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Community Medical Center of Western Illinois Inc. v. Alliance Imaging Inc.

June 6, 2008

COMMUNITY MEDICAL CENTER OF WESTERN ILLINOIS INC., PLAINTIFF
v.
ALLIANCE IMAGING INC., DEFENDANT
ALLIANCE IMAGING, INC., COUNTER-PLAINTIFF
v.
OSF HEALTHCARE SYSTEM, COUNTER-DEFENDANT



The opinion of the court was delivered by: John A. Gorman United States Magistrate Judge

ORDER

The parties have consented to have this case heard to judgment by a United States Magistrate Judge pursuant to 28 U.S.C. § 636(c), and the District Judge has referred the case to me. Now before the Court are the Defendant's Motion for Partial Summary Judgment (Doc. #16) and the Plaintiff's Cross Motion for Summary Judgment (Doc. #23). The motions are fully briefed and I have carefully considered the arguments and evidence of the parties. For the following reasons, the Defendant's motion is granted and the Plaintiff's motion is denied.

JURISDICTION

This case was filed in Warren County, Illinois, on May 3, 2007. It was removed by Defendant to this Court on June 12, 2007, on the basis of diversity jurisdiction pursuant to 28 U.S.C. § 1446.

Plaintiff Community Medical Center of Western Illinois, Inc., is a corporation under the laws of Illinois with its principal place of business and its headquarters in Monmouth, Illinois. Defendant Alliance Imaging, Inc., is a corporation under the laws of Delaware with its headquarters and principal place of business in Anaheim, California. The amount in controversy in the dispute between the two corporations exceeds $75,000.

Because this is a civil action between citizens of different states and the amount in controversy exceeds $75,000, exclusive of interest and costs, this Court has original jurisdiction over the subject matter of this case pursuant to 28 U.S.C. § 1332(a)(1).

The existence of diversity jurisdiction is not affected by the fact that Defendant Alliance Imaging has brought a third party action against OSF Healthcare System, which is not diverse from Plaintiff. "[A] third party's lack of diversity [will not] destroy federal subject matter jurisdiction for purposes of removal if it otherwise exists on the basis of the citizenship of or the claims between the original parties." 14B Charles Alan Wright, Arthur R. Miller, Edward H,. Cooper & Joan E. Steinman, Federal Practice & Procedure § 3723 (3d ed. 1998 & 2007 Supp.)(collecting cases). See, Caterpillar Inc. v. Lewis, 519 U.S. 61, 67 n.1 (1996), citing Wichita RR & Light Co. v. Public Util. Comm'n of Kansas, 260 U.S. 48, 54 (1922); Navarro Sav. Ass'n v. Lee, 446 U.S. 458, 462 (1980); Evra Corp. v Swiss Bank Corp.,673 F.2d 951, 959-60 (7th Cir. 1982).

UNDISPUTED FACTS

The following statement of facts are taken from the parties' statements of undisputed facts, the responses and replies thereto, and the evidence submitted in support.

Community Medical Center of Western Illinois, Inc. ("CMC") operates a hospital in Monmouth, Warren County, Illinois. Alliance Imaging is a provider of diagnostic medical imaging services such as Magnetic Resonance Imaging (MRI).

The two parties entered into an MRI services Agreement ("Agreement"), drafted by Alliance, in April of 2001. The Agreement includes a provision entitled "Exclusivity", which states that CMC "agrees to use Alliance solely for all of its mobile MRI needs." The Agreement was explicitly integrated in § 7.6, and requires any modification to be in writing. In § 7.7, the parties agreed that the Agreement was binding on the parties and their successors and assigns.

The Agreement defines the length of its term in Schedule A, appended to the Agreement. Paragraph 4 of Schedule A provides that the term of the Agreement is 48 months, beginning on the date on which services begin; a space for designating the "expected" beginning date was left blank, but the parties agree that services began on May 11, 2001. Hence, the original term of the Agreement would terminate on May 11, 2005. Paragraph 4 concludes by setting out the procedure for renewal and termination of the Agreement, as follows:

After each term, this Agreement will automatically renew for successive terms unless either party notifies the other to the contrary in writing at least 180 days prior to the scheduled expiration. In the event this Agreement terminates and [CMC] continues to accept service, the terms and conditions of this Agreement shall apply to the provision of services.

In late January 2004, the parties began negotiations to amend the Agreement. The negotiations resulted in Addendum A ("Addendum"), which revised the Agreement in three ways. The first change relates to scheduling; the Addendum provides that "Schedule A, Item 3, Scheduling, the first sentence, is changed to read..." The second change relates to the days of service; the Addendum states "Schedule A, Item 3.a. Additional Day of ...


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