NOTICE: NOT FOR OFFICIAL PUBLICATION.

UNDER ARIZONA RULE OF THE SUPREME COURT 111(c), THIS DECISION IS NOT PRECEDENTIAL

AND MAY BE CITED ONLY AS AUTHORIZED BY RULE.

IN THE

ARIZONA COURT OF APPEALS

DIVISION ONE

JOHN J. SHUFELDT, MD, a married man,

Plaintiff/Appellant,

v.

NEXTCARE, INC., a Delaware corporation,

Defendant/Appellee.

No. 1 CA-CV 15-0327

Appeal from the Superior Court in Maricopa County

No. CV2012-014120

The Honorable Patricia A. Starr, Judge

AFFIRMED IN PART, VACATED IN PART AND REMANDED

COUNSEL

Jennings, Haug & Cunningham, L.L.P., Phoenix

By Mark E. Barker, Jorge Franco, Jr., Russell R. Yurk

Counsel for Plaintiff/Appellant

Sacks Tierney P.A., Scottsdale

By Matthew F. Winter

Counsel for Defendant/Appellee
SHUFELDT v. NEXTCARE

Decision of the Court

2

MEMORANDUM DECISION

Judge Samuel A. Thumma delivered the decision of the Court, in which 

Presiding Judge Patricia K. Norris and Judge Margaret H. Downie joined.

T H U M M A, Judge:

¶1 Plaintiff Dr. John J. Shufeldt appeals from the entry of 

summary judgment in favor of defendant NextCare, Inc. and the denial of 

his motion for reconsideration. Shufeldt argues: (1) a written 

noncompetition agreement between the parties is unenforceable and (2) if 

it is enforceable, there are genuine issues of material fact precluding 

summary judgment. As discussed below, the superior court properly 

determined that the noncompetition agreement was enforceable but

disputed issues of material fact exist that preclude summary judgment. 

Accordingly, summary judgment is vacated and this matter is remanded 

for further proceedings consistent with this decision.

FACTS1 AND PROCEDURAL HISTORY

¶2 NextCare owns and operates walk-in family practice 

medical clinics that specialize in urgent, accident and injury care. Shufeldt, 

a medical doctor, founded NextCare in 1993 and continuously served as 

NextCare’s chief executive officer and board chair until August 31, 2010. 

¶3 While at NextCare, Shufeldt and NextCare entered into 

various written agreements, including a 2005 employment agreement. In 

2008, to secure an investment in NextCare, the parties amended the 

employment agreement in a detailed, integrated agreement. In this 2008 

agreement, NextCare agreed to pay Shufeldt a $325,000 annual salary,

annual bonuses, benefits and expenses. Shufeldt agreed to various 

undertakings, including being bound by a noncompetition agreement (the 

Noncompetition Agreement).

 

1 This court reviews the entry of summary judgment de novo, “viewing 

the evidence and reasonable inferences in the light most favorable to”

Shufeldt. Andrews v. Blake, 205 Ariz. 236, 240 ¶ 12 (2003).
SHUFELDT v. NEXTCARE

Decision of the Court

3

¶4 In the Noncompetition Agreement, Shufeldt 

agree[d] that during my Relationship with 

[NextCare] and for a period of 12 months 

immediately following the termination of that 

Relationship, . . . I shall not, either directly or 

indirectly, . . . engage in any Competing 

Business within a 25 mile radius of any 

location where [NextCare] conducts business

or has conducted business (or has at any time 

actively explored conducting business) during 

the 24 months preceding my termination of my 

Relationship with [NextCare].

“Competing Business,” in turn, was defined to “mean any business 

involving the development, delivery or management of urgent care, 

family, workers’ compensation or occupational health-related, or 

emergency medical services (other than practicing medicine in an 

emergency department in a hospital).” The Noncompetition Agreement 

did not limit Shufeldt’s “ability to practice medicine personally as a 

treating physician so long as I do not practice medicine in, or have a role 

in the marketing, management, consulting or business planning for, or an 

ownership in, a Competing Business.”

¶5 In 2010, Shufeldt decided to resign from, and terminate his 

employment with, NextCare, although he remained a significant 

NextCare shareholder. In a written Separation Agreement effective 

August 31, 2010, NextCare agreed to pay Shufeldt $487,500 over an 18-

month period, an amount equal to his $325,000 annual salary for that time. 

In this Separation Agreement, Shufeldt agreed to be bound by the 

Noncompetition Agreement during this 18-month period, six months 

longer than he had agreed to in 2008. The Separation Agreement specified 

that any purported waiver of “any condition or of any breach of any term 

or covenant” would not be effective unless in writing. 

¶6 At about this same time, Shufeldt developed an Internetbased virtual medicine delivery platform called MeMD. At his deposition, 

Shufeldt testified he presented the MeMD concept to NextCare in 

September 2010 but that NextCare declined his invitation to partner in 

MeMD. Shufeldt testified he developed MeMD by partnering with an 

urgent care facility in Lake Havasu City, Arizona. Through MeMD, 

Shufeldt apparently began treating patients online in May 2011, many of 
SHUFELDT v. NEXTCARE

Decision of the Court

4

whom NextCare alleges lived within the geographic scope of the 

Noncompetition Agreement.

¶7 In late June 2011, NextCare wrote Shufeldt that it would not 

make the remaining monthly Separation Agreement payments (through 

February 2012 and totaling nearly $260,000). NextCare took the position 

that Shufeldt’s “involvement with MeMD and [Shufeldt’s] and MeMD’s 

activities constitute engagement in a ‘Competing Business’” in breach of

the Noncompetition Agreement contained in the Separation Agreement.

¶8 The Noncompetition Agreement expired on February 28, 

2012. In September 2012, Shufeldt filed this case alleging NextCare

breached the Separation Agreement in June 2011 by failing to make the 

monthly payments. Shufeldt alleged the Separation Agreement “expressly 

modified and extended” the Noncompetition Agreement, that NextCare 

materially breached by failing to pay Shufeldt and that, as a result,

Shufeldt had been damaged in the amount of nearly $260,000 plus 

attorneys’ fees and costs. NextCare’s answer stated Shufeldt breached “the 

Separation Agreement and the . . . Noncompetition Agreement by 

operating a competing enterprise during the terms of those respective 

agreements” and, tacitly asserting this constituted the first material 

breach, alleged NextCare “owes no further payments to” Shufeldt. 

¶9 After the completion of discovery, NextCare moved for 

summary judgment, claiming that by owning, controlling and treating 

patients through MeMD, Shufeldt engaged in a “Competing Business”

and breached the Separation Agreement and Noncompetition Agreement.

Shufeldt cross-moved for summary judgment, claiming the 

Noncompetition Agreement was unenforceable and severable from the 

Separation Agreement and that he was entitled to judgment as a matter of 

law. 

¶10 After full briefing, and waiver of oral argument, the superior 

court granted NextCare’s motion and denied Shufeldt’s motion. After 

rejecting as a matter of law Shufeldt’s argument that his presentation of 

the MeMD concept to NextCare in September 2010 resulted in a waiver of 

NextCare’s contractual rights, the court rejected Shufeldt’s argument that 

the Noncompetition Agreement was unenforceable:

The reasonableness of a restrictive covenant “is 

a fact-intensive inquiry that depends on the 

totality of the circumstances.” Valley Medical 

Specialists v. Farber, 194 Ariz. 363, 369, ¶ 20, 982 
SHUFELDT v. NEXTCARE

Decision of the Court

5

P.2d 1277, 1283 (1999). Moreover, “each case 

must be decided on its own unique facts.” Id. at 

¶ 21.

Here, the Court finds no financial 

hardship to Shufeldt, who was paid his salary 

during the time he was restricted from 

engaging in a competing business. Nor does 

the Court find an unequal bargaining position 

between Shufeldt, the founder and CEO of 

NextCare, and NextCare itself.

The Arizona Supreme Court has held 

that a restrictive covenant between a physician 

and his employer cannot be enforced when the 

employers’ “interest in enforcing the restriction 

is outweighed by the likely injury to patients 

and the public in general.” Farber, supra, at 372, 

¶ 33, 982 P.2d at 1286. Here, the Court finds 

that the noncompetition agreement had no 

effect on patient choice or the general 

availability of urgent care to the public, and 

thus resulted in no likely injury to patients or 

to the public in general.

Balancing all of the factors, the Court 

finds the noncompetition agreement in this 

case to be reasonable, and thus enforceable.

¶11 Shufeldt moved for reconsideration, claiming: (1) MeMD is 

not a “Competing Business;” (2) “whether NextCare committed the first 

material breach remains an issue of fact for the jury;” (3) a written waiver 

of the contractual terms by NextCare was not required, suggesting the 

issue of waiver created an issue of fact for the jury and (4) the 

Noncompetition Agreement is unenforceable. Finding “no circumstances 

warranting reconsideration in this case,” the court denied the motion

without a response. The court then entered final judgment awarding 
SHUFELDT v. NEXTCARE

Decision of the Court

6

NextCare attorneys’ fees and taxable costs. See Ariz. R. Civ. P. 54(c) 

(2016).2

¶12 This court has jurisdiction over Shufeldt’s timely appeal

pursuant to Arizona Revised Statutes (A.R.S.) §§ 12-120.21(A)(4) and -

2101(A)(1).

DISCUSSION

¶13 Summary judgment is proper “if the moving party shows 

that there is no genuine dispute as to any material fact and the moving 

party is entitled to judgment as a matter of law.” Ariz. R. Civ. P. 56(a). 

This court reviews the entry of summary judgment de novo, to determine 

“whether any genuine issues of material fact exist,” Brookover v. Roberts 

Enter., Inc., 215 Ariz. 52, 55 ¶ 8 (App. 2007), and will affirm summary 

judgment if it is correct for any reason, Hawkins v. State, 183 Ariz. 100, 103 

(App. 1995). Although reasonableness in determining the enforceability of 

a noncompetition agreement is a fact-intensive inquiry based on the 

totality of the circumstances, see Farber, 194 Ariz. at 366-67 ¶ 11, this court 

reviews de novo the entry of summary judgment.

I. The Noncompetition Agreement Is Enforceable.

¶14 Shufeldt argues the Noncompetition Agreement was 

unenforceable under Farber. NextCare argues Farber does not apply:

Farber and all of the other restrictive 

covenant cases involve restrictive covenants 

entered into as part of an employment 

agreement which were being enforced after 

termination of the employment without 

payment of additional, substantial sums to the 

former employee in consideration for 

compliance with that covenant. In contrast, the 

instant case involves a restrictive covenant 

incorporated into a separation agreement, and 

in consideration for compliance therewith, Dr. 

Shufeldt, was to receive his full salary during 

the term of the covenant. This is a glaring and 

 

2 Absent material revisions after the relevant dates, statutes and rules cited 

refer to the current version unless otherwise indicated.
SHUFELDT v. NEXTCARE

Decision of the Court

7

dispositive distinction from Farber and the 

other restrictive covenant cases.

At oral argument before this court, NextCare argued the enforceability of 

the Noncompetition Agreement is governed by general contract principles 

(not Farber). Because NextCare had shown offer, acceptance, consideration 

and certainty of terms, it argued the Noncompetition Agreement was 

enforceable without further inquiry. See K-Line Builders, Inc. v. First Federal 

Savings & Loan Ass’n, 139 Ariz. 209, 212 (App. 1983) (citing cases). 

¶15 As NextCare suggests, Farber is different from this case in 

significant substantive and procedural ways. First, in this case, the 

Noncompetition Agreement allowed Shufeldt to practice medicine in 

hospital emergency departments and non-Competing Businesses, while 

the covenant in Farber prohibited the doctor “from providing any and all 

forms of ‘medical care.’” 194 Ariz. at 369 ¶ 21. Second, in this case, the 

Noncompetition Agreement obligated NextCare to pay Shufeldt nearly 

$500,000 during the covenant after the termination of his employment (if 

Shufeldt did not first materially breach his obligations), while the 

covenant in Farber involved no post-employment compensation. 194 Ariz. 

at 364-65 ¶ 3. Third, Shufeldt filed this case seeking money damages after

the Noncompetition Agreement expired given the passage of time, while 

in Farber, the former employer sought to enjoin the doctor from practicing 

medicine during the noncompetition period. 194 Ariz. at 365-66 ¶¶ 3-4.

Unlike Farber, NextCare never sought to enjoin Shufeldt from practicing 

medicine in any respect. 

¶16 Notwithstanding these significant differences, NextCare has 

not shown the analysis in Farber does not apply here. These differences 

show that many of the concerns expressed in Farber about protecting the 

doctor-patient relationship are not present in this case. 194 Ariz. at 369 ¶ 

19. But NextCare has failed to show Farber is inapplicable. Accordingly, 

notwithstanding these significant differences, Farber provides the proper 

analytical framework for assessing the enforceability of the 

Noncompetition Agreement. 

¶17 In general, “a contract restricting the right of an employee to 

compete with an employer after termination of employment ‘which is not 

unreasonable in its limitations should be upheld in the absence of a 

showing of bad faith or of contravening public policy.’” Fearnow v. 

Ridenour, Swenson, Cleere & Evans, P.C., 213 Ariz. 24, 26 ¶ 8 (2006) (quoting 

Lassen v. Benton, 86 Ariz. 323, 328 (1959)). Because “the doctor-patient 

relationship is special and entitled to unique protection,” a 
SHUFELDT v. NEXTCARE

Decision of the Court

8

noncompetition agreement to which a physician is a party “will be strictly 

construed for reasonableness” based on “the totality of the 

circumstances.” Farber, 194 Ariz. at 369 ¶¶ 19, 20. “A restriction is 

unreasonable and thus will not be enforced: (1) if the restraint is greater 

than necessary to protect the employer’s legitimate interest; or (2) if that 

interest is outweighed by the hardship to the employee and the likely 

injury to the public.” Id. at 369 ¶ 20 (citations omitted). This 

“reasonableness inquiry” focuses on “the interests of the employer, 

employee, patients, and public in general,” recognizing that “no exact 

formula can be used” in balancing these competing interests. Id. (citations 

omitted).

¶18 “Balancing all of the factors,” the superior court concluded 

the Noncompetition Agreement was reasonable, noting: (1) there was no 

financial hardship to Shufeldt, “who was paid his salary during the time 

he was restricted from engaging in a competing business;” (2) there was 

no unequal bargaining power; and (3) “the noncompetition agreement 

had no effect on patient choice or the general availability of urgent care to 

the public, and thus resulted in no likely injury to patients or to the public 

in general.” Shufeldt claims this was reversible error.

¶19 Focusing on NextCare’s interests, it is not genuinely 

disputed that Shufeldt “was intimately familiar and involved with all of 

NextCare’s operations, strategies, policies, procedures and data.” Indeed, 

it appears undisputed that Shufeldt was an “inventor of the urgent care 

model and an expert in the field of urgent care business.” NextCare 

demonstrated it had a legitimate interest in restricting Shufeldt “from 

offering to any competing businesses his knowledge and expertise about 

the urgent care business gained during his tenure as the founder, owner, 

chairman and CEO” of NextCare. See Farber, 194 Ariz. at 370 ¶ 22. 

¶20 Shufeldt’s interest, at all times relevant here, was practicing 

emergency medicine, which the Noncompetition Agreement restricted, 

but did not preclude. Apart from the terms of the Noncompetition 

Agreement, NextCare never sought to enjoin Shufeldt from practicing 

medicine in any respect. And the Separation Agreement obligated 

NextCare to pay Shufeldt during the term of the Noncompetition 

Agreement, provided he complied with his contractual obligations. Thus, 

Shufeldt was restricted in, but not prohibited from, practicing emergency 

medicine and did not incur a financial hardship. Cf. Farber, 194 Ariz. at 371

¶ 27 (noting “restraint must be limited to the particular specialty”

involved).
SHUFELDT v. NEXTCARE

Decision of the Court

9

¶21 The Noncompetition Agreement restricted Shufeldt’s 

practice in an urgent care facility for 18-months within a 25-mile radius of 

any location where NextCare “conducts business or has conducted 

business (or has at any time actively explored conducting business) 

during the 24 months preceding” Shufeldt’s termination. Shufeldt argues

this restriction limited him from engaging in a “Competing Business” in 

the Phoenix or Tucson metropolitan areas. As noted above, however, 

unlike in Farber, NextCare agreed to compensate Shufeldt during this 18-

month period. Similarly, unlike in Farber, Shufeldt could practice medicine 

in hospital emergency departments (including “in a hospital emergency 

room”) and non-Competing Businesses. Cf. Farber, 194 Ariz. at 366 ¶6, 370

¶26, 372 ¶33 (holding noncompetition agreement precluding 

pulmonologist from practicing any type of medicine for three years and 

covering a five-mile radius of all medical centers unreasonable). These 

distinctions from Farber do not compel a finding that the geographic scope 

of the restriction required the Noncompetition Agreement to be stricken 

as unenforceable.3

¶22 Nor does patient choice or the general availability of urgent 

care mandate a finding the Noncompetition Agreement was 

unenforceable. NextCare did not seek injunctive relief prohibiting 

Shufeldt from practicing medicine. Moreover, although even an 

unenforced covenant not to compete could have a chilling impact on a 

doctor’s practice, there is no showing that occurred here. Indeed, before 

 

3 Although the geographic scope of a covenant not to compete is a factor, 

it is not dispositive. Compare Phoenix Orthopeadic Surgeons, Ltd v. Peairs, 164 

54, 60 (App. 1989) (rejecting challenge to covenant prohibiting conduct 

within a five-mile radius of former employer’s offices), overruled on other 

grounds by Farber, 194 Ariz. 363, with Farber, 194 Ariz. at 365, 371 (striking 

similar covenant); see also Compass Bank v. Hartley, 430 F. Supp. 2d 973, 980 

(D. Ariz. 2006) (rejecting, in issuing preliminary injunction, challenge to 

covenant prohibiting conduct within 25-mile radius of former employer’s 

offices) (applying Arizona law); Bed Mart, Inc. v. Kelley, 373 202 Ariz. 370, 

373-74 ¶¶17-18 (App. 2002) (rejecting challenge to covenant prohibiting 

conduct within 10-mile radius of former employer’s offices); Varsity Gold, 

Inc. v. Porzio, 202 Ariz. 355, 356 ¶ 4 (App. 2002) (striking covenant 

prohibiting conduct “‘in the State of Pennsylvania or any contiguous 

state’”); Gann v. Morris, 122 Ariz. 517, 518 (App. 1979) (rejecting challenge 

to covenant prohibiting conduct in “Tucson and a 100 mile radius of 

Tucson”). As Farber noted in distinguishing Peairs, “each case must be 

decided on its own unique facts.” 194 Ariz. at 369 ¶ 21.
SHUFELDT v. NEXTCARE

Decision of the Court

10

the superior court, Shufeldt asserted that he “started an innovative online 

venture [MeMD] intended to expand patient choice by providing a new 

platform for non-urgent patients to consult with physicians via remote 

online interaction.” (Emphasis added.)

¶23 On this record, applying Farber and given the significant 

differences between this case and Farber, the court did not err in 

concluding the Noncompetition Agreement was not unreasonable and 

was enforceable. See Farber, 194 Ariz. at 365 ¶ 11 (“‘Each case hinges on its 

own particular facts.’”) (quoting Bryceland v. Northey, 160 Ariz. 213, 217 

(App. 1989)); see also id. at 369 ¶ 20 (“Reasonableness is a fact-intensive 

inquiry that depends on the totality of the circumstances.”) (citing cases).

¶24 Shufeldt next argues the superior court erred by not 

explicitly imposing a burden on NextCare to show the Noncompetition 

Agreement was reasonable. See Farber, 194 Ariz. at 372 ¶ 33 (“The burden 

is on the party wishing to enforce the covenant to demonstrate that the 

restraint is no greater than necessary to protect the employer’s legitimate 

interest, and that such interest is not outweighed by the hardship to the 

employee and the likely injury to the public. Here VMS has not met that 

burden.”). But the court properly found the Noncompetition Agreement 

was reasonable based on the record presented in briefing cross-motions 

for summary judgment. On this record, Shufeldt has not shown any 

allocation of the appropriate burden resulted in an erroneous decision.

¶25 Shufeldt next argues the superior court “made no inquiry or 

findings” regarding NextCare’s legitimate interests and whether the 

Noncompetition Agreement was “no greater than necessary.” The court 

expressly discussed why it found the Noncompetition Agreement was 

enforceable. Moreover, although courts are encouraged “to state on the 

record the reasons for” ruling on a motion for summary judgment, Ariz. 

R. Civ. P. 56(a), as applicable here, “[f]indings of fact and conclusions of 

law are unnecessary on decisions of motions” for summary judgment, 

Ariz. R. Civ. P. 52(a). And, as discussed above, given the differences 

between this case and Farber, Shufeldt has shown no substantive error in 

assessing the Noncompetition Agreement. Accordingly, Shufeldt has not 

shown the superior court erred in concluding the Noncompetition 

Agreement was enforceable.

4

 

4 For similar reasons, Shufeldt has not shown the superior court erred in 

denying his motion to reconsider addressing these issues. In addition, 
SHUFELDT v. NEXTCARE

Decision of the Court

11

II. Genuine Issues Of Material Fact Preclude Summary Judgment 

On Breach.

¶26 “‘To bring an action for the breach of the contract, the 

plaintiff has the burden of proving the existence of the contract, its 

[material] breach and the resulting damages.’” Thomas v. Montelucia Villas, 

LLC, 232 Ariz. 92, 97 ¶ 16 (2015) (quoting Graham v. Asbury, 112 Ariz. 184, 

185 (1975)). As applicable here, the inquiry includes whether Shufeldt (by 

competing) or NextCare (by refusing to pay) committed the first material 

breach of the Separation Agreement. See Murphy Farrell Development, LLLP 

v. Sourant, 229 Ariz. 124, 133 ¶ 33 (App. 2012) (noting “that an uncured 

material breach of contract relieves the non-breaching party from the duty 

to perform and can discharge that party from the contract”) (citing 

authority). Because the Noncompetition Agreement and the Separation 

Agreement are enforceable, the remaining issues to be resolved in 

addressing the parties’ competing motions for summary judgment were 

whether, as a matter of law, Shufeldt committed the first material breach 

of the Separation Agreement, relieving NextCare of its obligation to pay 

him.

¶27 By entering summary judgment and then final judgment in 

its favor, the superior court determined, as a matter of law, that MeMD 

was a Competing Business; that Shufeldt breached; that Shufeldt’s breach 

constituted the first material breach and that, as a result, NextCare was 

relieved of its obligation to make the remaining payments. On appeal, 

Shufeldt claims disputed issues of material fact precluded summary 

judgment on these points, including whether his conduct constituted a 

material breach and, even if it did, whether NextCare waived its rights by 

approving (or not objecting to) his actions involving MeMD as early as 

September 2010.

¶28 The record shows the parties provided conflicting evidence 

about their actions from August 31, 2010 (the effective date of the 

Separation Agreement) until NextCare stopped paying Shufeldt in June 

2011. 

¶29 Shufeldt’s evidence suggests that, in and after September 

2010, but before MeMD’s website launched, Shufeldt spoke to NextCare’s 

president John Julian several times. Shufeldt testified at his deposition that 

 

given this conclusion, Shufeldt’s argument that the Noncompetition 

Agreement was severable from the Separation Agreement is moot.
SHUFELDT v. NEXTCARE

Decision of the Court

12

he presented the idea of a partnership with MeMD to Julian multiple 

times, and to another representative of NextCare as well, and NextCare 

declined. Shufeldt also testified that he did not believe the MeMD virtual 

medicine concept violated the Noncompetition Agreement. Shufeldt 

testified that, after he presented the MeMD concept to NextCare in 

September 2010, no one at NextCare told him that his efforts with MeMD 

would violate the Noncompetition Agreement. 

¶30 Shufeldt further testified that he received an email from 

Julian in January 2011 stating “I hope you are doing well John, and the 

new ventures are progressing.” Shufeldt testified that, even though he did 

not believe the practice of virtual medicine violated the Noncompetition 

Agreement, MeMD partnered with an urgent care facility in Lake Havasu

City, outside the geographic scope of the Noncompetition Agreement, in 

an effort to be “overly cautious.” Shufeldt offered evidence (including predispute evidence) that could be read as indicating MeMD was not a 

Competing Business, including that it was affiliated with a Lake Havasu 

City facility well beyond the 25-mile radius of the Noncompetition 

Agreement and that MeMD did not compete with NextCare.

¶31 NextCare’s evidence was in conflict. During his deposition, 

Julian claimed no one at NextCare received a personal solicitation from 

Shufeldt regarding MeMD. According to Julian, MeMD sent a general 

solicitation to NextCare officer Laurel Stoimenoff in the fall of 2010. Julian 

described it as: 

a blanket, you know, marketing solicitation 

sent probably to everybody on an urgent care 

list. Because it was somewhat generic in form. 

And it basically said, you know, MeMD would 

like to recruit your urgent care physicians to be 

part of our network to provide telemedicine 

and urgent care services for our patients. If you 

would like to generate revenue for your 

providers and generate traffic for your clinic, 

you know, please join us, call this number. 

After Julian received the flyer, he put it in a folder he kept about MeMD. 

Julian and others at NextCare, including NextCare’s general counsel, 

conducted a month-long review of MeMD “in the fall of 2010.” At some 

point, NextCare sent the collected information to outside counsel with the 

directive “to contact [Shufeldt] and let him know that given all the 

information we’ve acquired here, we believe he’s competing against us 
SHUFELDT v. NEXTCARE

Decision of the Court

13

and he should cease and desist.” This apparently led to NextCare’s June 

2011 decision to stop paying Shufeldt. This conflicting evidence presents 

disputed issues of material fact not appropriate for resolution by 

summary judgment. See generally Ariz. R. Civ. P. 56(a). 

¶32 As discussed above, Shufeldt testified he met with Julian 

starting in September 2010 and unsuccessfully invited NextCare to partner 

with MeMD. Shufeldt asserted he disclosed to NextCare what MeMD 

would be, what he intended to do with MeMD and NextCare expressed 

no concern that MeMD’s conduct would violate the Noncompetition 

Agreement. Indeed, Shufeldt testified that no one from NextCare told him 

MeMD would violate the Noncompetition Agreement. According to 

Shufeldt’s facts, MeMD, as a virtual medicine delivery platform partnered 

with a Lake Havasu City facility outside of the geographic scope of the 

Noncompetition Agreement, may not have been a “Competing Business”

under that contract, an issue implicating whether Shufeldt’s affiliation 

with MeMD was the first material breach of the parties’ contractual 

obligations. 

¶33 As noted by the Arizona Supreme Court, such pre-dispute 

conduct may be relevant to determining the meaning of contract terms, 

which implicates whether the contract was breached. See Darner Motor 

Sales, Inc. v. Universal Underwriters Ins. Co., 140 Ariz. 383, 393 (1984)

(“Evidence on surrounding circumstances, including negotiation, prior 

understandings, subsequent conduct and the like, . . . may be used to 

interpret the meaning of the provisions contained in the agreement. This 

method obtains even though the parties have bargained for and written 

the actual words found in the instrument.”) (citations omitted); Abrams v. 

Horizon Corp., 137 Ariz. 73, 79 (1983) (similar). These facts, which 

NextCare disputed, indicate the issue could not be resolved as a matter of 

law on this record. 

¶34 Shufeldt asserted this same conduct constituted a waiver by 

NextCare, even if Shufeldt’s conduct otherwise could be construed as 

having materially breached his contractual obligations to NextCare. The 

summary judgment ruling stated NextCare never expressly waived its 

rights or made unequivocal statements that it did not view MeMD as a 

competing business; that Shufeldt never told NextCare that MeMD would 

be competing with NextCare and that the Separation Agreement provided 

that any waiver must be in writing and no such written waiver exists. But 

a party need not expressly and unequivocally waive a contractual right for 

a waiver to be effective. Instead, such a waiver may occur given the 

passage of time, by inaction, implied from the circumstances or by 
SHUFELDT v. NEXTCARE

Decision of the Court

14

conduct that “warrants an inference of . . . an intentional relinquishment”

of a known right. Russo v. Barger, 239 Ariz. 100, 103 ¶ 12 (App. 2016); see 

also College Book Centers, Inc. v. Carefree Foothills Homeowners’ Ass’n, 225 

Ariz. 533, 539 ¶ 22 (App. 2010) (“In the absence of an express waiver, the 

intent to relinquish a right may be implied from the circumstances. In 

context of this case, we do not find a meaningful distinction between 

action and inaction.”) (citing Southwest Cotton Co. v. Valley Bank, 26 Ariz. 

559, 563 (1924) (noting for waiver inferred from conduct, “it is essentially a 

matter of intention . . . and, if the conduct from which such intention must 

be inferred is such that reasonable minds may differ as to what the 

inference should be whether there is a waiver becomes a question of fact 

to be determined from the evidence submitted”)).

¶35 As discussed above, what Shufeldt told NextCare about 

what MeMD would be doing is disputed. And the lack of a written waiver 

required by the contract here is not dispositive. See Phoenix Orthopeadic 

Surgeons, Ltd v. Peairs, 164 Ariz. 54, 57-58 (App. 1989) (noting “general 

rule” that the “parties to a written contract may alter or modify its terms 

by a subsequent oral agreement even though the contract precludes oral 

modification”) (citation omitted), overruled on other grounds by Farber, 194 

Ariz. 363.

¶36 On the record presented, disputed issues of material fact 

precluded summary judgment, including, but not limited to, (1) the 

meaning of “Competing Business;” (2) whether Shufeldt’s conduct falls 

within the meaning of “Competing Business;” (3) which party committed 

the first material breach and (4) whether NextCare waived its right to 

enforce the Noncompetition Agreement. Accordingly, the entry of 

summary judgment is vacated.5

III. Attorneys’ Fees And Costs.

¶37 Both parties request attorneys’ fees and costs incurred on 

appeal. These requests are denied without prejudice to their reassertion 

with the superior court upon final resolution of the parties’ claims on 

remand.

 

5 As a result, Shufeldt’s arguments about the denial of his motion to 

reconsider these issues are moot.
SHUFELDT v. NEXTCARE

Decision of the Court

15

CONCLUSION

¶38 Although the superior court properly found the 

Noncompetition Agreement was enforceable, disputed issues of material 

fact precluded summary judgment. Accordingly, summary judgment is 

vacated and this matter is remanded for further consideration consistent 

with this decision.