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03/10/89 George Szczerbaniuk, v. Memorial Hospital For

March 10, 1989





536 N.E.2d 138, 180 Ill. App. 3d 706, 129 Ill. Dec. 454 1989.IL.310

Appeal from the Circuit Court of McHenry County; the Hon. James C. Franz, Judge, presiding.


JUSTICE REINHARD delivered the opinion of the court. NASH and DUNN, JJ., concur.


Plaintiff, George Szczerbaniuk, M.D., appeals from orders of the circuit court of McHenry County dismissing count II of his complaint and granting summary judgment on count I in favor of defendants, Memorial Hospital for McHenry County (Memorial) and Philip Dionne.

The following issues are raised on appeal: (1) whether section 10.2 of the Hospital Licensing Act (Ill. Rev. Stat. 1987, ch. 111 1/2, par. 151.2) precludes an action for civil damages against defendants; (2) whether defendants were precluded by the doctrine of judicial estoppel from asserting section 10.2 as a defense; and (3) whether the circuit court erred in dismissing count II of plaintiff's complaint, alleging breach of Memorial's bylaws.

The pleadings and excerpts of deposition testimony included in the record on appeal establish the following pertinent facts. Plaintiff is a physician licensed to practice in Illinois. Memorial is a municipal hospital corporation organized and licensed under Illinois law. On December 1, 1986, plaintiff and Memorial executed a written contract entitled "Radiology Service Agreement." This three-year agreement provided, in pertinent part, that plaintiff, functioning as an independent contractor in the practice of radiology, would discharge the duties of radiology service director at Memorial. According to the agreement, Memorial would furnish and maintain space, equipment, supplies, and staffing necessary to the operation of the radiology service. The agreement further provided that plaintiff was to be the exclusive provider of radiology services to Memorial. A termination clause provided that upon good cause shown and upon consultation with the executive committee of the board of directors of the hospital, either party shall be entitled to cancel the agreement upon 180 days' written notice to the other party. Further, this clause provided that "[membership] on the Medical Staff of the Hospital, in the event of the termination of this Agreement, shall be terminated."

Memorial has enacted bylaws which, as stated therein, form the basis of the medical staff's accountability to the board of directors for medical care of patients in the hospital and the conduct of its organization. The bylaws of the medical staff of Memorial define the term "medical staff" as "all medical practitioners and duly licensed dentists who are privileged to attend patients in the hospital." The general procedures for discipline of staff members are outlined in article III, paragraph 7, of the bylaws, which provides that a staff member who is the subject of a complaint shall be notified in writing of the complaint and shall be entitled to hearings before a joint session of the credentials committee and executive committee of the medical staff and, if further action is necessary, before the full medical staff. The bylaws further provide that the medical staff shall forward a recommendation to the executive committee of the board of directors and that the staff member shall be entitled to appear before the executive committee, which shall thereafter recommend that the board of directors accept the recommendation of the medical staff or refer the matter back to the medical staff for further consideration.

Article III, paragraph 3B, provides that "final authority on appointments, reappointments, suspension or termination of appointments shall rest exclusively with the Board of Directors." Article III, paragraph 5C, provides that "[the] Executive Committee or Credentials Committee of the Board of Directors, or the Executive Director of the hospital, may initiate an inquiry with respect to the category, service or privileges of any member of the medical staff."

Following an investigation by defendant, Philip Dionne, chief executive officer of Memorial, of allegations of sexual harassment made by certain employees against plaintiff, Dionne informed plaintiff on August 21, 1987, that the radiology service agreement was terminated. Excerpts of deposition testimony of Mr. Baringer, a member of the executive committee of the board of directors, indicate that the executive committee may have informally authorized Dionne to respond to the charges against plaintiff as he saw fit and that the executive committee concurred in the decision to discharge plaintiff. The complaints were not referred at any time to any of the committees of the medical staff.

On September 3, 1987, plaintiff filed suit against defendants and Alfonso de la Morena. De la Morena was later voluntarily dismissed from the case. Count I of plaintiff's complaint alleged breach of contract and count II alleged breach of Memorial's bylaws. Both counts sought injunctive relief and damages. Defendants successfully moved to dismiss all claims for equitable relief and to dismiss count II of plaintiff's complaint, which alleged breach of bylaws. Thereafter, defendants successfully moved for summary judgment on the breach of contract count, arguing that section 10.2 of the Hospital Licensing Act precluded an action for civil damages against them.

Plaintiff first contends that the circuit court erred in granting summary judgment to defendants on his breach of contract count. Plaintiff advances several arguments in support of the proposition that section 10.2 does not confer immunity upon defendants. Plaintiff contends that the process leading to his termination, because violative of due process, vitiates the immunity provided under section 10.2, that section 10.2 cannot be applied to defeat what he characterizes as a "vested right" to 180 days' written notice prior to termination pursuant to his contract with Memorial, and that staffing decisions based on allegations of sexual harassment of employees are not related to protecting patient care and are not within the purview of section 10.2. Plaintiff also argues that section 10.2 only confers immunity from liability arising from the acts of ...

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