Excel Pharmacy ("Excel") terminated Ortiz, its pharmacist, effective 1/31/2018. She had, in relevant part, a 2 year noncompete (ending 1/31/2020).
In August of 2018, Excel filed a verified complaint and order to show cause claiming she violated the noncompete by working with its new rival pharmacy Heath Smart located less than a mile away. Ortiz denied this and filed a breach of contract counterclaims for $100,000 to $200,000, representing the value of withheld profit-sharing and the value of a withheld ownership share.
8/27/2018, the parties settled on the record with no money changing hands, but the parties agreeing to a modified noncompete for Ortiz ending 5/1/2019.
In April of 2019 (when the settlement noncompete was about to expire), Excel filed a new order to show cause seeking to void the settlement agreement based on Ortiz's 2018 fraudulent behavior procuring the settlement agreement. Its evidence was a bunch of 2018 documents predating the settlement that it belatedly had discovered.
Ortiz filed a certification providing her own explanation for the documents.
The court, and Appellate Division, declined to void the settlement agreement. Essentially, the Appellate Division stated that Excel couldn't prove fraud by clear and convincing evidence because it couldn't show it relied on her representation that she hadn't violated the noncompete when it settled.
This is interesting because:
1. This was a clever attempt to blow up the settlement.
2. It didn't work.
3. Even though it didn't work, it may have effectively extended the noncompete for Excel (because Ortiz may not have wanted to do any activities that could be used against her if Excel won.)
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