OSEI-TUTU OWUSU, M.D., PLAINTIFF-APPELLEE, v. HOPE CANCER CENTER OF NORTHWEST OHIO, INC., ET AL., DEFENDANTS-APPELLANTS.
CASE NO. 1-10-81
IN THE COURT OF APPEALS OF OHIO THIRD APPELLATE DISTRICT ALLEN COUNTY
September 6, 2011
[Citе as Owusu v. Hope Cancer Ctr. of Northwest Ohio, Inc., 2011-Ohio-4466.]
Appeal from Allen County Common Pleas Court Trial Court No. CV 2010 0029 Judgment Affirmed in Part, Reversed in Part and Cause Remanded
Michael G. Sanderson for Appellants
David A. Rodabaugh for Appellee
WILLAMOWSKI, J.
{¶1} Defendants-Appellants, Hope Cancer Center of Northwest Ohio, Inc., et al. (“HCC“), appeals the judgment of the Allen County Court of Common Pleas finding that the covenant not to compete in HCC’s employment agreement with Plaintiff-Appellee, Osei-Tutu Owusu, M.D. (“Dr. Owusu” or “Employee“) was unreasonable and unenforceable. On appeal, HCC contends that the trial court erred in finding that the employment agreement was unenforceable; that it improperly applied the standards for enforcement of a covenant not to compete; and that it erred in its interpretation of the bonus provisions of the employment contract. For the reasons set forth below, the judgment is affirmed in part and reversed in part.
{¶2} HCC has been in business in Lima, Ohio, since 2003, with a satellite office in Van Wert. The practice is limited exclusively to the subspecialty of oncology and hematology. In mid-2008, Dr. Ravi Madan (“Dr. Madan“), HCC’s president and sole shareholder, hired a physician recruiter, Bill Brochetti (“Mr. Brochetti“), to locate an additional oncologist/hematologist to work for HCC. Dr. Madan and Mr. Brochetti engaged in negotiations with Dr. Owusu, a physician from the Cleveland area, concerning the potential terms of his employment with HCC.
{¶3} On November 12, 2008, Dr. Owusu entered into an Employment Agreement (“Agreement“), signed by both Dr. Owusu and Dr. Madan. The initial term of the Agreement began November 17, 2008 (when Dr. Owusu began working for HCC) and continued until December 31, 2009 (the “Term“). The Agreement would automatically renew for one additional year unless it was terminated per the specified terms of the Agreement. HCC could terminate the Agreement during the initial Term either for “Cause” or by giving 90 days written notice to Dr. Owusu. Either party could “terminate th[e] Agreement upon 90 days written notice after the initial Term.” (Ex. 1, Sections 2 and 13.)
{¶4} The Agreement and its four addenda provided for the terms and conditions of employment and provided that Dr. Owusu would receive a base salary of $325,000 for his first year of employment, plus a bonus based upon the amount of gross collections. The base salary was to increase to $350,000 during the following year. The parties also negotiated back and forth over the terms of the Agreement’s covenant not to compete. Dr. Owusu rejected and refused to agree to any specific mileage restriction in the non-compete terms of the Agreement. The final version of “Section 14. Noncompetition” (the “Non-Compete Clause“) in the signed Agreement stated:
14.1 Throughout the Term and for two (2) years after expiration or termination of this Agreement by either party, with or without cause, Employee may not directly or indirectly:
14.1.1 engage in any capacity in or have any financial interest in any medical practice specializing in hematology or oncology in the primary service area of Lima, Ohio and the primary service area of Van Wert, Ohio.
14.1.2 contact any patients of Hope or otherwise attempt to establish a referral base through such patients; or
14.1.3 contact any employеe or offer employment to any individual who was employed by Hope at any time within two (2) years prior to the date of termination of Employee’s employment. * * *
{¶5} Problems arose during the first Term of employment and Dr. Owusu decided that he did not wish to continue working for HCC. He learned that Dr. Madan’s medical license had been suspended by the State Medical Board of Ohio and that HCC was being investigated for several other matters. In early 2009, the other oncologist, Dr. Greene, left HCC, leaving Dr. Owusu as the only licensed physician to handle all of the patients at HCC. In the summer of 2009, Dr. Owusu attempted to give ninety days’ notice of termination, stating that he would be resigning from HCC, effective November 17, 2009. However, HCC would not accept his resignation, stating that he had “no right to terminate the contract until
{¶6} Dr. Owusu complied, and worked through the “notice period” until March 31, 2010. Thereafter, he wanted to continue working in the Lima area, either for another oncology group or by opening his own oncology practice. He planned to work at a location approximately two miles from HCC, but potential employers expressed concern about the Non-Compete Clause in the Agreement.
{¶7} Therefore, in January 2010, Dr. Owusu filed a complaint for declaratory judgment and preliminary injunction.2 He asked the trial court to find that the Non-Compete Clause in the Agreement was unenforceable and invalid. Dr. Owusu claimed that he had been led to believe that the geographic restrictions in the Non-Compete Clause had been removed. He further alleged that he had entered into the Agreement based upon misrepresentations as to Dr. Madan’s board certification and the status of his medical license suspension.3 In May 2010,
{¶8} HCC filed a motion for summary judgment on six of Dr. Owusu’s seven claims. On July 6, 2010, the trial court filed its judgment entry granting summary judgment in part and denying it in part. The trial court found genuine issues of material fact existed as to the reasonableness of the covenant not to compete, specifically as to the “primary service area,” and whether statements made by Dr. Madan concerning his medical license fraudulently induced Dr. Owusu into entering into the Employment Agreement. The issue concerning the bonus was not a part of the summary judgment and also remained to be decided.
{¶9} A two-day bench trial was held on the three remaining issues in October of 2010. After hearing the testimony of the parties and several other witnesses, the trial court filed a lengthy judgment entry on November 12, 2010. The trial court did not find any merit in Dr. Owusu’s claims for misrepresentation and fraudulent inducement. However, it did find that section 14.1.1 of the Non-Compete Clause was unenforceable and void as a matter of law. The remaining sections of the Non-Compete Clause remained viable and Dr. Owusu was prohibitеd from soliciting any of HCC’s employees or former patients during the
{¶10} It is from this judgment that HCC appeals, raising the following three assignments of error for our review.
First Assignment of Error
The trial court erred as a matter of law in holding the covenant not to compete too indefinite and unenforceable.
Second Assignment of Error
The trial court abused its discretion in its application of the Raimonde standards for enforcement of a covenant not to compete.
Third Assignment of Error
The trial court erred in its interpretation of the bonus provisions of the contract.
{¶11} All three assignments of error involve the application of basic contract law to the interpretation of the Employment Agreement. The construction of written contracts is a matter of law. Graham v. Drydock Coal Co., 76 Ohio St.3d 311, 313, 1996-Ohio-393, 667 N.E.2d 949; Alexander v. Buckeye Pipe Line Co. (1978), 53 Ohio St.2d 241, 374 N.E.2d 146, paragraph one of the syllabus. “Unlike determinations of fact which are given great deference, questions of law
{¶12} The purpose of contract construction is to discover and effectuate the intent of the parties, as that intent is evidenced by the contractual language. Skivolocki v. E. Ohio Gas Co. (1974), 38 Ohio St.2d 244, 313 N.E.2d 374, paragraph one of the syllabus. The intent of the parties is presumed to reside in the language they chose to use in their agreement. Kelly v. Med. Life Ins. Co. (1987), 31 Ohio St.3d 130, 509 N.E.2d 411, paragraph one of the syllabus. Extrinsic evidence is admissible to ascertain the intent of the parties when the contract is unclear or ambiguous, or when circumstances surrounding the agreement give the plain language special meaning. Shifrin v. Forest City Ent., Inc., 64 Ohio St.3d 635, 638, 1992-Ohio-28, 597 N.E.2d 499, 501. A contract is generally to be construed against the party who drafted it. Cent. Realty Co. v. Clutter (1980), 62 Ohio St.2d 411, 406 N.E.2d 515.
First and Second Assignments of Error – Non-Compete Clause
{¶13} The first two assignments of error both pertain to the validity and enforсeability of the Non-Compete Clause. HCC originally proposed that the restricted geographical area should encompass a 35-mile radius. Dr. Owusu rejected this and did not want to have any mileage restriction or covenant not to
{¶14} Dr. Owusu acknowledged that he was aware that the Agreement he signed contained a Non-Compete Clause referring to the “primary service area,” but claimed he did not understand what that meant and argued that it was vague and unenforceable. Dr. Madan testified that the “primary service area” was a term commonly used in the healthcare industry, and that it could easily be ascertained by using patient zip codes to statistically determine what was the geographic area from which a hospital or practice drew the majority of its patients. Testimony and exhibits were provided showing the percentages of patients that came from within certain areas that constituted HCC’s сlaimed primary service area.
{¶15} The trial court held that the language of “primary service area” was too indefinite and uncertain to be enforceable, based partly on testimony from Dr.
{¶16} On appeal, HCC contends that the trial court misapplied contractual legal standards and failed to take into account more current, contrary Ohio authority. He argues that the lack of a specific definition for this phrase did not make the contract void or indefinite; it merely required the trial court to use the rules of construction to determine what would be a reasonable meaning for the phrase. HCC further asserts that the phrase “primary service area” is well-known industry terminology and can be easily ascertained and defined.
{¶17} We agree with HCC that the current dispute should not be over whether there was a contract with a valid covenant not to compete, but should only
If it is found that the parties intended to be bound, the court should not frustrate this intention, if it is reasonably possible to fill in some gaps that the parties have left, and reach a fair and just result. 1 Corbin on Contracts, 400 to 406, Section 95; 1 Williston on Contracts (3 Ed.), 110 and 111, Section 37. Even though [the defendant‘s] purported acceptance stated the price
for [the plaintiff’s] services was “to be determined,” this does not indicate a mere “agreement to agree” as to an essential term of the contract. * * * Rather, it merely refers to [the plaintiff’s] offer to do the work for “ordinary industry prices,” a way of filling in a blank on its purchase order in the absence of a specified liquidated amount. Further, the term, “ordinary industry prices,” sets a standard ascertainable by proof, which would permit enforcement of the parties’ express contract.
Litsinger Sign Co. v. American Sign Co. (1967), 11 Ohio St.2d 1, 14, 227 N.E.2d 609.
{¶18} HCC presented a considerable amount of evidence to demonstrate that “primary service area” was a term-of-art common to the medical industry, and presented a statistical analysis as to what it considered HCC’s primary service area to include. The Ohio Administrative Code requires information concerning “[t]he current and proposed primary and secondary service areas and their corresponding population” when considering granting “certificates of need” relative to increasing or altering the number of beds for healthcare facilities. (Emphasis added.)
{¶19} The language of a contract “is unambiguous if it can be given a definite legal meaning.” Westfield Ins. Co. v. Galatis, 100 Ohio St.3d 216, 2003-Ohio-5849, 797 N.E.2d 1256, ¶11. It is clear that the boundaries of HCC’s “primary service area” could have been given a definitive meaning. The trial court should have determined the meaning and the extent of the primary service area instead of invalidating a key portion of the Non-Compete Clause.
{¶20} Although Dr. Owusu may not have wanted to be bound by non-compete restrictions, he knowingly signed an Employment Agreement that contained a covenant not to compete that prohibited him from engaging in a hematology or oncology practice within the primary service area of HCC’s two
{¶21} The trial court erred when it found that the Non-Compete Clause was rendered void merely because the parties used the phrase “primary service area” to describe the geographical limitations of the non-compete area. HCC’s first assignment of error is sustained.
{¶22} In its second assignment of error, HCC claims that the trial court misapplied the standards used to determine whether a covenant not to compete is enforceable. HCC specifically believes that the trial court erred in applying the three factors set forth in Raimonde v. Van Vlerah (1975), 42 Ohio St.2d 21, 325 N.E.2d 544. We review a trial court‘s determination of a declaratory-judgment action for an abuse of discretion, independently and without deference to the trial court‘s decision. Mid-Am. Fire & Cas. Co. v. Heasley, 113 Ohio St.3d 133, 2007-Ohio-1248, 863 N.E.2d 142, ¶12-14; Homan, Inc. v. A1 AG Servs., L.L.C., 175 Ohio App.3d 51, 2008-Ohio-277, 885 N.E.2d 253, ¶7.
{¶23} Covenants not to compete pertaining to physicians are not per se unenforceable pursuant to American Medical Association‘s principles of medical ethics or interpretations of those principles. See, e.g., Ohio Urology, Inc. v. Poll (1991), 72 Ohio App.3d 446, 594 N.E.2d 1027; Robert W. Clark, M.D., Inc. v. Mt. Carmel Health (1997), 124 Ohio App.3d 308, 314-15, 706 N.E.2d 336. Although the law does not favor such restrictive covenants, they will be upheld if they are reasonable. Ohio Urology at 453; Clark at 313.
{¶24} In Ohiо, the applicable rule of reason regarding covenants not to compete was stated in Raimonde v. Van Vlerah, supra, wherein the Supreme Court of Ohio held that a covenant not to compete is enforceable “if the restraint is no greater than is required for the protection of the employer, does not impose undue hardship on the employee, and is not injurious to the public.” Id. at paragraph two of the syllabus; Lake Land Emp. Group of Akron, LLC v. Columber, 101 Ohio St.3d 242, 2004-Ohio-786, 804 N.E.2d 27, ¶¶23-24 (reaffirming the holdings in paragraphs one and two of Raimonde). This rule is to be applied on a case-by-case basis, with each case being decided on its own facts. Raimonde at 25, 325 N.E.2d at 547. We find that the facts before the trial court clearly established that:
{¶25} The practice of oncology is a “referral-based specialty.” (Tr., p. 23). When Dr. Owusu started at HCC, he had no contacts or referral base in the area. During the sixteen months he worked for HCC, he developed physician referral connections as a result of his employment with HCC that he would like to utilize to build a new practice. This is specifically the business interest that HCC sought to protect with its Non-Compete Clause. In upholding covenants not to compete for such purposes, the Sixth District Court of Appeals stated:
It would eviscerate entirely the protection of restrictive covenants to allow a physician to practice, contrary to the restrictive covenant, after [the physician‘s] employment enabled [the physician] to establish the very contacts which would allow [the physician] to destroy a practice that was established before [the physician‘s] employment.
Wall v. Firelands Radiology, Inc. (1995), 106 Ohio App.3d 313, 332, 666 N.E.2d 235.
{¶26} The trial court also erred in finding that HCC did not have any legitimate business interest to protect because of Dr. Madan’s license suspension. Even though Dr. Madan cannot personally treat patients, he still owns and operates
{¶27} Furthermore, we find that the Non-Compete clause was reasonably limited to only two years and to only HCC’s primary service area. Similar narrow restrictions have been held to be reasonable and enforceable by other courts. See, e.g., Wall (restrictive covenant which prevented plaintiff from competing with corporation for period of up to three years within a 20-mile radius of corporation‘s offices and two hospitals was enforceable).
{¶28} Next, we find that the evidence demonstrated that the enforcement of the covenant would not unduly harm Dr. Owusu, who was working in Findlay, Ohio, for a practice owned by his wife, who was also a physician. Dr. Owusu also worked in Lima as a part-time emergency room physician, which was permitted under the terms of the Agreement because it did not involve the fields of oncology or hematology. Although he testified that his income had decreased since he left HCC, it was Dr. Owusu’s choice to terminate his employment. The evidence showed HCC very much wanted Dr. Owusu to remain and had even made him a partnership offer. Dr. Owusu was nоt from the Lima area and had no connections with this area prior to his employment with HCC. He had previously worked in Cleveland, Ohio, and had another job offer in that area at the time he accepted
{¶29} And finally, the covenant was not injurious to the public. Although the trial court found that “a patient should be able to chоose his or her own physician” (J.E. p. 27, ¶31), Ohio courts have repeatedly rejected the argument that covenants are not enforceable against physicians solely because it impairs the patient’s choice. See, e.g., Ohio Urology, supra; Gen. Medicine, P.C. v. Manolache, 8th Dist. No. 88809, 2007-Ohio-4169, ¶12. The enforcement of the covenant against Dr. Owusu did not bar patients from his services but only limited the physical location of his office.
{¶30} Also, several witnesses testified that there was no shortage of oncologists in the Lima area to service the public, including the physician recruiter. There are at least six to eight oncologists in the Lima area and this was said to be more than sufficient to handle the area’s needs. Dr. Madan and others testified that HCC, as well as other oncology practices in this area, had to maintain
{¶31} Based on the above, we find that the Non-Compete Clause in Dr. Owusu’s Agreement meets all of the Raimonde factors for enforceability. The trial court abused its discretion when it misapplied the facts in the record to the law. HCC’s second assignment of error is sustained.
Third Assignment of Error – Calculation of Bonus Provision
{¶32} In the third assignment of error, HCC claims that the trial court erred in its interpretation of the bonus provisions of the contract. HCC contends that it owed Dr. Owusu a maximum bonus of $100,000 for the full yеar that he worked in 2009, and that it did not owe him any bonus for the six weeks he worked in 2008 or for the three months he worked in 2010. In contrast, Dr. Owusu argues that he should have been paid bonuses of $50,000 for 2008, $200,000 for 2009, and $50,000 for 2010, for a total of $300,000.
{¶33} The parties agree that HCC already paid Dr. Owusu $150,000, so he contends that he is entitled to an additional $150,000. HCC claims that Dr. Owusu
{¶34} The parties’ disparate calculations are based upon very different versions as to what the wording in the Bonus Calculation Addendum (“Bonus Addendum” or “Addendum“) means and how it should be interpreted. “Contractual language is ambiguous only if its meaning cannot be determined from the four corners of the agreement, or if the language is susceptible of two or more reasonable interpretations.” Dunson v. Home-Owners Ins. Co., 3d Dist. No. 5-09-37, 2010-Ohio-1928, ¶27; Covington v. Lucia, 151 Ohio App.3d 409, 2003-Ohio-346, 784 N.E.2d 186, ¶18.
{¶35} In construing any written instrument, the primary and paramount objective is to ascertain the intent of the parties. Aultman Hosp. Ass‘n v. Community Mut. Ins. Co. (1989), 46 Ohio St.3d 51, 53, 544 N.E.2d 920, 923. However, where that cannot be determined, it has long been held that where there is doubt or ambiguity in the language of a contract, it will be construed strictly against the party who prepared it. McKay Mach. Co. v. Rodman (1967), 11 Ohio St.2d 1
{¶36} HCC, however, argues that the rule construing contracts against the drafter should be limited tо adhesion contracts where the parties lack equal bargaining power, citing to this Court‘s decision in Cline v. Rose (1994), 96 Ohio App.3d 611, 616, 645 N.E.2d 806. HCC asserts that, when given two different constructions, “the interpretation which makes a rational and probable agreement must be preferred.” See Id., quoting Skivolocki v. East Ohio Gas Co. (1974), 38 Ohio St.2d 244, 250, 313 N.E.2d 374, 378; Graham v. Dry Dock Coal Co., 76 Ohio St.3d at 316. However, we find that the outcome will be the same under either type of review, whether any ambiguities in the wording are construed against the drafter, HCC, or whether it is interpreted in order to effectuate the “rational and probable” meaning.
{¶37} The Agreement stated that in addition to his base salary, Dr. Owusu would be “entitled to such year-end bonus (“Bonus“) as the President of Hope, in
Bonus compensation will be calculated on collections as follows:
$1,000,001.00 thru $3,000,000.00 – 5% on gross collections
$3,000,001.00 and up -- $100,000.00 Bonus paid
Minimum Bonus of $50,000.00 will be guaranteed for years 1 and 2 of employment.
An advance of $25,000.00 from the first year guaranteed bonus of $50,000.00 shall be paid to [Dr. Owusu] in the first month of his start date of November 17, 2008.
{¶38} The parties agree that gross collections were in excess of $6 million for 2009, so the above calculations would be applicable for that year. Gross collections were less than $1 million for the partial years that Dr. Owusu worked in 2008 and 2010, so the minimum $50,000 bonus would have been payable if Dr. Owusu was entitled to a bonus for those years.
{¶39} The Bonus Clause was considered to be ambiguous because the parties claimed that it was susceptible to several different interpretations. The trial court heard testimony from numerous witnesses as to what they сonsidered the bonus clause to mean and what the parties claim they intended when it was drafted and signed. The parties gave opposing testimony as to their intent/interpretation,
{¶40} The first issue that we need to review concerns which years Dr. Owusu was entitled to receive a bonus. Dr. Owusu testified that Dr. Madan told him he would be entitled to $50,000 for 2008, even though he would have only worked for a short time. (Tr. 29-30.) However, we find that the plain language of the Agreement unambiguously contemplates a potential one or two-year agreement, and discusses salary and bonuses for “years 1 and 2 of employment.” Dr. Owusu is not entitled to a bonus in three different years. Furthermore, the Addendum clearly specifies that the first “Term” of the Agreement began on November 17, 2008 and continued until December 31, 2009. Therefore, the time Dr. Owusu worked in 2008 and 2009, combined, counted for his first year‘s bonus. The trial court correctly found that Dr. Owusu was not entitled to be paid a separate bonus for 2008, and then another bonus for 2009.
{¶41} However, because the first Term ended on December 31, 2009, the time Dr. Owusu worked in 2010 counted for his second year of employment. The Bonus Addendum clearly states that a “Minimum Bonus of $50,000.00 will be guaranteed for years 1 and 2 of employment.” (Emphasis added.) The Addendum did not specify any minimum amount of time or collections that were needed in
{¶42} HCC also argues against paying Dr. Owusu a bonus for 2010 because Section 3 of the Agreement states that the bonus was intended to be a “year-end” bonus and Dr. Owusu did not stay until the end of 2010. However, the Addendum completely modified the bonus payment terms and HCC, by its own course of conduct, refuted the notion that the bonus was only to be paid at the end of the year. The record shows that HCC paid Dr. Owusu his bonus on a somewhat quarterly basis, with paymеnts of $25,000 each made on the following dates: 11/21/2008, 4/30/2009, 7/09/2009, 10/01/2009, 10/22/2009, and 11/12/2009 (total of $150,000). (Ex. 35.) The trial court correctly found that Dr. Owusu was entitled to a $50,000 bonus for the time HCC insisted that he work in 2010.
{¶44} The primary area of contention regarding the 2009 bоnus involves deciding what, if anything, is owed for collections exceeding $3 million. The
{¶45} Dr. Owusu read the Addendum to mean that he would be entitled to $100,000 if collections were $3 million, and then he would be entitled to an additional $100,000 bonus for amounts exceeding $3 million in collections, for a total of a $200,000 bonus. He maintained that the additional “$100,000 paid” was a maximum, but only as to the additional bonus for amounts over $3 million – whether he earned $6 million, as he did, or even if he earned $16 million.”
{¶46} We concur with Dr. Owusu‘s and the trial court‘s reading of the plain language in the Addendum. If HCC had intended $100,000 to be a “maximum” or “cap,” it would have been very easy to insert either of those words. We cannot now create the contract that HCC wishes it had made. Furthermore, if HCC planned to pay a bonus only on amounts up to the first $3 million, then the line discussing amounts pertaining to “$3,000,001.00 and up” is superfluous and
{¶47} HCC asserts that it would be illogical to agree to pay an additional bonus of $100,000 even if Dr. Owusu only exceeded $3 million collections by one dollar. While there may be some rationale to this argument, that is what the Addendum states. Furthermore, it may have been just as illogicаl for Dr. Owusu to agree to limit his bonus, even if he brought in gross collections of $6 million, $10 million, or more. Under HCC‘s interpretation, Dr. Owusu did not earn a penny over the guaranteed minimum until collections reached over $2 million, and then they would be maxed out at $100,000 after only an additional million. There would be no incentive for Dr. Owusu to bring in collections over $3 million. The more revenue Dr. Owusu generated, the smaller the percentage his bonus became. Under HCC‘s interpretation, he would only receive a 3.3% bonus on collections of $3 million, which was further reduced with every dollar he brought in, resulting in only a 1.7% bonus for the $6 million collections he achieved. There was testimony that the other oncologist‘s bonus had been calculated on 6% of total gross collections, with no maximum cap whatsoever. Both sides wеre taking some risks in order to provide incentives and maximize their revenue. We determine the
{¶48} Furthermore, if this clause is ambiguous and the parties’ intended meaning cannot be ascertained, then it must be construed against the drafter. HCC‘s agent, Dr. Brochetti, drafted the Bonus Addendum and Dr. Madan reviewed it before they presented it to Dr. Owusu. HCC had every opportunity to easily and simply specify what it is now trying to argue. For instance, to calculate the bonus HCC claims it intended to pay, the Addendum could simply have stated that Dr. Owusu “will be paid an annual bonus of 5% of the gross collections, with the maximum possible total annual bonus capped at $100,000. A minimum bonus of $50,000 will be guaranteed if collections do nоt reach $2,000,000.” The language HCC chose to use did not state this.
{¶49} We affirm the trial court‘s determination that Dr. Owusu was entitled to a $200,000 bonus for 2009, based on the parties’ stated intentions that a $100,000 bonus was payable on the first $3 million in collections. We also affirm the trial court‘s findings that Dr. Owusu was entitled to the minimum $50,000
{¶50} Having found error prejudicial to the Appellant herein in the particulars assigned and argued in the first and second assignments of error, we reverse the judgment of the trial court as it pertains to its decision concerning the Non-Compete Clause and remand for further proceedings consistent with this opinion. We affirm the judgment of the trial court, as it pertains to the third assignment of error.
Judgment Affirmed in Part, Reversed in Part and Cause Remanded
SHAW, J., concurs in Judgment Only.
/jlr
ROGERS, P.J., concurring separately.
{¶51} I fully concur in the majority‘s resolution of the first and second assignments of errоr. However, I concur separately as to the majority‘s
{¶52} First of all, the Agreement provides for a year-end bonus at the discretion of the President of HCC. That language can only be interpreted to provide for a bonus at the end of each full employment year. It appears the majority has interpreted the employment year to coincide with the calendar year, and I agree. However, in my opinion this eliminates any consideration of a bonus payment for the partial year Owusu worked in 2010, and is an additional argument for denying a separate bonus for 2008.
{¶53} The Addendum only provides the method of calculation of minimum bonuses. It does not impact when or how those bonuses were to bе paid. Further, while the Addendum appears to set minimum levels of the bonus, nothing therein prevented the President from paying larger bonuses,6 or partial payments before the end of the year.
{¶54} I do agree with the majority that the short period of time in 2008 was to be considered as part of the first “year” for purposes of computing a bonus.
{¶56} Clearly there are three categories of collections defined by the Addendum: gross collections of $1,000,001 thru $3,000,000; $3,000,001 and up; and a minimum bonus of $50,000 guaranteed for years 1 and 2 of employment. Because the Addendum provides for three different categories, it is only reasonable to consider each as a separate calculation and requirement. For discussion purposes, it is more feasible to present the gross collections bonuses in a different order:
- Minimum bonus of $50,000 regardless of gross collections;
- Gross collections of $1,000,001 thru $3,000,000 @ 5% of gross collections, or $100,000; and,
- Gross collections of $3,000,001 and up, or $100,000.
{¶57} In my opinion, the only reasonable interpretation is that the first $50,000 is paid regardless of the amount of gross collections; that because gross collections reached the amount of $3,000,000, Hope was required to pay 5% for the gross collections between $1,000,001 and $3,000,000, or an additional bonus of $100,000; and because gross collections exceeded $3,000,001, Hope was required to pay an additional bonus of $100,000; or a total bonus for the 2009 year
{¶58} These calculations result in Hope owing Owusu a total of $250,000, of which it has already paid $150,000. The trial court did award Owusu $100,000, and therefore, I concur in the majority‘s affirmance of the trial court‘s award, although by different logic.