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03/29/94 DANVILLE POLYCLINIC v. DANIEL DETHMERS

March 29, 1994

DANVILLE POLYCLINIC, LTD., PLAINTIFF-APPELLANT,
v.
DANIEL DETHMERS, M.D., DEFENDANT-APPELLEE.



Appeal from Circuit Court of Vermilion County. No. 93CH49. Honorable John P. O'Rourke, Judge Presiding.

Petition for Rehearing Denied May 5, 1994.

Honorable Frederick S. Green, J., Honorable Robert W. Cook, J., Concurring, Honorable Carl A. Lund, J., Specially Concurring

The opinion of the court was delivered by: Green

JUSTICE GREEN delivered the opinion of the court:

On August 19, 1993, plaintiff Danville Polyclinic, Ltd. (Polyclinic), filed a complaint in the circuit court of Vermilion County against defendant Daniel Dethmers, M.D., seeking injunctive relief and damages. The four-count complaint alleged that (1) Polyclinic is a comprehensive medical services corporation; (2) on or about December 16, 1991, it entered into a contract with Dethmers agreeing to furnish him an office and certain services and he agreed to abide by Polyclinic bylaws and regulations and to practice medicine as an employee of Polyclinic; (3) Dethmers violated Polyclinic bylaws and regulations and was discharged; and (4) Dethmers then continued to practice medicine in the Danville area in violation of a restrictive covenant in the aforesaid agreement between the parties.

After an evidentiary hearing, the court entered an order on September 1, 1993, denying Polyclinic's request to preliminarily enjoin Dethmers from practicing medicine within 50 miles of Danville. Polyclinic has appealed. (134 Ill. 2d R. 307(a)(1).) It maintains that the court erred (1) in finding that none of the factors necessary for a preliminary injunction were shown; (2) in admitting improper evidence; and (3) in considering improper matters. It asserts that the denial of relief was a breach of discretion by the court. We disagree and affirm.

Two aspects of this case are very significant to our decision. One is that substantial discretion is granted to trial courts in deciding whether to grant a temporary injunction. ( Lonergan v. Crucible Steel Co. (1967), 37 Ill. 2d 599, 612, 229 N.E.2d 536, 542; Ron Smith Trucking, Inc. v. Jackson (1990), 196 Ill. App. 3d 59, 63, 552 N.E.2d 1271, 1275, 142 Ill. Dec. 530.) This court has applied that rule in affirming the denial of a preliminary injunction sought, as here, to enforce a restrictive covenant in a contract of employment. (See Lee/O'Keefe Insurance Agency, Inc. v. Ferega (1987), 163 Ill. App. 3d 997, 1003, 516 N.E.2d 1313, 1317, 114 Ill. Dec. 919.) The other aspect of the case is the unusual nature of the agreement between the parties. It was such that the physicians have great independence from Polyclinic. In addition, the purpose of the restrictive covenant contained in the agreement was not to enable Polyclinic to retain patients who were seeing Dethmers, but to keep him with Polyclinic and a related partnership, which was holding title to property, so that he would participate in the financing of a new building.

The facts concerning the contract between the parties were mostly undisputed. Polyclinic was incorporated in 1973 for the purpose of practicing medicine and "all services ancillary thereto." Middlefork partners (Middlefork) was a partnership consisting of most Polyclinic physicians. Its purpose was to hold title to real estate used by Polyclinic. In 1988, Polyclinic recruited Dethmers to serve as an orthopedic surgeon. He had not previously practiced in the area. Polyclinic guaranteed his salary for the first year and his moving expenses. United Samaritan Medical Center (USMC), which operated a hospital nearby, agreed to reimburse Polyclinic for those payments. After the end of the year, Dethmers became an employee on a salary. At times pertinent here, Dethmers' relationship to Polyclinic was determined by a "Participating Physician Agreement for Services" (Agreement) referred to in the complaint as being entered into in December 1991 but not actually signed by Dethmers until January 1992.

This dispute arises from a noncompetition provision of the Agreement, which states as follows:

"In the event that employee of the Polyclinic cease[d] employment or affiliation with the Polyclinic, then, for a period of five years following such event, such person[] shall not directly or indirectly solicit any patient or in any other way compete with the Polyclinic for patients within a 50[-]mile radius of the Danville city limits."

In early 1991, the governing board of Polyclinic began plans to construct a new four-story building to house the clinic.

On April 25, 1991, a Polyclinic shareholders meeting was held, and agreement was reached to send a letter to each shareholder requiring each shareholder to sign a restrictive covenant which stated that "if a physician wishes to leave the Polyclinic but remain in the Danville Polyclinic treatment area to be defined as 50 miles in any direction with the exception of Champaign/Urbana, there will be a penalty of $50,000 per year for five years." Dethmers signed that covenant.

In September 1992, Middlefork acquired land at 707 N. Logan Avenue in Danville, which is where the new building was to be located. In January 1993, Middlefork entered into a construction contract for the design and construction of the new building. The execution of this contract, which called for payment of $5,632,996 for the completion of the building, prompted Polyclinic to take further action to secure from its physicians a promise to pay for the new building. On July 8, 1993, another memorandum was sent to all the physicians requesting that each sign another statement of intent. Defendant was among four physicians who did not execute and return this statement of intent.

On July 27, 1993, the Polyclinic board of directors met and ordered that every physician, except those working at a satellite, must relocate to the new building upon its completion or face termination. Dethmers continued to refuse to comply with Polyclinic's requests. In July or August 1993, Polyclinic sent another letter to Dethmers requesting him to sign a letter of intent to pay one twenty-sixth of the operating expenses of the new building for an extended period. Defendant refused. ...


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