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D3M!(ÖÃ9 Z‹6Times New Roman RegularX(¼U!$¡¡ÑTR[ð AØ'ÿ LegalXà3Ø' Letter  AØ'ÿ Legalÿ3Ø'TÑÓ  ÓÓÓÑ8€é7XXdìXXdì8ÑÔUSUS.,Ô##37=CIQYag­­1.a.i.(1)(a)(i)1)a)i)(xir$··à0  àà0` (#(#àà0¸ ` (#` (#àÔ2#Ô(Ú  Ú0Ú  Ú)Ô3  Ôà0¸ (#¸ (#àn­'L EtpO' œ3|x(Ø(3xý$¤¤Ý ƒU!!ÝÑTR[° AØ'ÿ Legal3Ø' AØ'ÿ Legalÿ3Ø'TÑÓ  ÓÓÓÑ8€G<XXdìdì8ÑÔUSUS.,ÔÝ  Ýà  àòòÚ  Ú0Ú  Úóó(#Ã$òòÚ  Ú0Ú  ÚóóƒLevel 1Level 2Level 3Level 4Level 5ÿU‹ÿÀÀÀ ÜÝ ƒ ‚v$ÝÓ  ÓÓÓÔUSUS.,Ôà  àòòÚ  Ú1Ú  ÚóóÝ  ÝÔ_ÔÓÓÔ€ôÞÌ òXXÔIn€its€Memorandum€Opinion€denying€the€temporary€injunction,€the€Trial€Court€discussed€at€length€the€rulesÐ ° Ðpertaining€to€enforcement€of€covenants€not€to€compete€in€Tennessee€as€delineated€in€òòHasty€v.€€Rent„A„Driver,€Inc.,€óó671Ð tÄ ÐS.W.2d€471€(Tenn.€€1984). BÝ ƒ ‚v$ÝÓ  ÓÓÓÔUSUS.,Ôà  àòòÚ  Ú2Ú  ÚóóÝ  ÝÔ_ÔÓÓÔ€ôÞÌ òXXÔTestimony€from€the€Senate€General€Welfare€Committee€on€May€21,€1997:€Ô_ÔHerronÔ_Ô:€Sen.€€Ô_ÔCroweÔ_Ô,€help€meÐ ° Ðunderstand€what€this€bill€does.€€How€does€this€change€existing€law?€€Ô_ÔCroweÔ_Ô:€OK,€existing,€it€really€clarifies€it.€€It€doesnððtÐ tÄ Ðchange.€€It€clarifies€existing€law. {Ý ƒ ‚v$ÝÓ  ÓÓÓÔUSUS.,Ôà  àòòÚ  Ú3Ú  ÚóóÝ  ÝÔ_ÔÔ€ôÞÌ òXXÔòòÓÓÔ_ÔReddyÔ_Ô€v.€Community€Health€Foundation€of€Man,€óó298€S.E.2d€906,€917€(Ô_ÔW.VaÔ_Ô.€1982);€òòÔ_ÔKeeleyÔ_Ô€v.€Ð ° ÐCardiovascular€Surgical€Ô_ÔAssocsÔ_Ô.€€P.C.,€óó510€S.E.2d€880,€885€(Ô_ÔGa.AppÔ_Ô.€€1999);€òòMedical€Specialists,€Inc.€€v.€€Ô_ÔSleweonÔ_Ô,€óóÐ tÄ Ð652€N.E.2d€517,€522„523€(Ind.€€Ô_ÔApp.€€1995);Ô_Ô€òòWebber€v.€Ô_ÔTillmanÔ_Ô,€óó913€P.2d€84,€95€(Ô_ÔKanÔ_Ô.€1996);€òòÔ_ÔIredellÔ_Ô€Digestive€DiseaseÐ 8ˆ ÐClinic,€P.A.€v.€Ô_ÔPetrozzaÔ_Ô,€óó373€S.E.2d€449€(N.C.€App.€€1988);€òòÔ_ÔNalleÔ_Ô€Clinic€Co.€v.€Parker,€óó399€S.E.2d€363€(N.C.€App.Ð üL Ð1991);€òòDick€v.€Ô_ÔGeistÔ_Ô,€óó693€P.2d€1133€(Id.€Ô_ÔApp.€1985);Ô_Ô€òòPhoenix€Orthopaedic€Surgeons€v.€Ô_ÔPeairsÔ_Ô,€óó790€P.2d€752€(Ariz.€Ô_ÔApp.Ð À Ð1989).Ô_Ô˜HP LaserJet 8000 DN PSØÚØÚÚØØÚ0 |Ý ƒ[áS"ÝÓ  ÓÓÓÔUSUS.,ÔÝ  ÝÔ€XœüXXXÔÔ€èWMçXXœüÔÓ  ÓÔ_Ôò òÔ Ad ÔFILEDÔ€OÂçèWMÔÐ  ÐÌDecember€16,€1999ÌÌCecil€Ô_ÔCrowsonÔ_Ô,€Jr.ÌAppellate€Court€Ô_ÔClerkÔdA¨Ôó óÔ_Ô,c½¬AZ‹"Arial Regular nÝ ƒ[áS"ÝÓ  ÓÓÓÔUSUS.,ÔÝ  ÝÔ_ÔÔ€XœüXXXÔÔ€èWMçXXœüÔÓ  Óò òÔ Ad ÔÓÓFILEDÔ€OÂçèWMÔÐ  ÐÌDecember€16,€1999ÌÌCecil€Ô_ÔCrowsonÔ_Ô,€Jr.ÌAppellate€Court€ClerkÔdA¨Ôó ó,c½¬AZ‹"Arial Regular[\]_Cþÿ<<Cÿÿ d(Ø3áS$¢¢Ý ƒU!!ÝÑTR[° AØ'ÿ Legal3Ø' AØ'ÿ Legalÿ3Ø'TÑÓ  ÓÓÓÑ8€G<XXdìdì8ÑÔUSUS.,ÔÝ  Ý(Ø3áS$££Ý ƒU!!ÝÑTR[° AØ'ÿ Legal3Ø' AØ'ÿ Legalÿ3Ø'TÑÓ  ÓÓÓÑ8€G<XXdìdì8ÑÔUSUS.,ÔÝ  Ý($$””ò òÚ  Ú1Ú  Úó óZZZZ'ÿÿdxdÔ_ÔÑTR[° AØ'ÿ Legal3Ø' AØ'ÿ Legalÿ3Ø'TÑò òòòÑ8€G<XdìdÈ8ÑÔ_Ôà@  ìàóóÔ‡¼N»XXÔIN€THE€COURT€OF€APPEALS€OF€TENNESSEEˆÐ ° Ðññññà@cc$ìàAT€KNOXVILLEó óˆÐ Ä ÐÔ#†XG<X»¼NÇ#ÔÌññÌññññßv€Y_@0,j: `€€@ÿE˜±” tt¨¬Ð° ] vßññññññßr€Y_<,(j : `€€@ÿE˜ÅŽtt¨¦ÐÄ Wrßññññññññññññññà  àà ` àà ¸ àà  àà h àà À àà  àà p àà È àÌÌÌÌÌññÐ Ä ÐMEDICAL€EDUCATION€ASSISTANCEà0 À à)à0À(#À(#àC/A€NO.€€03A01„9908„CH„00289а(#(# ÐCORPORATION,à0 ¸ àà0¸ (#¸ (#àà0h(#(#àà0Àh(#h(#à)М ìÀ(#À(# Ðà  àà ` àà ¸ àà  àà h àà À à)Ìà  àPlaintiff/Appelleeà0  àà0h(#(#àà0Àh(#h(#à)à0À(#À(#àAppeal€As€Of€Right€From€TheÐt Ä(#(# Ðà  àà ` àà ¸ àà  àà h àà À à)à0  àWASHINGTON€CO.€€CHANCERY€Ð` °(#(# Ðà  àà ` àà ¸ àà  àà h àà À à)à0  àCOURTÐL œ (#(# Ðv.à0  àà0` (#(#àà0¸ ` (#` (#àà0¸ (#¸ (#àà0h(#(#àà0Àh(#h(#à)Ð8ˆ À(#À(# Ðññßt€Y_>.*jxÿÏ `€€@ÿE­óŽtt¨¦å+ tßññà  àà ` àà ¸ àà  àà h àà À à)ÌSTATE€OF€TENNESSEE,€through€theà0 À à)à0À(#À(#àHON.€€THOMAS€J.€€Ô_ÔSEELEYÔ_Ô,€JR.,Ð` (#(# ÐEAST€TENNESSEE€STATEà0  àà0h(#(#àà0Àh(#h(#à)à0À(#À(#àJUDGE,€By€Interchange€ÐüL (#(# ÐUNIVERSITY€Ô_ÔQUILLENÔ_Ô€COLLEGEà0 À à)Ðè8 À(#À(# ÐOF€MEDICINE,à0 ¸ àà0¸ (#¸ (#àà0h(#(#àà0Àh(#h(#à)ÐÔ$À(#À(# Ðà  àà ` àà ¸ àà  àà h àà À à)Ìà  àÔ_ÔIntervenorÔ_Ô/Appellee,à0  àà0h(#(#àà0Àh(#h(#à)ЬüÀ(#À(# Ðv.à0  àà0` (#(#àà0¸ ` (#` (#àà0¸ (#¸ (#àà0h(#(#àà0Àh(#h(#à)ИèÀ(#À(# Ðà  àà ` àà ¸ àà  àà h àà À à)ÌASHOK€V.€€MEHTA,€M.D.à0  àà0h(#(#àà0Àh(#h(#à)ÐpÀÀ(#À(# Ðà  àà ` àà ¸ àà  àà h àà À à)Ìà  àDefendant/Appellant.à0  àà0h(#(#àà0Àh(#h(#à)ÐH˜À(#À(# ÐÌÌÌÌò òòòFor€the€Appellantà ¸ àà  àà h àFor€the€Appelleeà p àà È àFor€the€Ô_ÔIntervenorÔ_ÔÐ ä4 ÐAshok€V.€€Mehta,€M.D.:óóó óà0  àà0h(#(#àò òòòMedical€Educationà p àà È àState€of€Tennessee€„€ÐÐ h(#h(# Ðà  àà ` àà ¸ àà  àà h àAssistance€Corp:óóó óà0 p àà0Èp(#p(#àò òòòÔ_ÔETSUÔ_Ô€Ô_ÔQuillenÔ_Ô€Collegeóóó óм È(#È(# Ðà  àà ` àà ¸ àà  àà h àà À àà  àà p àà È àò òòòof€Medicine:Ð ¨ ø Ðó óóóThomas€C.€€Ô_ÔJesseeÔ_Ôà0 ¸ àà0¸ (#¸ (#àà0h(#(#àJack€Ô_ÔTallentÔ_Ô,€IIà0ph(#h(#àà0Èp(#p(#àEdward€J.€€KellyД!äÈ(#È(# ÐJohnson€City,€TN€37605à0  àà0h(#(#àKnoxville,€TN€37902à0ph(#h(#àà0Èp(#p(#àJohnson€City,€TN€37614Ѐ"Ð È(#È(# Ðà0  àà0` (#(#àÐ ` (#` (# Ðà0  àà0` (#(#àà0¸ ` (#` (#àà0¸ (#¸ (#àÐ (#(# ÐÌÌÌAFFIRMED€as€MODIFIEDà0  àà0h(#(#àà0Àh(#h(#àà0À(#À(#àà0p(#(#àà0Èp(#p(#àà0 È(#È(#àÔ_ÔSwineyÔ_Ô,€J.Ð(X#& (# (# Ðand€REMANDEDÌÌÌÓ  ÓÌÌà@==$ìàò òòòÔ‡¼N»XXG<ÔO€P€I€N€I€O€NÔ#†XG<X»¼Nr#ԈР-à(, ÐÌà  àà ` àÌóóó óÓÓ€€€€€€€€€€€€€€€€€€€€€€€This€is€an€appeal€of€the€Trial€Courtððs€enforcement€of€a€covenant€not€to€compete€Ð |0Ì+/ Ðagainst€Ashok€V.€Mehta,€M.D.€(ð ðDr.€Mehtaðð),€a€pediatric€cardiologist,€in€favor€of€Medical€EducationÏAssistance€Corporation€(ð ðÔ_ÔMEACÔ_Ôðð),€and€the€State€of€Tennessee€through€East€Tennessee€StateÏUniversity€Ô_ÔQuillenÔ_Ô€College€of€Medicine€(ð ðÔ_ÔETSUÔ_Ôðð).€The€Trial€Court€enjoined€Dr.€Mehta€fromÏpracticing€medicine€in€a€seven€county€area€for€five€years,€and€awarded€damages€of€$358,265€toÏÔ_ÔMEACÔ_Ô.Ð ´959 ÐÔ_Ôà  àà ` àOn€appeal,€Dr.€Mehta€€states€the€issues€as€follows:ÌÓÓà  à1.à0 ` àThe€Trial€Court€erred€in€finding€that€as€a€matter€of€public€policy€in€Tennessee€aÐ  ` Ðcovenant€not€to€compete€involving€a€medical€speciality€is€enforceable€by€a€non€profitÏcorporation.Ð ` (#` (# ÐÌà  à2.à0 ` àThe€Trial€Court€erred€in€finding€that€there€were€special€circumstances€which€entitledÐ À  ÐMEAC€and€ETSU€to€protection€by€enforcement€of€the€covenant.Ð ` (#` (# ÐÌà  à3.à0 ` àThe€Trial€Court€erred€in€finding€that€the€covenant€in€question,€if€enforceable,€was€fairÐ „Ô  Ðand€reasonable€under€the€circumstances€as€set€forth€in€existing€case€law.Ð ` (#` (# ÐÌà  à4.à0 ` àThe€Trial€Court€erred€in€failing€to€find€that€there€was€not€[sic]€intentional/negligentÐ H˜ Ðmisrepresentation€relating€to€Mehtaððs€inducement€to€sign€the€employment€contractÏcontaining€the€covenant.Ð ` (#` (# ÐÌà  à5.à0 ` àThe€Trial€Court€erred€in€failing€to€find€that€MEAC€and€ETSU€had€waived€theirÐ øH Ðentitlement€to€enforcement€of€the€covenant€by€their€actions.Ð ` (#` (# ÐÌà  à6.à0 ` àThe€Trial€Court€erred€in€not€finding€that€MEAC€and€ETSU€breached€its€contract€with€Ð ¼  ÐMehta€for€failure€to€provide€adequate€equipment,€space,€research€funds,€and€facilities.Ð ` (#` (# ÐÌà0  à7.à0` (#(#àThe€Trial€Court€erred€in€awarding€damages€and€the€computation€of€the€same€as€wellÐ €Ð Ðas€erred€in€granting€a€five€year€enforceable€covenant.Ð ` (#` (# ÐÌÓÓà  àà ` àMEAC€appeals€the€Trial€Courtððs€award€of€six€monthsðð€severance€pay€to€Dr.€MehtaÏas€provided€under€the€employment€contract.Ìà  àà ` àFor€the€reasons€stated€in€this€opinion,€we€modify€the€judgment€so€as€to€enforce€theÏcovenant€not€to€compete€for€an€additional€two€years€starting€thirty€days€from€the€date€of€the€entryÏof€judgment€of€this€Court.€€We€remand€this€case€to€the€Trial€Court€for€the€determination€of€additionalÏdamages€to€be€awarded€to€MEAC€for€the€period€from€the€entry€of€the€Trial€Courtððs€judgment€throughÏthe€date€of€entry€of€this€Courtððs€judgment.€€In€all€other€respects,€we€affirm€the€decision€of€the€TrialÏCourt.€€€Ìò òòòà@%ìàBACKGROUNDˆÐ 0T+/ Ðóóó óà  àà ` àThe€East€Tennessee€State€University€Quillen€College€of€Medicine€was€establishedÐ Ü1,-1 Ðpursuant€to€the€Teague„Cranston€Act.€€One€of€its€goals,€in€addition€to€training€physicians€generally,Ïwas€to€encourage€physicians€to€enter€into€practice€in€rural€areas€of€Tennessee.€€ETSU€has€the€abilityÏto€pay€its€faculty€physicians€only€a€state„furnished€base€salary,€an€amount€much€lower€than€theÏsalaries€generally€earned€by€similar€physicians€in€private€practice.€€ETSU€depends€upon€the€MedicalÐ <9Œ49 ÐEducational€Assistance€Corporation€(Ô_ÔMEACÔ_Ô)€to€supplement€that€base€salary€in€order€to€attract€highlyÐ /h*. Ðqualified€faculty€members.€€Ô_ÔMEACÔ_Ô€is€a€non„profit,€professional€corporation€affiliated€with€Ô_ÔETSUÔ_ÔÐ ð0@,0 Ðfor€the€purposes€of€allowing€physician€faculty€members€to€conduct€a€clinical€practice€in€addition€toÐ È2.2 Ðtheir€faculty€duties,€and€providing€a€means€by€which€students€in€the€College€of€Medicine€and€residentÐ  4ð/4 Ðphysicians€can€have€valuable€hands„on€integral€experience.€€Such€an€arrangement€is€known€as€aÐ x6È16 Ðð ðfaculty€practice€plan.ððÐ P8 38 Ðà  àà ` àThe€State€of€Tennessee€funds€approximately€$19€million€per€year€of€the€Ô_ÔETSUÔ_ÔÐ (:x5: ÐCollege€of€Medicine€budget.€€Ô_ÔMEACÔ_Ô€supplements€this€by€providing€31%€of€the€total€College€ofÐ ° ÐMedicine€annual€budget€from€the€income€brought€in€by€faculty€physician€clinical€practices.€Ð ˆØ ÐNationally,€medical€school€budgets€are€supplemented€an€average€of€41%€from€similar€practice€groupÐ `° Ðfunds.Ð 8 ˆ Ðà  àà ` àIn€1986,€Dr.€Mehta€accepted€a€pediatric€cardiology€faculty€position€at€Ô_ÔETSUÔ_Ô,€afterÐ  ` Ðreading€a€vacancy€announcement€in€a€professional€journal.€€The€previous€pediatric€cardiologyÐ è 8  Ðprofessor€at€Ô_ÔETSUÔ_Ô€had€died,€and€Dr.€Mehta€was€hired€to€take€over€her€responsibilities€and€to€expandÐ À  Ðthe€program€by€adding€his€expertise€in€Ô_ÔelectrophysiologyÔ_Ô€and€pediatric€cardiology€Ô_ÔinterventionalÔ_ÔÐ ˜è  Ðtechniques.€€Ð pÀ Ðà  àà ` àIn€1983€or€1984,€there€had€been€a€major€physician„faculty€loss€at€Ô_ÔETSUÔ_Ô€when€theÐ H˜ Ðentire€cardiac€surgical€team€withdrew€from€the€College€of€Medicine€and€Ô_ÔMEACÔ_Ô€and€set€up€aÐ  p Ðcompeting€medical€practice€in€Kingsport.€€This€caused€various€administrators€at€Ô_ÔETSUÔ_Ô€and€Ô_ÔMEACÔ_ÔÐ øH Ðto€become€concerned€about€the€potential€effect€of€such€departures€on€medical€school€accreditation.€Ð Ð  ÐSome€faculty€and€administrators€perceived€that€the€college€was€being€used€as€a€tool€whereby€a€youngÐ ¨ø Ðsurgeon,€internist€or€pediatrician€completing€the€residency€program€would€find€it€attractive€to€joinÐ €Ð Ðthe€faculty,€Ô_ÔreceiveÔ_Ô€a€basic€guaranteed€salary€support,€build€up€a€practice€over€two€or€three€years,€andÐ X ¨ Ðthen€leave€to€go€into€the€private€sector,€having€built€up€a€private€practice€at€the€Stateððs€expense.€Ð 0"€  Ðà  àà ` àIn€a€move€to€reduce€or€eliminate€such€defections,€the€Board€of€Directors€of€Ô_ÔMEACÔ_Ô,Ð $X" Ðat€its€June€5,€1986€meeting,€adopted€a€resolution€requiring€faculty€hired€after€that€date€to€sign€aÐ à%0!$ Ðcovenant€not€to€compete.€€The€covenant€was€deemed€to€be€crucial€to€Ô_ÔETSUÔ_Ô€because€of€the€locationÐ ¸'#& Ðof€the€medical€school€in€a€rural€area.€€In€such€an€environment,€there€is€a€finite€number€of€patientsÐ )à$( Ðavailable€for€teaching€activities,€especially€in€Ô_ÔsubspecialtyÔ_Ô€areas€such€as€pediatric€cardiology,€andÐ h+¸&* ÐÔ_ÔETSUÔ_Ô€needed€to€keep€its€patient€base€for€these€teaching€purposes.€€Appendix€Ô_ÔAÔ_Ô€of€this€Opinion€isÐ @-(, Ða€copy€of€the€covenant€not€to€compete€from€Dr.€Mehtaððs€contract.Ð /h*. Ðà  àà ` àAlthough€the€covenant€not€to€compete€was€to€be€included€in€the€employmentÐ ð0@,0 Ðcontracts€of€physician€faculty€members€after€July€1,€1986,€it€did€not€apply€to€physicians€hired€beforeÐ È2.2 Ðthat€date.€€Moreover,€some€later„hired€faculty€were€not€required€to€sign€the€covenant,€some€wereÐ  4ð/4 Ðallowed€to€sign€modified€covenants,€and€some€who€signed€the€covenant€were€later€released€from€itÐ x6È16 Ðby€vote€and€approval€of€the€Ô_ÔMEACÔ_Ô€Board,€based€on€individual€circumstances.€€For€example,Ð P8 38 Ðphysicians€who€joined€Ô_ÔMEACÔ_Ô€after€having€already€established€a€private€practice€were€not€requiredÐ (:x5: Ðto€sign€the€covenant.€€Psychiatrists€and€family€practitioners€were€exempt.€€Physicians€who€had€familyÐ ° Ðties€to€the€area€sometimes€had€a€modified€version€wherein,€if€they€taught€and€practiced€at€Ô_ÔETSUÔ_Ô€forÐ ˆØ Ðfive€years,€they€were€not€restrained€from€competing€against€Ô_ÔMEACÔ_Ô,€so€long€as€they€agreed€to€teachÐ `° Ðat€Ô_ÔETSUÔ_Ô€for€another€five€years€after€establishing€a€non„Ô_ÔMEACÔ_Ô€private€practice.€€Ô_ÔMEACÔ_Ô€boardÐ 8 ˆ Ðminutes€indicate€that€a€Dr.€Evans€and€a€Dr.€Ô_ÔThackerÔ_Ô€were€apparently€released€from€the€covenantÐ  ` Ðbecause€their€attorneys€or€the€Ô_ÔMEACÔ_Ô€attorney€advised€the€board€of€concerns€about€the€Ô_ÔenforceabilityÔ_ÔÐ è 8  Ðof€the€covenant.Ð À  Ðà  àà ` àDr.€Mehta€entered€into€his€employment€contract€with€Ô_ÔMEACÔ_Ô€in€November€1986.€€HeÐ ˜è  Ðtestified€that€he€did€Ô_Ônot€want€to€sign€the€covenant€notÔ_Ô€to€compete,€and€signed€it€only€after€being€toldÐ pÀ Ðthat€all€physicians€were€required€to€sign€it€as€a€condition€of€employment.€€In€this€contract,€Dr.€MehtaÐ H˜ Ðspecifically€agreed€that€Ô_ÔETSUÔ_Ô,€Ô_ÔQuillenÔ_Ô€College€of€Medicine,€was€a€third€party€beneficiary€of€thisÐ  p Ðcovenant€not€to€compete€and€entitled€to€enforce€its€provisions.Ð øH Ðà  àà ` àDr.€Mehta€was€hired€to€work€in€Kingsport,€and€he€quickly€established€a€successfulÐ Ð  Ðpediatric€cardiology€practice€there€and€developed€a€large€referral€base€of€pediatricians,€some€ofÐ ¨ø Ðwhom€were€new€referral€sources€for€Ô_ÔETSUÔ_Ô.€€His€new€expertise€also€brought€referrals€of€types€ofÐ €Ð Ðpatients€Ô_ÔETSUÔ_Ô€had€not€treated€before.Ð X ¨ Ðà  àà ` àDr.€Ô_ÔFestusÔ_Ô€A.€Ô_ÔAdebonojoÔ_Ô€was€hired€as€Chairman€of€Pediatrics€in€December€1988€and€Ð 0"€  Ðbecame€Dr.€Mehtaððs€supervisor.€€When€Dr.€Ô_ÔAdebonojoÔ_Ô€was€hired,€the€President€of€Ô_ÔETSUÔ_Ô€€gave€himÐ $X" Ðthe€clear€understanding€that€a€main€facet€of€his€job,€in€addition€to€ensuring€the€Pediatrics€DepartmentÐ à%0!$ Ðð ðwas€solid,ðð€was€the€establishment€of€a€Pediatric€Residency€Program.€€Dr.€Ô_ÔAdebonojoÔ_Ô€was€told€thatÐ ¸'#& Ðwithout€such€a€program,€the€accreditation€of€the€medical€school€ð ðwas€in€jeopardy,ðð€since€accreditedÐ )à$( Ðmedical€schools€must€have€accredited€residency€programs€in€all€clinical€departments,€includingÐ h+¸&* Ðsurgery,€medicine,€obstetrics/gynecology,€pediatrics€and€others.€€Also,€a€Pediatric€Residency€ProgramÐ @-(, Ðmust€have€six€of€ten€possible€pediatric€Ô_ÔsubspecialtiesÔ_Ô.€€This€program€chose€pediatric€cardiology€asÐ /h*. Ðone€of€its€six€required€Ô_ÔsubspecialtiesÔ_Ô.€€Ð ð0@,0 Ðà  àà ` àDr.€Ô_ÔAdebonojoÔ_Ô€studied€the€history€of€the€Pediatrics€Department€at€Ô_ÔETSUÔ_Ô€and€learnedÐ È2.2 Ðthat€its€proposals€for€an€accredited€Pediatric€Residency€Program€had€been€denied€twice,€in€partÐ  4ð/4 Ðbecause€the€program,€as€envisioned,€was€to€be€based€ð ðall€over€the€place,ðð€i.e.,€in€Johnson€City,Ð x6È16 ÐKingsport€and€Bristol.€€He€decided€that€the€program€would€be€more€likely€to€obtain€accreditation€ifÐ P8 38 Ðhe€consolidated€it€to€one€location.€€He€asked€the€hospital€administrators€of€the€hospitals€in€Bristol,Ð (:x5: ÐJohnson€City€and€Kingsport€to€commit€to€helping€Ô_ÔETSUÔ_Ô€build€a€Childrenððs€Hospital€and€told€themÐ ° Ðthat€whichever€hospital€committed€to€the€project€would€receive€the€benefit€of€having€the€PediatricÐ ˆØ ÐResidency€Program€at€their€hospital.€€He€testified€that€Bristol€Memorial€Hospital€did€not€respond.€Ð `° ÐKingsportððs€Ô_ÔHolstonÔ_Ô€Valley€Hospital€administrators€met€with€him€six€times,€but€negotiations€brokeÐ 8 ˆ Ðdown.€€The€hospital€in€Johnson€City€ultimately€agreed€to€support€a€Childrenððs€Hospital€and€in€1992,Ð  ` ÐDr.€Ô_ÔAdebonojoÔ_Ô€moved€all€pediatric€faculty€offices€and€services€to€Johnson€City.€€Ð è 8  Ðà  àà ` àDr.€Mehta€did€not€want€to€move€from€Kingsport€to€Johnson€City€and€objected€toÐ À  Ðdoing€so.€€When€the€decision€was€made,€he€had€been€in€Kingsport€for€five€years€and€had€establishedÐ ˜è  Ða€good€practice€there.€€His€office€space€in€Kingsport€was€adequate€and€his€family€was€settled€there.Ð pÀ ÐHe€met€with€Dr.€Ô_ÔAdebonojoÔ_Ô€and€made€requests€and€proposals€to€stay€in€Kingsport,€to€no€avail.Ð H˜ Ðà  àà ` àAgainst€his€wishes,€Dr.€Mehta€moved€his€office,€his€practice€and€his€family€toÐ  p ÐJohnson€City€in€1992.€€Because€Dr.€Mehta€objected€strongly€to€moving€into€smaller€professionalÐ øH Ðoffice€space€in€Building€325,€where€other€pediatric€faculty€were€assigned,€Dr.€Ô_ÔAdebonojoÔ_Ô€rentedÐ Ð  Ðspace€in€Building€310€for€Dr.€Mehta€and€Dr.€Ô_ÔRajaniÔ_Ô€Anand,€another€pediatric€cardiologist€who€hadÐ ¨ø Ðbeen€hired€after€Dr.€Mehta.€€That€space€included€four€exam€rooms,€one€of€which€they€shared€withÐ €Ð Ðanother€doctor,€plus€three€other€rooms€Dr.€Mehta€could€use€to€see€patients€if€necessary,€includingÐ X ¨ Ða€treadmill€room,€his€personal€office,€and€a€conference€room.€€There€Ô_ÔwasÔ_Ô€also€a€dictation€room€andÐ 0"€  Ða€research€room€in€Building€310.Ð $X" Ðà  àà ` à1992€was€a€bad€year€for€Dr.€Mehtaððs€relationship€with€the€medical€school€for€anotherÐ à%0!$ Ðreason.€€Ô_ÔMEACÔ_Ô€changed€the€way€his€income€was€determined€and€directed€that€he€and€Dr.€Anand,Ð ¸'#& Ðwhom€Dr.€Mehta€had€wanted€to€hire,€would€split€the€Ô_ÔMEACÔ_Ô€Pediatric€Cardiology€income€50„50.€Ð )à$( ÐAs€a€result€of€these€changes,€his€income,€as€a€percentage€of€the€revenue€he€brought€in€to€Ô_ÔMEACÔ_Ô,Ð h+¸&* Ðbegan€to€decline€and€continued€to€do€so€every€year€thereafter€until€he€finally€left.€€Dr.€Mehta€testifiedÐ @-(, Ðthat€as€of€1997,€ð ðit€was€almost€40€„€45€percent€less€than€what€[I]€had€in€1992.ðð€€Ð /h*. Ðà  àà ` àThe€rent€on€the€space€in€Building€310€was€$67,000€per€year.€€Over€time,€as€theÐ ð0@,0 Ðconditions€of€practice€for€the€Pediatrics€Department€became€more€financially€challenging€due€toÐ È2.2 Ðchanges€in€Ô_ÔTennCareÔ_Ô,€that€rent€became€burdensome€in€terms€of€the€overall€budget€of€the€department.€Ð  4ð/4 ÐIn€1996,€Dr.€Ô_ÔAdebonojoÔ_Ô€decided€to€move€all€of€the€faculty€into€Building€325.€€Dr.€Mehta€stronglyÐ x6È16 Ðobjected.€€The€initial€plan€for€the€move€to€Building€325€called€for€Dr.€Mehta€to€be€assigned€twoÐ P8 38 Ðexamining€rooms€with€Dr.€Anand,€plus€an€echo€room€and€a€consultation€room,€both€to€be€sharedÐ (:x5: Ðwith€other€Pediatric€Department€faculty.€€His€personal€office€was€to€be€located€in€another€building.€Ð ° ÐThe€medical€charts€would€not€be€located€in€the€same€building€as€his€personal€office.€€He€testified€thatÐ ˆØ Ðhe€takes€many€emergency€calls,€and€the€plan€would€have€required€him€to€take€such€calls,€get€in€hisÐ `° Ðcar€and€drive€to€the€other€building,€look€at€the€chart,€then€return€the€call.€€He€said€that€ð ð[Ô_Ôi]nÔ_Ô€goodÐ 8 ˆ Ðconscience,€I€could€not€do€that.ððÐ  ` Ðà  àà ` àDr.€Mehta€had€several€meetings€with€supervisors€and€administrators,€trying€to€avoidÐ è 8  Ðmoving€to€Building€310.€€In€October,€1996,€he€met€with€Dr.€Shepard,€then€with€Dr.€Shepard€and€Dr.Ð À  ÐÔ_ÔAdebonojoÔ_Ô.€€In€Ô_ÔJanuary,€1997Ô_Ô,€he€discussed€the€problem€in€the€Pediatric€Department€monthlyÐ ˜è  Ðmeeting.€€In€February€a€special€meeting€was€called€by€Dr.€Ô_ÔAdebonojoÔ_Ô€with€Drs.€Mehta,€Anand,Ð pÀ ÐShepard€and€one€other€person€present.€€Dr.€Mehta€was€told€unequivocally€that€he€would€receive€noÐ H˜ Ðmore€than€two€exam€rooms€in€Building€325.€€There€were€plans€to€eventually€remodel€the€space€toÐ  p Ðtransform€the€total€of€11€exam€rooms€to€18€smaller€ones,€to€be€shared€by€all€pediatric€Ô_ÔfacultyÔ_Ô,€but€Dr.Ð øH ÐMehta€thought€the€rooms€then€available€for€his€use€would€still€be€inadequate,€both€in€number€andÐ Ð  Ðsize.€€Dr.€Mehta€complained€that€he€and€Dr.€Anand€were€seeing€eight€to€ten€patients€for€each€halfÐ ¨ø Ðday€clinic,€but€with€the€immediate€change,€they€would€only€be€able€to€see€four€or€five€patients.€€ThereÐ €Ð Ðwere€four€pediatric€residents€and€four€cardiology€fellows,€each€taking€electives€for€four€weeks,€plusÐ X ¨ Ðthird€year€medical€students€rotating.€€The€rooms€would€have€to€be€large€enough€to€accommodate€this.€Ð 0"€  ÐHis€expressions€of€concern€were€unavailing.€€On€February€7,€1997,€Dr.€Mehta€met€with€Drs.€Ô_ÔRaryÔ_Ô,Ð $X" ÐMichael,€and€Anand€and€asked€Dr.€Ô_ÔAdebonojoÔ_Ô€to€meet€with€them€again€to€discuss€the€move€andÐ à%0!$ Ðother€options.€€Dr.€Ô_ÔAdebonojoÔ_Ô€did€not€accommodate€this€request.€€At€the€monthly€PediatricÐ ¸'#& ÐDepartment€meeting€on€February€Ô_Ô11òòthÔ_Ôóó,€Dr.€Mehta€again€expressed€concerns€about€the€move.€€OnÐ )à$( ÐFebruary€Ô_Ô14òòthÔ_Ôóó,€he€received€the€written€clinic€schedule,€indicating€that€he€and€Dr.€Anand€were,€indeed,Ð h+¸&* Ðassigned€only€two€exam€rooms€to€share.Ð @-(, Ðà  àà ` àWhile€Dr.€Mehta€was€contemplating€leaving€Ô_ÔETSUÔ_Ô,€his€attorney€called€Dr.€Stanton,€Ð /h*. Ðvascular€surgeon€and€President€of€Ô_ÔETSUÔ_Ô€and€Ô_ÔMEACÔ_Ô,€on€one€or€two€occasions€and€indicated€that€heÐ ð0@,0 Ðwas€counseling€Dr.€Mehta€about€that€decision.€€He€also€indicated€he€was€counseling€two€otherÐ È2.2 Ðindividuals,€one€of€whom€was€ð ðanother€very€significant€cardiologist€in€Ô_ÔMEACÔ_Ôððs€adult€group.ðð€€Dr.Ð  4ð/4 ÐStanton€testified€that€he€was€particularly€troubled€as€to€the€Ô_ÔsubspecialtyÔ_Ô€groups€if€practitioners€wereÐ x6È16 Ðto€leave.€€For€example,€he€believed€that€if€Ô_ÔMEACÔ_Ô€lost€their€current€heart€surgery€team,€which€theyÐ P8 38 Ðhad€replaced€six€years€after€the€earlier€team€left,€ð ðit€could€put€us€[the€College€of€Medicine]€under.ððÐ (:x5: Ѐ€€€€€€€€€€€€€€€€€€€€€€On€March€3,€1997,€Dr.€Mehta€submitted€his€resignation€letter€to€Dr.€Ô_ÔAdebonojoÔ_Ô,Ð ° Ðeffective€May€1,€1997,€giving€as€his€reasons€the€limited€space€and€the€reduction€in€his€personalÐ ˆØ Ðincome€occasioned€by€the€lack€of€facilities€to€see€as€many€patients€as€he€had€been€seeing.€(ð ðI€amÐ `° Ðgreatly€concerned€about€my€financial,€physical,€and€mental€health€in€this€worrisome€long„termÐ 8 ˆ Ðsituation.ðð)€In€response,€Dr.€Ô_ÔAdebonojoÔ_Ô€advised€him€twice€that€if€he€left€his€faculty€position,€Ô_ÔETSUÔ_ÔÐ  ` Ðand€Ô_ÔMEACÔ_Ô€intended€to€enforce€the€covenant€not€to€compete.Ð è 8  Ѐ€€€€€€€€€€€€€€€€€€€€€€Dr.€€Mehta€invited€Dr.€Anand€to€leave€Ô_ÔMEACÔ_Ô€and€join€him€in€private€practice,€whichÐ À  Ðshe€declined.€€Dr.€Anand€stated€that€Ô_ÔDr.Ô_Ô€€Mehta€does€Ô_ÔelectrophysiologyÔ_Ô€studies€and€balloonÐ ˜è  Ðprocedures€in€older€children€that€she€does€not€do.€€However,€Dr.€€Mehta€earlier€had€taken€a€six€monthÐ pÀ Ðsabbatical€doing€Ô_ÔMEACÔ_Ô„sponsored€training€at€Vanderbilt€University,€and€during€that€period€of€time,Ð H˜ Ðno€patients€needed€such€treatment.€€Further,€the€number€of€patients€who€need€those€particular€studiesÐ  p Ðis€ð ðvery€insignificantðð€in€terms€of€the€overall€number€of€pediatric€cardiology€patients€she€and€Dr.€Ð øH ÐMehta€saw.Ð Ð  Ðà  àà ` àDr.€Mehta€leased€office€space€and€began€renovations€to€set€up€private€practice€inÐ ¨ø ÐJohnson€City.€€In€March,€while€still€at€Ô_ÔETSUÔ_Ô,€he€began€giving€each€of€his€patients€a€medical€releaseÐ €Ð Ðauthorization€so€that€he€could€request€their€records€for€his€new€office€when€he€moved.€€He€wasÐ X ¨ Ðdirected€to€stop€this€practice€and€complied€with€that€request.€€During€a€brief€period€of€Dr.€MehtaððsÐ 0"€  Ðabsence€from€campus,€Dr.€Ô_ÔAdebonojoÔ_Ô€sent€out€a€letter€on€March€17,€1997,€to€all€referring€doctorsÐ $X" Ðinforming€them€that€Dr.€Mehta€had€announced€his€intention€to€resign€and€that€they€should€continueÐ à%0!$ Ðto€send€their€patients€to€the€medical€school€after€he€left.€€When€Dr.€Mehta€returned,€he€beganÐ ¸'#& Ðreceiving€phone€calls€from€pediatricians€ð ðasking€what€was€going€on,ðð€and€therefore€he€sent€outÐ )à$( Ðpostcards€informing€his€referral€sources€and€patients€of€his€new€address€after€May€Ô_Ô1òòstÔ_Ôóó.€€He€testifiedÐ h+¸&* Ðthat€it€was€medically€necessary€for€him€to€notify€his€patients,€since€they€had€to€know€where€to€go€forÐ @-(, Ðtheir€next€appointments.€On€April€22,€1997,€Dr.€Ô_ÔAdebonojoÔ_Ô€sent€letters€to€parents€of€all€of€Dr.Ð /h*. ÐMehtaððs€patients,€advising€them€that€Ô_ÔMEACÔ_Ô€remained€capable€of€providing€ð ða€comprehensive€arrayÐ ð0@,0 Ðof€care€for€your€child,ðð€and€that€it€ð ðis€therefore,€òònotóó€necessary€for€you€to€transfer€your€childððsÐ È2.2 Ðcardiology€care€needs€outside€of€the€University.ðð€€Ð  4ð/4 Ðà  àà ` àDr.€Mehta€left€Ô_ÔETSUÔ_Ô€and€Ô_ÔMEACÔ_Ô€as€planned€and€set€up€his€private€practice€in€MayÐ x6È16 Ð1997,€and€immediately€began€seeing€patients€from€his€Ô_ÔMEACÔ_Ô€practice€as€well€as€new€referrals.€€HisÐ P8 38 Ðprivate€practice€office€in€Johnson€City€has€five€examination€rooms.€€After€18€months,€he€had€billedÐ (:x5: Ð$2,219,446.06,€had€collected€$968,945.91,€and€had€acquired€1,510€private€patients,€of€whom€345Ð ° Ðwere€patients€formerly€seen€in€his€Ô_ÔMEACÔ_Ô€practice.€€He€had€records€on€another€110€former€Ô_ÔMEACÔ_ÔÐ ˆØ Ðpatients€whom€he€had€not€seen€yet.€€He€testified€that€if€he€is€forced€to€leave€East€Tennessee,€theÐ `° Ðcommunities€will€be€adversely€affected€because€he€is€the€only€pediatric€cardiologist€in€the€area€whoÐ 8 ˆ Ðhas€expertise€in€angioplasty,€Ô_ÔvalvuloplastyÔ_Ô€and€Ô_ÔelectrophysiologyÔ_Ô.€€There€are€probably€only€100€suchÐ  ` Ðspecialists€in€the€United€States,€and€he€believes€that€if€he€leaves,€all€these€patients€will€have€to€goÐ è 8  Ðto€Duke€University€or€Vanderbilt€University€for€treatment.Ð À  Ðà  àà ` àIn€July€1997,€Ô_ÔMEACÔ_Ô€and€Ô_ÔETSUÔ_Ô€hired€Dr.€Thomas€Chin,€a€board„certified€pediatricÐ ˜è  Ðcardiologist,€to€replace€Dr.€Mehta.€€Dr.€Chin€devoted€half€of€his€time€during€the€early€months€of€hisÐ pÀ Ðtenure€to€marketing€the€pediatric€cardiology€division€in€an€effort€to€rebuild€the€practice€and€obtainÐ H˜ Ðreferrals€from€the€physicians€who€had€referred€patients€to€Dr.€Mehta.€€His€efforts€were€mostlyÐ  p Ðunsuccessful,€owing€to€Dr.€Mehtaððs€good€reputation€among€local€pediatricians€and€their€desire€toÐ øH Ðcontinue€to€send€their€patients€to€him.€€The€number€of€patients€seen€at€Ô_ÔETSUÔ_Ôððs€pediatric€cardiologyÐ Ð  Ðdivision€significantly€declined,€the€number€of€clinics€held€declined,€and€the€medical€studentsðð€andÐ ¨ø Ðresidentsðð€access€to€patients€declined€during€this€time.€€For€example,€from€August€1997€throughÐ €Ð ÐSeptember€1998,€the€pediatric€cardiology€division€had€a€62%€decline€in€new€patients€and€a€46%Ð X ¨ Ðdecline€in€physician€referrals,€as€compared€to€the€most€recent€one„year€period€of€Dr.€MehtaððsÐ 0"€  Ðemployment.€€Referrals€from€non„Ô_ÔMEACÔ_Ô€doctors€declined€over€70%.Ð $X" Ðà  àà ` àMeanwhile,€Dr.€Mehta€maintained€his€private€practice€in€Johnson€City€and€openedÐ à%0!$ Ðsatellite€offices€in€Bristol,€Kingsport€and€Ô_ÔMorristownÔ_Ô.€€Since€Ô_ÔHamblenÔ_Ô€County€is€not€among€theÐ ¸'#& Ðseven€counties€listed€in€the€covenant,€the€Ô_ÔMorristownÔ_Ô€office€is€the€only€location€not€covered€by€theÐ )à$( Ðcovenant.Ð h+¸&* Ðò òòòà@ìàóóòòTRIAL€COURT€PROCEEDINGSóóó 󀀈Ð @-(, Ðà  àà ` àOn€June€11,€1997,€Ô_ÔMEACÔ_Ô€filed€its€Complaint€for€Declaratory€Judgment€andÐ  /p*. ÐInjunctive€Relief€in€this€case,€asking€the€Chancery€Court€to€enforce€the€covenant€not€to€compete.€Ð ø0H,0 ÐÔ_ÔMEACÔ_Ô€asked€for€a€temporary€injunction€against€Dr.€Mehta€and,€upon€hearing,€for€a€permanentÐ Ð2 .2 Ðinjunction€against€his€practicing€medicine€in€the€seven€covenant€counties€and€for€money€damages.Ð ¨4ø/4 Ðà  àà ` àDr.€Mehta€answered€on€July€10,€1997,€that€ð ðthe€alleged€covenant€not€to€compete€isÐ €6Ð16 Ðvoidðð€for€lack€of€consideration€and€as€against€the€public€policy€of€the€State€of€Tennessee,€ð ðbecauseÐ X8¨38 Ðthe€plaintiff€is€attempting€the€corporate€practice€of€medicine€which€is€illegal€in€the€State€ofÐ 0:€5: ÐTennessee.ðð€€By€way€of€counterclaim,€he€averred€that€Ô_ÔMEACÔ_Ô€had€breached€its€employment€contractÐ ° Ðby€failing€to€provide,€pursuant€to€paragraph€20€of€the€original€contract,€office€space,€equipment€andÐ ˆØ Ðsupport€necessary€to€properly€maintain€a€practice€of€pediatric€cardiology.€€Dr.€Mehta€also€averredÐ `° Ðthat€Ô_ÔMEACÔ_Ô€had€breached€its€contract€by€selectively€enforcing€the€covenant€against€some€physiciansÐ 8 ˆ Ðbut€not€others,€by€its€accounting€of€receipts€for€his€services,€and€by€failing€to€pay€the€severanceÐ  ` Ðpackage€Ô_ÔMEACÔ_Ô€owed€to€him.Ð è 8  Ðà  àà ` àA€hearing€on€Ô_ÔMEACÔ_Ôððs€request€for€temporary€injunction€was€held€on€July€28,€1997.€Ð À  ÐBased€on€the€testimony€and€exhibits€at€that€hearing,€the€Trial€Court€entered€an€order€on€October€17,Ð ˜è  Ð1997€in€which€the€Court€found€that€Ô_ÔMEACÔ_Ô€benefits€the€faculty€of€Ô_ÔETSUÔ_Ô€by€serving€as€a€vehicle€toÐ pÀ Ðallow€them€to€engage€to€some€extent€in€private€practice€and€thereby€supplement€their€faculty€salaries.€Ð H˜ ÐIt€also€benefits€the€University€by€allowing€it€to€attract€physicians€and€by€providing€a€patient€base€forÐ  p Ðtraining€future€physicians.€€€The€Court€found€that€continuing€accreditation€of€the€residency€programÐ øH Ðin€pediatrics€requires€a€sufficient€patient€base€so€that€students€in€medical€school€can€have€theÐ Ð  Ðappropriate€clinical€training,€for€teaching€purposes,€for€treating€purposes,€and€for€generating€income.Ð ¨ø Ðà  àà ` àApplying€familiar€requirements€for€the€granting€of€an€injunction,€the€Court€found€thatÐ €Ð Ðthere€was€no€question€that€Dr.€Mehtaððs€leaving€had€caused€harm€to€Ô_ÔETSUÔ_Ô€and€Ô_ÔMEACÔ_Ô,€due€to€the€lossÐ X ¨ Ðof€patients€and€income,€which€could€adversely€affect€accreditation.€€The€Court€found€the€harm€wasÐ 0"€  Ðimmediate,€and€that€the€potential€for€that€harm€to€continue€was€substantial.€€However,€the€Trial€CourtÐ $X" Ðdid€not€find€the€harm€to€be€irreparable.€€Rather,€the€Trial€Court€Ô_ÔfoundÔ_Ô:Ð à%0!$ ÐÓÓà8  àIt€would€be€Ô_ÔviolativeÔ_Ô€of€the€public€interest€to€deprive€this€area€of€[Dr.€Mehtaððs]Ð ¸'#& Ðexpertise€.€.€.€Dr.€Mehta€has€served€the€University€well€over€this€almost€eleven„yearÐ ¤(ô#' Ðperiod.€€Whatever€investment€the€University€had€in€him,€he€has€repaid€several€timesÐ )à$( Ðover€during€his€tenure.Ð|*Ì%)Ð Ð  ÐÓ’ÓÓÓà  àà ` àÌÓÛ“ÓAccordingly,€the€Trial€Court€declined€to€grant€Ô_ÔMEACÔ_Ôððs€request€for€a€temporary€injunction.׃×Ý ƒ #ÃÝòòÚ  Ú1Ú  ÚóóÝ  Ý×  ×€€Ð T,¤'+ Ðà  àà ` àOn€November€25,€1998,€the€Trial€Court€entered€a€Consent€Order€Granting€MotionÐ ,.|)- Ðto€Intervene€in€which€the€James€H.€€Ô_ÔQuillenÔ_Ô€College€of€Medicine,€East€Tennessee€State€University,Ð 0T+/ ÐState€of€Tennessee€was€designated€an€intervening€party€in€order€to€protect€its€rights.€€Ð Ü1,-1 Ðà  àà ` àThe€case€was€tried€on€March€15€„€18,€1999,€and€the€Trial€Court€filed€its€Opinion€onÐ ´3/3 ÐJune€14,€1999.€€The€Court,€in€a€detailed€and€comprehensive€Memorandum€Opinion,€summarized€theÐ Œ5Ü05 Ðfacts€which€influenced€the€Courtððs€decision.€€The€Court€noted,€specifically,€a€Damage€EstimateÐ ° ÐReport€prepared€for€trial€by€Ô_ÔPershingÔ_Ô€Ô_ÔYoakleyÔ_Ô€&€Associates,€trial€exhibit€32,€which€included€theÐ ˆØ Ðfollowing€data:Ð `° ÐÓÓà8  àIn€the€United€States€there€are€approximately€800€pediatric€cardiologists,€whichÐ 8 ˆ Ðequates€to€one€specialist€for€every€97,100€children.€€The€population€base€in€the€Tri„Ð $ t ÐCities€area€of€112,778€children€supports€1.15€full„time€equivalent€pediatricÐ  ` Ðcardiologists.€€The€Tri„Cities€now€has€approximately€2.3€full„time€equivalentÐ ü L  Ðpediatric€cardiologists:€Drs.€Mehta,€Chin€and€Anand.€€The€market€from€which€theÐ è 8  Ðpediatric€cardiology€division€draws€patients€does€not€have€the€capacity€to€generateÐ Ô$  Ðthe€visits€required€to€economically€support€both€Mehtaððs€practice€and€the€pediatricÐ À  Ðcardiology€division€of€Ô_ÔMEACÔ_Ô.€à0ÀÐ Ð àà0ÀÐ ÀÐ àЬü Ð Ð  ÐÌà  àà ` àBased€on€testimony€and€evidence€at€trial,€the€Court€found€that:Ð „Ô  ÐÌà8  àRequiring€Mehta€to€leave€would€have€resulted€in€the€loss€of€his€ability€to€performÐ \¬ Ðapproximately€five€procedures€which€could€not€be€done€by€Drs.€€Anand€or€Chin€inÐ H˜ Ð1998.€€The€loss€to€the€community€of€these€relatively€few€procedures€as€a€result€ofÐ 4„ ÐMehtaððs€having€to€leave€the€area€would€be€greatly€overshadowed€by€the€loss€to€theÐ  p Ðcommunity€which€would€result€from€the€far„reaching€harm€caused€the€College€as€aÐ  \ Ðwhole€if€Mehta€is€allowed€to€stay€in€the€area€and€continue€to€retain€the€referral€base.€Ð øH ÐDrs.€€Anand€and€Chin€would€be€able€to€substantially€provide€for€all€pediatricÐ ä4 Ðcardiology€patients€if€Mehta€relocates€outside€the€covenant€area,€just€as€AnandÐ Ð  Ðhandled€the€entire€patient€load€when€Mehta€went€on€a€six„month€sabbatical€toÐ ¼  ÐVanderbilt€Hospital.ШøÐ Ð  ÐÌÓÓà  àà ` àAgain€applying€òòHasty€v.€€Rent„A„Driver,€Inc.,€óó671€S.W.2d€471€(Tenn.€€1984),€theÐ €Ð ÐTrial€Court€found:Ð X ¨ ÐÓÓà8  àSetting€legal€niceties€and€arguable€factual€issues€aside,€this€case€really€turns€on€whatÐ 0"€  Ðis€in€the€public€interest,€i.e.,€is€it€in€the€public€interest€to€have€Mehta€remain€here€withÐ #l! Ðthe€great€majority€of€the€patient€referral€base,€or€is€it€in€the€public€interest€that€Ô_ÔMEACÔ_ÔÐ $X" Ðand€its€pediatric€cardiologists€have€the€patient€referral€base€for€the€use€of€the€studentsÐ ô$D # Ðat€the€College€of€Medicine€as€well€as€serving€the€areaððs€public.Ðà%0!$Ð Ð  ÐÌÓÓà  àà ` àThe€Trial€Court€set€out€a€list€of€considerations€in€favor€of€and€against€enforcementÐ ¸'#& Ðof€the€covenant.€€Finally,€the€Trial€Court€found€this€particular€covenant€not€to€compete€to€beÐ )à$( Ðenforceable,€based€on€substantial€and€irreparable€damage€to€Ô_ÔMEACÔ_Ô€and€Ô_ÔETSUÔ_Ô€so€long€as€Dr.€MehtaÐ h+¸&* Ðremains€and€competes€with€his€former€employer.€€Accordingly,€by€Order€of€June€14,€1999,€the€TrialÐ @-(, ÐCourt€enjoined€Dr.€Mehta€from€engaging€in€the€practice€of€medicine€in€the€restricted€area€for€aÐ /h*. Ðperiod€of€five€years,€ð ðcommencing€this€day.ðð€€The€Court€also€awarded€monetary€damages€to€Ô_ÔMEACÔ_ÔÐ ð0@,0 Ðin€the€sum€of€$358,265€and€dismissed€all€other€claims.€€€On€subsequent€Motion€to€Alter€or€Amend,Ð È2.2 Ðthe€Trial€Court€ordered€that€the€damage€award€should€be€reduced€by€$21,050.50,€the€amount€Ô_ÔMEACÔ_ÔÐ  4ð/4 Ðowed€Dr.€€Mehta€for€six€months€severance€Ô_ÔpayÔ_Ô€as€provided€in€paragraph€15€of€the€employmentÐ x6È16 Ðcontract.€€On€July€29,€1999,€the€Trial€Court€ordered€that,€upon€the€posting€of€a€cash€bond€by€Dr.Ð P8 38 ÐMehta,€its€five„year€injunction€against€his€practice€in€the€seven„county€area€be€stayed€pending€hisÐ (:x5: Ðappeal.€€Dr.€Mehta€posted€the€bond€and€the€injunction€was€stayed€pending€this€appeal.€Ð ° Ѐ€€àHFF Fàò òòòˆà@ˆˆ%ìàDISCUSSIONˆÐ ˆØ Ðóóó óà  àà ` àOur€review€is€òòde€novoóó€upon€the€record,€accompanied€by€a€presumption€of€theÐ h¸ Ðcorrectness€of€the€findings€of€fact€of€the€Trial€Court,€unless€the€preponderance€of€the€evidence€isÐ @  Ðotherwise.€€Rule€13(d),€Ô_ÔT.R.A.P.Ô_Ô;òò€Davis€v.€€Ô_ÔInmanÔ_Ô,€óó974€S.W.2d€689,€692€(Tenn.€1998).€€A€TrialÐ  h ÐCourtððs€conclusions€of€law€are€subject€to€Ô_Ôa€òòdeÔ_Ô€novoóó€review€with€no€presumption€of€correctness.€Ð ð @  ÐòòÔ_ÔGanzevoortÔ_Ô€v.€€Russell,€óó949€S.W.2d€293€(Tenn.€1997).Ð È  Ðà  àà ` àDr.€Mehta€first€raises€the€issue€that€the€Trial€Court€erred€in€finding€that,€as€a€matterÐ  ð  Ðof€public€policy€in€Tennessee,€a€covenant€not€to€compete€involving€a€medical€specialty€is€enforceableÐ xÈ Ðby€a€non„profit€corporation.€€€His€second€and€third€issues€are€inextricable€from€the€first.€€In€hisÐ P  Ðsecond€issue,€Dr.€Mehta€contends€that€the€Trial€Court€erred€in€finding€that€there€were€specialÐ (x Ðcircumstances€which€entitled€Ô_ÔMEACÔ_Ô€and€Ô_ÔETSUÔ_Ô€to€protection€by€enforcement€of€the€covenant.€€InÐ P Ðthe€third€issue,€he€contends€that€the€Trial€Court€erred€in€Ô_ÔfindingÔ_Ô€that€the€covenant,€if€enforceable,€wasÐ Ø( Ðfair€and€reasonable€under€the€circumstances€as€set€forth€in€existing€case€law.€€We€will€discuss€theseÐ ° Ðfirst€three€issues€together.Ð ˆØ Ðà  àà ` àÔ_ÔDr.Ô_Ô€€Mehta€argues€that,€when€he€entered€into€this€contract,€€Ô_ÔT.C.AÔ_Ô€ðð€ðð€63„6„204€andÐ ` ° Ð68„11„205€provided€that€a€corporation€and€any€state,€local,€county€governmental€unit€or€divisionÐ 8"ˆ  Ðthereof€were€prohibited€from€the€practice€of€medicine€and€physicians€were€not€permitted€to€divideÐ $`" Ðor€split€fees€with€non„physicians.€€Despite€the€later„enacted€amendment€of€€Ô_ÔT.C.AÔ_Ô€ðð€63„6„204€toÐ è%8!$ Ðallow€for€€faculty€practice€plans,€Dr.€€Mehta€says€the€law€at€the€time€the€contract€was€entered€intoÐ À'#& Ðgoverns,€and€under€that€law€and€the€particular€circumstances€of€this€case,€this€covenant€should€notÐ ˜)è$( Ðbe€enforced€as€a€matter€of€public€policy.€€Ð p+À&* Ðà  àà ` à€€We€first€observe€that€Ô_ÔDr.Ô_Ô€€Mehta's€argument€is€directed€against€Ô_ÔMEACÔ_Ô,€not€Ô_ÔETSUÔ_Ô.€Ð H-˜(, ÐHowever,€paragraph€22€of€the€contract,€the€covenant€not€to€compete,€specifically€provides€that€Ô_ÔETSUÔ_ÔÐ  /p*. Ðis€a€third„party€beneficiary€of€the€contract€and€is€entitled€to€enforce€its€provisions.€€Even€if€Ô_ÔDr.Ô_ԀРø0H,0 ÐMehta's€argument€against€Ô_ÔMEACÔ_Ô€were€to€prevail,€Ô_ÔETSUÔ_Ô€could€still€enforce€the€covenant€as€a€third„Ð Ð2 .2 Ðparty€beneficiary.Ð ¨4ø/4 Ðà  àà ` àThe€weakness€in€Ô_ÔDr.Ô_Ô€€Mehta's€public€policy€argument€against€the€involvement€ofÐ €6Ð16 ÐÔ_ÔMEACÔ_Ô€in€the€doctor„patient€relationship€is€its€timing.€€The€covenant€was€entered€into€in€1986.€€Dr.€Ð X8¨38 ÐMehta€first€€raised€this€ð ðcorporate€practice€of€medicineðð€argument€more€than€ten€years€later.€€Dr.Ð 0:€5: ÐMehta€is€Ô_ÔestoppedÔ_Ô€from€raising€the€issue€now.€€Our€Supreme€Court€has€held:Ð ° ÐÓÓà8  àEquitable€estoppel,€in€the€modern€sense,€Ô_Ôarises€from€the€'conduct'€of€the€party€.€.€.€hisÐ ˆØ Ðpositive€acts,€andÔ_Ô€his€silence€or€negative€omission€to€do€any€thing.€€Its€foundation€isÐ tÄ Ðjustice€and€good€conscience.€€Its€object€is€to€prevent€the€unconscientious€andÐ `° Ðinequitable€assertion€or€enforcement€of€claims€or€rights€which€òòmightóó€have€existed,Ð L œ Ðor€been€enforceable€by€other€rules€of€law,€unless€prevented€by€an€estoppel;€Ô_Ôand€itsÔ_ÔÐ 8 ˆ Ðpractical€effect€is,€from€motives€of€equity€and€fair€dealing,€to€create€and€vestÐ $ t Ðopposing€rights€in€the€party€who€obtains€the€benefit€of€the€estoppel.Ð `Ð Ð  ÐÌÓ5¹ÓòòÔ_ÔBalilesÔ_Ô€v.€€Cities€Serv.€€Co.,€óó578€S.W.2d€621,€624€(Tenn.€€1979)€(Ô_ÔcitationsÔ_Ô€omitted).Ð è 8  Ðà  àà ` àIn€this€case,€€Ô_ÔDr.Ô_Ô€€Mehta's€positive€acts€in€practicing€medicine€as€an€employee€ofÐ À  ÐÔ_ÔMEACÔ_Ô€and€his€silence€or€negative€omission€to€make€any€objection€inured€to€his€great€benefit.€Ð ˜è  ÐÔ_ÔMEACÔ_Ô€provided,€among€other€benefits,€an€initial€referral€network€and€€office€space,€equipment€andÐ pÀ Ðstaff€for€more€than€a€decade.€€Accordingly,€we€find€he€is€Ô_ÔestoppedÔ_Ô€from€now€complaining€that€theÐ H˜ Ðcontract€involves€the€corporate€practice€of€medicine.€€Ð  p Ðà  àà ` àòòóóEven€without€the€ten„year€lapse€before€Dr.€Mehta€raised€the€corporate€practice€ofÐ øH Ðmedicine€issue,€his€argument€on€this€issue€would€fail.€€The€corporate€practice€of€medicine€is€enjoinedÐ Ð  Ðin€Tennessee€by€Ô_ÔT.C.AÔ_Ô€ðð€68„11„205.€€€In€order€to€practice€medicine€in€Tennessee,€one€must€beÐ ¨ø Ðlicensed€by€the€Board€of€Medical€Examiners,€as€provided€in€€€Ô_ÔT.C.AÔ_Ô€ðð€ðð€63„6„201,€202.€€The€reasonÐ €Ð Ðfor€this€requirement€is€so€that€the€Board€can€ð ðexamine€the€qualifications€of€all€applicants€forÐ X ¨ Ðcertification€of€fitness€to€practice€medicine€or€surgery€in€this€state.€.€.€.ðð€€The€rule€exists€for€theÐ 0"€  Ðbenefit€of€the€citizens€of€this€State,€who€depend€upon€the€Board€to€ensure€that€the€practice€ofÐ $X" Ðmedicine€is€conducted€only€by€qualified€individuals.€€There€is€no€evidence€in€the€record€that€Ô_ÔMEACÔ_ÔÐ à%0!$ Ðhas€or€will€subject€the€citizens€of€Tennessee€to€such€unauthorized€medical€practice.€€Accordingly,Ð ¸'#& Ðwe€further€decline€to€apply€the€corporate€practice€of€medicine€rule€in€this€instance€in€favor€of€Ô_ÔDr.Ô_ԀР)à$( ÐMehta,€who€is€not€a€member€of€the€class€of€citizens€to€be€protected€by€the€statute€and€who€seeksÐ h+¸&* Ðenforcement€of€the€rule€for€other,€more€personal€reasons.Ð @-(, Ðà  àà ` àDr.€€Mehta€next€argues,€as€to€the€public€policy€involved€in€the€Ô_ÔenforceabilityÔ_Ô€of€thisÐ /h*. Ðcovenant:Ð ð0@,0 ÐÓÓà8  àas€a€matter€of€public€policy,€this€particular€covenant€should€be€unenforceable€becauseÐ È2.2 ÐÔ_ÔMEACÔ_Ô/Ô_ÔETSUÔ_Ô€cannot€establish€that€it€is€necessary€to€protect€any€legitimate€interests.€Ð ´3/3 ÐIf€the€Court€is€not€willing€to€take€the€additional€step€of€stating€that€all€covenantsÐ  4ð/4 Ðinvolving€practicing€physicians€are€against€public€policy€because€they€interfere€withÐ Œ5Ü05 Ðthe€doctor/patient€relationship,€then€certainly€this€type€of€covenant€is€far€broader€andÐ x6È16 Ðmore€onerous€than€ones€recognized€in€other€jurisdictions€as€enforceable.Ðd7´27Ð Ð  ÐÌÓÓà  àIn€adopting€Ô_ÔT.C.AÔ_Ô€ðð€63„6„204(e)€in€1997,€our€legislature€implemented€the€public€policy€thatÐ <9Œ49 Ðcovenants€not€to€compete€are€enforceable€against€physicians€employed€by€faculty€practice€plans€suchÐ ° Ðas€Ô_ÔMEACÔ_Ô,€with€some€limitations.€€The€Act€provides,€in€part:Ð ˆØ ÐÓÓà8  àThe€general€assembly€further€finds€that€restrictive€covenants€and€prohibitions€againstÐ `° Ðan€employed€physicianððs€right€to€practice€medicine€upon€the€termination€orÐ L œ Ðconclusion€of€the€employment€relationship€with€a€faculty€practice€plan€are€reasonableÐ 8 ˆ Ðand€not€inimical€to€the€public€interest,€subject€to€the€temporal€and€geographicÐ $ t Ðlimitations€set€forth€in€subdivision€(2).Ð `Ð Ð  ÐÌÓËÓThose€limitations€provide€that,€in€some€cases,€such€covenants€must€be€restricted€to€one€county€andÐ è 8  Ðcontinue€for€no€longer€than€two€years.€€€However,€this€case€arises€from€a€covenant€entered€into€priorÐ À  Ðto€the€enactment€of€Ô_ÔT.C.AÔ_Ô€ðð€63„6„204(e).€€€Dr.€€Mehta€says€the€later„enacted€statute€cannot€beÐ ˜è  Ðretrospectively€applied€to€uphold€his€covenant€on€public€policy€grounds.€€He€is€correct.€However,Ð pÀ ÐÔ_ÔMEACÔ_Ô€argues€that€the€enactment€was€not€a€substantive€change€in€the€law€but€merely€a€clarificationÐ H˜ Ðby€the€legislature€of€pre„existing€law.€€Indeed€there€is€òòóósupport€for€Ô_ÔMEACÔ_Ôððs€position€in€the€legislativeÐ  p Ðhistory.Ô_Ô׃×Ý ƒ #ÃÝòòÚ  Ú2Ú  ÚóóÝ  Ý×  ×Ô_Ô€€Accordingly,€to€resolve€Dr.€€Mehtaððs€first€three€issues,€we€must€determine€whether€thisÐ øH Ðparticular€1986€covenant€is€enforceable€in€Tennessee€as€a€matter€of€public€policy,€considering€anyÐ Ð  Ðspecial€circumstances€as€well€as€whether€it€was€fair€and€reasonable,€without€being€bound€by€theÐ ¨ø Ðprovisions€of€the€later„enacted€statute.€€Ð €Ð Ðà  àà ` àDr.€€Mehta,€Ô_ÔETSUÔ_Ô€and€the€Trial€Court€agree€that€there€are€no€cases€in€TennesseeÐ X ¨ Ðdealing€with€covenants€not€to€compete€against€physicians,€and€that€the€leading€Tennessee€case€onÐ 0"€  Ðsuch€covenants€generallyòòóó€is€òòHasty€v.€Rent„A„Driver,€Inc.,€óó671€S.W.2d€471€(Tenn.€1984).€€òòóó€In€thatÐ $X" Ðcase,€Rent„A„Driver,€Inc.€was€in€the€business€of€leasing€services€of€truck€drivers€to€other€businesses.€Ð à%0!$ ÐEarl€Hasty€entered€into€an€employment€contract€as€a€driver€for€the€company.€€The€contract€containedÐ ¸'#& Ða€covenant€not€to€compete€against€Rent„A„Driver€in€which€Hasty€agreed:Ð )à$( ÐÓÓà8  àthat€for€a€period€of€six€months€from€the€date€employee€is€last€assigned€for€work€byÐ h+¸&* ÐRent„A„Driver,€Inc.€that€employee€will€refrain€from€accepting€or€soliciting€anyÐ T,¤'+ Ðemployment€of€the€type€performed€by€Rent„A„Driver€Inc.€€from€any€account€to€whichÐ @-(, Ðemployee€has€been€assigned€.€.€.€within€a€one€hundred€miles€radius€from€the€officesÐ ,.|)- Ðof€Rent„A„Driver,€Inc.€.€.€.Ð/h*.Ð Ð  ÐÌÓeÕÓOur€Supreme€Court€held€that€non„competition€covenants€in€employment€contracts€are€not€favoredÐ ð0@,0 Ðin€Tennessee€because€they€are€in€restraint€of€trade.€€However,€they€are€Ô_Ônot€invalidÔ_Ô€per€se€and€will€beÐ È2.2 Ðenforced,€provided€they€are€reasonable€under€the€particular€circumstances.€€The€Court€set€out€factorsÐ  4ð/4 Ðrelevant€in€determining€reasonableness:€(1)€Ô_ÔtheÔ_Ô€consideration€supporting€the€agreements;€(2)€Ô_ÔtheÔ_ÔÐ ° Ðthreatened€danger€to€the€employer€in€the€absence€of€such€an€agreement;€(3)€Ô_ÔtheÔ_Ô€economic€hardshipÐ ˆØ Ðimposed€on€the€employee€by€such€a€covenant;€Ô_ÔandÔ_Ô€(4)€whether€or€not€such€a€covenant€should€beÐ `° Ðinimical€to€public€interest.€€An€employer€cannot€restrain€ordinary€competition.€€In€order€for€anÐ 8 ˆ Ðemployer€to€be€entitled€to€protection€under€a€non„competition€covenant€of€an€employment€contract,Ð  ` Ðthere€must€be€special€facts€present€over€and€above€ordinary€competition€such€that€without€theÐ è 8  Ðcovenant€not€to€compete€the€employee€would€gain€an€unfair€advantage€in€future€competition€withÐ À  Ðthe€employer.€€€Certain€legitimate€business€interests€have€emerged€as€being€entitled€to€the€protectionÐ ˜è  Ðof€a€non„competition€covenant,€including€the€preservation€of€trade€or€business€secrets€andÐ pÀ Ðconfidential€information.€€In€other€cases,€€covenants€have€been€upheld€when€the€employee€hasÐ H˜ Ðassociated€closely€or€had€repeated€contact€with€the€employerððs€customers€so€that€the€customer€tendsÐ  p Ðto€associate€the€employerððs€business€with€the€employee€(i.e.,€the€employee€becomes€ð ðthe€faceðð€of€theÐ øH Ðemployer€to€its€customers).€€General€knowledge€and€skill€obtained€by€the€employee,€even€if€acquiredÐ Ð  Ðwith€expensive€training,€is€not€a€Ô_ÔprotectableÔ_Ô€interest€of€the€employer,€but€training€in€conjunction€withÐ ¨ø Ðother€factors€has€been€cited€as€a€factor€in€upholding€the€reasonableness€of€a€covenant.€€òòId.€óó€Ô_ÔatÔ_Ô€472,Ð €Ð Ð473.Ð X ¨ Ðà  àà ` àThe€Supreme€Court,€in€òòHasty,óó€found€that€the€driver€did€not€have€trade€or€businessÐ 0"€  Ðsecrets€or€confidential€information,€did€not€personally€influence€customersðð€decisions€regarding€useÐ $X" Ðof€the€employerððs€services,€and€did€not€receive€training€from€the€employer.€€There€were€no€facts€ofÐ à%0!$ Ðthe€type€ordinarily€used€to€attempt€to€justify€a€non„competition€clause.€€The€Court€found€that€theÐ ¸'#& Ðbasis€of€the€employerððs€suit€was€the€loss€of€its€employees€to€a€competitor,€and€that€ð ðthis€is€the€typeÐ )à$( Ðof€injury€which€results€from€ordinary€competition€and€which€cannot€be€restrained€by€contract.ðð€Ð h+¸&* ÐAccordingly,€the€Court€found€the€non„competition€clause€against€Hasty€to€be€unenforceable.Ð @-(, Ðà  àà ` àIn€the€case€before€us,€the€Trial€Court,€in€a€Ô_Ôwell„reasonedÔ_Ô€and€comprehensive€analysis,Ð /h*. Ðapplied€the€principles€set€out€in€òòHasty€óóand€considered€medicine„related€cases€in€other€jurisdictions.Ô_Ô׃×Ý ƒ #ÃÝòòÚ  Ú3Ú  ÚóóÝ  Ý×  ×Ô_ԀРð0@,0 ÐThe€Trial€Court€then€concluded,€as€quoted€from€the€Trial€Courtððs€detailed€Memorandum€Opinion:Ð È2.2 ÐÓÓà  à1.à8 ` àCovenants€not€to€compete€contained€in€an€employment€contract,Ð ° Ðalthough€not€favored€in€the€law,€are€valid€and€enforceable€ifÐ œì Ðreasonable.ЈØ` x` x ÐÌà  à2.à8 ` àThe€reasonableness€of€such€restrictive€covenants€is€a€matter€of€law€forÐ `° Ðthe€court.ÐL œ` x` x ÐÌà  à3.à8 ` àA€covenant€not€to€compete€may€be€reasonable€as€to€one€employee€andÐ $ t Ðunreasonable€as€to€another.€€Each€case€is€limited€to€its€own€particularÐ  ` Ðfacts.€€However,€the€resolution€of€the€validity€of€this€covenant€underÐ ü L  Ðthese€circumstances€is€important€beyond€Dr.€€Mehta€alone.€€OtherÐ è 8  Ðphysicians,€both€those€employed€by€Ô_ÔMEACÔ_Ô€and€physicians€in€privateÐ Ô$  Ðpractice,€and€the€College€of€Medicine€are€vitally€interested€in€andÐ À  Ðconcerned€with€the€outcome€of€this€case.Ьü ` x` x ÐÌà  à4.à8 ` àIn€determining€the€reasonableness€of€a€covenant€not€Ô_Ôto€competeÐ „Ô  Ðinvolving€a€physicianÔ_Ô,€in€addition€to€the€factors€of€time€andÐ pÀ Ðgeographical€limitations,€the€court€must€consider€the€ð ðspecial€factsððÐ \¬ Ðof€each€situation,€the€most€important€of€which€is€the€public€good.ÐH˜` x` x ÐÌà  à5.à8 ` àThe€covenant€not€to€compete€in€this€instance€is€reasonable€on€its€faceÐ  p Ð(no€competition€for€five€years€in€a€seven„county€area).Ð \` x` x ÐÌà  à6.à8 ` àTo€determine€if€there€are€ð ðspecial€factsðð€which€render€this€covenantÐ ä4 Ðenforceable€as€to€Dr.€€Mehta,€the€court€must€balance€the€competingÐ Ð  Ðinterests€of€the€College€of€Medicine€and€its€clinical€arm,€Ô_ÔMEACÔ_Ô,€andÐ ¼  Ðthe€interests€of€Dr.€€Mehta€and€the€public.Шø` x` x ÐÌà  àà ` àA.à8 ¸ àCompeting€Interests:Ѐи ¸  ÐÌà  àà ` àà ¸ à1.à8  àThe€Collegeððs€interest€in€recruitingÐ X ¨ Ðand€retaining€skilled€faculty€membersÐ D!” Ðfor€its€teaching€and€research€goals.Ð0"€ ÈÈ ÐÌà  àà ` àà ¸ à2.à8  àThe€Collegeððs€interest€in€providingÐ $X" Ðquality€medical€care,€especially€in€theÐ ô$D # Ðareas€of€specialization€andÐ à%0!$ ÐÔ_ÔsubspecializationÔ_Ô.ÐÌ&"%ÈÈ ÐÌà  àà ` àà ¸ à3.à8  àThe€Collegeððs€Ô_Ôinterest€in€giving€itsÐ ¤(ô#' Ðmedical€students€and€residentsÐ )à$( Ðadequate€clinical€experience€whichÐ |*Ì%) Ðcan€only€come€through€having€aÐ h+¸&* Ðsufficient€patient€baseÔ_Ô.ÐT,¤'+ÈÈ ÐÌà  àà ` àà ¸ à4.à8  àDr.€€Mehtaððs€interest€in€the€likelihoodÐ ,.|)- Ðof€a€greater€income€and€more€personalÐ /h*. Ðfreedom€in€private€practice.Ð0T+/ÈÈ ÐÌà  àà ` àà ¸ à5.à8  àDr.€€Mehtaððs€interest€in€remaining€inÐ Ü1,-1 Ðthe€community€where€he€has€nowÐ È2.2 Ðdeveloped€significant€ties.д3/3ÈÈ ÐÌà  àà ` àà ¸ à6.à8  àThe€publicððs€interest€in€having€accessÐ Œ5Ü05 Ðto€a€highly€skilled€professional€such€asÐ x6È16 ÐDr.€€Mehta.Ðd7´27ÈÈ ÐÌà  àà ` àà ¸ à7.à8  àThe€publicððs€Ô_Ôinterest€in€having€theÐ <9Œ49 ÐCollege€of€Medicine€and€its€facultyÐ (:x5: Ðpractice€plan€not€only€remainÔ_Ô€viable,Ð ° Ðbut€continue€to€grow€in€both€prestigeÐ œì Ðand€its€contribution€to€the€community.ЈØÈÈ ÐÌà  àà ` àB.€€Factors€bearing€on€ð ðconsiderationsðð:Ð `° ÐÌà  àà8 ` àDr.€€Mehta€entered€into€the€contract€with€the€College€and€Ô_ÔMEACÔ_ÔÐ 8 ˆ Ðknowingly€and€at€no€bargaining€disadvantage.€€He€did€not€have€toÐ $ t Ðtake€this€employment€opportunity;€with€his€qualifications€he€wouldÐ  ` Ðhave€had€many€opportunities€available€to€him,€just€as€he€now€has.€€Dr.€Ð ü L  ÐMehta€was€the€beneficiary€of€and€further€developed€the€patientÐ è 8  Ðreferral€network€with€area€physicians.€€Immediately€upon€hisÐ Ô$  Ðdeparture€from€Ô_ÔMEACÔ_Ô€and€the€College,€Mehta€opened€his€privateÐ À  Ðpractice€in€competition€with€University€Physicians€on€the€followingÐ ¬ü  Ðday.€€He€has€taken€the€acquired€referral€network€with€him.€€TheÐ ˜è  ÐCollege€has€replaced€Mehta€with€Dr.€€Thomas€Chin,€also€a€board„Ð „Ô  Ðcertified€pediatric€cardiologist.€€However,€the€area€physicians€areÐ pÀ Ðcontinuing€to€refer€their€child€patients€with€heart€problems€to€theÐ \¬ Ðsame€physician€they€have€for€many€years,€Dr.€€Mehta.€€The€CollegeÐ H˜ Ðand€Ô_ÔMEACÔ_Ô€are€not€able€to€replace€those€patients€in€this€limitedÐ 4„ Ðmarket.€€The€Department€of€Pediatrics,€and€hence€the€College€ofÐ  p ÐMedicine,€have€sustained€a€significant€loss,€both€of€income,€whichÐ  \ Ðaffects€equipment,€supplies,€space,€and€recruitment€of€newÐ øH Ðphysicians,€and€the€clinical€opportunities€for€students€and€residents.€Ð ä4 ÐThis€loss€is€irreparable€so€long€as€Dr.€€Mehta€remains€and€competesÐ Ð  Ðwith€his€former€employer.м ` x` x ÐÌà  àà8 ` àThere€should€be€some€sanctity€to€a€contract.€€A€contract€is€a€set€ofÐ ”ä Ðpromises.€€Dr.€€Mehta€committed€himself€to€not€entering€intoÐ €Ð Ðcompetition€with€University€Physicians€(Ô_ÔMEACÔ_Ô)€in€this€area.€€He€hasÐ l¼ Ðbreached€his€commitment.€€His€breach€has€caused€and€will€continueÐ X ¨ Ðto€cause€substantial€and€irreparable€damage,€Ô_ÔmonetarilyÔ_Ô€andÐ D!” Ðeducationally,€to€University€Physicians€and€the€College€of€Medicine.Ð0"€ ` x` x ÐÌÓÓà  àà ` àThe€Trial€Court€found€the€covenant€not€to€compete€enforceable€as€to€Dr.€€Mehta€andÐ $X" Ðpermanently€enjoined€him€from€engaging€in€the€practice€of€medicine€in€the€restricted€area€for€aÐ à%0!$ Ðperiod€of€five€years,€ð ðcommencing€this€day.ðð€€Ð ¸'#& Ðà  àà ` àThis€case€involves€competing€public€interest€considerations.€€The€first€such€interestÐ )à$( Ðis€the€right€of€a€patient€to€choose€her€physician€and€to€be€allowed€to€continue€that€relationship€evenÐ h+¸&* Ðafter€the€physician€leaves€her€place€of€employment.€€The€competing€public€interest€is€the€publicððsÐ @-(, Ðinterest€in€having€an€accredited,€qualified,€and€well€staffed€medical€college€in€upper€East€Tennessee.€Ð /h*. ÐIt€is€in€the€publicððs€interest€for€the€medical€college,€Ô_ÔETSUÔ_Ô,€to€have€a€sufficient€patient€base€to€allowÐ ð0@,0 Ðit€to€train€medical€students,€interns,€and€residents€in€the€most€effective€and€best€way€possible.€€TheÐ È2.2 Ðpublic€benefits€by€having€these€well€trained€physicians€enter€into€the€practice€of€medicine€in€the€StateÐ  4ð/4 Ðof€Tennessee.€€Ð x6È16 Ðà  àà ` àApplying€the€public€policy€considerations€and€special€circumstances€of€TennesseeÐ P8 38 Ðmedical€schools€as€described€above€by€medical€educators€and€administrators€at€Ô_ÔETSUÔ_Ô€€to€the€factsÐ (:x5: Ðof€this€case,€we€agree€with€the€Trial€Court€that€the€covenant€is€enforceable€against€Dr.€€Mehta.€€WeÐ ° Ðemphasize€that€this€decision€is€limited€to€the€facts€of€this€particular€case,€and€that€each€situation€mustÐ ˆØ Ðbe€decided€on€its€own€merits.€€The€involvement€of€Ô_ÔETSUÔ_Ô,€Ô_ÔQuillenÔ_Ô€College€of€Medicine,€as€a€namedÐ `° Ðthird€party€beneficiary€of€the€covenant€not€to€compete,€was€crucial€to€both€the€Trial€Courtððs€and€ourÐ 8 ˆ Ðdetermination€that€the€covenant€not€to€compete€should€be€enforced€against€Dr.€Ô_ÔMethaÔ_Ô.€€This€is€notÐ  ` Ða€situation€where€a€physician€leaves€a€purely€private€practice€group€and€proceeds€to€compete€againstÐ è 8  Ðthat€private€practice€group.€€We€express€no€opinion€whether€or€not€the€publicððs€interest€wouldÐ À  Ðmandate€the€enforcement€or€non„enforcement€of€a€covenant€not€to€compete€involving€a€physicianððsÐ ˜è  Ðleaving€his€private€practice€group€to€compete€against€that€private€practice€group.€Ð pÀ Ðà  àà ` àThe€publicððs€interest€in€having€an€accredited€medical€school€in€upper€East€TennesseeÐ H˜ Ðcannot€be€questioned.€€The€publicððs€interest€in€Ô_ÔETSUÔ_Ôððs€being€able€to€recruit€and€retain€skilled€facultyÐ  p Ðmembers€cannot€be€questioned.€€The€publicððs€interest€in€Ô_ÔETSUÔ_Ô€having€stability€in€its€patientÐ øH Ðpopulation€base€to€enable€it€to€provide€sufficient€and€adequate€exposure€to€patients€to€its€residents,€Ð Ð  Ðinterns€and€medical€students€cannot€be€questioned.€€We€find€these€public€interests€to€be€of€paramountÐ ¨ø Ðimportance€in€resolving€this€dispute.€€All€elements€necessary€to€the€enforcement€of€the€covenant€notÐ €Ð Ðto€compete€are€present€here.€€We€affirm€the€judgment€of€the€Trial€Court€on€issues€one,€two,€andÐ X ¨ Ðthree.€€Ð 0"€  Ðà  àà ` àDr.€€Mehta€next€raises€the€issue€that€the€Trial€Court€erred€ð ðin€failing€to€find€that€thereÐ $X" Ðwas€not€[sic]€intentional/negligent€misrepresentation€relating€to€his€inducement€to€sign€theÐ à%0!$ Ðemployment€contract€containing€the€covenant.ðð€€The€Trial€Court€found€that€Dr.€€Mehta€had€notÐ ¸'#& Ðcarried€his€burden€of€proving€misrepresentation.€€€Ð )à$( Ðà  àà ` àIn€Tennessee,€negligent€misrepresentation€is€defined€as€follows:Ð h+¸&* ÐÓÓà8  àOne€who,€in€the€course€of€his€business,€profession€or€employment,€or€in€any€otherÐ @-(, Ðtransaction€in€which€he€has€a€pecuniary€interest,€supplies€false€information€for€theÐ ,.|)- Ðguidance€of€others€in€their€business€transactions,€is€subject€to€liability€for€pecuniaryÐ /h*. Ðloss€caused€to€them€by€their€justifiable€reliance€upon€the€information,€if€he€fails€toÐ 0T+/ Ðexercise€reasonable€care€or€competence€in€obtaining€or€communicating€theÐ ð0@,0 Ðinformation.ÐÜ1,-1Ð Ð  ÐòòÌRobinson€v.€€Ô_ÔOmerÔ_Ô,€óó952€S.W.2d€423,€426€(Tenn.€€1997),€quoting€Restatement€(Second)€of€Torts,€ðð€Ð ´3/3 ÐÌ552€(1977).Ð Œ5Ü05 Ðà  àÌÓÓThe€statute€of€limitations€for€negligent€misrepresentation€is€three€years€from€the€accruing€of€€theÐ d7´27 Ðcause€of€action.€€òòCity€State€Bank€v.€Dean€Ô_ÔWitterÔ_Ô€Reynolds,€Inc.,€óó948€S.W.2d€729,€735€(Tenn.€Ð <9Œ49 ÐCt.€App.€1996)€perm.€app.€denied€(Tenn.€1997);€Ô_ÔT.C.AÔ_Ô€ðð€28„3„105.Ð ° Ðòòóóà  àIntentional€misrepresentation€in€Tennessee€is€fraud€in€the€inducement€of€a€contract,€the€oldÐ ˆØ Ðcommon€law€action€of€deceit,€for€which€the€statute€of€limitations€is€three€years.€€òòAlexander€v.€€ThirdÐ `° ÐNational€Bank,€óó915€S.W.2d€797,€799€(Tenn.€€1996),€quoting€òòVance€v.€€Ô_ÔSchulderÔ_Ô,€óó547€S.W.2d€927Ð 8 ˆ Ð(Tenn.€€1977);€Ô_ÔT.C.AÔ_Ô€ðð€28„3„105.Ð  ` Ðà  àà ` àA€cause€of€action€accrues€for€either€intentional€or€negligent€misrepresentation€whenÐ è 8  Ða€plaintiff€discovers,€or€in€the€exercise€of€reasonable€care€and€diligence,€should€have€discovered,€hisÐ À  Ðinjury€and€the€cause€thereof.€€òòCity€State€Bank€v.€€Reynolds€óóat€735.€€Ð ˜è  Ðà  àà ` àIn€this€case,€Dr.€€Mehta€knew€or€should€have€known€soon€after€accepting€employmentÐ pÀ Ðin€1986€that€other€physicians€were€not€required€to€sign€the€covenant.€€His€contract€of€employmentÐ H˜ Ðprovides€that€Minutes€of€the€Board€of€Directors€of€Ô_ÔMEACÔ_Ô€are€integrated€into€the€contract,€and€heÐ  p Ðtestified€that€those€minutes€were€made€available€to€him.€€The€resolution€adopting€the€covenant,€asÐ øH Ðwell€as€the€votes€allowing€each€deviation€or€release€from€the€terms€of€a€covenant€not€to€compete,Ð Ð  Ðwere€placed€in€the€Minutes€of€the€Board€of€Directors.€€The€record€is€clear€that€Dr.€Mehta€knew€orÐ ¨ø Ðshould€have€discovered€long€before€July€10,€1994€€ð ð.€.€.his€injury€and€the€cause€thereof.ðð€€Since€Dr.€Ð €Ð ÐMehta€did€not€make€any€claim€against€Ô_ÔMEACÔ_Ô€or€Ô_ÔETSUÔ_Ô€for€misrepresentation€until€July€10,€1997,Ð X ¨ Ðwhen€he€filed€his€Answer€in€this€case,€his€claim€of€negligent/intentional€misrepresentation€is€notÐ 0"€  Ðtimely,€and€Defendantððs€issue€four€is€without€merit..Ð $X" Ðà  àà ` àDr.€€Mehta€next€raises€the€issue€that€the€Trial€Court€erred€in€failing€to€find€that€Ô_ÔMEACÔ_ÔÐ à%0!$ Ðand€Ô_ÔETSUÔ_Ô€had€waived€their€entitlement€to€enforcement€of€the€covenant€by€their€actions.€€The€TrialÐ ¸'#& ÐCourt€found:Ð )à$( ÐÓÓà8  àAs€to€waiver,€it€is€true€that€certain€physicians€who€were€subject€to€the€restrictiveÐ h+¸&* Ðcovenant€were€released€from€it€and€immediately€allowed€to€establish€a€practice€in€theÐ T,¤'+ Ðrestricted€area.€€However,€these€were€generally€local€physicians€who€had€prior€tiesÐ @-(, Ðto€the€community.€€As€noted€earlier,€psychiatrists€were€not€required€to€sign€theÐ ,.|)- Ðcovenant.€€The€fact€that€some€few€physicians€have€been€released€from€the€covenantÐ /h*. Ðdoes€not€constitute€a€waiver€by€Ô_ÔMEACÔ_Ô€of€its€right€to€enforce€that€part€of€theÐ 0T+/ Ðagreement€and€the€Court€so€FINDS€and€HOLDS.€€òòSeeóó€28€Ô_ÔAm.JurÔ_Ô.2d€òòEstoppel€andÐ ð0@,0 ÐWaiver€óóððòò€óó154.òòÐÜ1,-1Ð Ð  ÐóóÌÓÓà  àà ` àIn€Tennessee,€ð ð[Ô_Ôw]aiverÔ_Ô€is€a€voluntary€relinquishment€of€some€right,€a€foregoing€orÐ ´3/3 Ðgiving€up€of€some€benefit€or€advantage,€which,€but€for€such€waiver,€he€would€have€enjoyed.€€It€mayÐ Œ5Ü05 Ðbe€proved€by€express€declaration;€or€by€acts€and€declarations€manifesting€an€intent€and€purpose€notÐ d7´27 Ðto€claim€the€supposed€advantage;€or€by€a€course€of€acts€and€conduct,€or€by€so€neglecting€and€failingÐ <9Œ49 Ðto€act,€as€to€induce€a€belief€that€it€was€his€intention€and€purpose€to€waive.ðð€€òòKnoxville€Rod€andÐ ° ÐBearing,€Inc.€€v.€€Ô_ÔBettisÔ_Ô,€óó672€S.W.2d€203,€207€(Tenn.€Ct.€App.€€1983)€òòperm.€€app.€€denied€óó(Tenn.€Ð ˆØ Ð1984).€The€acts€or€course€of€conduct€must€be€clear,€unequivocal€and€decisive€acts€of€the€party€or€anÐ `° Ðact€which€shows€determination€not€to€have€the€benefit€intended€in€order€to€constitute€a€waiver.€€òòId.óó€Ð 8 ˆ Ðà  àà ` àIn€this€case,€all€of€Ô_ÔMEACÔ_Ôððs€acts€clearly€indicate€a€determination€to€enforce€theÐ  ` Ðcovenant€rather€than€to€waive€it.€€Each€time€a€physician€sought€release€from€the€covenant,€the€BoardÐ è 8  Ðof€Directors€of€€Ô_ÔMEACÔ_Ô€discussed€the€circumstances,€determined€whether€special€circumstancesÐ À  Ðexisted€and€voted€on€the€matter.€€There€is€nothing€in€the€record€indicating€that€any€physician€wasÐ ˜è  Ðever€released€from€the€covenant€without€specific€approval€of€the€Board€of€Directors.€€Nor€were€anyÐ pÀ Ðof€the€releases€òòpro€forma.óó€€There€were€very€few€releases€over€the€eleven€years€in€question,€and€eachÐ H˜ Ðone€was€shown€to€be€rationally€based€on€special€facts.€€Employers€should€be€encouraged€to€make€anÐ  p Ðindependent€determination€concerning€each€employee€as€to€whether€or€not€it€is€necessary€to€enforceÐ øH Ða€covenant€not€to€compete.€€If€we€accept€Dr.€Mehtaððs€position,€we€will€tell€employers€that€if€theyÐ Ð  Ðwish€to€retain€the€right€to€enforce€a€covenant€not€to€compete€against€any€employee,€they€must€enforceÐ ¨ø Ðall€covenants€not€to€compete€even€if€such€enforcement€is€not€necessary€to€protect€the€employerððsÐ €Ð Ðinterest.€€We€decline€to€do€this.€€The€record€is€clear€that€when€Dr.€Mehta€gave€notice€of€hisÐ X ¨ Ðresignation,€Ô_ÔMEACÔ_Ô€and€Ô_ÔETSUÔ_Ô€informed€him€that€they€would€enforce€his€covenant€not€to€compete.Ð 0"€  ÐWe€find€no€evidence€in€the€record€to€support€Dr.€€Mehtaððs€contention€that€Ô_ÔMEACÔ_Ô€waived€theÐ $X" Ðcovenant,€and€therefore€we€affirm€the€ruling€of€the€Trial€Court€on€Dr.€Mehtaððs€issue€number€five.Ð à%0!$ Ðà  àà ` àNext€Dr.€€Mehta€raises€the€issue€that€the€Trial€Court€erred€in€not€finding€that€Ô_ÔMEACÔ_ÔÐ ¸'#& Ðand€Ô_ÔETSUÔ_Ô€breached€its€contract€with€him€for€failure€to€provide€adequate€equipment,€space,€researchÐ )à$( Ðfunds,€and€facilities.€€The€Trial€Court€found:Ð h+¸&* ÐÓÓà8  àThere€is€insufficient€proof€that€Mehta€was€not€furnished€adequate€space€or€facilitiesÐ @-(, Ðto€operate€his€practice.€€It€is€understandable€that€he€wanted€more€of€everything,€butÐ ,.|)- Ðbudget€constraints€in€a€state„supported€university€will€not€always€permit€that.Ð/h*.Ð Ð  ÐÌÓÓà  àà ` àDr.€€Mehtaððs€employment€contract€permits€the€Board€of€Directors€of€Ô_ÔMEACÔ_Ô€toÐ ð0@,0 Ðdetermine€the€extent€of€their€responsibility€for€his€office€space,€equipment€and€other€expenses.€€TheÐ È2.2 Ðcontract€provides,€as€pertinent:Ð  4ð/4 ÐÓÓà8  àò ò20.€€Office€Space,€Equipment,€and€Other€Expenses.€ó ó€First€party€[Ô_ÔMEACÔ_Ô]€agreesÐ x6È16 Ðto€provide€to€Second€Party€[Dr.€€Mehta]€such€office€space,€equipment,€and€otherÐ h7¸27 Ðappropriate€expenses€as€may€be€necessary€for€him/her€to€perform€his/her€services€asÐ T8¤38 Ðoutlined€herein€and€as€determined€and€approved€by€the€Board€of€Directors.€€SecondÐ @949 ÐParty€agrees€to€pay€all€other€professional€expenses€not€covered€by€First€Party.Ð,:|5:Ð Ð  ЇÓÓà  àà ` àThe€record€indicates€that€Dr.€€Mehta€had€meetings,€both€within€the€PediatricÐ ° ÐDepartment€and€with€the€President€of€Ô_ÔETSUÔ_Ô€and€Ô_ÔMEACÔ_Ô,€seeking€to€resolve€his€complaints€aboutÐ ˆØ Ðoffice€space.€€The€situation€at€that€time€was€not€optimal€for€any€members€of€the€Pediatric€DepartmentÐ `° Ðfaculty.€€Dr.€€Ô_ÔAdebonojoÔ_Ô€had€accommodated€Dr.€€Mehta€when€his€office€was€moved€from€KingsportÐ 8 ˆ Ðto€Johnson€City€by€renting€special€office€space€for€him€at€an€annual€cost€to€Ô_ÔMEACÔ_Ô€of€$67,000.€Ð  ` ÐÔ_ÔAdebonojoÔ_Ô€testified€that€he€was€unable€to€justify€the€rental€expense€in€terms€of€the€overallÐ è 8  Ðdepartment€budget€€as€Ô_ÔTennCareÔ_Ô€changes€began€to€severely€decrease€income.€€Other€faculty€membersÐ À  Ðtestified€that€the€office€space€was€small€for€all€of€them.€€It€does€not€appear€that€Dr.€€Mehta€wasÐ ˜è  Ðsingled€out€for€inadequate€provisions.€€We€agree€with€the€Trial€Court€that€ð ðbudget€constraints€€in€aÐ pÀ Ðstate„supported€universityðð€are€legitimate€considerations.€€The€findings€of€fact€of€the€Trial€Court€onÐ H˜ Ðthis€issue€are€presumed€correct€unless€the€preponderance€of€the€evidence€is€otherwise.€€We€affirmÐ  p Ðthe€judgment€of€the€Trial€Court€on€this€issue.Ð øH Ðà  àà ` àDr.€€Mehtaððs€last€issue€is€that€the€Trial€Court€erred€in€awarding€damages€and€theÐ Ð  Ðcomputation€of€the€same€as€well€as€erred€in€granting€a€five„year€enforceable€covenant.€€€As€to€theÐ ¨ø Ðdamages,€the€Trial€Court€found:Ð €Ð ÐÓÓà8  àThe€Court,€utilizing€Schedule€A€of€the€Ô_ÔPershingÔ_Ô€Ô_ÔYoakleyÔ_Ô€report€presented€by€MartinÐ X ¨ ÐBrown€(Trial€exhibit€32)€finds€damages€from€May€1,€1997€to€June€15,€1999€to€beÐ D!” Ð$358,265.00.Ð0"€ Ð Ð  ÐÌÓÓà  àà ` àBoth€€Dr.€€Mehta€and€Ô_ÔMEACÔ_Ô€cite€òòÔ_ÔChisholmÔ_Ô€&€Moore€Mfg.€v.€U.€S.€Canopy€Co.,€óó77Ð $X" ÐÔ_ÔS.W.Ô_Ô€1062€(Tenn.€€1903)€as€controlling€on€the€issue€of€whether€lost€profits€are€recoverable€in€a€claimÐ à%0!$ Ðfor€breach€of€contract.€€€That€case€was€most€recently€considered€in€òòÔ_ÔWachtelÔ_Ô€v.€€Western€Ô_ÔSizzlinÔ_Ô,€óó986Ð ¸'#& ÐS.W.2d€2,€6€(Tenn.€€Ct.€€App.€€1998)€òòperm.€€app.€€deniedóó€(Tenn.€€1999).€€The€òòÔ_ÔWachtelÔ_Ô€óóCourt€affirmedÐ )à$( Ðthe€long„held€principle€that€remote€and€speculative€damages€may€not€be€recovered€for€a€breach€ofÐ h+¸&* Ðcontract,€but€contract€damages€that€are€proved€with€reasonable€certainty€may€be€recovered.€€Ð @-(, Ðà  àà ` àDr.€€Mehta€argues€that€Ô_ÔMEACÔ_Ôððs€financial€expert€witness,€Martin€Brown,€a€C.P.A.Ð /h*. Ðwith€Ô_ÔPershingÔ_Ô€Ô_ÔYoakleyÔ_Ô€&€Associates,€ð ðdid€nothing€more€than€project€Mehtaððs€cash€flow€over€timeÐ ð0@,0 Ðwithout€any€substantiation€as€to€factors€such€as€new€physicians€coming€to€the€area,€populationÐ È2.2 Ðchanges,€and€changes€in€insurance€requirements€which€would€obviously€effect€[sic]€any€patientÐ  4ð/4 Ðbase.ðð€€Dr.€€Mehta€failed€to€provide€any€countervailing€expert€financial€testimony.€€We€haveÐ x6È16 Ðreviewed€the€ð ðDamage€Estimate€Report€„€Medical€Education€Assistance€Corporation€„€PediatricÐ P8 38 ÐCardiology€Divisionðð€prepared€by€Ô_ÔPershingÔ_Ô€Ô_ÔYoakleyÔ_Ô€and€introduced€at€trial€by€Ô_ÔMEACÔ_Ô.€€Like€the€TrialÐ (:x5: ÐCourt,€we€find€the€25„page€report€to€be€comprehensive€and€credible.€€Accordingly,€we€find€the€TrialÐ ° ÐCourt€did€not€err€in€relying€on€this€Ô_ÔunrebuttedÔ_Ô€expert€evidence€to€set€damages€in€this€case.Ð ˆØ Ðà  àà ` àAs€stated€earlier,€the€Trial€Court,€after€awarding€damages€of€$358,265€to€Ô_ÔMEACÔ_Ô,€alsoÐ `° Ðenjoined€Dr.€Mehta€from€practicing€in€the€restricted€area€for€a€period€of€five€years€from€the€date€ofÐ 8 ˆ Ðthe€Trial€Courtððs€June€14,€1999€order.€€Dr.€Mehta€argues€that€the€Trial€Courtððs€decision,€in€effect,Ð  ` Ðconverts€the€five€year€restriction€into€a€seven€year€restriction.€€There€is€merit€to€Dr.€Mehtaððs€position.€Ð è 8  Ðà  àà ` àAs€expressed€above,€Ô_ÔMEACÔ_Ô€has€a€legitimate€contractual€interest€to€protect€throughÐ À  Ðthis€covenant€not€to€compete,€as€does€Ô_ÔETSUÔ_Ô.€€However,€Ô_ÔMEACÔ_Ôððs€and€Ô_ÔETSUÔ_Ôððs€interests€are€notÐ ˜è  Ðidentical.€€Ô_ÔETSUÔ_Ôððs€sole€interest€is€in€prohibiting€Dr.€Mehta€from€practicing€in€the€restricted€area.€Ð pÀ ÐÔ_ÔMEACÔ_Ô€wishes€to€recover€monetary€damages€from€Dr.€Mehta€as€well€as€prohibit€him€from€practicingÐ H˜ Ðin€the€restricted€area.€€€There€is€€overlap€in€that€MEAC€provides€31%€of€ETSU€Medical€SchoolððsÐ  p Ðtotal€annual€budget.€€This€fact€situation€requires€this€Court€to€balance€the€legitimate€interests€of€theseÐ øH Ðparties€to€enforce€a€reasonable€covenant€not€to€compete.€€Dr.€Mehta€should€not€be€allowed€simplyÐ Ð  Ðto€buy€completely€out€of€the€covenant€not€to€compete€by€paying€Ô_ÔMEACÔ_Ô€damages€as€such€would€notÐ ¨ø Ðprotect€the€legitimate€and€compelling€interests€of€Ô_ÔETSUÔ_Ô.€€However,€Dr.€Mehta€should€not€have€hisÐ €Ð Ðfive€year€covenant€not€to€compete€transformed€into€a€seven€year€covenant€not€to€compete.€€For€theseÐ X ¨ Ðreasons,€it€is€our€opinion€that€a€reasonable€enforcement€of€this€covenant€not€to€compete€requires€thatÐ 0"€  Ðthe€monetary€damages€against€Dr.€Mehta€be€affirmed,€that€the€covenant€not€to€compete€be€enforcedÐ $X" Ðfor€a€two€year€period€beginning€30€days€from€the€date€of€entry€of€our€judgment,€and€that€Ô_ÔMEACÔ_Ô€beÐ à%0!$ Ðawarded€additional€damages€from€Dr.€Mehta€for€the€time€of€his€continued€competition€from€the€dateÐ ¸'#& Ðof€the€Trial€Courtððs€judgment€through€the€date€of€entry€of€our€judgment.€€Ð )à$( Ðà  àà ` àÔ_ÔMEACÔ_Ô€raises€one€issue€on€appeal,€that€the€Trial€Court€erred€in€awarding€Dr.€€MehtaÐ h+¸&* Ðsix€monthsðð€severance€pay€as€provided€under€his€contract€with€Ô_ÔMEACÔ_Ô.€€Ð @-(, Ðà  àà ` àOn€July€9,€1999,€the€Trial€Court€heard€Defendantððs€Motion€to€Ô_ÔAlterÔ_Ô€or€Amend€andÐ /h*. Ðoverruled€the€motion€ð ðexcept€as€follows:ððÐ ð0@,0 ÐÓÓà8  à(Ô_ÔiÔ_Ô)€that€the€Court€is€of€the€opinion€that€the€damage€award€made€to€the€plaintiff€Ô_ÔMEACÔ_ÔÐ È2.2 Ðshould€be€reduced€by€the€amount€representing€the€six€months€severance€pay€whichÐ ´3/3 Ðwas€provided€in€paragraph€15€of€Dr.€€Mehtaððs€Professional€Services€AgreementÐ  4ð/4 Ðwhich€the€Court€finds€Dr.€€Mehta€was€entitled€to€receive€and€the€parties€stipulate€thatÐ Œ5Ü05 Ðamount€to€be€$21,050.50€.€.€.€.Ðx6È16Ð Ð  ÐÌÓÓThe€Trial€Court€then€ordered€plaintiffððs€damage€award€reduced€by€$21,050.50€to€a€total€ofÐ P8 38 Ð$337,214.95.Ð (:x5: Ðà  àà ` àÔ_ÔMEACÔ_Ô€argues€that€Dr.€€Mehta€is€not€entitled€to€recover€the€severance€pay€because€heÐ ° Ðbreached€the€employment€contract€by€leaving€Ô_ÔMEACÔ_Ô€and€setting€up€a€competing€practice.€€Dr.€Ð ˆØ ÐMehta€argues€that€the€severance€pay€was€based€on€a€percentage€of€fees€already€earned€prior€to€hisÐ `° Ðleaving,€and€that€ð ðas€the€Trial€Court€found,€Mehta€would€be€entitled€to€a€set€off€for€those€amountsÐ 8 ˆ Ðagainst€the€judgment€awarded€to€Ô_ÔMEACÔ_Ô€on€a€theory€that€Ô_ÔMEACÔ_Ô€would€be€unjustly€enriched€if€itÐ  ` Ðreceived€both€damages€and€the€monies€due€Mehta€from€his€collections.ððÐ è 8  Ðà  àà ` àð ðUnjust€enrichment€is€a€quasi„contractual€theory€or€is€a€contract€implied„in„law€inÐ À  Ðwhich€a€court€may€impose€a€contractual€obligation€where€one€does€not€exist€[citation€omitted].€Ð ˜è  ÐCourts€will€impose€a€contractual€obligation€under€an€unjust€enrichment€theory€when:€(1)€there€is€noÐ pÀ Ðcontract€between€the€parties€or€a€contract€has€become€unenforceable€or€invalid;€and€(2)€the€defendantÐ H˜ Ðwill€be€unjustly€enriched€absent€a€quasi„contractual€obligation.ðð€€òòÔ_ÔWhitehavenÔ_Ô€Community€BaptistÐ  p ÐChurch€v.€€Holloway,€óó973€S.W.2d€592,€596€(Tenn.€€1998).Ð øH Ðà  àà ` àThe€award€to€Dr.€€Mehta€is€not€an€issue€of€unjust€enrichment.€€It€is€an€issue€of€theÐ Ð  Ðenforcement€of€the€terms€of€the€contract.€€We€have€required€Dr.€€Mehta€to€abide€by€his€obligationÐ ¨ø Ðnot€to€compete€against€Ô_ÔMEACÔ_Ô€and€Ô_ÔETSUÔ_Ô€and€to€pay€damages€to€Ô_ÔMEACÔ_Ô€for€the€breach€of€thatÐ €Ð Ðobligation.€€It€follows€that,€in€the€enforcement€of€this€contract€between€the€parties,€fundamentalÐ X ¨ Ðfairness€requires€that€Ô_ÔMEACÔ_Ô€also€uphold€its€end€of€the€bargain.€€Accordingly,€we€affirm€the€TrialÐ 0"€  ÐCourtððs€award€of€severance€pay€to€Dr.€€Mehta€under€the€terms€of€the€contract.Ð $X" ÐÓ  Óòòò òà @ àCONCLUSIONó óóóÐ à%0!$ ÐÓ  Óà  àà ` àThe€judgment€of€the€Trial€Court€is€affirmed€as€modified€and€this€cause€is€remandedÐ ¸'#& Ðto€the€Trial€Court€for€a€determination€of€the€additional€damages€due€from€Dr.€Mehta€to€Ô_ÔMEACÔ_Ô€andÐ )à$( Ðfor€such€further€proceedings,€as€may€be€required,€consistent€with€this€Opinion.€€The€costs€on€appealÐ h+¸&* Ðare€assessed€against€the€Appellant,€Dr.€Ashok€V.€Mehta.Ð @-(, ÐÌÓÓÌÌÌÌÌÌà  àà ` àà ¸ àà  àà h àà À à__________________________________________Ð x6È16 Ðà  àà ` àà ¸ àà  àà h àà À àD.€MICHAEL€SWINEY,€J.Ð d7´27 ÐÌÌÐ (:x5: ЇÌÌCONCUR:Ð ˆØ ÐÌÌÌÌÌ_____________________________________Ð  ` ÐHOUSTON€M.€Ô_ÔGODDARDÔ_Ô,€Ô_ÔP.J.Ô_ÔÐ ü L  ÐÌÌÌÌÌÌ_____________________________________Ð pÀ ÐCHARLES€D.€SUSANO,€JR.,€J.Ð \¬ Ðà@ìì*ìàˆÌÌÌÌÌÌÌÌÌÌÌÌÌÌÌÌÌÌÌà  àà ` àÝ"‚ir"ÝÝ  Ý