Concord Medical Group, Inc. v. Dallam-Hartley Counties Hospital District
07-14-00297-CV
| Tex. App. | Nov 24, 2015Background
- Concord Medical Group contracted with Dallam-Hartley Counties Hospital to supply emergency-room physicians; the contract included a non-competition/non-contact provision restricting the Hospital from allowing Practice Providers to “work” at the Hospital independent of Concord and barring the Hospital from contacting providers about "employment or contract services" without Concord's written consent.
- After the Concord contract ended, three physicians previously provided by Concord performed ER services at the Hospital under a contract between the Hospital and a third party (ESS).
- Concord sued the Hospital for breach of contract; both parties filed cross-motions for summary judgment.
- The trial court denied Concord’s summary-judgment motion and granted the Hospital’s, rendering that Concord take nothing; Concord appealed.
- The Hospital’s summary-judgment motion relied on two grounds: (1) the Hospital did not "employ" the physicians (so no breach), and (2) the covenant was unenforceable under Hospital Consultants, Inc. v. Potyka.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Scope of "work"/non‑competition clause: whether clause covers only employment or also other forms of "working" at the Hospital | Concord: "work" plus "employment" and "contract services" show clause covers non‑employment activity (e.g., contracting through a third party) | Hospital: clause only bars employment; no employment here, so no breach | Court: clause language ("work," "employment," "contract services") reasonably covers non‑employment work; Hospital failed to show no breach as a matter of law |
| Enforceability of covenant (Potyka reliance) | Concord: covenant may be enforceable under the facts here | Hospital: Potyka holds similar covenants unenforceable, so summary judgment should follow | Court: Potyka was fact‑specific; Hospital did not prove Potyka’s missing factual predicates applied here, so Potyka did not establish entitlement to summary judgment |
| Burden on movant in traditional summary judgment | Concord: — | Hospital: must prove entitlement to judgment as a matter of law | Court: Hospital failed to meet its burden on the asserted grounds |
| Availability of other unpled grounds on appeal | Concord: — | Hospital (on appeal): covenant expired with the contract | Court: appellate court will not consider new grounds not raised in the trial‑court motion |
Key Cases Cited
- Cantey Hanger, LLP v. Byrd, 467 S.W.3d 477 (Tex. 2015) (movant’s burden on traditional summary judgment)
- Provident Life & Accident Ins. Co. v. Knott, 128 S.W.3d 211 (Tex. 2003) (affirmance of summary judgment if any asserted theory is meritorious)
- State Farm Lloyds v. Page, 315 S.W.3d 525 (Tex. 2010) (appellate court may not affirm summary judgment on grounds not presented to trial court)
- Hospital Consultants, Inc. v. Potyka, 531 S.W.2d 657 (Tex. Civ. App.—San Antonio 1975) (fact‑specific refusal to enforce a hospital–affiliate covenant against post‑contract physician placements)