Searching over 5,500,000 cases.


searching
Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.

Saez v. Nephrology Associates, P.A.

Superior Court of Delaware

October 16, 2019

JOSE SAEZ, Plaintiff/Counterclaim Defendant,
v.
NEPHROLOGY ASSOCIATES, P.A., Defendant/Counterclaim Plaintiff.

          Submitted: September 16, 2019

         On Plaintiff/Counterclaim Defendant Jose Saez's Motion to Dismiss. DENIED.

         On Defendant/Counterclaim Plaintiffs Motion for Partial Judgment on the Pleadings as to Counts I and II of the Counterclaim. GRANTED.

          Daniel C. Herr, Esquire, Law Office of Daniel C. Herr, Wilmington, Delaware, Attorney for Plaintiff Jose Saez.

          Alan D. Albert, Esquire, O'Hagan Meyer PLLC, Wilmington, Delaware, Attorney for Defendant Nephrology Associates, P.A..

          MEMORANDUM OPINION

          Richard R. Cooch, R.J.

         I. INTRODUCTION

         Before this Court is the Motion to Dismiss of Plaintiff/Counterclaim Defendant Jose Saez ("Dr. Saez") as well as the Motion for Partial Judgment on the Pleadings as to Count I and Count II of the Counterclaim of Defendant/Counterclaim Plaintiff Nephrology Associations, P.A. ("NAPA"). These motions arise from Dr. Saez's separation from NAPA's medical practice and Dr. Saez's subsequent filing in this Court for declaratory judgment against NAPA.

         Dr. Saez contends that, by NAPA placing him on so-called "Garden Leave, "[1]"[NAPA] has materially breached the [Employment] Agreement and, as a result, [Dr. Saez] is therefore excused from owing the non-competition liquidated damages contemplated in the Agreement."[2]

         NAPA asserts that, pursuant to the Employment Agreement signed by Dr. Saez, "the board of NAPA has 'complete discretion to direct, control, and supervise the duties to be performed by [NAPA] for the Corporation' and that [NAPA's] exercise of that discretion to relieve [Dr. Saez] of patient care responsibilities during the terminal months of his contractual employment is entirely within [NAPA's] rights under the Employment Agreement[, ]" after Dr. Saez informed NAPA in August 2018 that in six months he would be leaving NAPA.[3]

         The issue before this Court is whether the placement of Dr. Saez on so-called "Garden Leave"[4] constitutes a material breach of the Employment Agreement, thus relieving Dr. Saez of non-competition liquidation damages.

         This Court now finds for NAPA and agrees with NAPA that "the plain words of the agreement make clear that [Dr. Saez] agreed that the practice group had sole and complete discretion to [...] direct, control and supervise the services [Dr. Saez] was to perform."[5] In this Court's view, this includes the elimination of patient care responsibilities, although he was paid, during the terminal months of Dr. Saez's employment.

         II. THE "JOINT STIPULATION OF THE PARTIES"[6]

         1. The plaintiff, Dr. Saez, a newly-trained nephrologist, entered into a written employment agreement (the "Employment Agreement" or "Agmt.") dated July 1, 2003, with defendant NAPA, Delaware's largest specialty nephrology practice. Cmplt. ¶ 4 (pleading Agreement) & Ex. A (executed Agreement); NAPA Ans. ¶ 4 (admitting Agreement); NAPA Countercl. ¶ 6 (pleading Agreement); Saez Mot. to Dismiss ¶ 2 (pleading entry into Agreement) (the lattermost pleading is hereinafter cited as "Saez MTD").

         2. The Employment Agreement is a fully integrated agreement, constituting, by its own terms, "the entire agreement between the parties" and "superseding] any prior employment or other agreement between the parties," Agmt. at 1 (recitals) and § 14. The Employment Agreement may be amended only by a "subsequent written amendment signed by both parties," id. § 14.

         3. Pursuant to the Employment Agreement, Dr. Saez agreed to be employed by NAPA "to practice medicine" and "to perform certain other duties as may be determined from time to time by [NAPA]," id. at 1 (recitals). Dr. Saez, by executing the Employment Agreement, accepted employment "on the terms and conditions set forth" in the Agreement, id. at 1 (recitals). Prior to the events of October, 2018, that are a subject of this action, Dr. Saez generally saw patients on a daily basis.

         4. Pursuant to the Employment Agreement, "the Board [of NAPA] shall have complete discretion to direct, control and supervise the duties performed by [Dr. Saez] for [NAPA]," subject only to the limitation that NAPA's Board "shall not require [Dr. Saez] to infringe upon the ethics of the profession of medicine or violate any law or regulation," id. § 3.

         5. The Agreement contains, in § 9(a), a noncompetition provision (the "Noncompetition Covenant") by and through which Dr. Saez agreed that he "will refrain from the practice of nephrology ... in any manner whatsoever, including, but not limited to, as a sole practitioner, partner, employee of another corporation, consultant or medical director of any hemodialysis center without the express written permission of the Board" of NAPA, for a "period of one (1) year" following termination of his employment with NAPA, within a specified geographic area (the "Defined Noncompetition Area").[7] Agmt. § 9(a); NAPA Countercl. ¶¶ 27-28 (pleading Covenant); Saez Ans. to Countercl. ¶¶ 27-28 (Covenant "speaks for itself).

         6. Pursuant to the terms of the Employment Agreement, after six years of service, Dr. Saez was offered the opportunity to become a shareholder of NAPA, and accepted that offer, becoming a full shareholder. Countercl. ¶¶ 12-13; Saez Ans. to Countercl. ¶¶ 12-13 (Agreement speaks for itself, "believes" allegations are admitted).

         7. Dr. Saez voluntarily resigned his employment by NAPA by means of an E-mail communication sent to NAPA's leadership on or about August 25, 2018, designating March 1, 2019 as his "termination date." Cmplt. ¶ 6; NAPA Ans. ¶ 6; NAPA Countercl. ¶ 21; Saez MTD ¶ 5. Section 8(a) of the Employment Agreement, addressing voluntary termination of employment, provides that written notice of voluntary termination of employment is to be given "not less than one hundred eighty (180) days in advance of the termination date;" Dr. Saez's March 1, 2019 Termination Date, falling 187 days after delivery of his written notice, is consistent with this requirement. Agmt. § 8(a); Cmplt. ¶ 6; NAPA Ans. ¶ 6; Countercl. ¶ 21; Saez Ans. to Countercl. ¶ 21, second sent, (admitting same).

         8. In early October 2018, NAPA advised Dr. Saez that he was being relieved of patient care responsibilities for the balance of his six-month notice period and would not be assigned any more patient encounters during that period, although he would continue to be paid his full compensation. NAPA advised Dr. Saez that he should henceforth avoid being present in patient care areas of the practice. Dr. Saez abided by NAPA's prohibition. As a result, during the final months of his six-month notice period (early-October 2018 through March 1, 2019), Dr. Saez did not see patients.

         9. Dr. Saez was paid his salary through his termination date of March 1, 2019. Dr. Saez also remained a NAPA shareholder through March 1, 2019.

         10. Since the termination of his employment with NAPA on March 1. 2019, Dr. Saez has been practicing, and is currently practicing, nephrology within southern Delaware, which is part of the Defined Noncompetition Area. Agmt. ¶ 9(a) (southern Delaware part of defined area); Saez MTD ¶ 8 ("Saez opened his own nephrology practice in southern Delaware").

         11. The Noncompetition Covenant provides that, if the noncompetition obligation is not enforceable, Dr. Saez is obliged to pay liquidated damages for each end-stage renal disease ("ESRD") patient of NAPA that becomes a patient of any competing practice he operates during the noncompetition period. Agmt. § 9(b)); Cmplt. ¶ 19 (acknowledging Agmt. § 9(b) and NAPA assertion of its rights pursuant to it); NAPA Ans. ¶ 19 (admitting it considers Dr. Saez bound by Agmt § 9(b); Saez MTD ¶ 2 (acknowledging liquidated damages provisions). The Agreement recites that the Liquidated Damages Provisions are not a penalty but rather are an estimate of damages that would arise from competition, and recites the basis upon which the liquidated damages have been computed. Id.

         12. A statute, 6 Del. Code § 2707, [8] renders the Noncompetition Covenant unenforceable as a matter of law, inasmuch as the Covenant would prevent Dr. Saez, a physician, from practicing within a specified geographic area for a defined period of time. Section 2707, however, expressly permits the enforcement of liquidated damages provisions in lieu of injunctive enforcement of a physician noncompetition covenant.

         13. Dr. Saez contends that he is not obligated to pay liquidated damages pursuant to Liquidated Damages Provisions, Cmplt. ¶¶ 20-29 (seeking declaration that he is not bound by Liquidated Damages Provisions); Saez MTD ¶ 2 (seeking dismissal of NAPA effort to obtain declaration that Dr. Saez is bound by Liquidated Damages Provisions and dismissal of breach of contract claim relating to same), and through his Complaint and Motion to Dismiss requests the Court to enter a declaratory judgment affirming his position.

         14. Dr. Saez's rationale for seeking declaratory relief invalidating the noncompetition provisions of the Agreement, and for denying any obligation to pay liquidated damages for competing with NAPA, is his allegation that NAPA first breached the Agreement in October, 2018, by relieving him of patient care responsibilities for the balance of his six-month notice period ending March 1, 2019, determining not to assign him any more patient encounters during that period, and instructing ...


Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.