In Kowalak v. Keystone Medical Services of N.Y. P.C., the Appellate Division of New York reversed a lower court's decision that had granted plaintiff Thomas Kowalak, M.D., summary judgment on his first cause of action and dismissed defendant Keystone Medical Services' counterclaims. The case stemmed from a contract under which Kowalak, an emergency medicine physician, provided services to hospitals through Keystone. Following the termination of Keystone's contract with Eastern Niagara Hospital (ENH), which led to ENH contracting with another provider, Keystone terminated its contract with Kowalak. The contract contained a one-year noncompete clause prohibiting Kowalak from practicing emergency medicine at hospitals served by Keystone.
Kowalak sought a declaration that continuing to work with ENH would not breach his contract, while Keystone asserted counterclaims, including breach of contract and the enforceability of the noncompete clause. The Supreme Court ruled in favor of Kowalak, prompting Keystone's appeal. The Appellate Division found that the lower court erred in its interpretation of the noncompete clause, emphasizing that the determination of a contract's ambiguity is a judicial function. The court highlighted that for summary judgment, the moving party must prove that their interpretation of the contract is the only reasonable one. In this case, the interpretation of the noncompete clause was deemed central to the dispute, and Kowalak failed to demonstrate that his view was the sole valid interpretation, leading to the reinstatement of Keystone's counterclaims.
The contract defines 'Hospitals' as all hospitals where the plaintiff provides emergency medical services, specifically including ENH, which is listed in Exhibit A. The plaintiff argues that the noncompete clause should allow him to work at ENH since the defendant no longer provides services there. However, the court finds that the plaintiff's interpretation overlooks the contract's definition, which includes ENH as a 'Hospital.' Therefore, the noncompete clause reasonably prohibits the plaintiff from working at ENH. The court emphasizes that the intent of the parties regarding the noncompete clause requires consideration of extrinsic evidence, rendering summary judgment inappropriate. Additionally, the court rejects the plaintiff's argument that ambiguities in the contract should be resolved against the drafter, noting that both parties participated in the contract's negotiation. The court also finds that the plaintiff is not entitled to summary judgment on the defendant's counterclaims, which involve the noncompete, non-solicitation, and confidentiality clauses, due to unresolved questions of fact and incomplete discovery.
