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10/23/97 RICHARD B. BERLIN v. SARAH BUSH LINCOLN

October 23, 1997

RICHARD B. BERLIN, JR., M.D., APPELLEE,
v.
SARAH BUSH LINCOLN HEALTH CENTER, APPELLANT.



Petition for Leave to Appeal from the Circuit Court of Coles County. TRIAL JUDGE: Hon. Dale A. Cini. CASE NUMBERS: AC4-95-0569, TR96MR7.

The Honorable Justice Nickels delivered the opinion of the court. Justice Harrison, dissenting. Justice Miller joins in this dissent.

The opinion of the court was delivered by: Nickels

The Honorable Justice NICKELS delivered the opinion of the court:

Plaintiff, Richard Berlin, Jr., M.D., filed a complaint for declaratory judgment and a motion for summary judgment seeking to have a restrictive covenant contained in an employment agreement with defendant, Sara Bush Lincoln Health Center (the Health Center), declared unenforceable. The circuit court of Coles County, finding the entire employment agreement unenforceable, granted summary judgment in favor of Dr. Berlin. The circuit court reasoned that the Health Center, as a nonprofit corporation employing a physician, was practicing medicine in violation of the prohibition on the corporate practice of medicine. A divided appellate court affirmed (279 Ill. App. 3d 447, 664 N.E.2d 337, 215 Ill. Dec. 940), and this court granted the Health Center's petition for leave to appeal (155 Ill. 2d R. 315(a)).

The central issue involved in this appeal is whether the "corporate practice doctrine" prohibits corporations which are licensed hospitals from employing physicians to provide medical services. We find the doctrine inapplicable to licensed hospitals and accordingly reverse.

BACKGROUND

The facts are not in dispute. The Health Center is a nonprofit corporation duly licensed under the Hospital Licensing Act (210 ILCS 85/1 et seq. (West 1994)) to operate a hospital. In December 1992, Dr. Berlin and the Health Center entered into a written agreement whereby the Health Center employed Dr. Berlin to practice medicine for the hospital for five years. The agreement provided that Dr. Berlin could terminate the employment relationship for any reason prior to the end of the five-year term by furnishing the Health Center with 180 days advance written notice of such termination. The agreement also contained a restrictive covenant which prohibited Dr. Berlin from competing with the hospital by providing health services within a 50-mile radius of the Health Center for two years after the end of the employment agreement.

On February 4, 1994, Dr. Berlin informed the Health Center by letter that he was resigning effective February 7, 1994, and accepting employment with the Carle Clinic Association. After his resignation, Dr. Berlin immediately began working at a Carle Clinic facility located approximately one mile from the Health Center. Shortly thereafter, the Health Center sought a preliminary injunction to prohibit Dr. Berlin from practicing at the Carle Clinic based on the restrictive covenant contained in the aforesaid employment agreement.

The circuit court granted the Health Center's request and enjoined Dr. Berlin from working for any competing health care provider within a 50-mile radius of the Health Center. Subsequently, the appellate court reversed the circuit court's order granting the preliminary injunction because Dr. Berlin's trial court motion for substitution of judge had been improperly denied. The appellate court remanded the action to the circuit court for further proceedings. Sarah Bush Lincoln Health Center v. Berlin, 268 Ill. App. 3d 184, 205 Ill. Dec. 325, 643 N.E.2d 276 (1994).

Before any further action could be taken on the Health Center's request for a preliminary injunction, Dr. Berlin filed a complaint for declaratory judgment and a motion for summary judgment seeking to have the restrictive covenant declared unenforceable. The Health Center filed a cross-motion for summary judgment seeking enforcement of the restrictive covenant. The circuit court, finding the entire employment agreement unenforceable, granted Dr. Berlin's motion for summary judgment and denied the Health Center's cross-motion for summary judgment. Relying primarily on this court's decision in People ex rel. Kerner v. United Medical Service, Inc., 362 Ill. 442, 200 N.E. 157 (1936), the circuit court determined that the Health Center, by hiring Dr. Berlin to practice medicine as its employee, violated the prohibition against corporations practicing medicine. A divided appellate court affirmed. The majority agreed with the circuit court's reliance on Kerner and further determined that the Health Center did not fall under any exception to its rule. 279 Ill. App. 3d at 455. The dissent contended that any prohibition on corporations engaging in health services did not prohibit the Health Center's employment of Dr. Berlin. 279 Ill. App. 3d at 461 (McCullough, J., dissenting).

This court granted the Health Center's petition for leave to appeal. 155 Ill. 2d R. 315(a). We granted the County of Cook, the Illinois Hospital and Healthsystems Association, the Metropolitan Chicago Healthcare Council, the American Hospital Association, and OSF HealthCare System leave to file amicus curiae briefs in support of the Health Center. We granted leave to the American Medical Association, the Illinois State Medical Society, the Illinois State Dental Society, and several regional medical societies to file amicus curiae briefs in support of Dr. Berlin's position. 155 Ill. 2d R. 345.

ISSUES

We are asked to consider two issues: (1) whether the expiration of the two-year term of the restrictive covenant of the employment agreement renders this appeal moot; and (2) whether the "corporate practice doctrine," as set forth by this court in People ex rel. Kerner v. United Medical Service, Inc., 362 Ill. 442, 200 N.E. 157 (1936), prohibits licensed hospitals from employing physicians to provide medical services.

ANALYSIS

In appeals from summary judgment rulings, review is de novo. Delaney v. McDonald's Corp., 158 Ill. 2d 465, 467, 199 Ill. Dec. 696, 634 N.E.2d 749 (1994). Summary judgment is to be granted only if the pleadings, affidavits, depositions, admissions, and exhibits on file, when reviewed in the light most favorable to the nonmovant, show that there is no genuine issue as to any material fact and that the movant is entitled to judgment as a matter of law. 735 ILCS 5/2-1005(c) (West 1994); Busch v. Graphic Color Corp., 169 Ill. 2d 325, 333, 214 Ill. Dec. 831, 662 N.E.2d 397 (1996); Gilbert v. Sycamore Municipal Hospital, 156 Ill. 2d 511, 517-18, 190 Ill. Dec. 758, 622 N.E.2d 788 (1993). Summary judgment is a drastic means of disposing of litigation and therefore it must be clear that the moving party is truly entitled to such remedy. Jackson Jordan, Inc. v. Leydig, Voit & Mayer, 158 Ill. 2d 240, 249, 198 Ill. Dec. 786, 633 N.E.2d 627 (1994).

Mootness

In a motion filed November 25, 1996, Dr. Berlin contended that, because the two-year term of the restrictive covenant had concluded, there no longer remains any justiciable issue for which this court could grant relief. This motion was taken with the case.

The Health Center argues that this action is not moot because, if this court determines that the employment agreement is enforceable, it has a viable cause of action for breach of contract against Dr. Berlin. In the alternative, the Health Center urges this court to find that this case falls within the public policy exception to the mootness doctrine.

A case becomes moot where the occurrence of events since filing of the appeal make it impossible for the reviewing court to render effectual relief. Balmoral Racing Club, Inc. v. Illinois Racing Board, 151 Ill. 2d 367, 387, 177 Ill. Dec. 419, 603 N.E.2d 489 (1992). A court should not decide a case where the judgment would have only an advisory effect. People ex rel. Black v. Dukes, 96 Ill. 2d 273, 276, 70 Ill. Dec. 509, 449 N.E.2d 856 (1983). The court would have, in effect, rendered an advisory opinion where a decision on the merits cannot result in appropriate relief to the prevailing party. Balmoral Racing Club, 151 Ill. 2d at 387, citing George W. Kennedy Construction Co. v. City of Chicago, 112 Ill. 2d 70, 76, 96 Ill. Dec. 700, 491 N.E.2d 1160 (1986). Further, this court does not review cases merely to set precedent or guide future litigation. Madison Park Bank v. Zagel, 91 Ill. 2d 231, 235, 62 Ill. Dec. 950, 437 N.E.2d 638 (1982).

However, where a decision "could have a direct impact on the rights and duties of the parties" there is life in the appeal. People ex rel. Bernardi v. City of Highland Park, 121 Ill. 2d 1, 6-7, 117 Ill. Dec. 155, 520 N.E.2d 316 (1988). In addition, this court has recognized that, where a decision could have "important consequences" for the parties before the court, it is proper to entertain the appeal. Balmoral Racing Club, 151 Ill. 2d at 387. A determination in this case that hospitals are prohibited from employing physicians could mean that the Health Center must implement significant changes in its working relationships with its medical staff. See Balmoral Racing Club, 151 Ill. 2d at 387-88. Moreover, such a finding could subject both the Health Center and Dr. Berlin to disciplinary action and civil penalties for violations of the Medical Practice Act of 1987 (225 ILCS 60/1 et seq. (West 1994)). In contrast, a determination that hospitals may legally employ physicians may mean that the Health Center may have various causes of actions against Dr. Berlin based upon the contract. Therefore, we conclude that the appeal is not moot. We now consider the various contentions regarding the corporate practice of medicine doctrine.

Hospital Employment of Physicians

The Health Center and its supporting amicus curiae contend that no judicial determination exists which prohibits hospitals from employing physicians. In support of this contention, the Health Center argues that this court has acknowledged the legitimacy of such employment practices in past decisions. See, e.g., Gilbert v. Sycamore Municipal Hospital, 156 Ill. 2d 511, 190 Ill. Dec. 758, 622 N.E.2d 788 (1993); Darling v. Charleston Community Memorial Hospital, 33 Ill. 2d 326, 211 N.E.2d 253 (1965). In the alternative, the Health Center contends that if a judicial prohibition on hospital employment of physicians does exist, it should be overruled. In support ...


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