### IN THE S UP REME COURT OF TENNESS EE AT JAC KSON A pr il 3, 200 7 S es sio n

UT MEDI CAL GROUP, INC. v . VAL Y. VOGT, M.D.
Appeal by p erm ission from the Court of Appeals, Wester n Section

Chancery Court

for Sh elby County No. CH-04-0303- 2 Arnold Goldin, Ch ancellor

No. W2005-00256-SC- R11-CV - F iled on Au gust 20, 2007

We gr anted r evi ew i n t h i s case to determine whether UT Medica l Group, Inc. pre sented a jus tic ia ble c a se or

c on tr ov e rs y

to t he tr ia l c ourt

wh e n it a lle g e d that

Dr . V og t anti c ipator ily b re ac h ed an employ

ment contra ct covena

nt. B eca use the rec ord fails to show that Dr. Vo gt
com mitted an anticipatory repudiation of the non-compe tition covenant found in her employ ment ag ree ment, Dr. Vog t is entitl ed to summa ry judgme nt. There fore , we r ever se the judg ment of the Court of Appea ls and rema nd this case to the tria l court for the entry of an or der dismissing the
case

.
Te nn. R . A pp. P . 1 1; Judg m e ntof t he Co ur t o f Appe als Re ve r se d and

Case Re m anded to the Chancery Courtfor Sh elby County

C OR NE L I A A. C LARK , J. , d e li v e r e d th e o p in io n o f th e c o urt, in w h ic h W I L L I AM M. B ARKE R , C.J ., and G AR Y R. W ADE , J . and D AVI D G. H AYES , S P . J . joined. J ANI CE J. H OL DER , J ., not p ar t i ci p at i n g.

Kenne th P. J ones, Memphis, Tenne ssee, f or the a ppellant, Val Y. V og t, M.D. Stephen H. B iller and Walter E. Sch u l er, Me mphis, Tennessee , for the a ppellee, U T Medica l Group, Inc.
OP IN ION

Fa ctual & Procedur al B ackground

Th e pr oc e dura l hi sto ry

of thi s matte r i s com plic a te d, but it s r e c itatio n is ne c e ssa ry to understand our

resolution of the c ase.T here i s d i sagr eem ent be t ween t he p art i es as t o t he ef f ect i ve d at e o f t he A greem ent

. Fo r t he p urpo ses of o ur 1

a n a lysis, ho w e v e r, this d isp u te is o f no c o n se q u e n c e

.

A ltho u g h t h is C o u r t h e ld in M u rfre e sb o ro M e d . C linic , P .A . v. U d o m , 1 6 6 S .W .3 d 6 7 4 (T e n n . 2 0 0 5 ), tha t, 2

exc ept f or t hos e s peci f

i cal l y pre s cr i bed b y s t at ut e, phy s i ci an coven ant s not t o c om pet e a r e u nen f orce abl e a nd voi d as ag ai n s t pu bl i c pol i cy , t h e n on
- compe t i t i on a g r ee men t a t i s s u e i n t h i s ca s e i s s pec i f i ca l l y au t h or i ze d u n der T en n

. Code A n n . § 6 3 -6 -2 0 4 (e ) (2 0 0 4 ).

Addi t i on al l y , 2007 Publ i c Cha pt er N o. 487, wh i ch wi l l t ak e ef f ec t Ja n u ar y 1, 2008, ame n ds T en n es s ee Code A n n o ta te d , T itl e 6 3 , to p ro v id e sp e c ifi c a lly tha t h e a lthc a re p ro v id e r no n -co m p e tit io n a g re e m e n ts w ill b e d e e m e d va lid and r eas onabl e i f t he dur at i on of t he r es t r i ct i on i s t wo y ear s or l es s and t her e i s ei t her : ( 1) a ge ogr aphi c r es t r i ct i on t hat d o es not exceed t he great er of a) 1 0 m i l es f

rom t he p ro v id e r’s p rimary practi ce si t e o r b) t he co unt y i n whi ch t he pr ov i der ’ s pr i mar y pr ac t i ce i s l oca t ed; or (2) if ther e i s n o g eog r aph i c r es t r i ct i on , t h e pr ov i der i s r es t r i ct ed f r om p ra c ticin g his o r h e r p ro fes sio n a t an y fac ili ty at w h ic h the e m p lo ye e e n tit y p ro v id e d se rv ic e s.
-2- I n 1997, UT Medica l Gr oup, I nc. (“ UTMG”) , an indepe ndent, not-for -prof it org anization in wh i ch fa culty

members of

the Univer sity

of Tenne ssee Me dical School pra ctice me dicine pr ivate ly , a

nd Dr . V a l Y . V og t, M .D. ( “ Dr . V og t” ), a fa c ult y me mbe r a

nd ur og y ne c olo g ist , ag ree d to and sig ned a Phy sician Employ ment Ag ree ment. Subsequently , on Marc h 12, 2002, a sec ond Phy sician Employ ment Ag ree ment (“A g ree ment”) w as ag ree d to an d s i g ned by the par ties. As part of

this Agr eeme nt, Section 22 1

se ts f or th a no n- c omp e tit ion

c ov e na nt. In p e rt ine nt p art , it

pr ov ide s: 2
(a ) .

. . Phy sic ian a g re e s th a t in the e ve nt h is o r he r e mpl oy me nt w ithUT MG is terminated for

any rea son, voluntarily

or involuntari l y , wi t h or without cause , or in t he e ve nt Phy sic ian v olu

nta ri ly le ave s th e e mpl oy

me nt o f U TM G, Phy sic ian w ill not for a pe riod of one ( 1) ca lendar y ear eng ag e in the pra ctice of medicine, e ither direc tly or indirec tly , actively

or passively , under co n t ract or otherw ise, as an employ ee, owner, pa

rtn er , agent, stockholde r, direc tor, or other wise in the Restricted Ar ea. . . . Phy sician conse nts in such event to the g rantingof injunctive relief ag ainst any

continuing br eac h, t og ether with retrospe ctive re lief in the for m of liquidated dama g es equa l to [ 66 2/ 3 %] of all fe es or other income g ener ated or obtained by

Phy sician or throug h his or her e ffor ts as a re sult o f t h e b re ac h

. In the event UT MG is gr anted injunctive r elief a s pro v i d ed here in, whateve r portion of the one (1 ) y ea r term state d in subsection (a) of this Section 22 had not expired at the tim e the br e a c h f

ir st o c c ur re d s ha ll b e to ll ed b y

the br e a c h, and

sh a ll b e g in t o run a g a in a s o f th e d a te p e r ma n e n t in ju n c ti v e r e li e f is g r an te d

. Phy s ic ia n shall be liable to UTMG for

all costs rea sonably

incurre d by

UTMG in pursuing
e nfo rcem ent of

the pr ov isi on s o f t

his Se c tio n, inc lud ingbut no t li mit e d to
rea sonable attorney s fee s and costs. (b) As a n alternative to the remedies ot herw ise aff orded by this S ection 22, Phy sician may

elec t to buy o u t h i s o r h er oblig ations under this Section 22 . . . by
c omp le tin g e a c h o f t

he foll owi ngste ps : ( i) pr ov idi ngpr op e r wri tte n n oti c e to-3-

UTMG of Phy sician’s ter mination of this Agr eeme nt; (ii) includ i n g i n such written noti ce a s tatement that Phy sician is exercising his or her e lection under this S ection 22, subsec tion (b); and (iii) pay ing UT M G a dollar

amount [equal to]

. . . 1 0 0 % o f Phy sician’s Annua l Planned Income f or the fisc al y ear

prec edingthe termination of employ

ment with UTMG. On the Ag ree ment’s sig nature p age, the parties de fined “ Restricted Ar ea” “[t] o include Shelby County , Ten ness e e and

a 15 0 mi le ra diu s o f S he lby County , T e nn e sse e .” I n o rd e r t o te rm inate the Ag re e me nt v olu

nta ri ly , th e Ag re e me nt’ s Se c tio n 2 0 prov ides that D r. Vo g t mu st g ive UT MG written notice of

her intent to terminate the Ag ree ment voluntarily “at lea st si x t y (6 0 ) d ay s prior to the eff ective da te of ter mination.”

On Dece mber 15, 2003, Dr . Vog t wrote a letter to UTMG’ s chief me dical off icer , Dr. J eff rey R. W oodside, indicating that she planne d to resig n her U TMG pos i t i o n o n Marc h 12, 2004. Four

day s later, Dr . Woodsi de r ep l i ed to Dr. Vog t’s letter, via e -mail, askingher whether she planne d to eng ag e the p roce ss outlined in the Agr eeme nt’s Section 22(b) to buyout her nonc omp e tit ion

c ov e na nt. I n h is l e tte r, Dr . Wo od sid e state d th e thr e e op tio ns ava ila ble to D r. Vo g t: [T]o ta l f r e e d o m t o p r a c ti c e me d ic in e a t a n y ti me o u ts id e th e Re s tr ic te d A r ea descr ibed in y o u r empl oy ment ag ree ment, or

not prac tice medicine within the Res t ri ct ed Ar ea f

or one c alenda

r y ear following y our depa

rture f rom UTMG, or buy -out y our oblig ation for [$194,197, the ag ree d upon buy -out price ,] and prac tice medicine at any

time within the Restricted Are a. (empha sis added).

B e fo re Dr . V og t r e sp on de d to Dr . Wo od sid e ’s e -m a il, on Janu ary 7, Dr . O we n P. Phi lli ps , inte ri m c ha ir

of the Un ive rs ity ’s De pa

rtme nt o f O B /G YN , s e nt D r. Vo g t an e -m a il asking her t o rec onsider and “ put [ her] resig nation on hold for a year . . . . I f you elec t to stay for the ne xt y e ar ( thr ou g h Jun e 20 05 ), Iwi ll p re ss U TM G t o a dju st t he no n-c omp e te c la

us e amou nt. Ikn owthi s h a s b e e n d on e in o the r d e pa rtme nts .” Un

pe rs ua de d b y UTM G’s att e mpt s to re ta in he r s e rv ic e s, on

Janu ary 14 , 2 00 4, Dr . V og t r e pli e d to Dr. W oods ide ’s e -m a il, statin g “ [t]his is a fo llo wu p to my pr e vio us le tte r o f r e sig natio n.

. . . A ft e r m uc h c on sid e rat io n I plan

to e ng a g e in the pr a c tic e o f

m e d i c i n e l o c a l l y

. . . . Iw i s ht o d i s c u s s th e b uy - o u tan d th e p o s s i b l e m e c h a nis ms that addre ss the non-compe tition component of my contra ct.” Duringthe wee ks after

Dr. Vog t’s e-ma il to Dr. W o o d side, the par ties eng ag ed in a pe ri od of int e ns e man euv e ri ngand ne g oti a tio n. Dr . V og t me t w ithDr . Wo od sid e to d isc us s a possible reduc t i o n o f the Section 22(b) buy -out option. After a n exchang e of se vera l more ema ils bet ween Dr . V og t and Dr . Wo od sid e , U TM G r e fu se d to re du c e the buy -o ut a mou nt. I nstead, on F ebrua

ry 2, 2004, UTMG’s c ounsel sent a letter to Dr. Vog t, which stated:-4-

Iunderstand [that] conversations betwe en you and Dr . Woodsi de re lating to the potential ex er cis e of your buyout option concluded this morning w ithout ag ree ment. . . . We take y o u r d ec l ar at i o n of intent to prac tice “loc ally ” to be a decla ration of intent to brea ch your non-c ompetition covenant. The eff ect of y our dec laration of such intent is to require us to take prompt acti on to secure y o u r p ro m ise not to violate y our non-c ompetition covenant and, if we c annot do so, to init iate leg al ac tion to enjoin y our anticipatory brea ch.

I n respon s e t o t h i s letter, on F ebrua ry 10, Dr. Vog t’s attorney

wrote a letter to UTMG’ s attorney
re- confirmingDr. Vo gt ’s intention to practice medicine loca lly afte r her

resig nation from UTMG and

d ec l ar i n g her de sire “to e x erc ise the buy -out option” as provide d for in the Ag ree ment. On the sa m e d ay , UTMG’s attorney responde d to the letter, de manding the pay ment of $194,197 (or

the execution of a pr omissory note in that amount pay abl e on or be fore Marc h 5 , 2 00 4) and

thr e a te nin g Dr . V og t w ithhavin g to p ay a tto rn e y ’s fe e s, in ter est , a nd c os ts
a s s o c i a t e d

w i t hp u r s u i n g a

l aw s u i ti f s h e d i d n o ta c c e p tth i s p r o p o s a l b y 5 : 0 0 p

. m

. th a ts am e d ay. Th e le tte r a lso pr omi se d to “ inv olv e ” th e do ctors that U TM G b e lie ve d D r. Vo g t in te nd e d to prac tice with af

ter he r re signation “due to their knowin gl y interfe ring with the contra ctual
re latio ns hip ” be tw e e n U TMG a nd Dr . V og t. D r. Vo g t r e sp on de d to thi s le tte r b y a g a in expressing he r desire to exercise the buy -out option.

On Fe bruar

y 13, UTMG filed a

complaint ag ainst Dr. Vog t in Shelby County Chance ry Court, claiming that Dr. Vog t had co m mitted an anticipatory brea ch of the Ag ree ment. The complaint alleg ed, inter a lia, that, throug h her r es i gn ati on letter a nd subsequent e- mail to Dr. Woodsi de, Dr . Vog t had “a dmitted her intent to brea ch an dhas bre ache d the Employ ment Ag re e me nt .

. . .” Ad dit ion a lly , U TM G all eged th a t it ha d “ c ome to u

nd e rs tand tha t [Dr . V og t] had lea sed spac e . . . with the intent of e stablishing an of fice for the pr o fe s sional prac tice of medicine in the spe cialty of urog y necolo gy .” To re medy

Dr. Vog t’s alleg ed anticipatory brea ch of c on tr a c t, U TM G s ou g ht a de c lar ato ry ju dg me nt t

hat th e Agre e me nt’ s Se c tio n 2 2 w a s v a lid
and e nf or c e a ble and an in jun c tio n p ro hib iti ngDr . V og t f ro m vi ol ati ng the Agre e me nt. Significa ntly , in l i gh t o f t he letter sent three day s befor e, the c omplaint did not s eek mone y dama g e s, sp e c if

ic a lly statin g that “ mon e y

dama g e s w ou ld be ina de qu a te and imp os sib le to
acc urate ly

asce rtain.”

On the same day

that UTMG file d its complaint, the trial court sche duled an injunction he ari ngin t

he c a se fo r F e br

ua ry 26

. Th e cou

rt a lso iss ue d a

su bp oe na du c e s te c um t o He a lt h c ar e Re a lt

y T r u s t, th e la

n d lo r d o f a M e mp h is me d ic a l o f f ic e b u il d in g w h e r e V o g t was be li e v e d t o h av e l e a s e d o f f i c e s p a c e

. In r e s p o n s e t o th e s u b p o e n a , H e a l th c ar e R e a lty Tr us t produce d a two-pa g e d o cu m en t , dated F ebrua ry 6, 2004, that: (1) re quested that the la ndlord desig n a door sig n for a

n office suite in the b u i l d ing that included Dr. V og t’s name unde r the corpor ate name “Women’s He alth Specialists, PL L C , ” an d (2 ) listed Dr. Vog t on an “Employ ee L ist” for the “ Tena

nt” “Women’s He alth Specialists, PL L C.”T he em p l o ym en t co ntrac t s b etwe en U T M G an d ea ch i nterv en o r d i d no t co ntain no n-co m p eti t i o n a gre em en t s. 3

-5- One we ek later , o n Fe bruar y 20, Dr. Vog t answer ed UTMG’ s complaint, denying that sh e ha d c omm itt e d an ant ici pat or y br e a c h o f t

he Agre e me nt. She a lso fi le d a “ Counte rc la im i n I nterplea der” ag ainst UTMG, see king, a mong othe r thing s, a d ec l ar atory judgme nt that Section 22 was void and une nforc eable . Pleading in the alternative, Dr. Vogt o ff er ed to pay

$194,197 into the court in the eve nt that Section 22’s buy -out option was found va lid and enfor cea ble. Th e tr ia l c ourt

a c c e pte d th e se fu

nd s.
On the same da

y that D r. Vo g t ans we re d U TM G’ s c omp la int and fi le d h e r c ounte rc la im, t h r e e M e mp h i s p h y s i c i an s , F r a n k W

. Li n g , M

. D

. , T h o m a s G

. S t o v a l l , M

. D

. , an d R o b e rtL. Sum mit , J r., M. D. (“ I nte rv e no rs ” ), fi le d a mot ion to i nte rv e ne in t

he c a se , atta c hin g to t

he ir motion a pr o p o s ed complaint ag ainst UTMG. The pr oposed complaint made sever al statutory and common law c laims, including unlaw ful re s t ra int of trade, pr ocure ment of a br eac h of contra ct, and unlaw ful interfe renc e with the medica l treatment of I nterve nors’ p at i en t s . The I nterve nors’ propose d complaint alleg ed t hat they had tende red the ir own re signations from UTMG on or a

bout Dece mb er 2 3 , 2 0 0 3 and planne d to enter into a pr ivate Memphis medica l pr a c tic e wi th D r. Vo g t. Al tho ug h U TM G h a d in iti a lly g ive n th e I nte rv e no rs its c on se nt t o 3 prac tice to g e th e r

p r iv a te ly , U T M G s u

b s e qu e n tl y

c h an g e d it s p o s it io n , th e p r o p o s e d c o mp la int alleg ed, interpr eting the Interve nors’ e mploy ment ag ree ments with UTMG to prohibit them from pra cticingmedicine pr ivately with Dr. Vog t and with eac h ot h er. The I nterve nors pr op os e d thre e fo rm s o f r e lie f: (1 ) a de c lara tor y judgm ent th a t th e ir

re sp e c tiv e UT MG employ ment ag ree ments did not prohibit t hem from pr acticingmedicine p ri v ately toge ther; (2) an injunction that prohibited UTMG fr om interfer ing w ith their rig ht to associate with ea ch other in a pr ivate medica l prac tice; and ( 3) dama g es.
On F e br ua ry 25 , U TM G a

ns we red Dr. Vogt ’s c ounte rc la im, de nyingthat D r. Vo g t st ill h adt h e r i gh tt o “b u y o u t ” h er co n t ra ct an d as s ert i n g th at th e “A gre em en td o es p re cl u d e D r. Vo gt from ente ring into practice with cer tain other UTMGphy sicians for a period of one y ea r af

ter Dr. Vog t leaves U TMG.” ( emphasis in orig inal). Additionally , at UTMG’ s reque st, the trial court c ance lled the Fe bruar y 26, 2004 i n

j u n ction hear ing. It was neve r re schedule d. One we ek later, on Ma

rch 2, U TMG’s counse l sent a letter to the tr ial court, infor ming it that UTMG ha d
re a c he d “ a

pa rt ia l se ttl e me nt” with th e I nt e rv e no rs . N e ith e r t he le tte r n or

any oth e r d oc ume nt i n the re cord se ts forth th e fu l l t er ms of the settlement. On Mar ch 8, by consent of a ll of the pa rt ie s, the tr ia l c ourt

g rant ed th e thr e e phy sic ia ns ’ m oti on

to i nte rv e ne . T he Inte rv e no rs a lso formally filed their pr oposed complaint ag ainst UTMG.

On Marc h 10, UT M G gave Dr. Vog t notice that it wished to depose he r. On Mar ch 11, Dr

. Vo g t fi le d a mot ion to dis mis s UT MG ’s c omp la int , arguin g that it fa ile d to pr e se nt a j u s t i c i a b l e c a s e o r

c o n t r o v e r s y. O nM ar c h1 2 , D r

. V o g t l e f t U T M G ’ s e mp l o y. T h e s am e d ay, Dr . V og t f

ile d a mot ion fo r t he re turn of th e int e rp le d f un ds arguin g that th e re wa s n o ju sti c ia ble
c a s e o r c o n t r o v e r s y , an d

t h e r e f o r e , t h e c o urth a d

n o r e a s o nt o c o n t i n u e t o h o l d t h e f un d s

. In support of this contention, Dr. Vogt as s erte d that: (1) UTMG ha d filed its Febr uary 13, 2004U T M G addres s ed D r

. V ogt ’ s r eques t f or t he r et ur n of

t he i nt er pl ed f

un ds i n a pleadi ng t i t l ed 4

“ P l ai nt i f f / C o un t er-D efen d an t ’ s R esp o nse t o M o t i o n for P ro t ec t i ve O rd er a nd f o r S t ay o f

D i sco ve ry, ” b ut f

ail ed t o ad d ress the issu e s p le d in V o g t’s “M o tio n fo r R e tur n o f Inte rp le d F u n d s.”

U T M G ’ s “cr o ss m o tio n” f o r sum m ary jud gm en t wa s f i l ed i n re sp o nse t o D r. V o gt’ s m o t i o n to d i sm i ss, 5

c la im ing tha t D r. V o g t’s m o tio n to d ism iss sh o u ld ha v e a c tua lly b e e n a m o ti o n f o r su m m a ry j u d g m e n t. W e re fer to U T M G ’s m o tio n a s a c ro ss-m o tio n so le ly b e c a u se tha t i s h o w the m o tio n w a s style d in the trial c o u rt.

In l i ght of t he f

act s b ef o re t he t ri al co urt , U T M G was al l o wed t o m o ve f o rward wit h i t s N o t i ce o f D ep o si t i o n, 6 b ut was pro hi b i t ed f

rom aski ng D r. V o gt ab o ut any t hi ng rel at i ng t o W o m en’ s H eal t h Sp eci al i st s, P LL C , and D rs

. Li ng, S to v a ll, a n d /o r S u m m itt

.

A t t h e ti m e o f t h is law su it, w ritten no tice o f t h e in te n t to n o n s u it w a s su ff ic ie n t t o d ism iss D r. V o g t’s 7
count er cl ai ms. See T en n. R

. C i v. P

. 4 1 .01 (2 0 0 4 ). It wa s no t unti l Ju l y 1, 2 0 0 4 , t ha t “[a] vo l un t ary no nsuit t o d i sm i ss
-6- complaint specific ally

to preve nt her fr om eng agi n g i n t h e private pra ctice of medicine with the I nterve nors; (2) UT MG h ad re ached a se ttlement with the I nterve nors, of whic h the cour t
rec eived notice in a Marc h 2, 2004 letter to the cour t, noted above, a

nd that, beca

use of the settlement, she would not pra ctice me dicine with th e I nterve nors until March 15, 2005; (3) she had not ac tually

violated Section 22 of the A g ree ment, even if the cove nant w as v al id and enfor cea ble; and (4) it was now only “pure speculation” that she would pra ctice i n violation of the Ag ree ment. UTMG neve r filed a motion in re s p o n se to Dr. Vog t’s reque st to return the funds. On M arch 19, rely ing on the same four

arguments listed above, Dr . Vog t moved for a 4 protec tive order

and a sta y of all discover

y

. After a Mar ch 26, 2004 hea

ring , the tri al co u rt returne d the $194,197 that Dr. V og t had paid into the court, a

nd g rante d a par

tial st ay o f d i s co very

but permitted UTMG to take Dr. Vo g t’ s de po sit ion

. Al so on Marc h 26 , in re ply to Dr

. Vo g t’ s Ma rc h 11 mo ti on to di smi ss, UTMG filed a

cross-motion fo r s ummary judgme nt, contendingthat there was no fa ctual

5 dis pute re g ard ing Se c tio n 22 ’s e nf or c e a bil ity

. In th e mot ion , U TM G a lso a sk e d th e tr ia l c ourt to tr e a t D r

. V o g t ’ s m o t i o n t o d i s m i s s a s o n e f o r s u m m ar

y j u d g m e n t b e c a

u s e h e r m o t i o n r e f

e r r e d to matters outside of the ple ading s.
On Ap ri l 1, Dr . V og t fi le d a n a ff ida vit statin g that sh e ha d a c c e pte d a po sit ion a s a urog y necolog ist in I ndianapolis, Indiana, we ll outsi de the A g ree ment’s Restricted A rea . Ba sed on this af fi davit, Dr. Vog t rene wed he r motion for a c omplete stay of discover

y and a pr otective order that would prohibit UTMG from de posi n g h er

. T aking judicial notice of the fa ct that UT M G “ h a s r e a c h e d a s e t t l e m e n t w i t h th e In t e r v e n o r s

. . . [a

n d th a t ] D r

. V o g tis n ot g oin g to pr a c tic e wi th [the I nte rv e no rs ] at any tim e pr ior

to M arc h 1 5, 20 05 ,” the tri a l c ourt g ra nte d in pa rt and de nie d in

pa rt Dr . V og t’ s mo ti on to stay dis c ov e ry

. Dr . V og t’ s mo tio n to dis mis s

6 plaintiff’s complaint re mained pending

. On April 7, Dr. V og t ga ve wri t t en n o tice that she w ished voluntarily to nonsuit her counter cla i m s ag ainst UTMG. The tr ial court did not ac t on this not ice f or more tha

n four
months

. Thro ug ho ut t

he re st o f A

pr il 2 00 4, UT MG tw ice mo re gav e Dr . V og t no tic e of its 7an act i o n wi t ho ut prejud i ce m ust b e f o l l o wed b y an o rder o f vo l unt ary d i smi ss al si gned b y t he co urt

. . . . ” T enn. R

. C i v. P . 4 1 .0 1 (3 ) (2 0 0 5 ).
-7- i n t en t i o nt o d ep o s e h e r i nac co rd an ce wi tht h e t ri al co urt ’s s t an d i n g d i s co v ery o rd er p erm i t t i n g a deposition. Dr. Vog t did not cooperate. As a r esult, UTMG filed a motion to compel Dr. Vog t’s deposition and to sanction her for he r fa ilure to coope rate . After an Ap ri l 2 3 hear ing on the mo t i o n t o c o mp e l , t h e t r i a l c o u rt g r an t e d D r

. V o g t a c o mp l e t e s t ay o f d i s c o v e r y un til it
re so lve d h e r m oti on

to d ism iss

. Also on April 23, Dr. Vog t filed a sec ond aff idavit. I n this affidavit, Dr

. Vo gt s t ated, “ I am not g oing to e ng ag e in th e p ra ct i ce of medicine in Shelby County , Tenne ssee, or

within a 150-mile radius of Shelby Count y , T en n es s ee, be fore Marc h 15, 2005.” (e mphasis in origina l). Un lik e the a ff

ir matio n in he r April 1 , 2 00 4 a ff

ida vit , D r. Vo g t ma de no re fe re nc e to h e r s pe c if ic employ ment plans.

On Ap ri l 30 and May 14 , the tr ia l c ourt he ld he ari ng s on Dr

. Vo g t’ s mot ion to di sm iss and UTMG’ s opposing moti o n fo r s u m m ary judgme nt. The trial cour t acc epted Dr . Vog t’s argument that UTMG’s suit failed to pr esent a continuing c ontrov ersy

and dismissed the ca se. Th e tr ia l c ourt

a lso de nie d U TM G’ s mo tio n f or summa ry jud g me nt. At bo th of the se he ari ng s, UTMG ar g ued that Dr . Vog t’s motion to di smiss shoul d be tre ated a s a motion for summary jud g me nt b ecaus e her

mot ion to d ism iss re fe rr e d to matte rs outsi de of the ple a din g s, pr ima

ri ly the Interve nors’ settlement with UTMG and Dr. V og t’s two aff idavits conce rning her f

uture employ ment plans. Followingthe May 14 hear ing, the trial co u rt en t er ed an order grantingDr. Vo g t’ s mo tio n to dis mis s and de nyingUT MG ’s c ro ss- mot ion fo r s umm ary

jud g me nt. Followingthe orde r, UTMG f iled a motion asking the cour t to reconsid er i t s grant of Dr. Vog t’s Mo tio n to Di smi ss. On May 28, 2 0 0 4 , UT M G m o ved to amend its complaint to include, for the first time, a
c la im that D r. Vogt owed U TM G the buy -o ut a mou nt o f $ 19 4, 19 7 b e c a

us e , in he r c ounte rc la im, she had a lleg edly

“emphatically

and uneq u i v o cally ” ele cted to ac cept the Sec tion 22(b) buy -out option. UTMG reque sted this amendment more tha n three months aft er i t h ad ref used to ac cept Dr . V og t’ s v olu

nta ry of fe r o f t he same buy -o ut p ri c e and ha d e nte re d into a

“ pa rt ia l ag re e me nt” with the I nterve nors, thus preve nting Dr . Vog t from pra cticingwith the I nterve nors for one cale ndar year . The amendment also ca me s ev en we ek s after

Dr. Vog t filed a notice of dismissal of the c ounterc laim upon which UTMG r elied.

After y et another

hear i n g, o n J u n e 4, the trial court amende d its dism issal order, id e n ti f yin g D r

. V o g t’ s mo ti o n to d is mi s s a s a mo ti o n f o r s umm ar

y ju d g me n t an d o r d e r in g Dr. Vog t to file a s tate me n t o f u n d is p u te d f a c ts

. T h e tr ia l c o urt d id n o t d is tu r b it s d e n ia l of U T M G ’ s m o t i o nf

o r s u m m ar y j u d g m e n tan d

d i d n o tl i f tth e s t ay o f

d i s c o v e r y.
On June 25 , U TM G f

ile d a se c on d mo tio n f

or summa ry jud g me nt, re pe a tin g its contention that i ts employ ment contra ct with Dr. Vog t was valid and e nforc eable , and that it wasU T M G al s o f i l ed an appl i cat i on t o app eal , but t hat appl i cat i on was deni ed. T he i s sue s ra i s ed i n t hat 8

a p p lica tio n w e re d e c id e d c o rr e c tly b y the trial c o u rt.
-8- entitled to the $194,197 Section 22(b) buy -out price . On J une 28, the tria l court denie d UTMG’s mot ion to a me nd , c on clu di ng th a t th e pr op os e d ame ndme nt “ wo uld c a us e un du e pr e

jud ic e to Dr. Vog t.”

On Aug ust 10, Dr. Vog t f iled her statement of u n d i s p u t ed m at er i al fa cts , asser ting the r e in th a t s h e h a d le f

t U T M G ’ s e mp lo y o n M ar c h 1 2 , 2 0 0 4 , h a d s u b s e qu e n tl y a c cepte d a po sit ion to p ra c tic e me dic ine in I

nd iana po lis , a nd the re fo re , woul d not b e pr a c tic ingme dic ine in violation of the Ag ree ment. Be fore respondingto Dr. Vog t’s statement, UTMG move d the trial court to lift the stay

of discover

y . The trial c ourt ref

used.

On Se pte mbe r 1 5, the tr ia l c ourt e nte red a n o rd e r gra

nti ngDr . V og t a

vo luntary

no ns uit on her c ounterc laims pursuant to her Apr i l 7 , 2 004 notice. At this point, UTMG’s second motion for sum m ar y judgme nt, discussed above , was still pending. F inally , on November 1, the trial court g rante d Dr. Vog t’s conver ted motion for summary judgme nt and denie d UTMG’s
se c on d mo tio n f

or summa ry jud g me nt. I n it s o rd e r, the tr ia l c ourt no ted th at UTM G o ri g ina lly h a d a s k e d o n ly f

o r tw o s p e c if

ic f o r ms o f r e li e f

, an in ju n c ti o n an d a d e c la

r a ti o n o f Se c tion 22’ s v a li d it y

. A f te r U T M G h a d , in e s s e n c e , a b an d o n e d it s p ur s u it o f an in ju n c ti o n , the trial court
rea soned th at i t found itself with only UTMG’s r equest for

a dec laratory

judgme nt to consider. Re c og nizi ng that Te nn e sse e law re qu ir e s a jus tic ia ble qu e sti on to e xist be fo re a c ourt c an g ra nt a
re qu e st f or a de c larator

y jud g me nt, the tr ia l c ourt

he ld t hat:

Neither in its C omplaint nor in any other plea ding f

iled i n this case ha s UTMG alleg ed that [Dr.] Vogt ha s prac ticed medicine with any one in Shelby County , Tenne ssee o r wi thin a 150-mile radius of Shelby County , Tenne ssee, other than w ith UTMG.

Be cause there is no alleg ation that [Dr.] Vog t w as ev er empl oy ed by any other medic al g roup in Shelby County , Tenne ssee or

within 150 mil es of Shelby C o u n t y , Tenne ssee other than [with] UTMG, ther e is no dispute as to any materia l fac t and [Dr.] Vogt is entitled to a judg ment as a m att er of law, ther e beingno justiciable ca se or c ontroversy to s u s t ai n the dec laratory judgme nt action. UTMG timely

appea led. The Court of A ppeals re verse d t h e t ri al court’s grant of summary jud g me n t a

n d r e ma n d e d th e c a s e to th e tr ia l c o urt, c o n c lu d in g th a t t h e tr ia l c ourt should have g iven UTMG more time for discove ry . The Court of Appe als did not address the thr e sh old qu e st io n of th e ca se ’s jus tic ia bil ity . We a c c e pte d D r. Vo g t’ s a pp lic a tio n to a

pp e a l to deter mine whether

UTMG’s suit for d ec l ar at ory relief prese nted a justiciable c ase or c o n t r o v e r s y. 8-9- DI SCU SSIO N

Standard of Re view

We reviewa trial c ourt’s g rant of summar y ju d gment de novo. See B lair v. W. Town Mall, 130 S.W .3d 761, 763 (Tenn. 2004) . Ba sed on the pa rt i es ’ respe ctive stateme nts of
un dis pute d f

a c ts, se e Te nn . R. Civ . P. 56 .0 3, and “ the ple a din g s, de po sit ion s, ans we rs to interrog atories, a

nd admissions on file, toge ther with the a ffid av its, if any ,” a grant of summar y jud g me nt is app rop ri ate on ly wh e n ( 1) the re is n o g e nu ine iss ue wi th r e g ard to t he mate ri a l f

a c ts rele vant to the claim or de fen s e co n t ai n ed in the motion, and (2) base d on undisputed fac ts, “the
mov ingpa

rt y is e nti tle d to a

ju dgmen t as a matter

of law, ” id. 56 .0 4. Se e a lso W. T ow n M a ll, 130 S.W .3d at 764. When w e construe a written contra ct, we do so de novo. See, e. g. , Ba rn es v. Ba rnes, 193 S.W.3d 495, 498 (Tenn. 2006).

Justi c ia bil ity The princ ipal p u rp o s e of the De clar atory J udg ment Act is “to settle and to a ffor d relief from unce rtainty

and insec urity

wi t h respe ct to rig hts, status, and other leg al re lations . . . .” Tenn. Code Ann. § 2 9 -1 4 -1 1 3 (2000). And, a lthough the A ct is “to be libera lly construed a

nd administered,” id., at t i m es , we h ave de termined that “ some limit ations must be placed upon the operation of the statute.” C i t y of Johns on City v. Caplan, 253 S.W.2d 725, 726 (Tenn. 1952). See also Super Flea Mkt. of Chattanoog a, Inc. v. Olsen, 677 S.W .2d 449, 451 (T en n

. 1 9 84) (s tatin g that a

de c larator

y jud g me nt a c tio n c ann ot be us e d to “ a lla y fe ars a s to wh a t ma

y oc c ur in the future ”); Miller v. Miller, 261 S.W. 965, 971 (T enn. 1924) ( holding that a decla ratory judgme nt a ction cannot be used to de cide a theore tical q u es tion). Thus, in order to sustain an action for a dec laratory

judgmen t , a justiciable controve rsy must ex ist. J are d v. Fitzge rald, 195 S.W .2d 1, 4 (Tenn. 1946)

.
To be jus tic ia

ble , a c a se mus t inv olv e pr e se ntl y e xistin g ri g hts , li ve iss ue s th a t are wi thi n a c ourt ’s jur isd ict io n, and pa rt ie s w ho have a

le g a lly c og niza ble int e re st i n th e iss ue s. Se e State v. Br own & Wil liamson Tobacc o Corp., 18 S.W .3d 1 8 6 , 193 (Tenn. 2000) . A ca se is not justiciable if it does not involve a g enuine, e x isting con t ro v er s y requiringthe adjudication of prese ntly exis ting r ights. See State ex rel. L ewis v. State, 347 S.W.2d 47, 48-49 (Tenn. 1961).

F ro m th e on se t of

thi s d isp ute , U TM G ha s ar g ue d th a t a jus tic ia ble c on tr ov e rs y

e xists be c a us e Dr . V og t c omm itt e d a n a nti c ipator y re pu diatio n o f th e Agre e me nt. UT MG ba se s it s anti cipatory

brea ch cla im on: (1) Dr. Vog t’s Janu ar y 1 4 , 2 0 0 4 e
- ma il to D r

. Wo o d s ide , which stated t h a t s h e “ p la

n [n e d ] t o e n g a g e in

th e p r a c ti c e o f

me d ic in e lo c a ll y ” ; a

n d ( 2 ) e v id e n c e that Dr. Vog t ha d “lea sed space

. . . with the intent of establishing an office for th e p ro fe s s i o nal pr a c tic e of

me dic ine

. . . [w ith in t

he Rest ri cte d Area] .” T hu s, to d e te rm ine wh e the r t he re is a justiciable controve rsy

in this case, we must determine whe ther Dr

. Vo gt comm itted an anticipatory

brea ch of he r employ

ment contra ct.-10- Anticipatory

Repudiation
A p art

y to a c on tr a c t c an ta

ke c e rt a in a cti on s or make c e rt a in s tate me nts that r e pu diate it. Suc h a re pu diatio n c an oc c ur wh e n a pa rt y “ c omm it[s] a vo luntary a c t wh ic h re nd e rs the party unable or appar ently

unable to per form the c ontrac t,” Wright v. Wrig ht, 832 S.W .2d 542, 545 (Tenn. Ct. App. 1991); se e Restateme nt (Second) of Contracts § 250 (1979), or when “ the
wo rd s and

c on du c t of

the c on tr a c tin g pa

rt y

. . . amou

nt t o a tot a l and

un qu a lif ie d r e fu sa l to pe rf or m th e c on tr a c t.” Wri g ht, 83 2 S. W.2 d at 54 5; s e e Ky . H ome Mu t. L if e Ins. Co. v. Rog e rs , 270 S.W .2d 188, 194-95 (Te nn. 1954); Br ady v. Oliver, 147 S.W. 113 5 , 1139 (Tenn. 1911) ; Wil kins v. T h i rd Nat. Bank in Na shville, 884 S.W .2d 758, 761 (Tenn. Ct. App. 1994) . An ind ic a ti on that mo re ne g oti a tio ns are so ug ht i s n ot a tot a l and un qu a lif ie d r e fu sa l to pe rf

or m. See Palmiero v. Spada

Distr. Co., 217 F.2d 561 , 5 6 5 (9th Cir. 1954) (holdingthat “an anticipatory

brea ch of c ontrac t is not established by a neg ative attitude or one which indicate s that more ne g otiations are soug ht”).

When a re pudiation occur s befor e the time that a contract requires a party to perfor m, the repudiating pa

rty has committed an “ anticipatory repudiation” or an “ anticipatory brea ch” of

the contra ct. S ee Churc h of Christ Home for A g ed v. Na shville Trust Co., 202 S .W.2d 178, 183 (Tenn. 1947) ; 23 S am u el Wil liston, Treatise on the L aw of Contracts § 63.29 (Richa rd A. L ord
e d

. , 4 th e d

. 2 0 0 2 )

. B e li e v in g th a t a n o th e r p arty h a s c o mm itte d

anan ti c ip a to r

y brea ch of a contra ct, the non-br eac hing party may elec t to take one of thre e cour ses of a ction: (1) re scind the
c on tr a c t and

purs ue re me die s b a se d o n a re sc iss ion ; ( 2) t reat

the re pu diatio n a s an imme diate b r e a c hb y b r in g in g s u it

o r c h an g in g p o s it io nin

s o me w ay ; o r

( 3 ) aw a it th e ti me f

o r p e r f o r ma nce of the c ontrac t and bringsuit after that time has ar ri v ed. Willi ston on Contracts at § 63.33; see To we r I nv e sto rs , L L C v. 11 1 Ea st Che stn ut Con su lta

nts , I nc ., 86 4 N.E .2 d 9 27 , 9 40 (I ll. Ap p. Ct. 2007).

I f the non-bre aching party elec ts to sue on the anticipatory brea ch, then h i s an t icipatory brea ch ca use of a ction, if proven, e ntitles t h e n o n -b rea chingparty to a re medy

for a n actual brea ch of the contra ct, as if the a nticipatory

brea ch had oc curr ed af

t er t h e time for pe rfor

mance h ad ar rived. See , e.g ., Roehm v. Horst, 178 U.S. 1, 9 (1900); Towe r Investors, 864 N.E.2d at 940; Bourke v. Western B us. Prods., 120 P.3d 876, 883 (Okla

. C i v

. Ap p. 2005); Weitz el v. Sio ux Va lle y Hea

rt Part ne rs , 7 14 N. W.2 d 8 84 , 8 94 (S .D . 2 00 6) . U nd e r t his log ic , c ourt s w ill sometimes refe r to an “ anticipatory brea ch” of

cont ra ct as a “constructive bre ach.” See B lack’ s L aw Dic tionary

182 (7th ed. 1999).

I nt h e i n s t an tca s e, t h e A gre em en tp l ai n l y e s t ab l i s h es th at th e d at e o nwh i ch Dr

. Vo gt
w a s r e qu ir e d

to b e g in to a b id e by Section2 2 ’ s r e s tr ic ti o n s w a s th e d a te D r

. V o g t “ [w a ]s t erm i n at ed ” f

ro mUT M G ’s em p l o y

. Be cau s e U T M G b ro u gh ti t s s u i ta m o n thb ef o re Dr

. Vo gt left UTMG’ s em p l o y , UTMG ele cted to tre at Dr. V og t’s actions up to the date of the c omplaint
a s an a nti cip ato ry breac h o f t

he Ag re e me nt a

nd so ug ht a re me dy un de r t he c on tr a c t as if Dr. Vog t had a c t u a lly

brea ched the contra ct. Havingmade this elec tion, the disposit ive leg al question befor e the tria l court bec ame, “ Did Dr. Vog t commit an anticipatory re p u d i at i o n of herM arch 15 , 20 0 5 was a y ear a n d th re e d a ys a fter D r. V o gt l ef t her emp l o y wi t h U T M G

. T he A greem ent 9

res t ri ct ed D r. V o gt ’ s em p l o y m ent i n t he R est ri ct ed A rea f o r onl y one cal end ar y ear.
-11- covena n t n o t t o prac tice medicine within the Restricted Are a for a y ear afte r leaving U TMG’s employ ? ”

Wit h the prope r l ega l q u es t ion in focus, we c onclude that ther e is no g enuine issue of materia l fac t in this case , and ther efor e, Dr . Vog t is en t i t l ed to judgment a s a matter of law. Neither of the ke y piece s of evidenc e upon which U TMG base d its original c laim—Dr. Vog t’s Jan uary 14 , 20 04 e-m ail to Dr. W oo ds id e or th e Hea thc a re Re a lty Trus t documents—demonstrate that Dr. V og t committed an anticipatory brea ch of he r contra ct.

I n Dr. Vog t’s J anuar

y 14, 2004 e-ma il to Dr. Wo o d s i d e s he stated, “ After much
c o n s i d e r a t i o n , I p l ant o e n g a g e i nt h e p r a c t i c e o f m e d i c i n e l o c a l l y.

. . . I w i s ht o d i s c u s s t h e b u yout and the possible mecha nisms that address the non-c ompetition component of my contra ct.” Although the e-ma il was ce rtainly a voluntary

act, its plain langua ge gi v es no indication that Dr. Vog t was unable to perfor m under he r Ag ree ment with UTMG o r t h at she had totally and
w i t h o u t q u a l i f

i c a t i o nr e f

u s e d t o p e r f o r mh e r o b l i g a t i o n s u n d e r

th e A g r e e m e n t

. T o th e c o n tr ar y, the e- mail makes it clea

r t h at s he had e very

intention to perform he r duties under the contra ct by
e ng a g ingin t

he Se c tio n 2 2( b) buy -o ut p ro c e ss. Th is in ten t w a s r e a ff ir me d a ft e r U TM G f

ile d it s complaint when Dr. Vog t inter pled funds into c ourt that would have satisfied her ob l i gations under the Section 22 buy -out option.

We also do not find the Hea lthcare Realty T ru s t d o cuments suffic ient to establish that Dr. Vog t anti ci p at o ri ly

brea ched the Ag ree ment. We find that neither the pr oposition t hat Dr. Vo g t’ s n ame wa s sl a te d to a pp e ar o n a

sign und e r t

he fi rm name “ Wome n’s Heal th Spe c ia lis ts, PL L C” no r t

hat sh e was li st ed on a

land lor d’ s a dmi nis tr a tiv e fo rm a s a n e mpl oy e e of

the fi rm to be a br eac h of the Ag ree ment.

I nstead, we find the actions of Dr. Vog t a nd the dates on whic h they occur red to be clea

r, undisputed proof that D r. Vo gt did not anticipatorily brea ch the Agree ment. The He althcar e Realty Trust documents we re dated Fe bruar y 6, 2004. That fa ct shows only that, as of th is date, Dr. Vog t possibly

intended t o prac tice medicine within the Restricted Are a. B ut, as late a s Fe bruar y 10, 2004, Dr. Vog t was still actively pursuing her options with UTMG under the Section 22 buy -out provision. The int ent t o prac tice withi n the Restricted A rea coupled with the intent to eng ag e in the buy -out option was not in violation of the Ag ree ment’s terms.

Fur thermore , althoug h Dr. Vog t’s orig inal intent might have been to wor k withi n the Restricted Ar ea, this intent cha ng ed, or at least bec ame l es s ce rt ain, when U TMG re ache d “a part ia l s e tt le me n t” w it

hth e I n te r

v e n o r s

. A lt

h o u g hth e f

u ll te r ms o f th e a g r e e me n t w e r e n ever introduced to the tria l court, the trial c ourt took judicial n o t i ce o f t he fa ct that the Interve nors would not prac tice tog ether with Dr. Vog t unt i l M ar ch 15, 2005. Followingthis ag ree ment and 9I t i s i mpor t an t t o n ot e t h at , h ad D r

. V og t ac t u al l y br ea ch ed t h e Agr ee men t a t a n y t i me bet we en M ar ch 12, 10
20 04 an d M ar ch 12 , 200 5, U T M G coul d hav e f i l ed a c aus e of

ac t i on f or br eac h of

cont r act

. -12- afte r her employ with UT M G ce as ed, Dr. Vog t announce d her intention to prac tice outside the Restricted Ar ea.
Acc ording ly , following UTMG’s pa rt i al settlement with the Interve nors, the undisputed fac ts in thi s case wer e as f o l l o ws: Dr. Vog t left UTMG’s e mploy on Marc h 12, 2004. The Ag ree ment’s non-c ompete cove nant took eff ect a s of this same day an d l as t ed until March 12, 2005. On April 1, 2004, Dr. V o gt fi l ed an af fidavit with the trial cour t stating that she ha d
acc epted a

position as a urog y

n ec o l o gist in I ndianapolis, Indiana, we ll outsi de the Agree ment’s Re str ic ted Area. I n a

su bs e qu e nt a ff

ida vit , D r. Vo g t st a te d th a t sh e wa s “ no t g oin g to e ng a g e in the pr a c tic e of

med ici ne [with in t

he Re str ic te d A re a ] be fo re Marc h 1 5, 20 05 .” (e mph a sis in orig inal). Ne ither in the origin al co m p laint nor in any subsequent plea dings be fore the trial court did UTMG a lleg e any fac t that demonstrated that Dr

. Vo gt had anticipatorily brea ched the Ag ree ment’s non-c ompetition covenant.

I n an a tt e mp t to s u

p p le me n t th e r e c o r d to s h o w th a t D r

. V o g t a c tu a ll y b r e a c h ed the Agr ee m en t , UT M G a tt ac h edd o cu m e n t s t o i t s b ri ef th at , i tco n t en d s , d em o n s tra t e t h at Dr

. Vo gt ha s n ot a bid e d b y the Ag re e me nt’ s Se c tio n 2 2. No ne of th ese do c ume nts , h ow e ve r, a pp e ar i n 10 the appe llate re cord a

nd are not properly

befor e u s

. S ee Sher

rod v. Wix , 849 S.W .2d 780, 783 (Tenn. Ct. App. 1992) ; see a lso Tenn. R. App. P. 13(c) ( “The Supreme Cou rt . . . may consider those fac ts established by the evidenc e . . . and se t forth in the re cord.” ).

CO NC LU SION

Be cause Dr. Vog t did not commit an anticipatory repudiation of the Ag ree ment and thus
no jus tic ia

ble c on tr ov e rs y wa s eve r be fo re the tr ia l c ourt , s he wa s e nti tle d to summa ry jud g me nt. As such, we vaca

te the dec ision of the C o u rt o f Ap p ea ls and rema nd the ca se to the trial cour t for the e ntry

of an or der dismissing the c ase.

We t a x this a

pp e a l’s cos ts t o U T M e dic a l G ro up , Inc ., fo r whic h e xec uti on may iss ue , if
n e c e s s ar y.

________________________________ CO RN EL I A A . CLARK, JUSTI CE