By Patrick J. Miller, Givens Pursley LLP

On January 24, 2018, a Boise, Idaho jury found that Treasure Valley Hospital Limited Partnership could not enforce a noncompetition covenant to prevent a limited partner in the limited partnership from performing minor procedures under local anesthesia in the physician’s private medical office.

In the case, John G. Kloss, M.D. v. Treasure Valley Hospital Limited Partnership, the hospital partnership first contended that Dr. Kloss, a board certified fellowship trained hand surgeon, was not practicing full time and, therefore, could be expelled from the limited partnership.

When Dr. Kloss contested the determination he was not practicing full time, the limited partnership contended that the noncompetition covenant in the limited partnership agreement precluded Dr. Kloss from performing certain minor procedures in his office under local anesthesia even though no facility fee was charged.

The main point of contention was whether Dr. Kloss could perform carpal tunnel release surgery using a technique known as Wide Awake Local Anesthesia No Tourniquet (WALANT) in his office without violating a noncompetition covenant that purported to limit a physician’s ability to perform surgery in his or her office.

The Court had determined in advance of trial that Dr. Kloss had not retired and that the noncompetition covenant was ambiguous. After an eight-day jury trial, the jury determined the noncompetition covenant was not enforceable and awarded Dr. Kloss $926,626 in damages for his expulsion from the partnership in breach of the limited partnership agreement.

*Patrick J. Miller and Bradley J. Dixon were counsel for the plaintiff.