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Callen v. Akhter





APPEAL from the Circuit Court of Cook County; the Hon. SAMUEL EPSTEIN, Judge, presiding.


Rehearing denied December 5, 1978.

These consolidated appeals arise from a judgment entered by the circuit court of Cook County, Chancery Division, pursuant to an accounting, in favor of plaintiffs Irwin R. Callen M.D. and Northern Cardiac Associates, Ltd., and against defendant Iqbal Akhter, M.D. Subsequent to the entry of the judgment Akhter filed a petition to set aside the judgment pursuant to section 72 of the Illinois Civil Practice Act. (Ill. Rev. Stat. 1975, ch. 110, par. 72.) This petition was dismissed. He appeals from the entry of the judgment and the dismissal of his section 72 petition.

Plaintiff, Irwin Callen, is a physician licensed to practice medicine in the state of Illinois. Callen was the sole owner of a medical practice located at 5701 North Ashland Avenue, Chicago, Illinois. Callen specialized in cardiac illness and had acquired a substantial practice and hospital affiliation over a 25-year period (1947-1972).

Subsequently, Callen became unable to actively participate in his practice due to failing health. Accordingly, he desired to enter into an agreement with another physician regarding the continued operation of his medical practice.

Iqbal Akhter was a physician then practicing in the State of Wisconsin. Akhter was agreeable to operating Callen's practice and on November 15, 1973, both physicians entered into a written agreement pursuant to which a medical corporation, Northern Cardiac Associated, Ltd., was formed. Akhter became a 50-percent shareholder and was elected president, treasurer and a director of the corporation.

Under the terms of the agreement Akhter was to remain in the employ of the corporation for a period of three years ending November 30, 1976. Akhter agreed to devote "full time" as an employee of the corporation and include in the corporation's earnings all of Akhter's earnings and billings, including consultation fees, salaries from hospitals and teaching fees for the same three-year period. Akhter further agreed that upon the termination of his employment he would not treat any of the corporation's patients for a period of 18 months if the patients were found to reside within a 20-mile radius of the Ashland Avenue corporate office.

Callen loaned $20,000 to the corporation for its working capital and transferred to the corporation all of the assets of his former practice. Included in the assets was a list of patients.

On July 29, 1975, Callen brought suit for an accounting and other relief. The complaint alleged that Akhter had breached the medical incorporation agreement by failing to account for certain outside earnings. The complaint further alleged that Akhter had violated his fiduciary duty to the corporation by wrongfully diverting corporate funds and confidential patient lists. The latter misappropriation allegedly violated the aforementioned restrictive covenant of the contract.

Akhter filed an answer in response to Callen's complaint. Through this answer Akhter (1) denied the existence of the contract, (2) asserted that Callen had wrongfully terminated the practice and sold its assets (for which Akhter demanded an accounting) and (3) urged that Callen be denied relief upon application of the equitable doctrine of "unclean hands."

On August 11, 1976, after a hearing on the matter, the circuit court found for Callen and against Akhter and ordered an accounting. An interlocutory decree was entered to this effect. Akhter prematurely appealed to this court from this interlocutory order and the appeal was dismissed. On December 2, 1976, a final accounting was held and the circuit court entered judgment against Akhter in the amount of $100,936 plus his accounts receivable. Akhter appealed from this judgment and then filed a section 72 petition (Ill. Rev. Stat. 1975, ch. 110, par. 72) to have the judgment set aside. The section 72 petition was based upon the alleged illegality of the medical incorporation agreement as a fee-splitting arrangement. Upon dismissal of the section 72 petition Akhter appealed. The appeals have been consolidated for our review.

Subsequent to the dismissal by this court of the aforementioned premature interlocutory appeal and prior to the return of our mandate to the circuit court of Cook County, that court, with participation of both parties, conducted a hearing relative to the award of damages. This sequence of events prompts Akhter to contend that the damage award is void due to the lack of jurisdiction in the circuit court. His claim is premised upon Illinois Supreme Court Rule 369(b) (Ill. Rev. Stat. 1975, ch. 110A, par. 369(b)) which reads as follows:

"(b) Dismissal or Affirmance. When the reviewing court dismisses the appeal or affirms the judgment and the mandate is filed in the circuit court, execution may issue and other proceedings may be conducted as if no appeal had been taken."

Rule 369(b) appears to require the filing of the mandate as a condition precedent to further circuit court proceedings subsequent to the dismissal of an appeal. There is no ...

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