Duffner v. Alberty

718 S.W.2d 111 (1986)

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Nature Of The Case

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Facts

Ps were orthopedic surgeons who had been engaged in the practice of their profession in Fort Smith, Arkansas. D completed his residency training in orthopedic surgery in June of 1984, at a clinic in Temple, Texas, and afterwards determined to locate in Fort Smith and associate himself with Ps. Under the terms of the agreement, Ps agreed to pay all general expenses, and certain specific expenses listed in the agreement were to be paid by the physician who incurred them. Each physician was assigned a private office and paid rent to the Alberty-Wideman (Ps) partnership. Certain portions of the office and the medical equipment owned by the partnership were to be used in common, and the practice would be organized as an association of individual professional associations, but D would initially practice as a sole proprietorship. Call schedules would be shared equally. At the end of one year, D would arrange financing to buy his share of the equity in the furniture and equipment and would have an option to purchase an interest in the condominium offices. The agreement contained a covenant that should D desire to leave the group, he would not practice within a radius of thirty miles of the offices of Ps for a period of one year from the date of termination. D would be furnished rent and overhead at no expense for the first three months, at one-third the normal rate during the fourth month, and two-thirds that rate in the fifth month. D would begin paying his equal share beginning with the sixth month. There was no agreement to share income or new patients with D, and individual billings were made and collected for services rendered by each physician. Late in the spring of 1985, D joined another orthopedic clinic in the same building as Ps' offices were located. During the year, D treated 1207 patients, and during the first nine months of that association, his personal receipts were in excess of $300,000.00. D requested from Ps the files on twenty-eight patients, which he testified had been treated by him while the association continued, and were receiving follow-up medical attention only. The court found that D 'had access to the confidential patient files of Ps, had use of Ps' office furniture and equipment, and utilized for his own benefit the good professional reputation and goodwill of Ps.' The court held the restrictive covenant to be reasonable and that Ps had a valid and enforceable right to protect their substantial investment in their medical practice, and to protect their established medical clientele. The court entered an injunction enforcing the covenant. D appealed.

Issues

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Holding & Decision

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Legal Analysis

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