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Lassen v. Benton

Supreme Court of Arizona

November 13, 1959

Keith O. LASSEN, Appellant,
F. R. BENTON, Appellee.

[86 Ariz. 324] Rhodes & Killian, Mesa, and Evans, Kitchel & Jenckes, Phoenix, for appellant.

Snell & Wilmer, and Roger W. Perry, Phoenix, for appellee.

DON T. UDALL, Superior Court Judge.

Plaintiff-appellant, Dr. Keith O. Lassen, a licensed veterinarian, brought an injunctive action in the Maricopa County Superior Court against defendant-appellee, Dr. F. R. Benton, also a veterinarian, to enforce a restrictive covenant in an employment contract theretofore entered into between the parties, and for damages incident to the breach thereof. The trial court--without any findings of fact--held that said contract was unenforceable and entered judgment for defendant Benton. This appeal followed. The parties will hereafter be designated as they appeared in the lower court, i. e., plaintiff and defendant.

For nearly 20 years the plaintiff had been engaged in the practice of his profession in Mesa, a city of not over 20,000 population at the time the parties entered into the agreement. He limited his own practice to treating and caring for large animals and specialized in that field. However, the plaintiff also built a small animal hospital in Mesa in 1948, which was operated thereafter under the supervision of hired veterinarians.

On April 1, 1953, defendant entered his employ under a written contract whereby he was to operate and manage the small animal hospital owned by plaintiff. The contract expired at the end of three years.

Page 138

At the close of the term, the parties attempted to negotiate a new agreement, but [86 Ariz. 325] their efforts to renew the contract failed, and ten months thereafter, February 1, 1957, the plaintiff terminated defendant's employment.

Thereupon, the defendant began practicing veterinary medicine in Mesa and commenced the establishment of a boarding kennel and small animal hospital, which resulted in the bringing of this lawsuit.

The pertinent part of the contract which plaintiff alleges defendant violated, reads as follows:

'In the event that this contract shall be terminated by either party, or by its terms shall elapse, the second party hereby agrees that he will not practice Veterinary Medicine or establish, or work in any small animal hospital within twelve (12) miles of the city limits of the City of Mesa, Arizona, for a period of five (5) years from the date of termination.'

The 12 mile zone surrounding Mesa city limits takes in approximately two-thirds of Phoenix, and all of the cities of Scottsdale, Tempe, Chandler, and Gilbert, as well as Williams Air Force Base. The record further reveals that a large proportion of plaintiff's hospital business came from the immediate vicinity of Mesa, the remainder coming from the outside area, and that the hospital had approximately 6,000 customers during the time defendant managed it.

The plaintiff makes only one assignment of error wherein he contends that the restrictive covenant appearing in the agreement is valid and enforceable and that the lower court erred in entering judgment for defendant. He argues that both the duration and the area mentioned in the covenant are reasonable and necessary for the protection of the employer's business, and that no injury will result to the public by restraining the breach of the covenant.

One of the leading cases in this field of the law, with a similar factual basis to the one at bar, is the case of Granger v. Craven, 159 Minn. 296, 199 N.W. 10, 52 A.L.R.1356. In that case, plaintiff, a physician and surgeon in Rochester, employed the defendant, who was also a physician and surgeon, to take charge of the ear, nose, and throat department in plaintiff's office. The contract was subject to termination by either party on 30 days' written notice. It further provided that defendant, after termination of the contract, would not engage in the practice of medicine or surgery, or any of the branches thereof, directly or indirectly, or as an employee of anyone else in Rochester, nor within 20 miles thereof, for three years after such termination. The Supreme Court of Minnesota in a well-reasoned opinion held that the restrictive covenant was reasonable and enforceable. See also Allen v. Rose Park Pharmacy, 120 Utah 608, 237 P.2d 823. In Bauer v. Sawyer, 6 Ill.App.2d [86 Ariz. 326] 178, 126 N.E.2d 844, 851--in many respects comparable to the instant case--the Appellate Court of Illinois held that a restrictive covenant could properly be enforced in equity by injunction. In this regard the Court said:

'The provision in this agreement, therefore, preventing the defendant withdrawing partner from practicing within a radius of 25 miles of Kankakee for 5 years from the date of withdrawal being limited as to area and being limited as to time, being not greater than reasonably necessary to protect the fair and legitimate contract rights and interests of the remaining partners, is reasonable and not contrary to public policy, is supported by a sufficient legal consideration, and, a breach having occurred, it is a negative restrictive covernant which may properly be enforced in equity by injunction.'

A treatise on restrictive covenants is found in Briggs v. Butler,140 Ohio St. 499, 45 N.E.2d 757, 758, 41 A.L.R.2d 60. A syllabus by the ...

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