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Radiologix, Inc. v. Radiology And Nuclear Medicine, LLC

United States District Court, D. Kansas

March 6, 2017

RADIOLOGIX, INC. and RADIOLOGY AND NUCLEAR MEDICINE IMAGING PARTNERS, INC., Plaintiffs,
v.
RADIOLOGY AND NUCLEAR MEDICINE, LLC, et al., Defendants.

          MEMORANDUM AND ORDER

          Daniel D. Crabtree United States District Judge

         Plaintiffs Radiologix, Inc. (“Radiologix”) and Radiology and Nuclear Medicine Imaging Partners, Inc. (“RNMIP”) bring this lawsuit against defendants Radiology and Nuclear Medicine, LLC (“RNM”) and 19 individual physicians (“the Physician Defendants”). The Physician Defendants have filed a Motion for Judgment on the Pleadings under Fed.R.Civ.P. 12(c) (Doc. 92), against the only claim that plaintiffs assert against them-one for breach of contract. Plaintiffs have submitted a Response (Doc. 95), opposing the Physician Defendants' motion. And, the Physician Defendants have filed a Reply (Doc. 98). After considering the parties' arguments, the court denies the Physician Defendants' motion. The court explains why below.

         I. Factual Background

         The following facts are taken from plaintiffs' Second Amended Complaint (Doc. 61), accepted as true, and viewed in the light most favorable to them. Ramirez v. Dep't of Corr., 222 F.3d 1238, 1240 (10th Cir. 2000) (explaining that, on a motion for judgment on the pleadings, the court must “accept the well-pleaded allegations of the complaint as true and construe them in the light most favorable to the plaintiff” (citation omitted)).

         Plaintiff Radiologix is a national provider of imaging services based in Dallas, Texas. Defendant RNM is a Kansas limited liability company and physician-owned radiology practice based in northeast Kansas. Since 1997, plaintiff Radiologix or one of its predecessors-in-interest has provided management services to defendant RNM under a long-term management service agreement.

         Each of defendant RNM's physician-owners has signed a “Physician Employment Agreement” with defendant RNM. In 1997, defendant RNM's physician-owners signed a “Physician Employment Agreement” that named American Physician Partners, Inc. (“APPI”) as a third-party beneficiary. See Doc. 61-1 [“the 1997 Agreement”]. APPI later merged with plaintiff Radiologix. The 1997 Agreement provided, in pertinent part:

F. Physician acknowledges that Employer [who is defendant RNM] has entered into a Service Agreement dated as of June 27, 1997 with American Physician Partners, Inc., a Delaware corporation (“APPI”) (as may be amended from time to time, the “Service Agreement”). Physician further acknowledges that in accordance with the provisions of the Service Agreement, APPI will have third party beneficiary rights to enforce certain provisions of this Agreement.
. . . .
2.12 Covenant Not to Compete or Solicit.
(a) Physician acknowledges that, during the term of this Agreement, (i) Employer will introduce Physician to Employer's patients and to the medical community and (ii) Physician will receive substantial direct and indirect benefits from the existence of the Service Agreement, both of which will enable Physician to develop his or her professional reputation in a manner which, if Physician terminates his or her relationship with Employer, could be used to the financial detriment of Employer and APPI. Accordingly, during the term of this Agreement and for a period of twenty-four (24) months thereafter, Physician covenants as follows:
. . . .
(ii) that Physician will not, directly or indirectly . . . (B) whether for himself or any other person or entity, . . . divert or take away, or attempt to . . . divert or take away . . . business or clients of . . . APPI . . . or (E) disrupt, damage, impair or interfere with the business of . . . APPI.

Doc. 61-1 at 1, 6.

         In 2002, plaintiffs and defendant RNM executed an Amended and Restated Service Agreement (“2002 Amended and Restated Service Agreement”). Under the 2002 Amended and Restated Service Agreement, plaintiffs agreed to provide ...


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