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03/27/97 JOHN P. HOLDEN v. ROCKFORD MEMORIAL

March 27, 1997

JOHN P. HOLDEN, PLAINTIFF AND COUNTER-DEFENDANT-APPELLEE,
v.
ROCKFORD MEMORIAL HOSPITAL, DEFENDANT AND COUNTER-PLAINTIFF-APPELLANT.



Appeal from the Circuit Court of Winnebago County. No. 96--MR--46. Honorable Gerald F. Grubb, Judge, Presiding.

Released for Publication May 2, 1997.

The Honorable Justice Colwell delivered the opinion of the court. Geiger, P.j., and Thomas, J., concur.

The opinion of the court was delivered by: Colwell

JUSTICE COLWELL delivered the opinion of the court:

Defendant and counterplaintiff, Rockford Memorial Hospital, appeals from the trial court's order granting summary judgment. The trial court determined as a matter of law that an employment agreement between the hospital and plaintiff and counterdefendant, Dr. John Holden, was unenforceable because under the corporate practice of medicine doctrine hospitals are prohibited from employing physicians. On appeal, the hospital contends the corporate practice of medicine doctrine does not apply to hospitals and that the employment of physicians by hospitals is not against public policy. We affirm.

Dr. Holden and Rockford Memorial Hospital (hospital) entered into an employment agreement on May 28, 1993. Under the agreement, Dr. Holden was an "employee of the hospital" and was to "provide reproductive endocrinology services" in that department. Further, pursuant to the agreement, Dr. Holden was to "devote all professional practice time to or on behalf of and at the direction" of the hospital. The agreement stated also:

"In the event this Employment Agreement is terminated for any reason (or expires), whether during or at the conclusion of the term of this Agreement, the Physician shall, for a period of two years after the termination or expiration date, be barred from practicing reproductive endocrinology in the following counties of the Hospital's service area: in Wisconsin, Rock County; and in Illinois, Winnebago, Boone, Ogle, Whiteside, Lee, DeKalb, McHenry, Stephenson, and Kane."

On October 26, 1995, Dr. Holden submitted his resignation. He remained as an employee of the hospital through February 28, 1996. On March 4, 1996, Dr. Holden filed a complaint for declaratory judgment and injunctive relief seeking a declaration that his employment agreement with the hospital was void and unenforceable as a matter of law. The hospital filed a counterclaim for injunctive relief against Dr. Holden and damages from his breach of the employment agreement.

Dr. Holden then filed a motion for summary judgment. The hospital filed a cross-motion for summary judgment. After reviewing the evidence and hearing oral arguments, the trial court granted Dr. Holden's motion. Specifically, the trial court stated that it was bound, as a matter of law, to follow the fourth district's ruling in Berlin v. Sarah Bush Lincoln Health Center, 279 Ill. App. 3d 447, 215 Ill. Dec. 940, 664 N.E.2d 337 (1996), in reaching its decision.

In Berlin, the fourth district was presented with the same issue that is before this court. In Berlin, a physician filed a complaint for declaratory judgment seeking to have his employment agreement with a health center declared unenforceable. As is true in the instant case, the health center was a not-for-profit medical provider. See Berlin, 279 Ill. App. 3d at 452. The physician in Berlin stated that the agreement was void because by employing physicians the health center was violating the corporate practice of medicine doctrine. The Berlin court agreed with the physician and upheld the trial court's order granting summary judgment. Berlin, 279 Ill. App. 3d at 459.

On appeal, the hospital contends that the Berlin case was wrongly decided because the corporate practice of medicine doctrine does not apply to licensed hospitals. Further, the hospital argues that there is no public policy that prohibits licensed hospitals from employing physicians.

Summary judgment is appropriate only when the pleadings, depositions, and admissions on file, together with affidavits, if any, disclose that there is no genuine issue as to any material fact and the moving party is entitled to judgment as a matter of law. Bolingbrook Equity I Limited Partnership v. Zayre of Illinois, Inc., 252 Ill. App. 3d 753, 764, 191 Ill. Dec. 909, 624 N.E.2d 1287 (1993). Summary judgment is a drastic measure and should be granted only if the movant's right to judgment is clear and free from doubt. Outboard Marine Corp. v. Liberty Mutual Insurance Co., 154 Ill. 2d 90, 102, 180 Ill. Dec. 691, 607 N.E.2d 1204 (1992). Therefore, where a reasonable person can draw divergent inferences from undisputed facts, summary judgment should be denied. Outboard, 154 Ill. 2d at 102. Finally, our review of the trial court's entry of summary judgment is de novo. Monticello Insurance Co. v. Wil-Freds Construction, Inc., 277 Ill. App. 3d 697, 701, 214 Ill. Dec. 597, 661 N.E.2d 451 (1996).

First, we note that the trial court was bound to follow the Berlin decision as neither this court nor the supreme court has ever addressed the issue of whether a not-for-profit hospital may employ physicians without violating the corporate practice doctrine. See Glasco Electric Co. v. Department of Revenue, 87 Ill. App. 3d 1070, 1071, 409 N.E.2d 511, 42 Ill. Dec. 896 (1980), aff'd, 86 Ill. 2d 346, 427 N.E.2d 90, 56 Ill. Dec. 10 (1981). The Berlin decision, however, is not binding upon this court because it is a decision by a court of coordinate jurisdiction. See People v. Spahr, 56 Ill. App. 3d 434, 438, 14 Ill. Dec. 208, 371 N.E.2d 1261 (1978). Therefore, although we acknowledge the Berlin court's decision and its analysis, we are not obligated to follow that court's ruling or its reasoning.

The hospital's primary contention is that the corporate practice of medicine doctrine does not apply to not-for-profit hospitals. To support this argument, the hospital claims that the Illinois Supreme Court, the Illinois appellate court, and the Illinois legislature have all recognized that hospitals employ physicians. In essence, the hospital argues that, by recognizing that hospitals employ physicians, the courts and ...


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