Opinion
354266
09-16-2021
VASCULAR HEALTH CLINICS PLLC, Plaintiff-Appellant, v. MIDMICHIGAN HEALTH and SHIKHA SHARMA M.D., Defendants-Appellees.
UNPUBLISHED
Ogemaw Circuit Court LC No. 20-651442-CK
Before: Murray, C. J., and M. J. Kelly and O'Brien, JJ.PER CURIAM.
Plaintiff, Vascular Health Clinics PLLC (VHC), appeals by right the trial court order granting summary disposition under MCR 2.116(C)(6) to defendants MidMichigan Health and Shikha Sharma, M.D. Because there are no errors warranting reversal, we affirm.
I. BASIC FACTS
VHC hired Dr. Sharma on April 26, 2019. As part of her employment, she signed an employment agreement that contained both a confidentiality provision and a non-compete clause. The non-compete clause provided that for 24 months following termination of the employment agreement, Dr. Sharma would be prohibited from working as a physician with any competing health care entity located within a 30 miles radius of any sites established by VHC, with the distance to be calculated by GPS point to point instead of road miles. The agreement identified Alma, Mount Pleasant, Saginaw, Kingston, Bad Axe, Bay City, and Midland as sites established by VHC. The confidentiality provision required Dr. Sharma to maintain the confidentiality of the employment agreement and "any and all business records, financial information, medical records and proprietary information of VHC.
In March 2020, VHC terminated Dr. Sharma's employment. Thereafter, Dr. Sharma entered into an employment agreement with MidMichigan Physicians Group (MPG), with an anticipated start date of May 17, 2020. The agreement provided that she would work as a cardiologist at a medical office owned and operated by MPG located in West Branch, Michigan. The medical office in West Branch was 22.4 miles from VHC's Gladwin clinic, but was approximately 46 miles from VHC's Midland clinic, which is where Dr. Sharma worked while she was employed by VHC.
On April 30, 2020, after VHC learned of Dr. Sharma's planned employment in West Branch, VHC's lawyer sent a letter to MidMichigan Health indicating that Dr. Sharma had breached her employment agreement with VHC. In the letter, VHC noted that it had not "received any inquires whatsoever from MIDMICH requesting information on the performance of Dr. Sharma or the existence of any competition prohibitions." Based on the lack of inquiry, VHC explained that it could only assume that MidMichigan was "acting as an accomplice to breach the non-competition provision of the Employment Agreement of Dr. Sharma and to engage in theft of the protected information known by Dr. Sharma." The letter warned that if MidMichigan wished "to avoid the twin burdens of expense and inconvenience, which inevitably attends protracted litigation," it should contact VHC's lawyer on or before May 8, 2020. Attached to the letter was a draft of a complaint that VHC intended to file in Ogemaw County if MidMichigan did not respond to the letter in a satisfactory manner.
On May 7, 2020, MPG and Dr. Sharma filed a complaint for declaratory judgment in Midland County (the Midland action). The complaint sought a declaration that the non-compete provision in Dr. Sharma's employment agreement with VHC did not apply under the circumstances and that, even if it did apply, it was unenforceable because it did not protect a reasonable competitive business interest of VHC, was particularly injurious to the public, and was unreasonable in its geographical scope.
On May 14, 2020, VHC filed a verified complaint in Ogemaw County against Dr. Sharma and MidMichigan Health (the Ogemaw action). VHC acknowledged that there was a complaint that "has been improperly filed in the Circuit Court for the County of Midland," but did not otherwise address the Midland action. In its complaint, VHC alleged that Dr. Sharma had breached her employment agreement by violating the non-compete and the confidentiality provisions. Furthermore, it alleged that Dr. Sharma was "intimately familiar with VHC's trade secrets" and that she had "willfully and maliciously misappropriated" those secrets to compete with VHC and to secure employment with MidMichigan. Finally, VHC contended that MidMichigan had hired Dr. Sharma in order "to gain the use of the confidential information" she had acquired from VHC so that MidMichigan could gain an unfair business advantage. VHC sought injunctive relief as well as a declaratory judgment that the non-compete and confidentiality provisions were valid and enforceable.
VHC also requested and received an ex parte temporary restraining order against defendants, prohibiting Dr. Sharma "from being employed by" MidMichigan, "its subsidiaries or affiliated, in any capacity, at any location within a 30 mile radius of any established VHC location, unless or until ordered otherwise by this Court." The order further prohibited Dr. Sharma from disclosing any confidential information of VHC and it held that the non-compete provision and the confidentiality provisions were "deemed enforceable, unless or until ordered otherwise by this Court" Defendants moved to dissolve the temporary restraining order; however, the trial court denied the motion.
Thereafter, defendants filed a motion for summary disposition under MCR 2.116(C)(6). Defendants argued that their Midland complaint, which was filed on May 7, 2020, was a pending action "initiated between the same parties involving the same claim." In response, VHC argued that pursuant to MCL 600.1641 and MCL 600.1629, venue over "this entire action" is only proper in Ogemaw County. VHC also contended that MPG and Dr. Sharma's Midland complaint for declaratory judgment was not ripe at the time it was filed and did not involve an actual case or controversy. Finally, VHC asserted that MCR 2.116(C)(6) was inapplicable because its application in this case would be "inconsistent with substantial justice" because it would allow defendants to "game the system and avoid the clear requirements of the venue statue. . . ." Following oral argument, the trial court granted defendants' motion for summary disposition.
II. SUMMARY DISPOSITION
A. STANDARD OF REVIEW
VHC argues that the trial court erred by granting summary disposition under MCR 2.116(C)(6). Challenges to a trial court's decision to grant summary disposition are reviewed de novo. Barnard Mfg Co, Inc v Gates Performance Engineering, Inc, 285 Mich.App. 362, 369; 775 N.W.2d 618 (2009). Summary disposition under MCR 2.116(C)(6) is proper if "[a]nother action has been initiated between the same parties involving the same claim." When reviewing a motion brought under MCR 2.116(C)(6), the trial court must consider the affidavits, pleadings, depositions, admissions, and documentary evidence filed in the action or submitted by the parties. MCR 2.116(G)(5).
B. ANALYSIS
"[S]ummary disposition cannot be granted under MCR 2.116(C)(6) unless there is another action between the same parties involving the same claims currently initiated and pending at the time of the decision regarding the motion for summary disposition." Fast Air, Inc v Knight, 235 Mich.App. 541, 549; 599 N.W.2d 489 (1999). The requirement that the two actions involve the "same parties" does not require the "complete identity of the parties." JD Candler Roofing Co, Inc v Dickson, 149 Mich.App. 593, 598; 386 N.W.2d 605 (1986); Fast Air, Inc, 235 Mich.App. at 545 n 1. In this case, the parties to the Midland action were Dr. Sharma, MPG, and VHC, whereas the parties to the Ogemaw action were Dr. Sharma, MidMichigan, and VHC. MPG is a wholly owned subsidiary of MidMichigan. Therefore, the same-parties requirement is satisfied.
Additionally, both actions involve the "same claims." The claims need not be identical. Instead, "the two suits must be based on the same or substantially the same cause of action." Id. Further, a motion based on MCR 2.116(C)(6) is properly granted where resolution of the action will require examination of the same operative facts as the pending action. Id. at 601. Here, in the Midland action, Dr. Sharma and MPG raised a single claim for declaratory judgment, asserting that the employment agreement between Dr. Sharma and VHC was either inapplicable under the circumstances or that the non-compete provision was unenforceable under Michigan law. Likewise, the Ogemaw action sought a declaratory judgment holding that the non-compete and confidentiality provisions were valid and enforceable against Dr. Sharma, as well as asserting that Dr. Sharma breached the non-compete and confidentiality clauses by accepting employment at MidMichigan's West Branch clinic. VHC's claims for unfair competition and misappropriation of trade secrets were based on Dr. Sharma's alleged breach of the employment agreement. Thus, resolution of both actions is dependent on a determination regarding the validity and enforceability of the employment agreement between Dr. Sharma and VHC. As a result, we conclude that the trial court did not err by finding that the two actions involved the "same claims."
On appeal, VHC does not challenge the trial court's determination that there was another action between the same parties involving the same claims currently initiated and pending at the time that VHC filed its complaint in the Ogemaw circuit court. Rather, VHC contends that under MCL 600.1629, the only proper venue for its claims against defendants was in Ogemaw County. MCL 600.1629(1)(a) provides:
(1) Subject to subsection (2), in an action based on tort or another legal theory seeking damages for personal injury, property damage, or wrongful death, all of the following apply:
(a) The county in which the original injury occurred and in which either of the following applies is a county in which to file and try the action:
(i) The defendant resides, has a place of business, or conducts business in that county.
(ii) The corporate registered office of a defendant is located in that county. [Emphasis added.]
In Dimmitt & Owens Fin, Inc v Deloitte & Touche (ISC), LLC, 481 Mich. 618, 628; 752 N.W.2d 37 (2008), our Supreme Court explained that MCL 600.1629(1)(a) "clearly and unambiguously limits venue to the situs of the original injury when either the defendant or the plaintiff resides, does business, or has a corporate office there." In evaluating the original-injury requirement, courts "must look to the first injury resulting from an act or omission of a defendant to determine where venue is proper. It is the original injury, not the original breach of the standard of care, that establishes venue under MCL 600.1629(1)(a) and (b)." Id. at 630. On appeal, VHC contends that the situs of the original injury in this case is Ogemaw County, whereas defendants contend that the original injury occurred in Midland County.
We conclude that it is not proper to address venue at this time. In its ruling, the trial court explained that with respect to venue, where the original injury occurred was not briefed, so the issue was not before the court. Nevertheless, the court posited that its knee-jerk reaction was that the original injury occurred in Midland County, but that "there is a strong argument that can be made that there is an injury due to the activity in" Ogemaw County. Despite those comments, the court did not hold that venue was proper in Ogemaw County. Rather, it noted that it was unclear "what the court will do in Midland County," and then proceeded to analyze the issue before it, i.e., whether summary disposition was warranted under MCR 2.116(C)(6). Because the trial court did not make any decision as to whether Ogemaw or Midland County was the situs of the original injury for purposes of MCL 600.1629, there is no decision on the matter of venue presently before this Court.
Next, VHC argues that MCR 2.116(C)(6) does not require dismissal in this case because the court rule "is intended to shield parties from the 'litigious plaintiff' scenario-it is not to be used as a sword by a 'litigious tortfeasor defendant' who wants to preemptively control venue when it anticipates a claim will be filed by the party it injured." In support, VHC directs this Court to the decision in Fast Air, Inc, 235 Mich.App. at 546, where this Court stated that the purpose of MCR 2.116(C)(6) is so
that parties may not be harassed by new suits brought by the same plaintiff involving the same questions as those in pending litigation. If this were not so repeated suits involving useless expenditures of money and energy could be daily launched by a litigious plaintiff involving one and the same matter.
Although the above quotation references a litigious plaintiff, the court went on to quote Justice Riley's concurring opinion in Rowry, where she explained that the "rule is designed to stop parties from endless litigating matters involving the same questions and claims as those presented in pending litigation. In other words, its purpose is to prevent 'litigious harassment' involving the same questions as those in pending litigation." Id., quoting Rowry v Univ of Mich, 441 Mich. 1, 20-21; 490 N.W.2d 305 (1992) (Riley, J., concurring) (first emphasis added). Moreover, in Valeo Switches & Detection Sys, Inc v Emcom, Inc, 272 Mich.App. 309, 313; 725 N.W.2d 364 (2006), this Court explained that MCR 2.116(C)(6) "is a codification of the former plea of abatement by prior action," the purpose of which was "to protect parties from the harassment of new suits." Thus, it is clear that MCR 2.116(C)(6) is not just designed to prevent litigious plaintiffs from filing multiple claims. Here, given that an action was initiated and pending between the same parties involving the same claims, application of MCR 2.116(C)(6) serves the rule's purpose.
Moreover, as explained by this Court in Valeo, when interpreting and applying a court rule, we cannot disregard the plain language used in that rule. Valeo, 272 Mich.App. at 318 ("While the language of a statute should be read in light of previously established rules of common law, including common-law adjudicatory principles, this is only true if the language is ambiguous and requires construction."). Here, MCR 2.116(C)(6) contains no language prohibiting its application in cases where the defendant or defendants to the first action believe that the plaintiff or plaintiffs in the first action are engaging in forum and venue shopping by preemptively filing a claim. Nor is there any language in the court rule limiting its application to cases where the defendants will be shielded from a litigious plaintiff. Instead, the rule provides that summary disposition is warranted if "[a]nother action has been initiated between the same parties involving the same claim." Here, as explained above, at the time the summary disposition motion was heard in the Ogemaw court, there was another action initiated and pending between the same parties involving the same claim. As a result, under the plain language of the court rule, summary disposition was warranted. See Valeo, 272 Mich.App. at 319 (explaining that in the absence of precedent requiring this Court to apply MCR 2.116(C)(6) "in a manner other than its plain language dictates," this Court will decline to do so).
Finally, VHC argues that multiple courts have held that a temporary stay rather than dismissal is the appropriate remedy when there are questions regarding the validity of the first action. For instance, this Court held that" 'if there is another action pending and the party opposing the motion under MCR 2.116(C)(6) raises a question regarding whether that suit can and will continue, a stay of the second action pending resolution of the issue in the first action, should be granted.'" Planet Bingo, LLC v VKGS, LLC, 319 Mich.App. 308, 324; 900 N.W.2d 680 (2017), quoting Fast Air, Inc, 235 Mich.App. at 549. VHC challenged the validity of the Midland complaint, arguing that it was not ripe, that there was no actual case or controversy, and asserting that anticipatory-declarative-judgment actions were impermissible. It is unclear if VHC raised those challenges to the Midland complaint's validity in the Midland action. Regardless, because VHC did not request a stay of the Ogemaw proceedings to allow it to pursue those claims in the Midland action, we cannot conclude that the Ogemaw Court erred by dismissing the complaint instead of entering a stay.
On appeal, VHC argues at length the Midland County declaratory judgment action is not ripe, that there is no actual controversy about the meaning or interpretation of Dr. Sharma's employment agreement with VHC, and that anticipatory declaratory judgments should be barred. However, that issue is not presently before this Court. The trial court order that we are reviewing granted summary disposition under MCR 2.116(C)(6). The court made no ruling as to whether the Midland complaint was properly filed. Consequently, because that issue is not properly before us, we do not address VHC's challenge to the validity of the Midland complaint. We note, however, that VHC is free to pursue those arguments in the Midland action.
III. CONCLUSION
In sum, the only issue properly before this Court is whether the trial court erred by granting summary disposition under MCR 2.116(C)(6). Review of the record shows that the Midland action was initiated and pending at the time the Ogemaw circuit court heard the motion for summary disposition. Further, the Midland action involves the same parties and the same claim. As a result, application of MCR 2.116(C)(6)'s plain language required the Ogemaw circuit court to grant defendants' motion for summary disposition. And, although a stay was permissible because VHC raised multiple challenges to the validity of the Midland action, VHC did not request a stay. There is no requirement that the trial court sua sponte grant relief that is not requested by the parties. Moreover, although VHC argues that venue for its claims exists only in Ogemaw County, no lower court has made a decision as to whether venue was proper in Midland or Ogemaw County, so the question is not ripe for this Court to review.
Affirmed. Defendants may tax costs as the prevailing party. MCR 7.219(A).