Court Opinion

ID: 4465788
Source: CourtListenerOpinion
Date Created: 2019-12-19 16:06:32.449662+00
Date Added: 2024-06-11T14:28:07.964877
License: Public Domain

FILED
MEMORANDUM DECISION                                                      Dec 19 2019, 10:37 am

                                                                              CLERK
                                                                          Indiana Supreme Court
Pursuant to Ind. Appellate Rule 65(D), this                                  Court of Appeals
                                                                               and Tax Court
Memorandum Decision shall not be regarded as
precedent or cited before any court except for the
purpose of establishing the defense of res judicata,
collateral estoppel, or the law of the case.

APPELLANT PRO SE                                         ATTORNEYS FOR APPELLEE
Kent Farnsworth                                          Roger K. Kanne
Fort Wayne, Indiana                                      David D. Becsey
                                                         Erin E. Meyers
                                                         Zeigler Cohen & Koch
                                                         Indianapolis, Indiana

                                             IN THE

    COURT OF APPEALS OF INDIANA

Kent Farnsworth,                                         December 19, 2019
Appellant-Plaintiff,                                     Court of Appeals Case No.
                                                         19A-PL-1726
        v.                                               Interlocutory Appeal from the
                                                         Allen Superior Court
Lutheran Medical Group, LLC,                             The Hon. Craig J. Bobay, Judge
Appellee-Defendant.                                      Trial Court Cause No.
                                                         02D02-1903-PL-113

Bradford, Judge.

Court of Appeals of Indiana | Memorandum Decision 19A-PL-1726 | December 19, 2019                 Page 1 of 11
                                          Case Summary
[1]   As of 2017, Dr. Kent Farnsworth, M.D., practiced internal medicine for

      Lutheran Medical Group, LLC, in Fort Wayne. That year, Lutheran’s Practice

      Management Committee (“the Committee”) voted to eliminate call-coverage

      duties for Dr. Farnsworth (among others) at Lutheran Hospital (“the

      Hospital”). In March of 2019, Dr. Farnsworth sued Lutheran, claiming that it

      had breached the terms of its employment agreement (“the Agreement”) with

      him by eliminating call coverage. At the same time, Dr. Farnsworth requested

      that the trial court enjoin enforcement of the non-compete provisions of the

      Agreement, a request the trial court denied. Dr. Farnsworth contends that the

      trial court abused its discretion in denying his request for a preliminary

      injunction. Because we disagree, we affirm.

                            Facts and Procedural History
[2]   Dr. Farnsworth has practiced internal medicine in Indiana since 1996. In 2009,

      Dr. Farnsworth became employed by Lutheran in the Internal Medicine

      Section (“the Medical Group”), pursuant to the Agreement. The Agreement

      provided that Dr. Farnsworth was to render “Professional Medical Services and

      such reasonable administrative and management services as may be delegated

      to Physician by Employer on an exclusive basis, in accordance with all of the

      terms and conditions of this Agreement.” Appellant’s App. Vol. II p. 36.

[3]   More specifically, the Agreement provided that Dr. Farnsworth was to conduct

      office visits during normal business hours as determined by Lutheran, upon

      Court of Appeals of Indiana | Memorandum Decision 19A-PL-1726 | December 19, 2019   Page 2 of 11
      mutual agreement by Dr. Farnsworth, in consultation with the Committee.

      The Agreement also provided that Dr. Farnsworth’s duties included

              providing on-call coverage for patients of the Hospital (i.e.
              Emergency Room Call) after regular business hours in
              coordination with other Medical Group Physicians, in accordance
              with a schedule established by [the Committee] as necessary to
              satisfy the Medical Group Physicians’ obligations under the
              Hospital’s Medical Staff Bylaws, rules and regulations, and
              providing on-call coverage after regular business hours for patients
              of Physician or other physicians practicing in the same Medical
              Office in coordination with such other physicians, in accordance
              with a schedule established by [the Committee.]
      Appellant’s App. Vol. II p. 38. Hospital call coverage is a practice pattern that

      can place heavy demands on a physician’s time because it requires admitting

      and performing rounds on hospitalized inpatients before and after regular office

      hours, including weekends. Dr. Farnsworth was also required to comply with

      the policies and procedures established by Lutheran through the Committee as

      they were liable to change from time to time. Finally, the Agreement contained

      a non-competition provision, pursuant to which Dr. Farnsworth agreed that

      after leaving employment with Lutheran, he would not practice medicine for

      one year within a thirty-mile radius of Lutheran’s Hospital and Medical Office.

[4]   In 2017, after one the internists in the Medical Group left, several of the

      remaining internists decided that they no longer wanted to provide call

      coverage at the Hospital. The Medical Group held a vote, which resulted in

      three internists voting to continue call coverage and three voting to end it. The

      deadlock was referred to the Ops-Finance Subcommittee (“Finance

      Court of Appeals of Indiana | Memorandum Decision 19A-PL-1726 | December 19, 2019   Page 3 of 11
      Subcommittee”) of the Committee. The Finance Subcommittee determined

      and recommended to the Committee that the Medical Group no longer be

      scheduled to have call-coverage duty in the Hospital.

[5]   On April 20, 2017, the Committee held a meeting at which Dr. Farnsworth was

      present. As it happens, Dr. Farnsworth had been a member of the Committee

      for eighteen years. The Committee voted unanimously in favor of the Medical

      Group call-coverage schedule change. The schedule change was reaffirmed,

      again by unanimous vote, on May 18, 2017. On October 1, 2017, the new

      Hospital call-coverage schedule went into effect.

[6]   Over the course of the next year or so, Dr. Farnsworth noticed a significant

      decrease in his compensation as a result of the elimination of call coverage. On

      December 7, 2018, Dr. Farnsworth notified the Finance Subcommittee that he

      considered the call-coverage schedule change to be a breach by Lutheran of the

      Agreement. Checking with other members of the Medical Group revealed that

      none of the other internists desired to resume call coverage.

[7]   On February 18, 2019, Dr. Farnsworth received a letter from Lutheran, which

      stated:

                Thank you for taking the time to discuss your concerns with me.
                While we have not breached our employment agreement, allow
                this letter to document, permit and clarify that you shall have
                complete control over the diagnosis and treatment of patients
                assigned to you, including the ability to round on same in the
                hospital, before and after normal business hours. In addition, our
                employment agreement does not obligate us to create an on-call
                schedule, or provide you a call group, but requires you to provide

      Court of Appeals of Indiana | Memorandum Decision 19A-PL-1726 | December 19, 2019   Page 4 of 11
              on-call services should such a schedule be created. Currently, no
              such schedule exists.
      Appellant’s Br. p 35.

[8]   On March 29, 2019, Dr. Farnsworth filed suit against Lutheran, alleging breach

      of the Agreement and seeking declaratory judgment. Dr. Farnsworth claimed

      that Lutheran had breached the Agreement by changing the call-coverage

      schedule on April 20, 2017. Dr. Farnsworth also moved to preliminarily enjoin

      enforcement of the non-competition provision of the Agreement. On June 27,

      2019, the trial court denied Dr. Farnsworth’s motion for a preliminary

      injunction.

                                 Discussion and Decision
[9]   Dr. Farnsworth contends that the trial court abused its discretion in denying his

      motion to preliminarily enjoin enforcement of the non-compete provisions of

      the Agreement. “The grant or denial of a preliminary injunction rests within

      the sound discretion of the trial court, and our review is limited to whether

      there was a clear abuse of that discretion.” Ind. Family & Soc. Servs. Admin. v.

      Walgreen Co., 769 N.E.2d 158, 161 (Ind. 2002) (citing Harvest Ins. Agency, Inc. v.

      Inter-Ocean Ins. Co., 492 N.E.2d 686, 688 (Ind. 1986)).

              To obtain a preliminary injunction, the moving party must
              demonstrate by a preponderance of the evidence: (1) a reasonable
              likelihood of success on the merits; (2) the remedies at law are
              inadequate, thus causing irreparable harm pending resolution of
              the substantive action; (3) the threatened injury to the moving
              party outweighs the potential harm to the nonmoving party from

      Court of Appeals of Indiana | Memorandum Decision 19A-PL-1726 | December 19, 2019   Page 5 of 11
                the granting of an injunction; and (4) the public interest would not
                be disserved by granting the requested injunction.
       Ind. High Sch. Athletic Ass’n, Inc. v. Cade, 51 N.E.3d 1225, 1235 (Ind. Ct. App.

       2016).

[10]   In addition, Dr. Farnsworth is appealing from a negative judgment, where he

       failed to prevail on a claim where he had the burden of proof. Dr. Farnsworth

       must therefore establish that the trial court’s judgment is contrary to law.

       Pinnacle Healthcare, LLC v. Sheets, 17 N.E.3d 947, 953 (Ind. Ct. App. 2014). “A

       judgment is contrary to law only if ‘the evidence in the record, along with all

       reasonable inferences, is without conflict and leads unerringly to a conclusion

       opposite that reached by the trial court.’” Id. (quoting Carley v. Lake Cty. Bd. of

       Elections & Registration, 896 N.E.2d 24, 32 (Ind. Ct. App. 2008), trans. denied). If

       the trial court correctly concluded that Dr. Farnsworth failed to establish any

       one of the four requirements for a preliminary injunction by a preponderance of

       the evidence, we will affirm.

[11]   We choose to first address Dr. Farnsworth’s claim that he established a

       likelihood of success on the merits. “To obtain a preliminary injunction, the

       party seeking the injunction must have a reasonable likelihood of prevailing on

       the merits.” Bowling v. Nicholson, 51 N.E.3d 439, 444 (Ind. Ct. App. 2016),

       trans. denied. To demonstrate this element, the moving party is not required to

       show that he is entitled to relief as a matter of law, but only that success on the

       merits is probable. See id.

       Court of Appeals of Indiana | Memorandum Decision 19A-PL-1726 | December 19, 2019   Page 6 of 11
[12]   As mentioned, Dr. Farnsworth’s underlying claim is that Lutheran breached

       the Agreement. To prevail in any contract action under Indiana law, a plaintiff

       must establish that (1) a contract existed; (2) the defendant breached the

       contract; and (3) the plaintiff suffered damage as a result of defendant’s breach.

       Roche Diagnostics Operations, Inc. v. Marsh Supermarkets, LLC, 987 N.E.2d 72, 85

       (Ind. Ct. App. 2013), trans. denied. Contract construction is a question of law

       for the court, and if the intention of the parties can be ascertained from their

       written expression, that intention must be carried out by the court. Eck &

       Assocs., Inc. v. Alusuisse Flexible Packaging, Inc. 700 N.E.2d 1163, 1167 (Ind. Ct.

       App. 1998), trans. denied.

[13]   “Indiana courts have long recognized and respected the freedom to contract.”

       Id. (quoting Trotter v. Nelson, 684 N.E.2d 1150, 1152 (Ind. 1997)). The courts

       should interpret contracts as a whole to determine the intent of the parties. Id.

       “‘[T]he general rule of freedom to contract includes the freedom to make a bad

       bargain.’” Indpls.–Marion Cty. Pub. Library v. Chadier Clark & Linard, PC, et al.,

       929 N.E.2d 838, 852 n.13 (Ind. Ct. App. 2010) (quoting Ind. Bell Tel. Co. v.

       Mygrant, 471 N.E.2d 660, 664 (Ind. 1984)), trans. denied.

[14]   Specifically, Dr. Farnsworth argues that the Committee’s elimination of call

       coverage constituted a breach of the Agreement. The Agreement provided, in

       part, that Dr. Farnsworth was required to provide call coverage “in accordance

       with a schedule established by [the Committee] as necessary[.]” Appellant’s

       App. Vol. II p. 38. So, the Agreement clearly provides that the call-coverage

       schedule was to be established by the Committee.

       Court of Appeals of Indiana | Memorandum Decision 19A-PL-1726 | December 19, 2019   Page 7 of 11
[15]   Dr. Farnsworth does not dispute that the Committee (of which he was a

       member) had the authority to establish the call-coverage schedule. Dr.

       Farnsworth does argue, however, that the Committee was not authorized to

       eliminate call coverage altogether. This argument ignores the fact that the

       Agreement provides that a schedule would be established “as necessary[.]”

       Appellant’s App. Vol. II p. 38. In other words, if no call coverage was deemed

       necessary, none need have been scheduled. Moreover, the Agreement clearly

       provided that Dr. Farnsworth was required to perform those medical services

       delegated to him by Lutheran, and Lutheran simply decided to no longer

       delegate call coverage to him.

[16]   Dr. Farnsworth also contends that the elimination of call coverage ran afoul of

       Section 11 of the Agreement, which prevented the Committee from exercising

       “any direct supervision or control over the individual treatment of patients by

       [Dr. Farnsworth.]” Appellant’s App. Vol. II p. 45. We have little hesitation in

       concluding that the elimination of call coverage did not amount to the

       Committee directly supervising or controlling Dr. Farnsworth’s care over any

       individual patient. By eliminating call coverage, the Committee was merely

       removing a class of patients from Dr. Farnsworth’s care, which is not the same

       thing.1

       1
         If we were to accept Dr. Farnsworth’s argument on this point and follow it to its logical conclusion, any
       decision by the Committee regarding a call-coverage schedule—be it elimination, establishment, or
       alteration—would have violated Section 11 of the Agreement.

       Court of Appeals of Indiana | Memorandum Decision 19A-PL-1726 | December 19, 2019                 Page 8 of 11
[17]   Given the Agreement’s clear language granting the Committee the power to

       establish (or not establish) a call-coverage schedule, Dr. Farnsworth has failed

       to show a reasonable likelihood of success on the merits of his breach-of-

       contract claim. Consequently, Dr. Farnsworth has not established that the trial

       court abused its discretion in denying his request to enjoin enforcement of his

       non-compete agreement with Lutheran.

[18]   We affirm the judgment of the trial court.

       Altice, J., concurs.

       Robb, J., concurs in result with opinion.

       Court of Appeals of Indiana | Memorandum Decision 19A-PL-1726 | December 19, 2019   Page 9 of 11
                                                 IN THE
           COURT OF APPEALS OF INDIANA

       Kent Farnsworth,                                         Court of Appeals Case No.
                                                                19A-PL-1726
       Appellant-Plaintiff,

               v.

       Lutheran Medical Group, LLC,
       Appellee-Defendant,

       Robb, Judge, concurring in result.

[19]   I agree that the trial court did not abuse its discretion in denying Dr.

       Farnsworth’s request to enjoin the enforcement of the Agreement. However, I

       do so for different reasons than the majority.

[20]   The Agreement states that Dr. Farnsworth’s duties include providing on-call

       coverage “in accordance with a schedule established by [the Committee] as

       necessary to satisfy the [Medical Group’s] obligations[.]” Appellant’s App.,

       Vol. II at 38. To me, that implies that there will be an on-call schedule and

       therefore, eliminating the on-call schedule altogether would be a breach of the

       Agreement. However, Dr. Farnsworth was a member of the Committee that

       voted unanimously to eliminate the on-call coverage schedule, which means he

       agreed to the change. See slip op. at ¶ 5. For that reason, I do not believe he

       Court of Appeals of Indiana | Memorandum Decision 19A-PL-1726 | December 19, 2019    Page 10 of 11
has demonstrated by a preponderance of the evidence a reasonable likelihood of

success on the merits, and I would affirm the trial court’s judgment on that

basis.

Court of Appeals of Indiana | Memorandum Decision 19A-PL-1726 | December 19, 2019   Page 11 of 11