Great Lakes Eye Institute Pc v. David B Krebs Md
335405
| Mich. Ct. App. | Jan 9, 2018Background
- Dr. David B. Krebs signed a 1999 employment agreement with Great Lakes Eye, P.C. (GLE) that included a restrictive covenant and an anti-assignment clause; the contract contained survival and successor clauses (Sections 17–18).
- GLE assigned assets to its sole shareholder, Dr. Farhad Shokoohi, who later transferred assets to Shokoohi Eye Center, P.C., which ultimately became Great Lakes Eye Institute, P.C. (GLEI).
- Krebs continued working for GLEI until 2008, then left and solicited patients; GLEI sued Krebs for breach of the non-compete and obtained judgment and fees at trial.
- On appeal this Court reversed, holding (1) the record did not show the employment contract was transferred to GLEI and (2) even if assigned, the initial transfer to Shokoohi violated the anti-assignment clause and relieved Krebs of obligations. The case was remanded.
- On remand Krebs (as the prevailing party on appeal) moved for contractual attorney fees under Section 18; the trial court denied the motion, finding Krebs barred by the law-of-the-case doctrine and judicial estoppel.
- The Court of Appeals vacated that denial and remanded, holding the law-of-the-case and judicial-estoppel defenses did not preclude Krebs’s claim for contractual fees and directing the trial court to determine successor liability and entitlement to fees under Section 18.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether the law-of-the-case doctrine bars Krebs’s claim for contractual attorney fees | The prior appellate ruling that GLEI had no rights under the 1999 contract implies it cannot be bound by or owe obligations (fees) under that contract | Prior opinion did not decide successor-liability; law-of-the-case applies only to issues actually decided, so fees claim is not barred | Law-of-the-case does not bar the fees claim; remand required to decide successor liability and fees entitlement |
| Whether judicial estoppel bars Krebs from arguing GLEI is a successor liable under the contract | Krebs successfully argued earlier that GLEI was not an assignee and thus cannot claim benefits; he should be precluded from inconsistent successor-liability theory | Prior arguments addressed assignment/standing to enforce a provision, not successor liability for contractual obligations; positions are not wholly inconsistent nor previously accepted as true in a way that warrants estoppel | Judicial estoppel does not apply; Krebs’s fees claim is not barred |
| Whether the prior panel decided that GLEI has no relationship to the employment contract at all | GLEI cannot be bound by contract it wasn’t assigned or party to | The prior panel’s holding was limited to assignment and enforcement of the non-compete, not to successor liability for other contract provisions | Prior decision did not resolve successor-liability; issue remains for trial court on remand |
| What proceedings should follow remand | N/A | N/A | Trial court must determine whether GLEI is a successor to GLE’s liabilities under the contract and if Krebs is entitled to attorney fees under Section 18 |
Key Cases Cited
- Bank of America, NA v. Fidelity Nat’l Title Ins. Co., 316 Mich. App. 480 (contract interpretation reviewed de novo)
- Lenawee County v. Wagley, 301 Mich. App. 134 (law-of-the-case doctrine scope; remand review standard)
- McNees v. Cedar Springs Stamping Co., 219 Mich. App. 217 (law-of-the-case applies only to issues actually decided)
- Henry v. Dow Chem. Co., 319 Mich. App. 704 (judicial estoppel prior-success model and standards)
- New Props, Inc. v. George D. Newpower, Jr., Inc., 282 Mich. App. 120 (definition and effect of law-of-the-case)
- Travelers Prop. Cas. Co. of Am. v. Peaker Servs., Inc., 306 Mich. App. 178 (persuasive value of sister-state caselaw)