On May 2, 2013, the Hon. Jeffrey K. Sprecher of the Berks County Court of Common Pleas filed an Opinion in support of a verdict in favor of the Reading Hospital Surgical Center at Spring Ridge, LLC ("Reading Hospital"). See Carim v. Reading Hospital, No. 10-5867 (Ct. Com. Pl. Berks Co., May 2, 2013). In doing so, Judge Sprecher provided a strict interpretation of a non-compete agreement between Reading Hospital and one of its former physicians, Moiz Carim, M.D. ("Dr. Carim").
On March 5, 2004, Dr. Carim paid $25,000.00 to Reading Hospital and entered into a subscription agreement (the "Agreement") in exchange for one membership unit in Reading Hospital. The Agreement stated in pertinent part that "during the time that [Dr. Carim] owns an interest in [Reading Hospital] and for a period of two (2) years, thereafter, [Dr. Carim] shall not participate directly or indirectly in (i) [the] establishment, development, ownership, operation, or management of another ambulatory surgery center or comparable facility ... that renders services which are the same as or similar to the services rendered by [Reading Hospital] within the restricted area."
In 2005, Dr. Carim acquired property in Spring Township, Berks County, and subsequently began refitting the facility in anticipation of performing surgeries there. On April 3, 2006, Dr. Carim notified Reading Hospital of his intent to withdraw his membership with Reading Hospital. Thereafter, Reading Hospital notified Dr. Carim that although it would accept his withdrawal, Dr. Carim had forfeited his initial investment of $25,000.00 due to his breach of the non-compete provision in the Agreement. Dr. Carim then sued to recover his $25,000.00.
After a non-jury trial, the Court found that Dr. Carim did not begin conducting surgeries at his facility until August 2008, which was outside the two-year limitations period. The Court found that Dr. Carim had nevertheless breached the clear language of the Agreement when he established his own facility to perform surgeries while still a member of Reading Hospital and before the two-year non-competition period had expired.
The Court determined that between June 1, 2006, and May 31, 2008, Dr. Carim fit out his Spring Township facility as a surgery center, purchased and installed equipment, applied for the necessary governmental approvals, and staffed his facility such that it was ready to for surgeries by August 2008. Dr. Carim purportedly further admitted that the procedures performed at his center after August 2008 were similar or identical to those of Reading Hospital.
The Court found that based on the strict unambiguous language of the Agreement, Dr. Carim was not permitted to even establish a facility to compete with Reading Hospital during the non-compete period, despite the fact that no competing surgeries would actually take place until after two-years from Dr. Carim's withdrawal from Reading Hospital. Accordingly, Judge Sprecher agreed that Dr. Carim had waived his $25,000.00 initial investment in Reading Hospital membership.
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