Title: Clinch Valley Physicians, Inc. v. Garcia

State: virginia

Issuer: Virginia Supreme Court

Document:

414 S.E.2d 599 (1992)
CLINCH VALLEY PHYSICIANS, INC.
v.
Luis A. GARCIA, M.D.
Record No. 910811.

Supreme Court of Virginia.
February 28, 1992.
*600 W. Fain Rutherford, Roanoke (Kevin S. Blair, Joe M. Bowen, Tazewell, Woods, Rogers & Hazlegrove, Roanoke, Bowen & Bowen, Tazewell, on briefs), for appellant.
Thomas W. McCandlish, Richmond (Beverly W. Snukals, Mark B. Rhoads, Mezzullo & McCandlish, on brief), for appellee.
Present: CARRICO, C.J., STEPHENSON, WHITING, LACY, HASSELL and KEENAN, JJ., and POFF, Senior Justice.
WHITING, Justice.
In this appeal, we decide whether a noncompetition provision in a year-to-year employment contract applies upon its nonrenewal, as well as upon its termination for cause.
Clinch Valley Physicians, Inc. (CVP) is a professional corporation whose shareholders are physicians who practice in the Richlands area and are employed by CVP. Each physician was employed pursuant to a uniform contract drafted by CVP. In the latter part of 1984, CVP and its physician-employees, including Dr. Luis A. Garcia, agreed to CVP's amendment of the contract.
The following provisions of various articles of this amended contract are relevant to the issue:
The contracts were renewed annually until 1990. At that time, CVP, exercising its rights under Article 1 of the contract, notified its physician-employees that it would not renew their employment contracts, but offered continued employment under new contracts. Dr. Garcia was dissatisfied with CVP's offer and allowed his contract to lapse.
*601 Desiring to practice medicine in the Richlands area, Dr. Garcia filed a bill of complaint for declaratory judgment to determine whether the noncompetition provision in Article 16 applied to him. After CVP filed its answer, Dr. Garcia filed a motion for summary judgment.
Dr. Garcia contended, and the trial court agreed, that the noncompetition provision applied only upon an employee's termination for cause. On the other hand, CVP contended that the Article 16 prohibition of employee competition upon termination of this agreement "for any reason whatsoever" applied to nonrenewals of the contract, as well as to CVP's terminations for cause. CVP appeals the trial court's grant of Dr. Garcia's motion for summary judgment and dismissal of the suit.
First, we consider the principles that govern us in deciding the applicability of noncompetition provisions in an employment contract.
Linville v. Servisoft of Va., Inc., 211 Va. 53, 55, 174 S.E.2d 785, 786-87 (1970). In Linville, the issue turned on the scope, not the ambiguity, of the noncompetition provision.
But if a noncompetition provision in an employment contract "is unambiguous and capable of only one reasonable construction, we read it according to its plain meaning." Paramount Termite Control Co. v. Rector, 238 Va. 171, 174, 380 S.E.2d 922, 925 (1989). However, each contractual provision must be considered in the context of all other contractual provisions. See Clyborne v. McNeil, 201 Va. 765, 770, 113 S.E.2d 672, 676 (1960); Worrie v. Boze, 191 Va. 916, 924-25, 62 S.E.2d 876, 880 (1951). Accordingly, if one such provision, considered in the context of the other language used in the contract, is capable of more than one reasonable construction, it is ambiguous, and we will adopt that construction most favorable to the employee. Iowa Fuel & Minerals, Inc. v. Bd. of Regents, 471 N.W.2d 859, 863 (Iowa 1991). Cf. Paramount Termite Control Co., 238 Va. at 174, 380 S.E.2d  at 925.
Next, we examine the contract in the light of these principles. CVP seeks to extend the scope of its noncompetition provision to the nonrenewals of the employment contract. Consistent with Linville, we carefully examine and strictly construe the language of Article 16 in determining whether its scope encompasses CVP's nonrenewal of Dr. Garcia's contract. 211 Va. at 55, 174 S.E.2d  at 787.
Article 3 lists some of the various reasons for termination, but expressly provides that CVP's termination of "this contract for justifiable cause ... shall not be limited to any of the [listed causes]." (Emphasis added.) Article 16 makes the noncompetition provision applicable "[u]pon termination of this agreement, for any reasons whatsoever." (Emphasis added.) This modifying clause can be construed reasonably to refer only to CVP's broad reservation of a right to terminate for any justifiable cause or reason even though not listed in the contract.
Considering Article 16 in context with Articles 1, 3, and 4, we conclude that it can be read reasonably to apply only to those instances in which CVP has terminated an employee for cause. Even if this may not have been what CVP intended when it drafted this provision, we are limited to the language of the contract, strictly construed. Linville, 211 Va. at 55, 174 S.E.2d  at 786-87. If CVP, the scrivener of the contract, had intended to make the restrictive covenant applicable upon nonrenewal, it should have said so in explicit terms.
Because we conclude that the noncompetition provision is inapplicable to CVP's nonrenewal of the contract, we will affirm the judgment of the trial court.
Affirmed.