Orthodontic v. Nichols

NOTICE: NOT FOR OFFICIAL PUBLICATION.
UNDER ARIZONA RULE OF THE SUPREME COURT 111(c), THIS DECISION IS NOT PRECEDENTIAL
AND MAY BE CITED ONLY AS AUTHORIZED BY RULE.

IN THE
ARIZONA COURT OF APPEALS
DIVISION ONE

ORTHODONTIC PARTNERS, LLC, et al., Plaintiffs/Appellants,

v.

TREVOR NICHOLS, et al., Defendants/Appellees.

No. 1 CA-CV 24-0701
FILED 12-03-2025

Appeal from the Superior Court in Maricopa County
No. CV2024-002585
The Honorable Erik Thorson, Judge

AFFIRMED

COUNSEL

Dorsey & Whitney LLP, Phoenix
By Gregory B. Collins, Brittany M. Gilbertson, Seth T. Goertz
Counsel for Plaintiffs/Appellants

Davis Miles, PLLC, Phoenix
By Bradley D. Weech, Marshall R. Hunt
Counsel for Defendants/Appellees

ORTHODONTIC, et al. v. NICHOLS, et al.
Decision of the Court

MEMORANDUM DECISION

Judge Anni Hill Foster delivered the decision of the Court, in which
Presiding Judge James B. Morse Jr. and Judge Veronika Fabian joined.

F O S T E R, Judge:

¶1 Plaintiffs, Orthodontic Partners, LLC (“OP”) and OP
Orthodontics of Arizona, PLLC (“OP AZ”) doing business as Frost
Orthodontics (“Frost Ortho”) and orthodontist Dr. Stuart Frost, sought a
preliminary injunction against former employee, Dr. Trevor Nichols.
Plaintiffs attempted to enforce restrictions on Nichols’ subsequent
employment, practice of dentistry, solicitation of clients and employment
of staff in his Employment Agreement (“Agreement”). The superior court
denied the injunction. Plaintiffs appeal the denial. For the following
reasons, this Court affirms.

FACTS AND PROCEDURAL HISTORY

¶2 Frost hired Nichols to work as an associate orthodontist at his
practice. Frost required Nichols to sign an initial agreement as part of his
onboarding process in 2019. That 2019 agreement outlined a potential
partnership between Frost and Nichols, beginning six months after Nichols
started working at Frost Ortho. But that partnership never materialized.

¶3 Frost sold his practice to OP, an Orthodontic Services
Organization managing practices across the country, while Nichols was still
employed at Frost Ortho. OP established OP AZ, while continuing to allow
Frost to do business as Frost Ortho. Nichols and Frost worked together
under the newly formed practice. As part of the sale, Nichols signed the
Agreement with OP AZ which contained three restrictive covenants
applicable in the “Designated Territory”: (1) non-competition, (2) non-
solicitation of employees and (3) non-solicitation of clients (collectively the
“Restrictive Covenants”).

¶4 The Agreement defined “Designated Territory” as

a 25-mile radius around each of the orthodontic and dentistry
offices and facilities located in the United States that are now
or in the future, owned, operated, or managed by any of the

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ORTHODONTIC, et al. v. NICHOLS, et al.
Decision of the Court

Companies or any of their affiliates, including any
orthodontic and dentistry offices with which any of the
Companies were actively contemplating a business
relationship during Orthodontist’s employment with the
Practice and of which Orthodontist had knowledge.

¶5 About a year and a half after the establishment of OP AZ, it
named Nichols Co-Clinical Director of OP AZ. But in September 2023, Frost
terminated Nichols for “failing to meet clinical day requirements,” “failing
to follow protocols and meet expectations associated with patient care” and
“breach of trust via disclosing confidential information regarding OP AZ.”
Frost notified Nichols orally of the termination and then in writing
following the verbal discussion.

¶6 After his termination from OP AZ, Nichols joined Somos
Dental & Orthodontics, located in the Phoenix metropolitan area. While
working at Somos, Nichols began advertising for his new practice, Nichols
Orthodontics and Aesthetics, PLLC, on social media. Nichols hired a chief
of operations who was previously employed by OP AZ.

¶7 Plaintiffs filed suit against Nichols alleging various claims
and sought (1) a temporary restraining order regarding Plaintiffs’ trade
secret information; (2) a preliminary injunction to bar Nichols from
soliciting their employees and patients; and (3) to prevent Nichols from
opening Nichols Ortho. Following a three-day evidentiary hearing, the
court denied Plaintiff’s application for a preliminary injunction finding that
Plaintiffs failed to establish the factors necessary for a preliminary
injunction. Among other things, the court stated that “Plaintiffs failed to
meet their burden to show a . . . strong likelihood of success on the merits
including enforcement of the restrictive covenants” and that “Plaintiffs did
not meet their burden to show irreparable harm if the injunction were
denied.”

¶8 Plaintiffs appealed. This Court has jurisdiction. A.R.S. §§ 12-
2101(A)(5)(b) and -120.21(A)(3).

DISCUSSION

¶9 Plaintiffs raise the following issues on appeal: (1) whether the
superior court appropriately interpreted the Federal Trade Commission’s
(“FTC”) non-compete rule; (2) whether non-competes incident to the sale of
a business are enforceable; (3) whether public policy disfavoring non-
competes for physicians apply to orthodontists; (4) whether the superior
court erred in determining that the restrictive covenants in this case were

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Decision of the Court

unenforceable due to an earlier breach; and (5) whether the superior court
erred in its reliance on an unreported case related to patent law in finding
irreparable harm cannot be presumed.

¶10 When the underlying order from the superior court is a denial
of a preliminary injunction, this Court reviews it for an abuse of discretion.
Fann v. State, 251 Ariz. 425, 432, ¶ 15 (2021). This Court will not reverse the
superior court’s findings absent “a mistake of law” or clear error in
determining the facts to the legal standard. Shoen v. Shoen, 167 Ariz. 58, 62–
63 (App. 1990); see id.

I. The superior court did not err in denying the application for
preliminary injunction.

¶11 To obtain a preliminary injunction, a party must demonstrate
(1) “a strong likelihood of success on the merits,” (2) a “possibility of
irreparable harm if the relief is not granted,” (3) that the balance of
hardships weighs in the party’s favor and (4) that public policy “favors
granting the injunctive relief.” Fann, 251 Ariz. at 432, ¶ 16. Because
irreparable harm is dispositive, this Court addresses it first. Id.

¶12 The Agreement provides:

Equitable Remedies. Each of the Parties hereto acknowledges
and agrees that upon any breach by the other Party of its
obligations under this Agreement, the aggrieved Party will
have no adequate remedy at law, and accordingly will be
entitled to specific performance and other appropriate
injunctive and equitable relief, in addition to any other legal
rights or remedies available.

Plaintiffs argue that given this boilerplate provision, Arizona law allowed
the superior court to presume irreparable harm. Plaintiffs also argue that a
breach of restrictive covenants can constitute irreparable harm due to the
“intangible and difficult to quantify” nature of the injury and that the court
erred by relying on Symbiont Nutrition, LLC v. BJM Feed Ingredients, LLC, 1
CA-CV 21-0218, 2022 WL 1580462, at *5, ¶ 24 (Ariz. App. May 19, 2022)
(mem. decision), which held that irreparable harm cannot be presumed.

¶13 Irreparable harm is harm not remediable by damages. See City
of Flagstaff v. Ariz. Dep’t of Admin., 255 Ariz. 7, 13, ¶ 18 (App. 2023) (quoting
Shoen, 167 Ariz. at 63) (“Injunctive relief is available only when the injury is
not remediable by damages.”) (cleaned up). Whether damages serve as an
adequate remedy is determined by the complexity of “proving damages

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Decision of the Court

with reasonable certainty.” IB Prop. Holdings, LLC v. Rancho Del Mar.
Apartments Ltd. P’Ship, 228 Ariz. 61, 65, ¶ 10 (App. 2011) (citation omitted).
If damages cannot be proven with reasonable certainty, the harm may be
irreparable. See id. A request for a preliminary injunction requires a
showing of irreparable harm, not a presumption. Fann, 251 Ariz. at 432, ¶
16.

¶14 Here, the court found that “Arizona law . . . does not presume
irreparable harm[] to determine whether to issue injunctive relief.” In
making that finding, it cited Symbiont, an unpublished case that addressed
an injunction in a patent-infringement case. Symbiont, 2022 WL 1580462, at
*5, ¶ 24. In that case, this Court discussed the difference between the federal
standard and Arizona’s standard in presuming irreparable harm. Id. The
Symbiont court reaffirmed Fann’s holding that irreparable harm is not
presumed in Arizona. Id. The court’s citation of Symbiont as persuasive
authority was not error. Instead, the court found that Plaintiffs relied on
contractual recitations of irreparable harm rather than proving a “risk of
actual harm.” A court cannot presume irreparable harm based on
boilerplate language in the contract.

¶15 Plaintiffs next contend “uncontroverted evidence of
irreparable harm” exists. Plaintiffs’ evidence includes (1) that “OP would
lose business and OP would suffer a significant administrative burden”; (2)
that Nichols chose a practice within the Designated Territory; and (3) that
“OP will lose (and likely has already lost) business and with it, goodwill.”
But the evidence Plaintiffs presented at the hearing does not support their
claim of irreparable harm.

¶16 Frost testified that Frost Ortho had recently hired a
replacement for Nichols. Additionally, Frost explained that he held no
patent or trademark for his “Frost Smile” technique and lectured other
dentists about how to do it. As a result, other dentists would be able to
provide those services under their own branding, negating his claims about
competition and loss of business. Frost’s testimony indicated a lack of
secrecy in his methods, further negating his allegations of disclosure of
trade secret information. Finally, there was no evidence establishing that
Nichols solicited employees or clients. Consequently, Plaintiffs did not
provide substantial evidence to support irreparable harm. See ArborCraft
LLC v. Ariz. Urban Arborist, No. 1 CA-CV 23-0384, 2024 WL 6439844, at *5,
¶ 29 (Ariz. App. Oct. 3, 2023) (mem. decision) (plaintiff provided substantial
evidence of irreparable injury when it presented that its proprietary
customer list was central to its business and that disclosure had already
caused customer loss). With this evidence, the court found that the vague

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Decision of the Court

testimony Frost provided regarding financial hardship, “if it were proven,
would be remediable by money damages” and thus were not irreparable.
See IB Prop. Holdings, LLC, 228 Ariz. at 65, ¶ 10.

¶17 Despite Plaintiffs’ disagreement with the superior court’s
assessment, this Court does “not reweigh the evidence or reassess
credibility issues.” Williams v. King, 248 Ariz. 311, 317, ¶ 26 (App. 2020), as
amended (Jan. 29, 2020). This Court discerns no error in the superior court
finding a lack of irreparable harm.

¶18 Because Plaintiffs’ showing of irreparable harm is dispositive,
this Court need not address whether Plaintiffs are likely to succeed on the
merits. The record supports the court’s findings and denial of the
preliminary injunction.

II. Attorneys’ fees.

¶19 Nichols requests his attorneys’ fees and costs on appeal under
Arizona Rule of Civil Appellate Procedure 21 and A.R.S. § 12-341.01. As the
prevailing party on appeal and because this action arises out of a contract,
Nichols is awarded his attorneys’ fees and costs. See Ariz. R. Civ. App. P.
21, A.R.S. § 12-341.01.

CONCLUSION

¶20 This Court affirms.

MATTHEW J. MARTIN • Clerk of the Court
FILED: JR

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