the Chancellor.
Brayman Constr. Corp. v. Com., Dep’t of Transp., 13 A.3d 925, 935-
936 (Pa. 2011) (citations omitted). “The standard of review applicable to
preliminary injunction matters … is highly deferential.” 3 Duquesne Light
____________________________________________
3
Our level of deference is further dependent on the nature of the
preliminary injunction sought.
An injunction can be either preventative or
mandatory in nature. While the purpose of all
injunctions is to preserve the status quo, prohibitory
injunctions do this by forbidding an act or acts while
mandatory injunctions command the performance of
some specific act that will maintain the relationship
between the parties. Thus, preventative injunctions
maintain the present status of the parties to the
litigation by barring any action until the litigants’
(Footnote Continued Next Page)
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Co. v. Longue Vue Club, 63 A.3d 270, 275 (Pa. Super. 2013) (citation
omitted), appeal denied, 77 A.3d 1260 (Pa. 2013). “The purpose of a
preliminary injunction is to prevent irreparable injury or gross injustice by
preserving the status quo as it exists or as it previously existed before the
acts complained of in the complaint.” Ambrogi v. Reber, 932 A.2d 969,
974 (Pa. Super. 2007) (citation omitted), appeal denied, 952 A.2d 673 (Pa.
2008). “Any preliminary injunction is an extraordinary, interim remedy that
should not be issued unless the moving party’s right to relief is clear and the
wrong to be remedied is manifest.” Id.In ruling on a preliminary injunction request, a
trial court has “apparently reasonable grounds” for
its denial of relief where it properly finds that any
one of the following “essential prerequisites” for a
preliminary injunction is not satisfied. “For a
preliminary injunction to issue, every one of the [ ]
prerequisites must be established; if the petitioner
fails to establish any one of them, there is no need
to address the others.” First, a party seeking a
preliminary injunction must show that an injunction
is necessary to prevent immediate and irreparable
harm that cannot be adequately compensated by
damages. Second, the party must show that greater
injury would result from refusing an injunction than
_______________________
(Footnote Continued)
rights are adjudicated on the merits. Mandatory
injunctions require the performance of a positive
action to preserve the status quo, are subject to
greater scrutiny, and must be issued more cautiously
than preventative injunctions.
Shepherd v. Pittsburgh Glass Works, LLC, 25 A.3d 1233, 1241 (Pa.
Super. 2011) (internal quotation marks and citations omitted). The
preliminary injunction sought by the Corporation in this case is prohibitory.
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from granting it, and, concomitantly, that issuance of
an injunction will not substantially harm other
interested parties in the proceedings. Third, the
party must show that a preliminary injunction will
properly restore the parties to their status as it
existed immediately prior to the alleged wrongful
conduct. Fourth, the party seeking an injunction
must show that the activity it seeks to restrain is
actionable, that its right to relief is clear, and that
the wrong is manifest, or, in other words, must show
that it is likely to prevail on the merits. Fifth, the
party must show that the injunction it seeks is
reasonably suited to abate the offending activity.
Sixth and finally, the party seeking an injunction
must show that a preliminary injunction will not
adversely affect the public interest.
Eckman v. Erie Ins. Exch., 21 A.3d 1203, 1206-1207 (Pa. Super. 2011)
(emphases omitted), quoting Summit Towne Ctr., Inc. v. Shoe Show of
Rocky Mount, Inc., 828 A.2d 995, 1000–1001 (Pa. 2003) (citations and
footnote omitted, quotation marks in original).
With these standards in mind, we turn to the issues raised by the
Corporation in this appeal. In its complaint and motion for preliminary
injunction, the Corporation averred Dr. Grube was in violation of the
employment agreement in two basic respects, from which it suffered
irreparable injury. Motion for Preliminary Injunction, 1/7/14, at 1-3. It first
averred Dr. Grube was in violation of the section 3(b) notice requirement of
his intent to terminate his employment. Complaint, 1/7/14, at 8, ¶¶ 41, 42.
It next averred Dr. Grube violated the section 10 restrictive covenants by
poaching employees and patients, and by establishing a competing practice
within the proscribed temporal and geographical constrictions defined by the
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covenant. Id. at 8, ¶¶ 43, 44. The Corporation’s first issue on appeal faults
the trial court’s determination that, relative to the former alleged breach, it
did not establish the above-cited first enumerated prerequisite to a grant of
a preliminary injunction, to wit, “that an injunction is necessary to prevent
immediate and irreparable harm that cannot be adequately compensated by
damages.” Eckman, supra at 1207; see also Corporation’s Brief at 15-16.
The notice provision at issue provides as follows.
Either party shall have the right to terminate this
Agreement for any reason or no reason upon prior
written notice to the other, as provided in this
subparagraph (b). … Employee shall have the right
to terminate this Agreement for any reason or no
reason upon prior written notice to Corporation not
later than September 1st of any year for such
termination to be effective on July 1st of the
succeeding year.
N.T., 1/14/14, at 164, Plaintiff’s Exhibit 6, Employment Agreement at 2, ¶
3(b).
The Corporation notes, “[a]s found by the trial court, the undisputed
evidence is that the notice provision was in place for the protection of the
Corporation in the event a doctor needed to be recruited and trained to
replace a departing doctor.” Corporation’s Brief at 16; see also Trial Court
Opinion, 1/31/14, at 9. Relative to this protective purpose, the trial court
found that the Corporation “began negotiating With Dr. Chen in November
2013[,] and she started working with the Corporation on January 2, 2014.
Dr. Chen is a Board Certified obstetrician and gynecologist and will perform
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the same duties that Dr. Grube performed.” Trial Court Opinion, 1/31/14, at
9. “Here, the Corporation was able to hire a new doctor relatively quickly.
The violation of paragraph 3(b) does not justify the granting of a preliminary
injunction as requested by the Corporation until July 1, 2014.” Id.
The Corporation asserts this reasoning was error.
Anticipating a reasserted argument that the
Corporation has hired a doctor to replace [Dr.]
Grube, it is illogical to argue that a new OB/GYN, no
matter how intelligent and dedicate[d], can replace[]
a tenured doctor familiar with the Corporation’s staff,
functions, patients, hospital privileges, etc.[] Time is
required to help hedge the harm of a departing
employee, the exact reason the Corporation
bargained for nine months to replace [Dr.] Grube.
Corporation’s Brief at 18. The Corporation further surmises “the trial court
reasoned that the facts put for [sic] by the Corporation did not satisfy the
first elements of a preliminary injunction: immediate and irreparable harm.”
Id. at 15. We disagree. Rather, we conclude the trial court’s analysis
relates to the above-cited fifth prerequisite showing, “that the injunction it
seeks is reasonably suited to abate the offending activity.” See Eckman,
supra.Instantly, the Corporation has not demonstrated how the imposition of
a preliminary injunction, prohibiting Dr. Grube from engaging in activity
violative of the section 10 restrictive covenant, will mitigate the difficulties
encountered by the Corporation in preparing Dr. Chen to be fully productive
within the practice of the Corporation. As noted, the requirement of a nine-
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month termination notice was intended to afford the Corporation time to find
and train a replacement for a departing employee. Normally, attendant to
that process would be the continued service of the departing employee to
aid in that transition. While Dr. Grube’s premature departure arguably made
that transition more difficult, the preliminary injunction sought would not
require Dr. Grube to resume his employment. Thus, a preliminary injunction
in this case would not accelerate Dr. Chen’s full integration into the practice
or otherwise ameliorate the effect of Dr. Grube’s early departure. Thus, we
conclude the trial court possessed “reasonable grounds” for its denial of the
Corporation’s motion for a preliminary injunction based on Dr. Grube’s
breach of the employment agreement’s notice provision. See Brayman
Constr. Corp., supra.
The Corporation argues that Dr. Grube “did not just leave early,” but
also “stole employees, patients and used his time outside the office to get
together a competing corporation.” Corporation’s Brief at 18. This
argument pertains to the Corporation’s claim that a preliminary injunction
against Dr. Grube was warranted for his breach of the employment
contract’s restrictive covenant, which we address infra.
Thus, we next address the Corporation’s second and third issues
together, which both allege the trial court erred in refusing to grant a
preliminary injunction on the basis of Dr. Grube’s violation of the restrictive
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covenant in section 10 of the employment agreement.4 That section
provides as follows.
10. Restrictive Covenant.
(a) While an employee of Corporation,
and for a period of three (3) years after the
termination of Employee’s employment by
Corporation for any reason or no reason and so long
as Corporation shall Continue to employ physicians
for the practice of medicine, Employee shall not
directly or indirectly induce or attempt to influence
any employee of Corporation to terminate his or her
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4
Our Courts have recognized the enforceability of restrictive covenants.
Restrictive covenants, of which non-disclosure and
non-competition covenants are the most frequently
utilized, are commonly relied upon by employers to
shield their protectable business interests. The non-
disclosure covenant limits the dissemination of
proprietary information by a former employee, while
the non-competition covenant precludes the former
employee from competing with his prior employer for
a specified period of time and within a precise
geographic area. In Pennsylvania, restrictive
covenants are enforceable if they are incident to an
employment relationship between the parties; the
restrictions imposed by the covenant are reasonably
necessary for the protection of the employer; and
the restrictions imposed are reasonably limited in
duration and geographic extent. Our law permits
equitable enforcement of employee covenants not to
compete only so far as reasonably necessary for the
protection of the employer. However, restrictive
covenants are not favored in Pennsylvania and have
been historically viewed as a trade restraint that
prevents a former employee from earning a living.
Shepherd, supra at 1244 (Pa. Super. 2011) (citation omitted). The
validity of the restrictive covenant at issue in this case is not challenged.
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employment with Corporation and shall not engage
in (as a principal, partner, director, officer, agent,
employee, consultant or otherwise) or be financially
interested in any medical practice offering obstetric
or gynecologic cart within fifteen (15) miles of any
office of Corporation existing on such date or any
hospitals at which any employees of Corporation
have staff privileges at the time of termination of
Employee’s employment (the “Restricted Area”). In
addition, Employee shall resign all privileges at any
hospital at, which the Corporation then maintains a
practice and shall not reapply for such privileges for
a period of three (3) years after the termination of
Employee’s employment. Employee acknowledges
that the restrictions contained in this subparagraph
10(a), in view of the nature of the practice in which
Corporation is engaged, are reasonable and
necessary in order to protect the legitimate interests
of Corporation and Employee will not challenge such
restrictions in any court or administrative
proceeding. If Employee does not comply with the
conditions contained in this subparagraph 10(a),
then Employee shall not be entitled to receive
deferred compensation pursuant to Paragraph 9, and
Employee promptly shall return to Corporation any
amount of deferred compensation paid to Employee.
Corporation’s right not to pay, or to discontinue
payment of, deferred compensation pursuant to this
subparagraph 10(a), and to receive back from
Employee any deferred compensation paid pursuant
to Paragraph 9, shall be Corporation’s sole
remedy for Employee’s failure to comply with
all of the conditions contained in this
subparagraph 10(a).
(b) Employee acknowledges that all
patients are patients of Corporation and that all
patient charts, lists, records and information are the
sole and exclusive property of Corporation. Upon the
termination of Employee’s employment for any
reason or no reason, Employee agrees not to initiate
contact or to solicit any patients of Corporation and
agrees that all such charts, lists, records and
information shall remain the sole and confidential
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property of Corporation. Employee acknowledges
that the restrictions contained in this subparagraph
10(b), in view of the nature of the practice in which
Corporation is engaged, are reasonable and
necessary in order to protect the legitimate interests
of Corporation and Employee will not challenge such
restrictions in any court or administrative
proceeding, If Employee does not comply with the
conditions contained in this subparagraph 10(b),
then Employee shall not be entitled to receive
deferred compensation pursuant to Paragraph 9, and
Employee promptly shall return to Corporation any
amount of deferred compensation paid to Employee.
Corporation’s right not to pay, or to discontinue
payment of, deferred compensation pursuant to this
subparagraph 10(a)[sic], and to receive back from
Employee any deferred compensation paid pursuant
to Paragraph 9, shall be Corporation’s sole
remedy for Employee’s failure to comply with
all of the conditions contained in this
subparagraph 10(a)[sic].
N.T., 1/14/14, at 164, Plaintiff’s Exhibit 6, Employment Agreement at 10-11,
¶¶ 10(a), 10(b) (emphasis added). As referenced in paragraph 10,
Paragraph 9 of the employment agreement describes an employee’s
eligibility to receive deferred compensation in pertinent part as follows.
9. Deferred Compensation Under Certain
Circumstances. Employee shall receive deferred
compensation, subject to the limitation contained in
subparagraph 9(g), as hereinafter provided:
…
(b) Deferred Compensation in the Event
of Termination of Employment by Employee. In the
event that
(1) Employee ceases to be
employed by Corporation for any reason other than
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(A) for Cause pursuant to the provisions of
Paragraph 8 hereof; (B) death; or (C) disability; and
(2) Employee has provided notice
of termination in accordance with the terms of
subparagraph 3(b) hereof, except as otherwise
provided in subparagraph 9(b)(5), and or more, and
(3) Employee has been employed
by Corporation for twenty (20) years
(4) Employee complies with the
restrictions set forth in Paragraph 10 hereof, then
Employee shall be entitled to deferred compensation
in an amount equal to the Salary Continuation
Amount. Such deferred compensation shall be
payable in accordance with the provisions of
subparagraph 9(d) hereof.
Id. at 7, ¶ 9(b).
Based on the evidence adduced at the January 14, 2014 hearing and
the terms of the parties’ employment agreement, the trial court determined
as follows.
The [trial] court found that Dr. Grube violated
the restrictive covenant in the employment
agreement by opening a competing gynecological
business within 15 miles of the Corporation,
influencing employees of the Corporation to
terminate their employment with the Corporation
and soliciting patients of the Corporation. However,
the [trial] court denied the [Corporation’s] request
for a preliminary injunction because the employment
agreement clearly stated that the Corporation’s sole
remedy for [Dr. Grube’s] failure to comply with the
restrictive covenant was to not pay or to discontinue
payment of deferred compensation. The [trial] court
determined that the language of the employment
agreement was unambiguous and therefore the
[Corporation] was not likely to succeed on the
merits.
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Trial Court Opinion, 4/2/14, at 4. Thus, the trial court’s determination,
relative to Dr. Grube’s violation of the restrictive covenant in the
employment agreement, is premised on the Corporation’s failure to establish
that it is “likely to prevail on the merits,” the above-cited fourth prerequisite
to a grant of a preliminary injunction. See Eckman, supra.The Corporation argues that the trial court’s finding that Dr. Grube was
in violation of the restrictive covenant was all that was required to satisfy
this showing. The Corporation argues that given the clear finding that Dr.
Grube was in breach of the restrictive covenant, “it is not a matter of if, but
a matter of when the Corporation will prevail on the merits.” The
Corporation’s Brief at 22. We disagree.
The relief sought in the Corporation’s complaint is an injunction.
Complaint, 1/7/14, at 11. The requirement that a party seeking a
preliminary injunction must first demonstrate a likelihood it will prevail
includes a showing “that the activity it seeks to restrain is actionable, that
its right to relief is clear, and that the wrong is manifest.” Eckman,
supra (emphasis added). Therefore, it is not enough to establish that Dr.
Grube is in breach of the employment agreement if the right to the relief
sought is not clear. Accordingly, we discern no abuse of discretion in the
trial court’s determination that the Corporation did not establish a likelihood
it will prevail on the merits based solely on the fact that Dr. Grube was in
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breach of the restrictive covenant imposed by the employment agreement.
See Id.
This leads us to the Corporation’s final issue, alleging the trial court
erred as a matter of law in its interpretation of the parties’ employment
agreement. Corporation’s Brief at 22. Specifically, the Corporation contends
the trial court failed to construe sections 9 and 10 of the employment
agreement together to avoid an unreasonable interpretation. Id. at 25-26.
Alternatively, the Corporation argues, “[b]ecause the Employment
Agreement was ambiguous, the trial court abused its discretion by not
considering the parol evidence introduced by the Corporation to explain the
terms of the Employment Agreement.”5 Id. at 26.
The interpretation of any contract is a question of
law and this Court’s scope of review is plenary.
Moreover, we need not defer to the conclusions of
the trial court and are free to draw our own
inferences. In interpreting a contract, the ultimate
goal is to ascertain and give effect to the intent of
the parties as reasonably manifested by the
language of their written agreement. When
construing agreements involving clear and
unambiguous terms, this Court need only examine
the writing itself to give effect to the parties’
understanding. This Court must construe the
contract only as written and may not modify the
plain meaning under the guise of interpretation.
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5
The trial court permitted the parties to present parol evidence of their
intent with respect to the provisions of the employment agreement in
question, but ultimately did not consider that testimony in light of its
conclusion that the agreement was not ambiguous. See generally N.T.,
1/14/14.
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Sw. Energy Prod. Co. v. Forest Res., LLC, 83 A.3d 177, 187 (Pa. Super.
2013), quoting, Humberston v. Chevron U.S.A., Inc., 75 A.3d 504, 509–
510 (Pa. Super. 2013) appeal denied, 96 A.3d 1029 (Pa. 2014). “If left
undefined, the words of a contract are to be given their ordinary meaning.”
Lenau v. CoeXprise, Inc., --- A.3d ---, 2014 WL 4696215, *5 (Pa. Super.
2014) (citation omitted).
When, however, an ambiguity exists, parol evidence
is admissible to explain or clarify or resolve the
ambiguity, irrespective of whether the ambiguity is
patent, created by the language of the instrument,
or latent, created by extrinsic or collateral
circumstances.
With specific reference to what constitutes
“ambiguity” in the context of contract interpretation,
our Supreme Court has opined as follows:
Contractual language is ambiguous if it is reasonably
susceptible of different constructions and capable of
being understood in more than one sense. This is
not a question to be resolved in a vacuum. Rather,
contractual terms are ambiguous if they are subject
to more than one reasonable interpretation when
applied to a particular set of facts. We will not,
however, distort the meaning of the language or
resort to a strained contrivance in order to find an
ambiguity.
Additionally, it is axiomatic that contractual
clauses must be construed, whenever possible,
in a manner that effectuates all of the clauses
being considered. It is fundamental that one
part of a contract cannot be so interpreted as
to annul another part and that writings which
comprise an agreement must be interpreted as
a whole.
Id. (internal quotation marks and citations omitted).
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The Corporation argues that the last sentences of sections 10(a) and
10(b) of the employment agreement that define the Corporation’s “sole
remedy” for breach by an employee of the restrictive covenant, should be
read in context with section 9(b), which outlines the rights of an employee,
who terminates his or her employment, to deferred compensation.
Corporation’s Brief at 24-25. The Corporation argues that because an
employee is only eligible for deferred compensation under section 9(b)(3)
after 20 years of employment, the “sole” remedy clauses of section 10(a)
and 10(b) should be interpreted to apply only to employees with 20 years or
more of employment. Id. at 25
What the trial court found is that an employee of the
Corporation for less than 20 years has NO restrictive
covenant, while a tenured, over twenty-year
employee of the Corporation is slapped with a
restrictive covenant, penalized by the withholding of
deferred compensation. This meaning is entirely
unreasonable, makes no sense, and focuses solely
on the word “sole” while ignoring the interaction of
Paragraphs 9 and 10.
Id. at 26 (emphasis in original).
Thus, under the interpretation urged by the Corporation, an employee
in violation of section 10, who had less than 20 years of employment, would
be subject to a full range of enforcement or damage actions by the
Corporation, while an employee in violation of section 10, who had 20 years
or more of employment, would be subject only to loss of deferred
compensation as a consequence of the violation. The trial court rejected the
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Corporation’s position. “The [trial] court finds that it is the [Corporation’s]
interpretation of the employment agreement that is nonsensical.” Trial
Court Opinion, 4/2/14, at 11.
Contrary to [the Corporation’s] argument, however,
[the trial] court did not find that the restrictive
covenant only applies after twenty years. The [trial]
court held that the employment agreement is
unambiguous that Dr. Grube had a restrictive
covenant. The [trial] court also held that the
employment agreement clearly and unambiguously
stated what the Corporation’s remedy is if Dr. Grube
violated the restrictive covenant. The Corporation’s
sole remedy is that Dr. Grube is not entitled to
deferred compensation.
Id. at 5.
We agree with the trial court that section 10 of the employment
agreement is clear and unambiguous in providing a sole remedy to the
Corporation for an employee’s violation of the restrictive covenant. The
Corporation’s interpretation requires the clause “sole remedy” to be qualified
according to unspecified classes of employees in a manner at odds with the
plain meaning of the language employed. See Lenau, supra. That the
Corporation is unsatisfied with the perceived inadequacy of its remedy is not
a ground to find an ambiguity.
The fact that parties to a contract disagree upon its
proper interpretation does not necessarily render the
writing ambiguous. [R]esort to the plain meaning of
language hinders parties dissatisfied with their
agreement from creating a myth as to the true
meaning of the agreement through subsequently
exposed extrinsic evidence…. In holding that an
ambiguity is present in an agreement, a court must
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J-A26021-14
not rely upon a strained contrivancy to establish
one; scarcely an agreement could be conceived that
might not be unreasonably contrived into the
appearance of ambiguity.
Halpin v. LaSalle Univ., 639 A.2d 37, 39 (Pa. Super. 1994) (internal
quotation marks and citations omitted), appeal denied, 668 A.2d 1133 (Pa.
1995). We therefore conclude that the trial court had “reasonable grounds”
to deny the Corporation’s motion for a preliminary injunction on the basis of
Dr. Grube’s breach of the employment agreement’s restrictive covenant.
See Brayman Const. Corp., supra.
Based on the foregoing, we conclude the trial court did not abuse its
discretion or commit an error of law in denying the Corporation’s motion for
preliminary injunction. Because reasonable grounds exist for said denial, we
affirm the trial court’s January 31, 2014 order.
Order affirmed.
Judgment Entered.
Joseph D. Seletyn, Esq.
Prothonotary
Date: 12/17/2014
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