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11/27/96 ANIL K. BIDANI v. EDMUND J. LEWIS

November 27, 1996

ANIL K. BIDANI, M.D., PLAINTIFF-APPELLANT,
v.
EDMUND J. LEWIS, M.D., INDIVIDUALLY, EDMUND J. LEWIS & ASSOCIATES, S.C., RENAL CONSULTANTS, LIMITED, AMERICAN MEDICAL SUPPLY CORPORATION AND CIRCLE MEDICAL MANAGEMENT, INC., DEFENDANTS-APPELLEES.



Appeal from the Circuit Court of Cook County. No. 91--L--11514. Honorable Arthur Sullivan, Judge Presiding.

Released for Publication January 15, 1997.

The Honorable Justice Cerda delivered the opinion of the court: Tully, P.j., and Gallagher, J., concur.

The opinion of the court was delivered by: Cerda

JUSTICE CERDA delivered the opinion of the court:

On July 22, 1991, plaintiff, Dr. Anil K. Bidani (Dr. Bidani), filed a complaint for breach of contract and constructive trust against defendants, Dr. Edmund J. Lewis (Dr. Lewis), Edmund J. Lewis and Associates, S.C. (Lewis and Associates), Renal Consultants, Limited (Renal), American Medical Supply Corporation (AMS), and Circle Medical Management, Inc. (Circle). Dr. Bidani claimed ownership and profit interests in Renal, AMS, and Circle as a result of alleged oral agreements he made with Dr. Lewis. Because Dr. Bidani had disavowed any interest in those companies in his previous divorce action, the trial court applied the doctrine of judicial estoppel and entered summary judgment in favor of defendants.

On appeal, Dr. Bidani asserts that (1) the doctrine of judicial estoppel was improperly invoked; and (2) the trial court erred in denying him leave to file a second amended complaint. We affirm.

The issue in this case is whether judicial estoppel should be applied where the same party testified that he held no interest in businesses in a prior lawsuit and now claims in this suit that he does have an interest in the same businesses.

In his first amended complaint, Dr. Bidani alleged as follows. He had been employed by Lewis and Associates to perform medical duties as a nephrologist at Rush-Presbyterian-St. Luke's Medical Center (Rush) from October 1979 through August 1990. In 1981, Dr. Bidani, Dr. Lewis, and two other Rush nephrologists made an oral agreement to propose to Rush that its dialysis services be transferred to an off-site private facility (the dialysis enterprise), which would be owned and operated by the four doctors. The dialysis enterprise would consist of two components: (1) free standing dialysis machines (dialysis machine unit) and (2) medical supplies for home dialysis patients (medical supply unit). To amass the necessary funds for the dialysis enterprise, the four doctors agreed to provide professional services at the Chicago Kidney Center, a private medical center that was independent from Rush. The professional fees earned at the Chicago Kidney Center would be held by Dialysis Services, Ltd. (Dialysis Services) until enough money was accumulated to establish the dialysis enterprise. The fees went to Dialysis Systems from 1979 through 1981, then to Renal Consultants, Limited. Dr. Bidani received over $100,000 from Renal through 1988.

When implementation of the dialysis enterprise was deferred indefinitely in 1983, Dialysis Services was liquidated and Dr. Bidani received $37,674 as his share of the distribution. The other two doctors ended their relationship with Dr. Lewis, but Dr. Bidani and Dr. Lewis orally agreed to continue their 1981 agreement.

The dialysis enterprise's medical supply unit was activated in 1983 through AMS (American Medical Supply Corp.), which bought medical supplies directly from medical suppliers and distributed them to the dialysis enterprise's home dialysis patients. Dr. Bidani received $72,120 from AMS from 1983 through 1986. In 1988, Rush transferred its 10 freestanding dialysis units to Circle, which allegedly received $150,000 from the dialysis enterprise's medical supply unit. In August 1989, Dr. Bidani discovered that the profits of Renal, AMS, and Circle had exceeded $6 million from 1982 through 1990.

Based on those allegations, Dr. Bidani claimed that he was entitled to an equal ownership interest in Circle and an equal profit share of Renal, AMS, and Circle. He alleged that Dr. Lewis breached his oral contract with Dr. Bidani and illegally converted the assets he held in constructive trust for Dr. Bidani.

Defendants filed a motion for summary judgment on the basis that Dr. Bidani was judicially estopped from proceeding with this action because his position was inconsistent with his sworn testimony in his 1986 dissolution of marriage action against his ex-wife, Dr. Nalini Bidani.

In 1986, Dr. Anil Bidani filed a dissolution of marriage action against his wife. In his sworn interrogatory answers, he claimed that the only interest he held in any closely held corporation, partnership, joint venture, or sole proprietorship was in an unrelated real estate partnership. In his deposition, he testified that he received performance bonuses from Renal and AMS from 1983 through 1986, was a Renal employee, received W-2 forms to support his payments from Renal, had no contract with either Renal or AMS, had never been a shareholder of any medical corporation, and his salary was not affected by the receipts of Lewis and Associates, Renal, or AMS. When asked to explain his prior interest in Dialysis Services, Dr. Bidani stated that he joined that group when he was making rounds at the Chicago Kidney Center, but received his shares and subsequent distribution only when Dialysis Services was liquidated. Later at the court hearing, Dr. Bidani disavowed any present or future interest in Renal, AMS, Circle, or any future medical practice or medical supply corporation. In addition, he testified that no one was holding any property of value as a trustee or nominee for him.

Dr. Lewis testified in a deposition in Dr. Bidani's divorce action that Dr. Bidani had no interest in Renal or AMS, but was periodically reimbursed by both companies for his consultant services at the Chicago Kidney Center, which averaged two hours a week. Dr. Lewis had discretion in the amount he gave Dr. Bidani for his services. There was no regular reimbursement, no fixed amount of reimbursement, and no agreement between Drs. Lewis and Bidani concerning the ...


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