According to the Court’s opinion,
the defendant dentist sold his Washington Court House practice to the plaintiff
dentist in 2010 and, as part of that sale, agreed to work one day per week for
the plaintiff dentist and not otherwise practice dentistry for 5 years within
30 miles of the plaintiff’s practice. The
contract also provided that the prevailing party would be entitled to attorneys’
fees in the event of litigation over a breach of the agreement. The defendant
dentist resigned six months later and began working for StoneCreek Dental in
Chillicothe. StoneCreek’s office was
less than 30 straight line miles from the plaintiff dentist’s office, but was
more than 30 driving miles. The plaintiff
dentist brought suit and the jury awarded him $125K plus interest. The trial court dismissed the claims against
StoneCreek, but that dismissal was reversed in part on
appeal in May.
First, the Court held that it was
not an abuse of discretion to reduce the attorneys’ fees to $250/hour based on
the prevailing rates in Fayette County instead of the actual rates of the
Franklin County attorneys. The plaintiff’s attorneys had requested $143,595
plus expenses. The trial court based its
analysis on the factors listed in Professional Rule of Conduct 1.5. In addition, the trial court properly
excluded litigation expenses because the contract only required the payment of
fees and not expenses. Without a
controlling contract or statute, the American Rule requires each party to pay
their own fees and expenses.
Second, the Court held that it was
proper for the jury to base its award on the plaintiff’s testimony about the
revenue he lost when the plaintiff resigned to work for a competitor. Damages for breach of a non-competition clause
is generally based on lost profits. As
the Court held last May, mathematical certainty is not required. The plaintiff dentist testified about his
past revenue and the increase in revenue he realized while the defendant worked
for him for six months. He doubled that
amount to show how the revenue would have increased in a year. Because his overhead did not change, the
increased revenue constituted profit that he lost when the defendant began
competing against him during the five-year non-competition period. “Whether the
revenues actually represented lost profits as testified to by Dr. Ginn relates
to Dr. Ginn's credibility and was for the jury to decide.”
Finally, the Court rejected that
defendant’s argument that the 30-mile territorial restriction was ambiguous
where the parties each had different interpretations of the restriction. It also refused to consider extrinsic evidence
– i.e., evidence outside the four corners of the contract – to interpret the 30
mile restriction because it was plain on its face and unambiguous. The contract contained an integration clause
which precludes the parties from attempting to contradict its terms with other
evidence about other side-agreements. Further,
Ohio courts have routinely interpreted similar restrictions to refer to
straight-line miles instead of driving miles.
NOTICE: This summary is designed merely to inform and alert you
of recent legal developments. It does not constitute legal advice and does not
apply to any particular situation because different facts could lead to
different results. Information here can be changed or amended without
notice. Readers should not act upon this information without legal advice. If
you have any questions about anything you have read, you should consult with or
retain an employment attorney.
