Maternal-Fetal Med. Assocs. of Md., LLC v. Stanley-Christian (Summary)

CONTRACT BREACH/COVENANT NOT TO COMPETE

Maternal-Fetal Med. Assocs. of Md., LLC v. Stanley-Christian, No. 0967 (Md. Ct. Spec. App. July 24, 2013)

The Court of Special Appeals of Maryland affirmed in part and vacated in part a lower court’s judgment, finding that the medical practice group has no contractual right to recover attorney’s fees and costs. A physician and her former employer, the medical practice group, both brought suit against each other. The former alleged: (1) fraud in the inducement; (2) breach of contract and duty of good faith and fair dealing; (3) tortious interference with contract or prospective business advantage; (4) wrongful termination (constructive discharge); and seeking (5) a declaratory judgment as to whether or not the non-competition provision was enforceable. The latter counter-claimed, asserting that the physician had breached the non-competition provision of her employment contract by working for her new employer.

The court found that the lower court’s granting of summary judgment in favor of the medical practice group did not bar the physician from later being able to assert that she did not materially breach the non-competition provision or that the medical practice group had breached other provisions of the contract. Furthermore, upon considering the medical practice group’s expert testimony, the court found that the lower court did not abuse its discretion in giving the instruction or permitting closing argument on the question of the medical practice group’s breach.

The court considered the physician’s evidence that indicated that the medical practice group rarely treated indigent, uninsured patients, which were the only patients treated by her new employers. Using this evidence, the court found that the lower court did not abuse its discretion in allowing the physician to claim that she had not materially breached her employment agreement by working for her new employer. Looking at the provision in the employment agreement that states the covenant not to compete, the court applied them to the facts of the case, and found that neither party was entitled to a contractual award of attorney’s fees and costs.  The court reasoned that the medical practice group failed in its attempt to enforce the non-competition provision and the physician was in breach of her obligation to reimburse the medical practice group for her pre-paid malpractice premium, per the contract.

The court concluded that the non-competition provision was reasonable on its face. Further, the geographical scope of the non-competition provision, twenty miles, is limited, and its duration, two years, is not unreasonable. The court agreed with the lower court that the parties considered the “non-compete was necessary for the protection of the parties and of the business.”

The court also deemed appropriate the lower’s court granting of summary judgment in favor of the medical practice group on the physician’s constructive discharge claim. There was no evidence to generate a jury question as to whether the medical practice group deliberately caused or allowed the physician’s working conditions to become so intolerable that she was forced into an involuntary resignation.