HeartSouth, PLLC v. Boyd


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Docket Number: 2002-CA-01456-SCT
Linked Case(s): 2002-CA-01456-SCT

Supreme Court: Opinion Link
Opinion Date: 11-20-2003
Opinion Author: McRae, P.J.
Holding: Affirmed

Additional Case Information: Topic: Contract - Motion to dismiss - Exhibits - M.R.C.P. 10(c) - M.R.E. 408 - Conversion to summary judgment - Expiration of agreement - Employment at will doctrine - Covenant not to compete
Judge(s) Concurring: Smith, P.J., Waller, Easley, Carlson and Graves, JJ.
Non Participating Judge(s): Diaz, J.
Concurs in Result Only: Pittman, C.J., and Cobb, J.
Procedural History: Dismissal
Nature of the Case: CIVIL - CONTRACT

Trial Court: Date of Trial Judgment: 07-30-2002
Appealed from: Lamar County Chancery Court
Judge: Sebe Dale, Jr.
Disposition: Granted the Appellee's motion to dismiss.
Case Number: 2002-0157-GN-D

  Party Name: Attorney Name:  
Appellant: HeartSouth, PLLC f/k/a HubSouth Cardiology




EDMUND L. BRUNINI STEPHEN J. CARMODY



 

Appellee: Timothy Boyd, M.D. JAMES LAWTON ROBERTSON BRENDA CURRIE JONES  

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Topic: Contract - Motion to dismiss - Exhibits - M.R.C.P. 10(c) - M.R.E. 408 - Conversion to summary judgment - Expiration of agreement - Employment at will doctrine - Covenant not to compete

Summary of the Facts: HeartSouth, PLLC, f/k/a Hubsouth Cardiology, filed a complaint against Timothy Boyd, M.D., for damages, injunctive relief, and a declaratory judgment alleging that Dr. Boyd violated the terms of a physician employment agreement, specifically the covenant not to compete/not to solicit. Boyd filed a motion to dismiss which the court granted. HeartSouth appeals.

Summary of Opinion Analysis: Issue 1: Dismissal HeartSouth argues that the court erred by looking outside the complaint to other documents and evidence before ruling on the motion to dismiss. HeartSouth is in no position to complain since it submitted a total of ten exhibits with its two responses to the motion to dismiss. M.R.C.P. 10(c) provides that a copy of any written instrument which is an exhibit to a pleading is a part thereof for all purposes. Since the employment agreement was attached by HeartSouth as an exhibit to its pleading, the court was free to review the agreement in ruling on the motion to dismiss. HeartSouth also argues that the court must take as true the specific allegations made in the complaint that there is a valid and enforceable contract. However, the court is only obliged to take the factual allegations made in the complaint as true, not the legal allegations made in the complaint. Because the employment agreement which was presented to the court was not a valid enforceable contract as it had lapsed by its own terms without renewal over a year before the lawsuit was filed, the court did not err in granting the motion to dismiss. HeartSouth also argues that pursuant to M.R.E. 408, a letter from HeartSouth to Boyd regarding his decision to cease negotiations concerning a possible membership in HeartSouth was a compromise and/or settlement letter which should not have been admitted into evidence. As of the date of the letter, no controversy existed concerning Boyd's practice of medicine in violation of the covenant or in breach of contract. At best, the letter can be characterized as mere "puffing" in an attempt by HeartSouth to downplay the significance of Boyd leaving the cardiology practice. Issue 2: Summary judgment HeartSouth argues that if the court's ruling merely amounted to a dismissal on the basis of summary judgment, then the court erred by failing to follow the proper procedure for conversion of a Rule 12(b)(6) motion into a rule 56 motion for summary judgment. Because the court's order which granted Boyd's motion to dismiss was not error, this issue is without merit. Issue 3: Expiration of agreement HeartSouth argues that, since Boyd did not ask for a new contract and remained an employee of HeartSouth after the lapse of the one year specified in the employment agreement, he acquiesced to its renewal and his actions so create a binding employment contract. The general rule is the intention of the parties must be drawn from the words of the whole contract, and if, viewing the language used, it is clear and explicit, then the court must give effect to this contract unless it contravenes public policy. The contract language in this case clearly provides that the employment agreement is valid for one year of employment which ended on March 31, 2001. No renewal of this agreement was ever executed, and neither party claims that another written contract has been executed. HeartSouth argues that, since the "TERMINATION" clause of the agreement did not provide for termination upon the one year lapse, the agreement is still in force. If HeartSouth wanted to provide for automatic renewal upon lapse, then it should have included such language in its contract. In addition, the "Amendments" provision of the employment agreement specifically provides that the agreement constitutes the entire agreement of the parties and may not be changed orally, but only upon an amendment in writing signed by the parties. Since no ambiguity exists, by its own language the employment agreement had in fact lapsed one year before Boyd left HeartSouth and one year and sixteen days before HeartSouth filed its complaint for breach of contract. Since the employment agreement is not ambiguous, parol evidence as to oral modification or the creation of a contract with differing terms by implication, cannot be allowed. Issue 4: Employment at will HeartSouth argues that Boyd's actions created a contract between the parties and therefore subjects him to the terms of the original employment agreement. The employment at will doctrine provides that an employment contact at will may be terminated by either party with or without justification. HeartSouth's "implied contract" is contrary to the employment at will doctrine. If HeartSouth were allowed, through the use of parol evidence, to prove an "implied contract" and thereby seek damages for the breach of such contract, then employees could also get around the employment at will doctrine and sue their employers for breach of an "implied contract" for employment. Issue 5: Covenant not to compete HeartSouth argues that the covenant not to compete/not to solicit survived the lapse of the employment agreement. By its own terms, the covenant was deemed null and void if the agreement terminated by its own terms without physician being allowed to become a member of the clinic. Boyd never became a member of the clinic and the agreement lapsed; therefore the covenant is not valid and enforceable but is null and void.


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