### TEXA S C OU R T OF A PPEAL S, THIR D DIST R ICT , AT AU STIN

NO. 03-04-00095- CV

S. M e r lin M c Ane lly , A ppe lla nt

v. Brady Medical Clinic, P.A .; Lonni e Lee Vickers; Jam es H. Allen, Jr.;

and P e dr o C as tr o, App e lle e s

F ROM THE DISTRICT CO URT OF MCCULLOCH COUNTY , 198TH JUDICIAL DISTRICT

NO. 20021 34, H ONO RAB LE EMIL KARL PRO HL, JUDGE P RESIDING

M E M O R

A N D U M O P I N I O N Ap pe lla nt D r. S. Me rl in M c An e lly c ha lle ng e s th e tr ia l c ourt ’s jud g me nt no n o bs tan te
v e re dic to (JNOV) in favor of appe llees B rady

Medica l Cli nic, L o n n i e Vi ckers, J ames Allen, a nd Pedro Castro (collectively , Br ady Medica l Clini c). Dr. McAnelly sued to enfor ce a

verba l ag ree ment that he alleg edly

made with Bra d y M ed i ca l Cli nic. Dr. Mc Anelly contende d that Br ady

Medica l Clin ic pr omi se d to pa

y him $2 5, 00 0 in

e xch ang e fo r s ome me dic a l su pp lie s and

his pr omi se no t to compete w ith th e cl i nic’s medica l prac tice for two y ear s. Alternatively , he soug ht damag es on promissory estoppel and quantum meruit g rounds. Be cause the promise not to compete a lleg ed by Mc An e lly

wa s une nf

or c e a ble un de r Te xas law, we a ff ir m the tr ia l cou

rt ’s jud g me nt wit

h r e g ard to enfor ceme nt of the non-compe te ag ree ment and the promissory estoppel claim. We rev er s e a nd2

rende r j udg ment with respec t to Dr. McAne lly ’s quantum meruit cla im for medica l supplies given to B ra dy Me dic a l Cli nic and

re mand to t he tr ia l c ourt

fo r a de te rm inatio n o f atto rn e y ’s fe e s.
BACK GR OUND Dr. McAnelly

prac ticed medicine as a f amily doctor in B rady , T ex as, for over 35 y ear s. At the time of his r etireme nt, D r. McAne lly was prac ticing with D r. Castro in a c linic owned by Wes t T e xas M e dic a l A sso c iate s ( WTM A) . D rs . M c An e lly and Ca str o w e re e m

p l o ye e s o f WT MA which paid them a salary based on the reve nue ea ch doctor g ener ated, less the ope ratingexpenses of the c lin ic
. WTM A de c ide d it wo uld c los e its c lin ic in B ra dy wh e n Dr . M c An e lly ann ounc e d h is
re tir e me nt. Br ady

Medica l Cli nic dec ided to open a ne w clinic in the same space . I t purcha sed the buildi n g which housed the clinic and WTMA donated some of its equipment. Br ady Medica l Clini c also neg otiated with Dr. McAnelly prior to his retire ment reg ardingdetails of the tra nsition. Th e se ne g oti atio ns and

the te rm s o f a

ny a g re e me nt b e tw e e n Dr . McAne lly and B ra dy Me dic a l Cli nic fo rm the ba sis of

the dis pute
. Dr
. Mc An e lly a lle g e d tha t in a ve rb a l a g re e me nt B ra dy Me dic a l Cli nic promised to pay

him $25,000 in ex chang e for h i s p ro mise not to compete and f or some medica l
su pp lie s r e ma ini ngin t

he c lin ic . B ra dy Me dic a l Clin ic c on te nd e d that the y a tte mpt e d to n e g oti a te a pric e they

would pay

Dr. McAnelly

for his g oodwill and th e re m aining supplies, but the parties
ne ve r c ou ld a g re e on

the te rm s. Dr. McAnelly

retire d from his medica l p ra ct i ce o n Dec ember 31, 2001, and B rady Medi cal Cl ini c op e ne d it s d oo rs Janu ary 1, 20 02 . D r. Mc An e lly wr ote a le tte r t o h is p a tie nts announcinghis retireme nt and informing them that Br ady Medica l Clinic would assume his pra ctice.3

Br ady Medica l Cli nic did not pay Dr. McAnelly

any money and Dr . McAne lly

did not recommend Br ady Med i ca l C l i n i c t o h i s p at i en t s . Dr
. M cA n el l y s u b s equ en t l y

b ro u gh ts u i taga i n s tBr ad y M ed i cal Clin ic se e kin g the $2 5, 00 0 h e a lle g e d wa s pro mis e d in exch ang e fo r his a g re e me nt n ot t o c omp e te and his share of t he medical supplies. The case was tried before a jury and the jury

found in favor of Dr. Mc Anelly

in all respe cts. The trial court, howe ver, grante d Br ady Medica l Cli nic’s motion for JNOV and de nied all re lief soug ht by Dr. McAnelly . This appea l followed.
DI SCU SSIO N Stand ard of Review

A J NOV is app ro pr iate wh e n th e e vid e nc e is c on c lus ive and wh e n o ne pa

rt y is entitled to judgment a s a matter of law. Mancorp, I

nc. v. Culpeppe r , 8 0 2 S. W. 2 d 2 2 6 , 2 2 7
- 2 8 ( T e x. 19 90 ); Trini ty Indus., Inc . v. Ashland, Inc , 5 3 S. W.3 d 8 52 , 86 3 ( Te x. Ap p. —Aus tin 20 01 , p e t. denied) . We review t h e d en i al o f a moti on for JNOV under a leg al suffic iency

or no evide nce standard of

revie w. Trin ity

In du s. , 53 S.W .3d at 863. That is, we r eview the evidenc e in the lig ht most favora

ble to the jury finding s, considering only the evidence and infere nces that support them and disreg ardingall evidenc e and inf ere nces to the contra

ry . Id . We will reverse a JNOV if there is more than a scinti lla of evidence to support the jury ’s finding
. Se e Ma nc or p , 802 S.W .2d at 228.
Enf orce m ent of the Contract

In his first issue, Dr. McAne lly con t ends t hat the trial c ourt’s JNOV was improper be c a us e he ha d a

n e nf or c e a ble a g re e me nt to re c e ive $2 5, 00 0 in e xch ang e fo r c on tr ibutin g c e rt a in medical supplies to B rady Medica l Cli nic and pr omising n o t to compete with its doctors for two4

y ear s. A cove nant not to compete is a disfa vored c ontrac t in restraint of tra de and w ill not be enfor ced unle ss it meets certa in statutory require ments. Alex Shes h u n off Mgmt. Servs., L.P. v. Johnson , 12 4 S.W. 3d 67 8, 68 4 (T e x. Ap p. —Aus tin 20 03 , p e t. gra

nte d) ; see Tex. Bus. & Com. Code Ann. § 15.50 (West 2002). The e nforc eabil i t y of a c ovenant not to compete is a question of law. Light v. Centel Cellular Co. of T exas , 8 83 S.W. 2d

64 2, 64 4 ( Te x. 19 94 ); Tril ogy Software, Inc. v. Calli dus Softwar e, Inc

. , 143 S.W .3d 452, 459 (Tex. App.—Austin 2004, no pet. h.). Gene rally , there
are two criter ia for the enfor cea bility of a covena

nt not to c ompete under

section 15.50: the cove nant
mus t ( 1) be anc ill ary to or pa rt of an oth e rw ise e nf

or c e a ble a g re e me nt a t th e tim e the a g re e me nt i s made, a nd (2) c ontain limit ations as to time, g eog raphic al are a, and scope of activity to be restra ined that are rea sonable a

nd do not impose a g reater re straint than is nece ssary to protect the goodw ill or other business intere st of the promisee. Light , 8 83 S.W. 2d a t 64 4; see Tex. Bus. & Com. Code Ann. § 15.50(a) . The statute pr ovides additional require ments for a covena nt not to compete involving a license d phy sician. See Tex. Bus. & Com. Code Ann. § 15.50(b).

The pa rties disputed the terms of the a lleg ed agree ment and whe ther the pa rties to the
a lle g e d o ra l a g re e me nt a

nti c ipate d th at th e y

wo uld be bo un d de sp ite the fa c t th a t ot he r t e rm s w ou ld have to be ag ree d upon lat er . Howeve r, eve n assuming that the ag ree ment was made as Dr. Mc An e lly

a lle g e s, it w ou ld b e un e nf or c e a ble un de r s e c tio n 1 5. 50 be c a us e th e agree me nt n ot t o compete was not “anc illary to an otherw ise enfor cea

ble ag ree ment.” See Light , 883 S.W .2d at 644. In o rd e r f or a c ov e na nt n ot t o c omp e te to b e anc ill ary to a n o the rw ise e nf

or c e a ble a g re e me nt it mus t be desig ned to enf

orce a contr actua l obligation of one of the pa rties. Id . at 647 (c iti n g Bu sin e ss El e cs. v . S

ha rp Ele cs. , 4 85 U. S. 7 17 , 7 38 -3 9 ( 19 88 )) ; Tril ogy , 1 43 S.W. 3d a t 46 2. “ Th e oth e rw ise5

e nf or c e a ble a g re e me nt m

us t g ive ri se to t

he ‘i nte re st w or

thy of pr ote c tion’ by th e c ov e na nt n ot t o compete.” Light , 8 83 S.W. 2d at 64 4. “ Exampl e s o f l e g iti mate , p r o t e c t a ble int e re sts inc lud e bu sin e ss g oodwill, trade sec rets, and othe r conf idential or propr ietary

information.” DeSantis v. W acke nhut Corp. , 7 93 S.W. 2d

67 0, 68 2 ( Te x. 19 90 ); see Trilogy , 143 S.W .3d at 462. Here, the only

otherwise e nforc eable ag ree ment Dr. McAnelly contends wa s made
wa s th e purc ha se of hi s r e ma ini ngme dic a l su pp lie s. An

a g re e me nt n ot t o c omp e te is who lly unrelated to the pur ch ase of medical supplies, and suc h a tra nsaction is not an intere st worthy of protec ting through a restra int of trade. See Light , 8 83 S.W. 2d at 64 7; De Sa nti

s , 793 S.W .2d at 682; Tril ogy , 143 S.W .3d at 462. Be cause we hold that the ag ree ment Dr. McAne lly seeks to enf orce was an unenf orce able r estraint on tra de, we overr ule his first issue.
P rom issory Estopp el

In the abse nce of

an enf orce able c ovenant n o t t o c o mp e te , D r . M c An elly contends that he wa s e nti tle d to re c ov e r $ 25 ,0 00 un de r a pr omi sso ry

e sto pp e l th e or

y . Pr om is sory

e sto pp e l is a
cause of ac tion available to a pr omisee who has acte d to his detriment in r easona ble relianc e on an otherwise une nforc eable promise. Se e W he e le r v. W

hite , 3 98 S.W. 2d

93 , 9 7 ( Te x. 19 65 ); Bailey v

. City of A us tin , 9 72 S.W. 2d

18 0, 19 3 ( Te x. Ap p. —Aus tin 19 98 , pet
. den ie d) . A n o the rw ise
un e nf or c e a ble pr omi se may

be bin din gif

the pr omi so r s ho uld

re a so na bly e xpe c t th a t th e pr omi se wi ll i nd uc e a c tio n or fo rb e ara

nc e , the pr omi se e su

bs tanti a lly

re lie s o n th e pr omi se to h is d e tr ime nt, and enf orce ment of the promise is nec essar y to avoid an injustice. Bailey , 972 S.W .2d at 192. Al tho ugh Dr . M cAn ell y ’s t est im on y pro vi des so me e vi den ce t hatth ere was a pro mi se n otto com pete and that he r elied on that promise by ref rai n i n g fr o m p racticing medicine pa rt time, there is no6

evidenc e that Dr . McAne lly ’s re liance w as for esee able. See E nglish v. Fischer , 660 S.W .2d 521, 524 (Tex. 1984) (ele ments of promissory estoppel inclu d e (1 ) promise, (2) fore seea bility of re liance there on by

the promisor, and ( 3) substantial relianc e by t h e p ro m i s ee to his detriment). Dr. McAne lly

consistently

stated durin g

n e g o ti a ti o n s w it h Br ady Medica l Cli nic that he intende d to retire fr om the pr a c tic e of me dic ine
. Th e re is no thi ng in the re c or d wh ic h ind ic a te s that Dr. McA nell y planned to open a

part-time pr actice afte r his r etireme nt f rom WTMA and that he g ave up that plan based upon a

ny promise made by Br ady Medica l Cli nic. Fur thermore , Dr. McAnelly

testified that Dr. Allen of

Br ady Medica l Cli nic informed him that the c lini c would not pay him the $25,000 without a signe d contra ct. The me re f act that Dr . McAne lly

relied on a

n unenfor cea

ble agree ment that Br ady

Medica l Cli nic had r epudiated doe s not make h i s ac t i o n s fore seea ble. We also ca

nnot
c on c lud e tha

t th e e nf or c e me nt o f a

n a g re e me nt whic h is e sse nti all y a naked re str a int of tr a de is
n ec es s ary to avoid injusti ce. See Crossmark, I nc. v. H azar , 1 2 4 S
. W
. 3 d

4 2 2 , 4 3 4 ( T e x. App.—Dallas 2004, pe t. denied) ( naked r estraint o f t rade ag ainst public policy). We there fore
overr ule Dr. Mc Anelly ’s sec ond issue that he is entitled to rec over unde r a pr omissory estoppel th e o r y. Qua nt um M e r uit

In his third issue, Dr. McAne lly contends that the trial court e rre d by g rantingJNOV on his claim for re cover

y in quantum meruit for the va lue of the m edica l supplies conveyed to B rady Medica l Cli nic. Quantum mer uit is an equitable reme dy which does not arise out of a contra ct but is independent of it. Vortt Ex ploration v. Chevron U.S.A., Inc

. , 787 S.W .2d 942, 944 (Tex. 1990); Colbert v. Dallas Joint Stock Land Bank, 1 02 S.W. 2d 10 31 , 1 03 4 (T e x. 19 37 ). Ge ne ra lly , a pa rt y7

may rec over unde r quantum meruit only when ther e is no express contra ct cove ringthe servic es or materia ls f

urnished and when non-pay ment for the service s or mater ials rende red w ould result in an
u n j u st enrichment to the pa rty benef itted. Vortt Exploration , 7 8 7 S
. W
. 2 d a t 9 4 4
. T h e r e m e dy is based upon the p ro m i s e i m p lied by law to pay

for mate rials furnishe d or ser vices re ndere d and knowing ly

acc epted. Id . T o r e c ov e r u nd e r q ua ntum me ru it a

c la ima nt m us t pr ov e that: (1) valuable se rvice s were rende red or materia ls furnished; (2) for the pe rson soug ht to be char g ed; (3) which ser

vices a nd materia ls wer e acce pted by the person soug ht to be cha rg ed, and us e d o r e njo y e d b y

him ; (4) under suc h circ umstances a s rea sonably notified the per son soug ht to be char g ed that the plaintiff in per formingsuch ser v i ce s was expectingto be paid by the person soug ht to be char g ed.
Id
. Her e ther e is evidenc e in the record supporting each element of quantum meruit. Dr. Mc An e lly , D r. Ca str o, and WTM A a dmi nis tr a tor

To mmy Mc Ma ho n a ll t e sti fi e d that D r. Mc An e lly had an ownership intere st in the remaining WTMA medical suppli es because the cost of his share of the supplies had be en regu l ar l y d ed ucted f rom his paychec k. I t is also undisput ed that Dr
. Mc Ane lly

so ug ht p ay

me nt f ro m B ra dy

Me dic a l Cli nic fo r t

he su pp lie s a s p art

of the a g re e me nt. Br ady Medica l Cli nic does not deny that they took possession of t h e s up p l i es and used the m. An inv e nto ry of the su pp lie s wa s take n and the ir va lue e sti mate d. Th e jur y c on c lud e d that D r. Mc An e lly
was e ntitled to $2400 compensation f or his sha re of the medical supplies a cce pted by Br ady Medica l Clini c.8 Viewingthe re cord as a whole, there was more than a scintilla of evidenc e supporting the jury ’s ver dict awa

rdingDr. McAnelly

$2400 in quantum meruit for the me dical supplies provided to B rady M edica l Cli nic. We there fore reve rse the tr ial court’s take nothing judgme nt
re g ard ingthe qu a

ntum me ru it c la im an d re nd e r jud g me nt u po n th e ve rd ic t in

fa vo r o f D r. Mc An e lly in the amount of $2400.
Attor ney’s F ees

Dr . McAne lly

a lso c ha lle ng e s th e tr ia l c ourt ’s JNOVon his c la im f

or a tto rn e y ’s fe e s. Dr. McAnelly

preva iled on his quantum meruit claim but did not pr ev ail on his contrac t and promissory estoppel claims. Be cause we rende r judgme nt in favor of Dr. McAne lly on his quantum meruit claim, he is entitled to some attorney ’s fe es. Se e Y ou ng v . Ne ath e rli n , 102 S.W .3d 415, 421- 22 (T e x. Ap p. —H oust on [14t h D ist .] 20 03 , n o p e t.) ; Exx on Corp. v. Breeze vale, Ltd. , 82 S.W .3d 429, 442 (Tex. App.—Dallas 2003, pe t. denied); City of Denton v. Mun. Adm in. Servs., Inc

. , 59 S.W .3d 764, 772 (Tex. App.—For t Worth 2001, no pet.). When a par ty seeks to re cover

attorney ’s fe e s in a c a se inv olv ingmul tip le c la ims , o ne of wh ic h h e pr e va ile d o n a

nd on e of wh ic h h e did

no t, the par ty must offer e vidence seg reg ating attorney ’s fe es among the var ious claims. Be ar d F am ily Partner s h i p v. Commercial Inde m. , 1 16 S.W. 3d 83 9, 85 0 ( Te x. Ap p. —Aus tin 20 03 , n o p e t.) ; see also Houston Livestock Show &Rodeo, Inc . v. Hamric k, 1 25 S.W. 3d 55 5, 58 5 ( Te x. Ap p. —Aus tin 2003, no pet.). But see Gorman v. Countrywood Property O wners Ass’n , 1 S. W. 3 d 9 1 5 , 9 1 8 ( T e x. App.—B eaumont 1 9 9 9 , p et
. d enied); Ae tna Cas . &Su r. v . W ild, 9 4 4 S. W. 2 d

3 7 , 4 1 ( T e x. App.—Amar illo 1997, writ denied).9 Dr . M c An e lly ’s att orney

te sti fi e d at tr ia l th a t th e iss ue s r a ise d w e re “ ine xtri c a bly intertwined” and that segreg ation was impossible. An exception to the duty to seg reg ate a

rises whe n the a tto rn e y ’s fe e s are in c onne c tio n w ithc la ims ari sin g out of the same tr ans a c tio n a

nd are s o interre lated that their prosecution entails proof of essentially the same f

acts. Stewart Ti tle Gaur. Co. v. Sterling , 8 22 S.W. 2d 1, 11 (T e x. 19 91 ); Hamrick, 125 S.W .3d at 585. Whether fe es ca n be seg reg ated be tween va

rious claims is a question for the court. Hamrick, 1 2 5 S.W .3d at 585. Contrary to the testimony

of Dr. Mc Anelly ’s at t o rney , we f ind that the proof ne cessa ry for the prosec ution of McAnelly ’s quantum meruit cla im differs substantially from that re quired to prove his contrac t and promissory estoppel claims. The majority of the e vidence in the rec ord is devoted to whether

the alleg ed agree ment was for Dr. McAnelly ’s g oodwill or a cove nant not to compet e. Th e iss ue s r e late d to the ow ne rs hip , tr ans fe r, and va lue of th e med ica l supp lie s w e re re lativ e ly undisputed and had little to do with the negotiations of t he parties. We theref ore c onclude that the att o rn ey ’s fe es ar e ca

pable of seg reg ation and that Dr . McAne lly is only entitled to those fee s at t ri b u t ab le to the prosec ution of his quantum meruit claim. See Ste rling , 822 S.W .2d at 11-12.

Her e, the jury

found that Dr. Mc Anelly ’s attorne y ’s fe es we re $32,000 f or p r e p a r a ti on
and tr ia l on all cl a ims and

$5 00 0 e a c h in

the e ve nt o f a

n a pp e a l to thi s c ourt

and the su pr e me c ourt
. Among the fac tors considere d by the jury in de termining a rea sonable a war d of attorne y s fee s was “the amount involved and the r esults obtained.” The jury was not aske d to seg reg ate the attorney ’s fee s. The dete rmination of rea sonable attorney ’s fee s is a question for the trie r of f

act. Sterling , 822 S.W. 2d a t 12
. B e c a

us e the re ha s b e e n n o d e te rm inatio n o f t he re a so na

ble a tto rn e y ’s fe e s attr ibuta ble10

to the quantum meruit claim, we rema nd the issue of attorney ’s fe es to th e trial court f or fur ther consideration consistent with thi s opinion.
CO NC LU SION We affir m the trial court’ s jud gme nt d e ny in g D r . M c An e ll y ’s contra ct and pr omissory estoppel cla ims, we reve rse a nd rende r judgm en t in the amount of $2400 on Dr. Mc Anelly ’s quantum meruit claim, and we rema nd the issue of attorney ’s fee s to the trial court f o r f u rt her consideration consistent with thi s opinion.

Be a Ann Smith, J ustice Be fore J ustices Kidd, B . A. Smith and Pemberton Affir med in Part; Reverse d and Rende red in Part; Reve rsed a nd Remanded in Part Filed: Nove mber 12, 2004