in the supreme court of ohio professional employees, david kristal, dds, and robert forche, dds, who...
TRANSCRIPT
IN THE SUPREME COURT OF OHIO
DRS. KRISTAL & FORCHE, D.D.S., INC.,
Appellee,
V.
RONALD S. ERKIS, D.D.S.,
Appellant.
CASE NO. 09-2211
On Appeal from the FranklinCounty Court of Appeals,Tenth Appellate District
(Court of AppealsCase No. 09APE01-0006)
MEMORANDUM OPPOSING JURISDICTIONOF APPELLEE DRS. KRISTAL & FORCHE, DDS, INC.
GordonP. Shuler (0019315)(COUNSEL OF RECORD)Gordon P Shuler, Attorney at Law, LLC145 East Rich Street, Second FloorColumbus, Ohio 43215Tel.: (614) 221-1795Fax: (614) [email protected]
Counsel for Appellee,Drs. Kristal & Forche, DDS, Inc.
Edwin J. I Iollern (0040539)Hollern &: Associates77 North State StreetWesterville, Ohio 43081Tel.: (614) 839-5700Fax: (614) 839-4200eholletn(r^^ejhlaw.com
Counsel for Appellant,Ronald S. Erkis, DDS
TABLE OF CONTENTS
STATEMENT OF WHY THIS CASF, IS NOT OF PUBLIC OR GREAT GENERALINTERES'I' .....................................................................................................................................1
RESPONSE TO STATEMENT OF THE CASE AND STATEMENT OF TI-IE FACTS ...........5
RESPONSE TO PROPOSITIONS OF LAW ................................................................................5
RESPONSE TO PROPOSITION OF LAW NO. 1 ...........................................................5
RESPONSE TO PROPOSITION OF LAW NO. 2 ........................................................... 7
RESPONSE TO PROPOSITION OF LAW NO. 3 ... ........................................................ 8
CONCLUSION .............................................................................................................................. 9
CERTIFICATF.. OF SERVICE ....................................................................................................10
STATEMENT OF WHY THIS CASE IS NOT OF PUBLICOR GREAT GENERAL INTEREST
There is no constitutional issue presented by this case. Ronald S. Erkis, DDS,
hereinafter, "Erkis," requests that this court accept jurisdiction on the ground that this case is of
public or great general interest.' It is neither.
Although public interest and great general interest may both be present in some cases,
they represent separate grounds for seeking jurisdiction. Cases of public interest are those in
which a public body, usually the state, a county or a city, is directly interested, while cases of
great general interest are those involving issues affecting a great number of people or that have
aroused widespread interest among the people of the state. See, Proceedings and Debates of the
Constitutional Convention of 1912 (1912), Vol. I, at 1030. Erkis makes no claim that this is a
case of public interest under Article IV, Section 2(13)(2)(e) of the Ohio Constitution, and we are
left with his claini that there is great general interest in the case. The issues in this case do not
affect a large number of people, and no general interest has been aroused.
This case involves a contract between an individual, Erkis, and his own corporation,
formed by him as the sole shareholder in 1977. The corporation is now known as Drs. Kristal &
Forche, DDS, hic., hereinafter, the "Corporation." He was the original shareholder, and from the
time the Corporation was fonned until his retirement in 2003, he was a director, officer and
employee of the Corporation. There were only two other shareholders, directors, officers and
professional employees, David Kristal, DDS, and Robert Forche, DDS, who became the only
remaining shareholders following Erkis' retirement. Three individuals, Erkis, Kristal and
Forche, orthodontists who once practiced together in the Columbus metropolitan area, are the
only people interested in this case. It is not one of general interest,
' The heading at the top of page 1 of the Memorandum in Support of Jurisdiction misstates theconstitutional basis for granting jurisdiction as "great public or general interest."
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The discretion exercised by this court when deciding whether to accept jurisdiction is
whether there is a question of great general interest "...as distinguished from questions of
interest primarily to the parties." Villiamson v. Rubich (1960), 171 Ohio St. 253, 254. The
questions in this case are, without a doubt, of primary interest only to the parties.
Nevertheless, Erkis claims that the issue of great general interest is a judicial
determination of the definition of the word "retire" within the context of a professional services
agreement, specifically, a professional seivices agreenient wherein the word is not defined within
the four corners of the written agreement. Freedom of contract is constitutionally protected in
this country and in this state. How, then, could the court of appeals or this court render an
opinion defining a word which may be used in myriad circuinstances? The fact that we are
dealing with the definition of retire in a professional services agreement between a professional
services corporation and one of its shareholders dramatically narrows the scope of the general
interest in this case to a very small number of people. First, professionals; second, those who
have written professional services agreements; and, third, those professional services agreements
wherein the words "retire" or "retirement" appear. These factors, alone, prevent the court from
accepting jurisdiction in this case as a matter of great general interest.
Erkis goes further afield when he analogizes his situation to that of Brett Favre without
further explanation.2 This attempted analogy illustrates why this case is not of great general
interest.
Without support, Erkis claims that Brett Favre has come back to play for another teani,
but is still being paid his retirement benefits. How does Erkis know that this is true? In 2001,
2 For those not interested in sports, generally, or professional football, in particular, Brett Favreplayed quarterback for the Green Bay Packers for many years, retired after an illustrious career,but came back to play for the New York Jets for one year, only to retire again. He then cameback to play for the Minnesota Vikings this season, 2009-2010.
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while still playing for Green Bay, Mr. Favre renegotiated the $47.25 million, 7-year, deal he had
signed just three years earlier in 1998. He signed a new $100 million contract extending over the
next 10 years, even tliough he said at the time that he did not expect to play beyond 2006. Mr.
Favre received a $10 million signing bonus in 2001 when the deal was renegotiated, and
publically stated that he did not expect to receive payments during the last few years of the 10-
year contract. The contract was back-loaded, with higher salaries in later years. All of this was
done because of the complicated salary cap formula imposed by the NFL - the new $10 million
signing bonus did not count against the Green Bay Packers for salary cap purposes for the next
five or six years Favre actually expected to play.
The court's reaction to this discussion must be: So, what? Or, who cares? Exactly! No
one in this case has reviewed the written agreements between Mr. Favre and the Green Bay
Packers. Does anyone know whether Mr. Favre is receiving any payments froni Green Bay
while being paid more than $10 million for one season by the Minnesota Vikings? The written
contracts between Green Bay and Mr. Favre are binding on those two parties, just as the
professional services agreement between Erkis and his own professional corporation is binding
on those two parties. The language of the contracts themselves detennines the meaning of the
word "retire" as between the parties to the professional services agreements, not what "retire"
means to anyone else. 'I'he economic terms of the respective contracts are unique. It would be a
vain effort for the court of appeals below or for this court to try to define the word "retire" to be
applied in every professional services contract entered into in the state of Ohio.
Erkis complains that dentists and orthodontists should not be treated differently from
others who retire. The Corporation does not disagree with this proposition. However, the
decision of the court of appeals is in no way dependent on the fact that the parties happen to be
orthodontists. The decision is based on the language oi'the contract between the parties, not the
fact that they are dentists or orthodontists. This argument must fail.
Finally, contrary to the presentation made by Erkis, this case does not involve a non-
eompete agreement. The Corporation did not seek an injunction to prevent Erkis from
competing with the Corporation from wluch he retired. The Corporation filed a declaratory
judgnient action, not an action seeking injunctive relief. Erkis began competing with the
corporation within approximately 18 months after the effective date of his retirement. He
opened an office in very close proximity to the existing office of the Corporation. His new
practice was successful from the very beginning, and he continues to have a very successful
practice. He has, in no way, been prevented fi-om earning a very good living.
At the time Erkis commenced his new, competing practice, he was being paid $160,000
per year by the Corporation and these payments had not been previously funded. Instead, Dr.
Kristal and Dr. Forche were exerting their efforts to make these payments from the current
earnings of the Corporation, without the assistance of the third shareholder, Erkis. This was at a
time when Erkis opened his new practice and began to treat the very same patients, their younger
siblings and those who were referred from the same small group of dentists, both general and
pediatric, who were referral sources for the Corporation. These patients would have been the
source of revenue from which the remaining shareholders in the Corporation would have earned
the money necessary to fund Erkis' retirement.
Fundarnentally, this case involves a contract dispute between the parties to the contract,
and is of no interest to anyone else. Nothing about this case makes it a case of great general
interest.
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RESPONSE TO STATEMENT OF THE CASEAND STATEMENT OF THE FACTS
The issues in this case have been thoroughly analyzed in the courts below. The trial court
issued a well-reasoned, eleven page decision on the cross motions for summary judgment,
followed by a seven page decision denying Erkis' first motion for reconsideration, explaining,
again, its reasoning. Erkis' second motion for reconsideration was surnmarily denied. The court
of appeals issued a con-iprehensive sixteen page decision addressing all of Erkis' claimed errors,
aud a seven page decision explaining why Erkis' application for reconsideration in that court had
no merit. Erkis has had more than his day in court.
In seeking jurisdiction in this court, Erkis claims that the decisions below were based on
an analysis of Paragraph 12 of the professional services agreement between the parties. This is
not so. The court of appeals relied on Paragraphs 11, 12, 13, 14 and 15, read in conjunction with
one another, in reaching its decision. (Court of Appeals Decision, ¶¶ 29 through 36, Appendix
A-1). Erkis asserts that the court of appeals reached its decision on the meaning of the word
"retire," even though that word was not defined within the four corners of the contract. The
opposite is true. The court of appeals explained in great detail why reading the contract as a
wlzole and in context required the result reached.
RESPONSE TO PROPOSITIONS OF LAW
RESPONSE TO PROPOSITION OF LAW NO.1
Restatement of Erkis' Proposition of Law No. 1.
For purposes of contract interpretation, the terra "retire" rmeans topermanently leave one's employment with a specific employer. Unless thereis language in a written agreement to the contrary, the term "retire" does notmean to permanently leave one's profession.
Under this proposition, Erkis asserts that the definition of "retire" set fortlr in Black's
Law Dictionary, Fifth Edition, 1979, should trump the definition of that word found in a general
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purpose dictionary for non-lawyers. Erkis refers to this resource as the quintessential legal
dictionary. Why, then, look to the Fifth Edition, published 30 years ago?
Black's Law Dictionary was first published in 1891, and again in 1910, 1933, 1951,
1979, 1990, 1999 and 2004. In the 1968 Fourth Edition, retire is defined as: "To withdraw from
active service as an officer of the army or navy; to separate, withdraw or remove." In the 1979
Fifth Edition, retire is defined as: "°I'o tenninate employment or service upon reaching
retirement age." In the 1990 Sixth Edition, the word does not appear. Instead, "retirement" is
defined as: "Termination of employment, service, trade or oecupation upon reaching retirement
age, or earlier at election of employee, self-employed, or professional." [Emphasis added.]
Inasmuch as the professional services agreement was entered into in 1994, if one were to rely on
Black's Law Dictionary, would not the 1990 definition be most appropriate? And, if so, the
word retire has more than one meaning, including to terminate or retire from one's "trade" or
"occupation," e.g., to retire from the practice of orthodontics.
This analysis from dictionary definitions is entirely too shallow to begin with.
Definitions set forth in Black's Law Dictionary, whatever edition, are not binding in any court.
Both the trial court and the court of appeals properly acknowledged that retire can have more
than one meaning.
That being the case, the first sentence of this proposition is without legal support. The
second sentence: "Unless there is language in a written agreement to the contrary, the term
"retire" does not mean to permanently leave one's profession." Not only is there no legal
support for this statement, there is no logical support. No recognized rule of contract
interpretation or construction supports this unfounded statement and it is readily apparent that
retire may have more than one meaning.
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Erkis rettuns to his underlying theme by claiming that a restrictive covenant has been
created by judicial fiat. This argtiment is completely without merit inasmuch as Erkis has not
been prevented from continuing his orthodontics practice in direct competition with the
Corporation fi-om which he retired. Erkis has persistently claimed that this declaratory judginent
action is an action for injunctive relief to enforce a restrictive covenant or non-compete
agreen-ient. The Corporation acknowledged from the beginning that there is no restrictive
covenant in the professional services agreement. The Corporation did not seek to enforce a non-
compete agreement. The claim brought by the Corporation was simply that, based on the
language of the contract itself; Erkis was entitled to receive retirement benefits only if he retired
from the practice of orthodontics. He was entitled to return to the practice, but, by doing so, he
forfeited his right to continue to receive payments from the Corporation which were generated by
the labor of the remaining shareholders.
The foundation for this proposition is the unfounded claim that a covenant not to compete
was judicially created. Because there was no judicially created covenant not to conipete, the
entire proposition must fail.
RESPONSE TO PROPOSITION OF LAW NO. 2
Restatement of Erkis' Proposition of Law No. 2.
In the absence of contractual language to the contrary, a just and reasonableconstruction of the term "retire" can mean leaving one's employment with aspecific employer or leave one's profession permanently. In such case, theterm "retire" is ambiguous, as a matter of law, and the court may acceptextrinsic evidence to determine the parties' intent.
tJnder this proposition, Erkis concedes that the parties filed cross motions for summary
judginent on the grotuid that interpretation of a contract is a matter of law, including the
interpretation or construction of the meaning of the word "retire" as that word is used in the
contract between the parties. Nevertheless, Erkis asserts that the word is ambiguous, and,
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therefore, its meaning within the contract is ambiguous. Proposition of Law No. 1 and
Proposition of Law No. 2 are directly contrary to one another.
Erkis then asserts that there is nothing to guide the bench and bar as to the meaning of the
word retire except the decision of the court of appeals in this case. There is no logic to this
argument. The court below did not define the word retire for all litigants in all cases based on all
contracts. The court's decision was solidly based on the facts of this case, based upon this
written agreement, between these parties.
Time and space do not permit a complete recitation of the reasoning of the court of
appeals, but at ¶28, the court began its analysis by stating that the issue before it was whether or
not Erkis retired "...within the meaning of the PSA [the professional services agreement between
the parties]." The court of appeals then carefully analyzed the language of the contract and
deterniined that the interpretation put forth by Erkis was illogical, unreasonable, and improbable.
Court of appeals decision ¶38. Then, at ¶43 and ¶44, the court detennined that the context of the
contract provided sufficient aid in construing the meaning of retire, and that there was, therefore,
no ambiguity. Further, that not only was the interpretation advanced by Erkis not reasonable, the
only reasonable interpretation of retire in the contract between these parties was to retire from
the practice of orthodontics. The many citations to authority contained in the decision of the
court of appeals will not be repeated, inasmuch as that decision is before the court as Appeudix
A-1 to the memorandum in support of jurisdiction.
RESPONSE TO PROPOSITION OF LAW NO. 3
Restatement of Erkis Proposition of Law No. 3.
When there are significant conflicting interpretations of a term in anemployment contract, each of whiclt is just and reasonable, a materialquestion of fact is disputed and a trial court cannot grant summaryjudgment to either party.
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This proposition, as stated, may well be correct, but it does not accurately describe the
analysis of the court of appeals below. While it is undisputed that there may be more than one
definition of the word retire, there were no conflicting interpretations of that word as used in the
contract between the parties. Even if one could legitiinately claim that there are conflicting
interpretations, it is simply not true that the claimed conflicting interpretations are both just and
reasonable. The very basis for the dccision of the court of appeals on summary judgment was
that the interpretation advanced by Erkis was illogical, unreasonable and improbable within the
context of the contract language, while the interpretation advanced by the Corporation was the
only reasonable interpretation based upon an analysis of the four comers of the contract.
Erkis does not assert that the court of appeals misinterpreted or misapplied the decisions
in any of the oases relied upon. The case law is sound, and the analysis is sound. Summary
judgment was granted because the interpretation or constiuction of unambiguous contract
language is a matter of law. Alexander v. Buckeye Pipe Line Co. (1978), 53 Ohio St. 2nd 241,
paragraph one of the syllabus. The court must read the contract as a whole and give effect to
every part of the contract, if possible. Clark v. Humes, 10th Dist. No. 06AP-1202, 2008-Ohio-
640; Foster Wlieeler Enviresponce, Inc. v. Franklin Co. Cty. Convention Facilities Auth., 78
Ohio St. 3rd 353, 361-62, 1997-Ohio-202. This is bedrock Ohio law which was appropriately
applied by the court of appeals in this case.
CONCLUSION
This case does not involve the enforeement of a restrictive covenant in an einployment
agreement in spite of the fact that Erkis has insisted from the beginning that a non-compete
agreement was being imposed against him. This is an action for declaratory judgment based on a
written contract between two parties. The court of appeals properly applied long-standing Ohio
law to interpret the language of the written contract as a matter of law. Only the parties to the
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professional services agreement, Erkis and the Corporation, are affected, and this case is not one
of great general interest. There is no reason for the court to accept jurisdictigp in this case.
Respect
Gordon P. Shuler (0019315)145 East Rich Street, Second FloorColumbus, Ohio 43215Teleplione: 614-221-1795Facsimile: [email protected] for Appellee Drs. Kristal &Forche, D.D.S., Inc.
CERTIFICATE OF SERVICE
I hereby certify that a true and accurate copy of the foregoing Memorandum Opposing
Jurisdiction was served on Edwin J. Hollem, Attorney for Defendant and Third Party Plaintiff-
Appellant Ronald S. Erkis, 77 North State Street, Westerville, Ohio 43081, by regular U.S. mail
service, this -7-day of January, 2010.
Gordon P. Shuler (0019-1TS)
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