HADEED et al v. ADVANCED VASCULAR RESOURCES OF JOHNSTOWN, LLC et al
Filing
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MEMORANDUM OPINION AND ORDER denying 48 Motion for Preliminary Injunction, and as more fully stated in said Memorandum Opinion and Order. Signed by Judge Kim R. Gibson on 12/8/2016. (dlg)
IN THE UNITED STATES DISTRICT COURT
FOR THE WESTERN DISTRICT OF PENNSYLVANIA
SAMIR HADEED, MD, and JOHNSTOWN
HEART AND VASCULAR CENTER, INC.,
Plaintiffs,
v.
ADVANCED VASCULAR RESOURCES
OF JOHNSTOWN, LLC, AVR
MANAGEMENT, LLC, WASHINGTON
VASCULAR INSTITUTE, LLC, and
MUBASHAR CHOUDRY, MD,
Defendants.
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Case No. 3:15-cv-22
JUDGE KIM R. GIBSON
MEMORANDUM OPINION
Pending before the Court is Defendants’ Motion for Preliminary Injunction (ECF No. 48).
For the reasons that follow, Defendants’ Motion is DENIED.
I.
Background
This case stems from disputes over the operation of a vascular-services center located in
Johnstown, Pennsylvania.
Plaintiff Samir Hadeed is a licensed physician who owns and
operates a cardiology practice in Johnstown: Johnstown Heart and Vascular Center, Inc.
(“Johnstown Heart”). (ECF No. 1 ¶¶ 2-3.) In November 2013, Dr. Hadeed and Johnstown Heart
partnered with Advanced Vascular Resources Management, LLC (“AVR Management”) to
open a new vascular-services center in Johnstown under the name Advanced Vascular
Resources of Johnstown, LLC (“AVR Johnstown”). (ECF Nos. 1-6 at 2, 30-31; 1-7 at 1, 8.)
Incidental to AVR Johnstown’s formation, Dr. Hadeed and Johnstown Heart executed
several other agreements. A decision was made to locate AVR Johnstown’s vascular-services
center in the same building as Johnstown Heart. Thus, Johnstown Heart and AVR Johnstown
entered into a sublease for a portion of Johnstown Heart’s building. (ECF No. 1-3 at 2, 11.) Dr.
Hadeed and Johnstown Heart also entered into an employment agreement with a separate
entity, Washington Vascular Institute, LLC (“Washington Vascular”). (See ECF No. 1-5 at 2, 1718.) Washington Vascular in turn contracted with AVR Johnstown for the medical services at
AVR Johnstown; in this way Dr. Hadeed and Johnstown Heart agreed to provide cardiology
and vascular services at AVR Johnstown. (Id. at 2, 19.) Under AVR Johnstown’s Operating
Agreement, AVR Management was responsible for managing the business affairs of AVR
Johnstown. (ECF No. 1-6 at 6, 12-13.) Stated simply, AVR Management handled the business
side of AVR Johnstown while Dr. Hadeed and Johnstown Heart handled the medical side.
The relationships among the parties deteriorated after AVR Johnstown was formed. On
January 23, 2015, Dr. Hadeed and Johnstown Heart filed this case against AVR Johnstown, AVR
Management, Washington Vascular, and Dr. Mubashar Choudry—who partially owns or
operates those entities. (ECF Nos. 1 ¶ 6; 7 ¶ 92.) Plaintiffs’ allegations can be summarized as
claims of chronic mismanagement of AVR Johnstown by Defendants. Plaintiffs state five counts
as grounds for relief: (1) breach of contract based on Defendants’ mismanagement of AVR
Johnstown; (2) breach of contract based on Defendants’ failure to pay Plaintiffs’ wages; (3)
fraudulent
misrepresentation;
(4)
requesting
an
accounting;
and
(5)
seeking
dissolution/partition. (ECF No. 1 ¶¶ 44-64.) Plaintiffs seek compensatory damages, including
lost wages and revenues, as well as attorneys’ fees and costs. (Id. ¶ 64.)
In their Answer, Defendants deny all liability and state five counterclaims against
Plaintiffs, namely (1) breach of contract based on the sublease and Plaintiffs’ employment
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agreement with Washington Vascular; (2) tortious interference with contractual relations; (3)
conversion; (4) unjust enrichment; and (5) breach of fiduciary duty. (ECF No. 10 ¶¶ 114-36.)
Fact discovery closed on January 29, 2016. (ECF No. 28.) Plaintiffs and Defendants
moved for summary judgment on October 17, 2016.
(ECF Nos. 40, 44.)
That same day,
Defendants requested leave to amend their Answer to “add and clarify new allegations related
to AVR of Johnstown LLC’s Operating Agreement, and Plaintiffs’ breach of that Operating
Agreement.”
(ECF No. 47 ¶ 9.)
And—most relevant for purposes of this Memorandum
Opinion—Defendants also filed a Motion for Preliminary Injunction (ECF No. 48). Defendants
request broad injunctive relief, but mainly seek to enjoin Plaintiffs “from managing Advanced
Vascular Resources of Johnstown, LLC’s vascular center in Johnstown, PA” and “from opening
and operating a competing vascular center in the Johnstown area.” (See ECF No. 49 at 2-3.) A
hearing on Defendants’ Motion for Preliminary Injunction was held on November 22, 2016.
II.
Jurisdiction & Venue
The Court has diversity jurisdiction over this case pursuant to 28 U .S.C. § 1332(a)(1)
because Plaintiffs are citizens of different states than Defendants and the amount in controversy
exceeds $75,000. (ECF Nos. 1 ¶¶ 1-7, 55-56; 10 ¶¶ 1-6) Because a substantial part of the events
underlying this case—namely, the alleged mismanagement of AVR Johnstown—occurred in the
Western District of Pennsylvania, venue is proper in this district pursuant to 28 U.S.C.
§ 1391(b)(2).
III.
Legal Standard
A preliminary injunction is “an extraordinary remedy,” which courts may grant only
“upon a clear showing that the [movant] is entitled to such relief.” Winter v. Nat. Res. Def.
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Council, Inc., 555 U.S. 7, 22 (2008) (citing Mazurek v. Armstrong, 520 U.S. 968, 972 (1997)). A party
“seeking a preliminary injunction must establish that he is likely to succeed on the merits, that
he is likely to suffer irreparable harm in the absence of preliminary relief, that the balance of
equities tips in his favor, and that an injunction is in the public interest.” Id. at 20 (citing cases).
The movant bears the burden of showing that these four elements weigh in favor of granting
the injunction. Ferring Pharms., Inc. v. Watson Pharms., Inc., 765 F.3d 205, 210 (3d Cir. 2014)
(citing Opticians Ass’n of America. v. Indep. Opticians of America, 920 F.2d 187, 192 (3d Cir. 1990)).
The failure to establish any of these four elements renders a preliminary injunction
inappropriate. Id. (quoting NutraSweet Co. v. Vit-Mar Enters., Inc., 176 F.3d 151, 153 (3d Cir.
1999)).
IV.
Threshold Issue – Choice of Law
Defendants’ Motion for Preliminary Injunction relies on allegations that Plaintiffs
violated AVR Johnstown’s Operating Agreement. 1 The Operating Agreement contains a choiceof-law provision, which provides that
[a]ll questions concerning the construction, validity and
interpretation of this Agreement and the performance of the
obligations imposed by this Agreement shall be governed by the
internal law, not the law of conflicts, of the State of Delaware, with
the exception of questions concerning the construction, validity or
interpretation of the restriction against Member holding an
ownership interest in a competing vascular center while also
holding an ownership interest in the Company, as set forth in
Section 2.3, which shall be governed by the internal laws of the
State of Florida, without regard for conflicts of law principles or
provisions.
The Court notes that although Defendants have requested leave to amend their Answer to include
counterclaims alleging violations of the Operating Agreement, Defendants’ Answer does not currently
include any such allegations.
1
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(ECF No. 1-6 § 10.6.) This case is a diversity action. Although state law therefore governs the
substantive issues, see Erie R.R. v. Tompkins, 304 U.S. 64 (1938), federal law governs the standard
for a preliminary injunction, Instant Air Freight Co. v. C.F. Air Freight, Inc., 882 F.2d 797, 799
(3d Cir. 1989). So while federal law provides the preliminary-injunction standard, Instant Air,
882 F.2d at 797, Delaware and Florida law determine whether Defendants have satisfied that
standard, see, e.g., Certainteed Ceilings Corp. v. Aiken, No. 14-3925, 2014 WL 5461546, at *8-14 (E.D.
Pa. Oct. 27, 2014) (applying state law to substantive issues in preliminary-injunction analysis);
Vector Sec., Inc. v. Stewart, 88 F. Supp. 2d 395, 399 (E.D. Pa. 2000) (same).
V.
Analysis
Defendants contend that Plaintiffs have breached the Operating Agreement by (1)
preventing AVR Management from performing its duties as manager of AVR Johnstown, and
(2) establishing a competing vascular-services center in violation of the Operating Agreement’s
non-compete provision. (ECF No. 49 at 8.) Defendants argue that they are likely to succeed on
the merits of these claims and that they will suffer irreparable harm without a preliminary
injunction. Here, the Court’s analysis begins and ends with the irreparable-harm prong.
A.
The Irreparable-Harm Standard
“In order to demonstrate irreparable harm the [movant] must demonstrate potential
harm which cannot be redressed by a legal or an equitable remedy following a trial.” Instant
Air, 882 F.2d at 801. In the absence of exceptional circumstances, economic loss does not qualify
as irreparable harm. Minard Run Oil Co. v. U.S. Forest Serv., 670 F.3d 236, 255 (3d Cir. 2011)
(citations omitted). And “[a]n inability to precisely measure financial harm does not make that
harm irreparable or immeasurable.” Acierno v. New Castle County, 40 F.3d 645, 655 (3d Cir.
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1994). Thus, “[t]he possibility that adequate compensatory or other corrective relief will be
available at a later date, in the ordinary course of litigation, weighs heavily against a claim of
irreparable harm.” Sampson v. Murray, 415 U.S. 61, 90 (1974).
In addition, more than a mere risk of irreparable harm must be demonstrated; “[t]he
requisite for injunctive relief has been characterized as a clear showing of immediate irreparable
injury, or a presently existing actual threat; (an injunction) may not be used simply to eliminate
a possibility of a remote future injury, or a future invasion of rights.” Cont’l Grp., Inc. v. Amoco
Chems. Corp., 614 F.2d 351, 359 (3d Cir. 1980) (internal quotation marks and citations omitted). If
the harm alleged stems from a breach-of-contract claim, then irreparable harm may be found in
two situations:
(1) where the subject matter of the contract is of such a special
nature or peculiar value that damages would be inadequate; or (2)
where because of some special and practical features of the
contract, it is impossible to ascertain the legal measure of loss so
that money damages are impracticable.
ECRI v. McGraw-Hill, Inc., 809 F.2d 223, 226 (3d Cir. 1987) (citation omitted).
B.
Defendants’ Arguments
Defendants assert that irreparable harm exists here because (1) the parties have agreed
that any breach of the Operating Agreement qualifies as irreparable harm, (2) Defendants are
losing a non-replicable business opportunity as a result of Plaintiffs’ breaches of the Operating
Agreement, (3) the Operating Agreement provides Defendants with limited means to address
the harm caused by Plaintiffs, and (4) Plaintiffs’ violation of the non-compete provision will
lead to confusion, loss of goodwill in the community, and loss of patients. (ECF No. 49 at 1316.) Below, the Court considers these arguments in turn.
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1.
The parties’ agreement that any breach of the Operating Agreement
qualifies as irreparable harm.
Section 10.3 of the Operating Agreement provides:
Specific Performance. The Members recognize that irreparable
injury will result from a breach of any provision of this
Agreement and that money damages will be inadequate to fully
remedy the injury. Accordingly, in the event of a breach or
threatened breach of one or more of the provisions of this
Agreement, any member who may be injured (in addition to any
other remedies which may be available to that Member) shall be
entitled to one or more preliminary or permanent orders (A)
restraining and enjoining any act which would constitute a breach
or (B) compelling the performance of any obligation which, if not
performed, would constitute a breach.
(ECF No. 1-6.) Defendants contend that this provision supports a finding of irreparable harm
here.
Delaware courts have provided conflicting guidance on whether contractual stipulations
are sufficient to establish irreparable harm. Compare True N. Commc’ns Inc. v. Publicis S.A.,
711 A.2d 34, 44 (Del. Ch. 1997) (contractual provision established irreparable harm), and Vitalink
Pharmacy Servs., Inc. v. Grancare, Inc., No. 15744, 1997 WL 458494, at *9 (Del. Ch. Aug. 7, 1997)
(same), with AM Gen. Holdings LLC v. Renco Grp., Inc., No. 7639-VCN, 2016 WL 787929, at *2
(Del. Ch. Feb. 19, 2016) (no irreparable harm despite contractual provision), and Kansas City S. v.
Grupo TMM, S.A., No. 20518-NC, 2003 WL 22659332, at *5 (Del. Ch. Nov. 4, 2003) (holding that
contractual provision established irreparable harm, but noting that “[i] the facts plainly do not
warrant a finding of irreparable harm, this Court is not required to ignore those facts”). It
appears that Delaware courts take contractual irreparable-harm provisions into consideration,
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but that they are not necessarily dispositive as to whether irreparable harm exists. Applying
this standard here, the contractual provision leans in favor of a finding of irreparable harm.
2.
Defendants’ argument that they are losing a non-replicable business
opportunity as a result of Plaintiffs’ breaches of the Operating
Agreement.
Defendants state that “outpatient vascular labs are a new and growing business in the
medical community,” and that “Plaintiffs [sic] breach of the Operating Agreement has meant
Defendants continue to lose the opportunity to enter and maintain a facility in this new
market.” (ECF No. 49 at 14.) Defendants reason that their loss of a non-replicable business
opportunity qualifies as irreparable harm.
The Court is unconvinced. As an initial matter, although a non-replicable business
opportunity can give rise to irreparable harm, it does not follow that every loss of a nonreplicable business opportunity gives rise to irreparable harm.
For preliminary-injunction
purposes, it is only harm that “cannot be redressed by a legal or an equitable remedy following
a trial” that qualifies as irreparable. See Instant Air, 882 F.2d at 801. The single case cited by
Defendants on this point—EUSA Pharma (US), Inc. v. Innocoll Pharm. Ltd., 594 F. Supp. 2d 570
(E.D. Pa. 2009)—illustrates this proposition. There, although the court stated that the movant
would “suffer irreparable harm by losing ‘a unique, non-replicable business opportunity,’” that
fact was relevant only because without an injunction “calculating an award of damages to
compensate [the movant] would require speculation.” EUSA Pharma, 594 F. Supp. 2d at 582
(citation omitted). Here, Defendants have not explained how the loss of “the opportunity to
enter and maintain a facility in [the outpatient vascular-labs] market” frustrates the calculation
of an eventual damages award. (ECF No. 49 at 14.) Thus, even assuming that Defendants are
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currently missing out on a non-replicable business opportunity, they have not established that
this qualifies as irreparable harm.
Furthermore, there is a substantial question whether operating an “outpatient vascular
lab” is actually a non-replicable business opportunity.
In their Brief in Opposition to
Defendants’ Motion for Preliminary Injunction, Plaintiffs cite extensively to depositions taken in
this case to argue that “there is nothing novel, unique, proprietary, or ‘non-replicable’ about an
outpatient vascular center such as AVR-Johnstown.” (ECF No. 56 at 11.) Plaintiffs assert,
supported by the record, that businesses such as AVR Johnstown are prevalent throughout the
United States. (Id. (citing depositions).) This case does not involve proprietary technology,
trade secrets, or the like, and Defendants have not explained how AVR Johnstown is a nonreplicable business.
Thus, the Court finds that Defendants argument of a loss of a non-
replicable business opportunity does not support a finding of irreparable harm.
3. Defendants’ argument that the Operating Agreement gives them limited means to
address the harm caused by Plaintiffs.
Defendants argue that their inability under the Operating Agreement to dissolve or
wind up AVR Johnstown supports a finding of irreparable harm. (ECF No. 49 at 14-15.)
According to Defendants, because the Agreement bars them from dissolving AVR Johnstown,
they “have no other recourse but an injunction to address the harm cause [sic] by Plaintiffs.”
(Id. at 15.) This argument is puzzling. And Defendants cite no authority for the proposition
that the unavailability of alternative remedies—other than litigation—transforms ordinary harm
suffered as a result of a breach of contract into irreparable harm. In the preliminary-injunction
context, this unavailability of alternative remedies is irrelevant unless the movant’s “legal
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remedies are either inadequate or impracticable.” See A. L. K. Corp. v. Columbia Pictures Indus.,
Inc., 440 F.2d 761, 763 (3d Cir. 1971). Defendants appear to overlook the most obvious means of
addressing the alleged harm caused by Plaintiffs: adjudication of Defendants’ counterclaims by
a neutral factfinder at an eventual trial and the possible award of monetary damages. Therefore
the Court finds that this argument too is unpersuasive.
4. Defendants’ argument that Plaintiffs’ violation of the non-compete provision will
lead to confusion, loss of goodwill in the community, and loss of patients.
Section 2.3 of the Operating Agreement provides in relevant part that
for so long as a such [sic] Member continues to hold any
ownership interest in the Company, and for two (2) years
thereafter, Member will not obtain or hold any ownership interest,
directly or indirectly, in any vascular center that provides any
treatment, therapy or service competitive with those offered by
the Company, located within thirty (30) miles of the vascular
center(s) owned and operated by the Company.
(ECF No. 1-6.) Defendants state that Dr. Hadeed is “creating a larger, competing, vascular
center in Richland Township, just seven miles from AVR-Johnstown’s facility.” (ECF No. 49
at 7.) Defendants argue that the establishment of the new facility violates Section 2.3 of the
Operating Agreement and will lead to irreparable harm in the form of “confusion, loss of
goodwill in the community, and loss of patients.” (Id. at 15-16.)
Notwithstanding these conclusory statements, however, Defendants have offered no
evidence that Dr. Hadeed’s new facility will actually cause confusion or result in the loss of
goodwill by AVR Johnstown. As for the loss of patients, it does not appear that any such loss
would be the result of Dr. Hadeed’s new facility. Rather, any loss of patients would be the
result of the dispute underlying this case. As Plaintiffs point out, with extensive support in the
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record, Defendants have credit holds with multiple vendors and suppliers, are unable to obtain
the necessary equipment and supplies for the performance of vascular procedures, do not have
the most critical piece of equipment necessary to operate a vascular lab, cannot obtain the
credentials with insurance companies necessary to run AVR Johnstown, and no longer have a
physician to perform vascular procedures at AVR Johnstown. (ECF No. 56 at 15-16 (citing
depositions).)
Therefore, at this stage of the case, Defendants have failed to establish that Dr. Hadeed’s
new facility will result in a loss of patients. Moreover, to the extent that a factfinder ultimately
finds that Dr. Hadeed’s new facility is responsible for a loss in AVR Johnstown’s patients, any
damages that result would be quantifiable and ascertainable; thus, no irreparable harm.
But these three grounds are not the only paths to irreparable harm on the basis of the
non-compete clause. As noted above, the Operating Agreement’s non-compete provision is
governed by Florida law.
(ECF No 1.6 § 10.3.)
Under Florida law, the violation of an
enforceable non-compete covenant creates a rebuttable presumption of irreparable harm to the
party seeking enforcement of that covenant. Fla. Stat. § 542.335(1)(j); see also Proudfoot Consulting
Co. v. Gordon, 576 F.3d 1223, 1231 (11th Cir. 2009).
For a non-compete covenant to be
enforceable under Florida law, the movant must “plead and prove the existence of one or more
legitimate business interests justifying the restrictive covenant.”
§ 542.335(1)(b).
Here,
however, even if the Court assumed that a legitimate business interest exists and that
Defendants are entitled to the presumption of irreparable harm, Plaintiffs have made a
sufficient showing to rebut that presumption.
Plaintiffs have presented substantial—and
unrebutted—evidence that there is nothing unique or proprietary about AVR Johnstown’s
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business and that that any possible harm would be strictly monetary. Thus, the Court finds that
any alleged violation of the non-compete provision does not give rise to irreparable harm.
C.
Defendants Have Failed to Meet the Burden for a Preliminary Injunction
Essentially, Defendants advance two principal reasons that irreparable harm exists here:
(1) Defendants’ inability to currently operate AVR Johnstown’s vascular center, and (2)
Plaintiffs’ offering of competing vascular services.
But neither of these grounds survives
scrutiny.
Regarding Defendants’ inability to operate AVR Johnstown’s vascular center, not only is
it doubtful that this qualifies as irreparable harm, but it is unclear why Defendants cannot
manage the vascular center without injunctive relief—and how, exactly, they are prevented
from managing AVR Johnstown. And more importantly, it is unclear how the injunctive relief
requested would put AVR Johnstown back in business. Defendants allege that “Plaintiffs
moved in and changed the locks at the Johnstown facility, barring AVR-Management . . . from
entering AVR-Johnstown’s clinic.”
(ECF No. 49 at 6.)
Plaintiffs do not contest that they
changed the locks of the Johnstown facility, (ECF No. 49-2 at 67:15-19); one of the allegations in
Plaintiffs’ Complaint is that “Defendants . . . failed to pay rents and utilities which were due
under the Sublease,” (ECF No. 1 ¶ 33). Defendants have denied this allegation, (ECF No. 7
¶ 33), and argued that it was Plaintiffs who violated the Sublease, (id. ¶ 115).
Although there is a dispute as to which party violated the Sublease, Defendants request
this Court order Plaintiffs to “allow AVR-Management access to Advanced Vascular Resources
of Johnstown, LLC’s vascular center and allow AVR-Management to manage Advanced
Vascular Resources of Johnstown, LLC and the vascular facility in accordance with Operating
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Agreement.” (ECF No. 48-1 at 2.) But it does not follow that the lack of access to the Johnstown
facility prevents Defendants from managing AVR Johnstown. The loss of a physical facility
certainly impedes the ability to run a vascular-services company, but the Operating Agreement
gives Defendant AVR Management the
full power and authority . . . to manage the business and affairs of
the Company . . . to make all decisions affecting such business and
affairs and to do all things which [AVR Management] deems
necessary or desirable in connection with the conduct of the
business and affairs of the Company.
(ECF No. 1-6 § 4.1.)
Notwithstanding the dispute over who violated the Sublease, AVR Management
appears fully authorized to procure a new facility on AVR Johnstown’s behalf while this case
proceeds.
Thus, it is unclear why Defendants cannot operate the vascular center without
injunctive relief and how they are being prevented from managing AVR Johnstown. Moreover,
if a factfinder ultimately finds that Plaintiffs violated the Sublease, the damages fairly traceable
to that violation—such as loss of revenue, loss of patients, and the costs of renting a new
facility—would be reducible to a monetary award. 2
Furthermore, it is unclear how the injunctive relief requested is necessary to put AVR
Johnstown back in business. Even if this Court ordered Plaintiffs to give Defendants the keys to
the Johnstown facility, “Defendants no longer have a physician to perform vascular procedures
Cf. DeHart v. HomEq Servicing Corp., 47 F. Supp. 3d 246, 253-54 (E.D. Pa. 2014) (“A Plaintiff in a breach of
contract case may be awarded any incidental damages that would naturally and ordinarily result from
the breach, along with any consequential damages that were reasonably foreseeable and within the
contemplation of the parties at the time they made the contract.” (citing Liss & Marion, P.C. v. Recordex
Acquisition Corp., 983 A.2d 652, 662 (Pa. 2009)); Kingsly Compression, Inc. v. Mountain V Oil & Gas, Inc.,
745 F. Supp. 2d 628, 636 (W.D. Pa. 2010) (“Damages for breach of contract or breach of a lease are
designed to place the aggrieved in as good a position as would have occurred had the contract or lease
been performed . . . .” (citing Trosky v. Civil Serv. Comm’n, 652 A.2d 813, 817 (Pa. 1995)).
2
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at AVR-Johnstown.” (ECF No. 56 at 16 (citing depositions).) Defendants counter that “once
AVR-Johnstown regains control of its Johnstown facility, it will be able to hire new physicians
to perform vascular treatments for patients in the Johnstown area.” (ECF No. 68-1 at 9.) But
Defendants do not explain why their ability to hire new physicians is conditional on access to
the Johnstown facility. If Defendants can hire new physicians now, and Defendants can sign a
new lease now, then Defendants can run their business now. Thus, it is unclear why injunctive
relief is necessary.
Defendants have also requested this Court to enjoin Plaintiffs “from commingling funds
from the operations of Advanced Vascular Resources of Johnstown, LLC’s vascular center and
Dr. Hadeed’s cardiovascular practice” as well as “from taking any action regarding the finances
of Advanced Vascular Resources of Johnstown, LLC.”
(ECF No. 48-1 at 2.)
In support,
Defendants allege that “Plaintiffs have diverted income and profits away from AVR-Johnstown
and altered the LLC’s bank accounts.” (ECF No. 49 at 10.) But the materials Defendants cite in
support for this allegation—excerpts of Dr. Hadeed’s deposition and a profit & loss statement of
Johnstown Heart—do not show that Plaintiffs have altered AVR Johnstown’s bank accounts.
And Defendants do not explain how, exactly, Plaintiffs have altered—or even accessed—AVR
Johnstown’s bank accounts. Plus, the Operating Agreement provides the following:
Bank Accounts. All funds of the Company shall be deposited in a
bank account, or accounts, opened in the Company’s name. The
bank accounts will be maintained in locations as shall be
determined by the Manager from time to time, subject to any
requirements imposed by applicable financing documents. The
Manager shall determine the financial institution or institutions at
which the accounts will be opened and maintained, the types of
accounts, and the Persons who will have authority with respect to
the accounts and the funds therein.
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(ECF No. 1-6 at § 9.1.) Thus, if Defendants have followed the Operating Agreement, then
Defendants should already be in control of AVR Johnstown’s bank accounts. And Defendants
do not explain how it is that they do not control AVR Johnstown’s bank accounts.
As for the alleged irreparable harm resulting from Plaintiffs’ competing vascular
services, it appears to the Court that any damages from violations of the non-compete can be
remedied by an eventual monetary judgment.
If Plaintiffs are eventually found to be in
violation of the non-compete clause, damages will be reasonably ascertainable by reviewing the
financial records of the violating services provided by Plaintiffs and calculating the loss in
business suffered by Defendants as a result. A loss of revenue or patients certainly seems
quantifiable and capable of being reduced to a monetary amount.
VI.
Conclusion
In the preliminary-injunction context, a movant must demonstrate “a clear showing of
immediate irreparable injury.”
Amoco, 614 F.2d at 359.
Of the four grounds Defendants
advance in support of a finding of irreparable harm, only one—the contractual stipulation of
irreparable harm—weighs in favor of such a finding. Delaware courts, however, treat such
stipulations as relevant to the irreparable-harm analysis, but not dispositive. Here, the Court
finds that Defendants have failed to establish irreparable harm because every type of harm
Defendants identify is quantifiable in monetary terms. And “[t]he possibility that adequate
compensatory . . . relief will be available at a later date, in the ordinary course of litigation,
weighs heavily against a claim of irreparable harm.” Sampson, 415 U.S. at 90.
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Because Defendants have failed to establish that they will suffer irreparable harm, the
Court will not address the remaining elements necessary for a preliminary injunction.
Defendants’ Motion for Preliminary Injunction (ECF No. 48) is DENIED. A corresponding
Order follows.
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IN THE UNITED STATES DISTRICT COURT
FOR THE WESTERN DISTRICT OF PENNSYLVANIA
SAMIR HADEED, MD, and JOHNSTOWN
HEART AND VASCULAR CENTER, INC.,
Case No. 3:15-cv-22
)
Plaintiffs,
)
)
JUDGE KIM R. GIBSON
)
)
v.
)
)
ADVANCED VASCULAR RESOURCES
OF JOHNSTOWN, LLC, AVR
MANAGEMENT, LLC, WASHINGTON
VASCULAR INSTITUTE, LLC, and
MUBASHAR CHOUDRY, MD,
)
)
)
)
)
)
Defendants.
)
ORDER
NOW, this 8th day of December 2016, upon consideration of Defendants' Motion for
Preliminary Injunction (ECF No. 48) and for the reasons set forth in the Memorandum Opinion
accompanying this Order, it is HEREBY ORDERED that Defendants' Motion for Preliminary
Injunction (ECF No. 48) is DENIED.
BY THE COURT:
KIM R. GIBSON
UNITED STATES DISTRICT JUDGE
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