Appeal from the Order Entered February 24, 2014 In the Court of Common Pleas of Montour County Civil Division at No(s): 449-2013
BEFORE: BOWES, OTT, and STABILE, JJ.
Geisinger Clinic ("Geisinger") appeals from the February 24, 2014 order denying its request for a preliminary and permanent injunction. We reverse and remand for entry of an order consistent with this adjudication.
On December 3, 2013, Geisinger instituted this action seeking an injunction against its former employee, Dr. Mark M. Radziewicz, D.O. ("Dr. Radziewicz"). It averred the following in its complaint. On January 8, 1998, upon accepting employment at Geisinger, Dr. Radziewicz executed a practice agreement. The January 8, 1998 accord stated that Dr. Radziewicz accepted a position as an associate physician practicing family medicine for Penn State Geisinger Medical Group-Dallas of Penn State Geisinger Clinic commencing on July 1, 1998. Dr. Radziewicz agreed that "[a]cceptance of this position" constituted his understanding that, in the event that his employment was terminated, it was his "agreement to restrict my practice of medicine" and that he could practice in "an area outside of a 15 mile radius" from his principal site of practice. Complaint, 12/3/13, at Exhibit A p.1. The restriction lasted for two years following the end of the parties' employment relationship.
Dr. Radziewicz acknowledged that the restrictive covenant was necessitated by the fact that "considerable effort will be devoted [by] other Penn State Geisinger Clinic physicians and personnel in assisting me in the development and maintenance of my practice[.]" Id. Geisinger agreed to waive the covenant if Dr. Radziewicz paid either the greater of Dr. Radziewicz's annualized base salary or his total compensation during the year prior to his termination.
When the January 8, 1998 restrictive covenant was executed, Dr. Radziewicz planned to practice at the noted Dallas location. However, before commencing employment, his practice location was changed to Mountain Top, Luzerne County. Accordingly, on April 19, 1998, before he began to work for Geisinger, Dr. Radziewicz signed an addendum to the January 8, 1998 agreement. In the April 19, 1998 addendum, the restrictive covenant was altered to encompass an area that was within fifteen miles from Penn State Geisinger Health System's Mountain Top office. Dr. Radziewicz again stated that, by accepting his new position, he agreed to "restrict my practice of medicine" to outside the noted fifteen-mile radius and that the restriction applied for two years. Id. at Exhibit B. The addendum confirms that, "This restriction applies not only to an office I may seek to establish within the restricted area for my practice but to staff memberships and the exercise of clinical privileges at any health care facility" within the denoted area. Id.
Dr. Radziewicz practiced as a full-time physician from July 1, 1998 through June 22, 2012 at the Mountain Top practice site. Geisinger spent in excess of $67, 000 to promote and build Dr. Radziewicz's family practice at that location, and Dr. Radziewicz had access to Geisinger's marketing and strategic plan techniques. Geisinger trained Dr. Radziewicz in various areas. On June 22, 2012, Dr. Radziewicz separated from employment with Geisinger, and on June 26, 2012, Dr. Radziewicz became an employee of Advanced Inpatient Medicine, Inc. ("AIM"). On October 7, 2013, Dr. Radziewicz began to violate his restrictive covenant by starting to practice medicine with the fifteen-mile radius prohibited by the accord.
Hearings were held on the matter. Dr. Radziewicz reported that he worked for Geisinger as a primary care physician from 1998 until his termination on June 22, 2012. Dr. Radziewicz acknowledged executing the January 8, 1998 and April 19, 1998 documents as a condition for his initial hiring by Geisinger. Dr. Radziewicz also admitted that he was working for an AIM hospital approximately eight miles from where he formerly practiced for Geisinger in Mountain Top.
Dr. Radziewicz was asked whether, during his tenure at Geisinger, Geisinger "spent its resources promoting that clinic site and promoting and developing at that site, " and Dr. Radziewicz responded, "Correct." N.T. Hearing, 12/17/12, at 21-22. Dr. Radziewicz also did not dispute that Geisinger promoted him personally "in newspapers and advertisements, mailers to [its] patients" and that the advertising payments "came out of Geisinger's costs[.]" Id. at 22. The witness was asked if he was "the beneficiary of Geisinger's practices with respect to developing [his] clinical skill, chronic disease management, things like that, " and he again responded, "Correct." Id. at 23. He also was "privy to" and participated in "discussions regarding Geisinger's strategic development and strategic business plan[.]" Id.
When he separated from employment with Geisinger on June 22, 2012, Dr. Radziewicz began to work for AIM on June 26, 2012, at Wayne Memorial Hospital, Honesdale, Wayne County, which was not within the area covered by the April 19, 1998 restrictive covenant. Dr. Radziewicz worked there as a hospitalist, a doctor who cares for inpatients admitted to the hospital. A hospitalist operates as a primary care physician ("PCP") for inpatients in a hospital and treats patients who either do not have a PCP or whose PCP does not have privileges at the hospital in question. Id. at 52-53. Upon discharge, if the patient has a PCP, he is referred to that doctor, but a patient who has no PCP can be referred to a PCP suggested by the hospitalist.
On October 7, 2013, AIM transferred Dr. Radziewicz to Wilkes-Barre General Hospital in Wilkes-Barre, which, as Dr. Radziewicz admitted, was approximately eight miles away from Mountain Top. At that location, Dr. Radziewicz continued to work as a hospitalist. Dr. Radziewicz specifically agreed that he was not disputing that he may have seen Geisinger patients at Wilkes-Barre General Hospital, but he had no specific knowledge of having done so. Id. at 30, 56.
Geisinger also adduced the following unrebutted proof. None of Geisinger's PCPs has staff privileges at Wilkes-Barre General Hospital. Concomitantly, any Geisinger patient admitted to that hospital would have to use a hospitalist. A patient can be admitted through the emergency room, by a surgeon, or through referral by his or her PCP. While Dr. Radziewicz had no control over who is admitted to the hospital, another PCP in the area could be inclined to admit a patient based upon Dr. Radziewicz's general reputation in the community for being a good physician. Thus, if Dr. Radziewicz had a positive reputation, other PCPs would be more likely to refer their patients to Wilkes-Barre General Hospital rather than the nearby Geisinger hospital due to that status. Id. at 76. Geisinger submitted documentary proof that Dr. Radziewicz had treated a Geisinger patient at Wilkes-Barre General Hospital.
Additionally, the following was uncontested. Since 2000, Geisinger expended about $65, 000 promoting and marketing Dr. Radziewicz's practice. In addition, during his fourteen-year tenure at Geisinger, Geisinger developed Dr. Radziewicz's family practice skills. "The skills of systems of care that Geisinger" developed related to "transitions from inpatient to outpatient" and "organized delivery using the electronic health record for chronic disease and preventative care." Id. at 86. Geisinger is nationally known and recognized for methods that it has developed and which Dr. Radziewicz utilized at that institution. He gained knowledge of Geisinger's "delivery processes, the systems, the organization, the methods by which you deliver" the clinical skills learned in medical school and residency programs "in an organized setting taking advantage of the electronic health record and the group practice." Id. at 87.
Based on this evidence, on February 24, 2014, the trial court denied Geisinger's petition for a preliminary/permanent injunction. It concluded that Geisinger was not likely to prevail on the merits of its position that Dr. Radziewicz breached the restrictive covenant. It also found that there may be an adequate remedy at law in that Geisinger represented that it was pursuing an action at law for damages in Luzerne County. It also found that Dr. Radziewicz would suffer more harm than Geisinger since issuance of an injunction would result in a loss of his livelihood. This appeal followed denial of relief. Geisinger raises the following contention on appeal:
Whether the trial court abused its discretion in denying Geisinger Clinic's request for preliminary injunction where no reasonable grounds exist in the record to support the trial court's Order and the rule of law relied upon by the trial court was erroneous and misapplied?
Appellant's brief at 2.
A trial court's decision to grant or deny a preliminary injunction is reviewed under an abuse of discretion standard. Brayman Const. Corp. v. Com., Dept. of Transp., 13 A.3d 925 (Pa 2011). Specifically:
On 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.
Id. at 935-36 (citations omitted). A petition must establish the following six elements in order to obtain a preliminary injunction:
(1) relief is necessary to prevent immediate and irreparable harm that cannot be adequately compensated by money damages; (2) greater injury will occur from refusing to grant the injunction than from granting it; (3) the injunction will restore the parties to their status quo as it existed before the alleged wrongful conduct; (4) the petitioner is likely to prevail on the merits; (5) the injunction is reasonably suited to abate the offending activity; and (6) the public interest will not be harmed if the injunction is granted. See Summit Towne Ctr., Inc. v. Shoe Show of Rocky Mount, Inc., 573 Pa. 637, 646–47, 828 A.2d 995, 1001 (2003).
Id. at 935.
The trial court concluded that one, two, and four were not satisfied herein. We first address the trial court's finding that Geisinger would not suffer irreparable harm that could not be compensated through monetary damages absent issuance of the injunction. As we noted in Quaker City Engine Rebuilders, Inc. v. Toscano, 535 A.2d 1083, 1085 (Pa.Super. 1987) (quoting Bryant Co. v. Sling Testing and Repair, Inc., 369 A.2d 1164, 1167 (Pa. 1977):
It is not the initial breach of a covenant which necessarily establishes the existence of irreparable harm but rather the threat of the unbridled continuation of the violation and the resultant incalculable damage to the former employer's business ...