NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION
This opinion shall not "constitute precedent or be binding upon any court." Although it is posted on the internet, this opinion is binding only on the parties in the case and its use in other cases is limited.
Defendants Dr. Wael Elkholy and Precision Pain and Spine Institute, LLC appeal from the Law Division's March 2, 2021 order declaring there was no restrictive covenant in any independent contractor agreement they allegedly had with plaintiffs Prajakta V. Avhad, M.D. and Interventional Pain and Spine Institute, Inc., that prevented Avhad and her company from working within a ten-mile radius of Elkholy's practice locations. After carefully reviewing the record, we conclude the trial court erred by conducting this matter as a summary proceeding under
Elkholy operates Precision Pain and Spine Institute, LLC, a pain management medical practice with locations in Hamilton and Edison. Avhad previously worked for Elkholy and another one of his companies as an employee. In her complaint, Avhad asserts that she and her company, Interventional Pain and Spine Institute, Inc., signed an independent contractor agreement to work with Elkholy. Avhad attached a copy of the contract to her complaint, but the contract is not signed or dated. The contract states it commenced on October 6, 2016.
Under the contract, Avhad agreed to provide medical services to patients at Elkholy's two facilities. Paragraph 9 of the agreement stated it could "not be modified in any manner except by an instrument in writing executed by the parties." Paragraph 7(B)(iii)(a) stated that Avhad and her company "shall not engage in... the practice of medicine/osteopathy... either on [their] own behalf or on behalf of any person, firm, corporation[,] or any other entity within a ten (10) mile radius of either [p]ractice [l]ocation."
Elkholy later opened a third practice location in North Brunswick and Avhad began working there. She also continued to see patients at the Hamilton and Edison facilities. The parties did not amend their written agreement to include the North Brunswick location in the restrictive covenant clause. However, Elkholy alleged he and Avhad entered into a new oral agreement whereby she agreed not to work for any other entity within a ten-mile radius of North Brunswick.
According to Avhad's complaint, she decided to end her business relationship with Elkholy in late 2020. She asked Elkholy to give her a letter stating she could work for another medical practice located within ten miles of Elkholy's North Brunswick location. He refused.
In late January 2021, plaintiffs filed an unverified complaint against defendants. They did not file a motion requesting the trial court to conduct the matter as a summary proceeding under
Nevertheless, the trial court entered an order to show cause on January 28, 2021. The order stated that Avhad was "seeking a preliminary injunction" but it did not specify the relief she sought. The order directed defendants to show cause "why orders should not be issued declaring that North Brunswick is not part of the noncompete clause."
In response, Elkholy submitted a certification. As noted, Elkholy asserted the parties had entered into a new oral agreement to address the North Brunswick location. Elkholy also provided several text messages in which Avhad appeared to acknowledge the restrictive covenant barred her from working within ten miles of North Brunswick.
After conducting oral argument on the February 22, 2021 return date, the trial court entered an order concluding "that there is no [r]estrictive [c]ovenant in any alleged [c]ontract between the [p]arties that covers the North Brunswick [l]ocation of the defendant[s] and therefore, no restrictive covenant can be enforced from that location." In a brief oral decision, the court found there was "no agreement that is before [the court] to enforce that's signed." Because the written agreement stated it could only be modified in writing, the court stated that any oral agreement was ineffective because it purported to modify the parties' written agreement to add a third location to the restrictive covenant. Thus, the court granted plaintiffs the permanent relief they sought in their complaint.
On appeal, defendants contend the trial court erred by conducting this matter in a summary fashion. They assert there were material disputes of fact that could not be resolved on this sparse record, especially since Avhad did not even submit a certification in support of her application. We agree with these contentions.
As we explained in
Further, the trial court improperly entered what it stated in its decision was "a final order"
Defendants plainly did not consent to have the matter resolved through a summary proceeding. They also disputed almost all of the few facts alleged by plaintiffs. In addition, Avhad did not address any of defendants' factual claims, which included their assertion the parties entered a separate oral agreement concerning the North Brunswick location and their claim that Avhad acknowledged being bound to the restrictive covenant in the text messages she sent to Elkholy. Yet, the trial court did not require the parties to present testimony on any of the issues involved in this case. Therefore, the court should not have attempted to resolve these factual disputes in a summary fashion.
Under these circumstances, we are satisfied the trial court erred by granting plaintiffs the permanent relief they sought on the return date of the order to show cause under the truncated, summary procedure it employed in this highly contested matter. Therefore, we vacate the March 2, 2021 order and remand for further proceedings.
Vacated and remanded. We do not retain jurisdiction.