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Osler Inst., Inc. v. Miller

Court of Appeals of Illinois, First District, Fifth Division

January 9, 2015

OSLER INSTITUTE, INC., Plaintiff-Appelant,
v.
RICHARD C. MILLER, Defendant-Appellee, Constance Stanley, Deborah McIntosh, Thomas Jeffers, and Nighthawk Medical Educators, Ltd., Defendants

As Corrected.

Appeal from the Circuit Court of Cook County. No. 05 CH 11260. Honorable Richard J. Billik, Jr., Judge Presiding.

SYLLABUS

In an action arising from a consent decree entered for plaintiff based on plaintiff's numerous claims, including breach of fiduciary duty and duty of loyalty, misappropriation of trade secrets, and breach of contract, when defendant and others, while employed by plaintiff's nonprofit corporation, established a competing business that provided similar services with materials misappropriated from plaintiff's business, the trial court properly dismissed plaintiff's complaint on the ground of laches, where plaintiff was not diligent in filing suit and the delay prejudiced defendant.

For Plaintiff-Appellant: Steven L. Blakely, Nicolas J. Boileu, Acton & Snyder, LLP, Danville; James G. Bonebrake, Friedman & Bonebrake, P.C., Chicago.

For Defendant-Appellee: Troy S. Radunsky, Jason E. DeVore, DeVore Radunsky LLC, Chicago.

JUSTICE McBRIDE delivered the judgment of the court, with opinion. Justice Gordon and Justice Reyes concurred in the judgment and opinion.

OPINION

Page 1273

McBRIDE, JUSTICE.

[¶1] Plaintiff Osler Institute, Inc., appeals from the circuit court's granting of defendant Richard Miller's motion to dismiss Osler's complaint pursuant to section 2-619(a)(9) of the Code of Civil Procedure (Code) (735 ILCS 5/2-619(a)(9) (West 2012)) and the circuit court's denial of Osler's motion to strike an affidavit. On appeal, Osler argues that: (1) the circuit court erred by granting Miller's section 2-619(a)(9) motion to dismiss on the basis of laches ; and (2) the circuit court erred by denying Osler's motion to strike Miller's affidavit in support of his section 2-619(a)(9) motion to dismiss. We affirm.

[¶2] In July 2005, Osler filed suit in Cook County against: defendant Richard Miller; Constance Stanley, Deborah McIntosh, and Thomas Jeffers, who are not parties to this appeal; and Nighthawk Medical Educators, Ltd., which is not a party to this appeal, in case No. 05 CH 11260 (2005 action). According to the complaint, Osler is a " non-profit corporation engaged in medical education" with a principal place

Page 1274

of business in Terre Haute, Indiana. It offers " specialty review courses to help physicians *** prepare for their board exams." Osler alleged that, in April 2005, Miller and Jeffers incorporated Nighthawk and then, along with Stanley and McIntosh, did business as principals of Nighthawk while still employed by Osler using Osler's resources to do so. As a result, Osler alleged causes of actions including a breach of fiduciary duty and duty of loyalty, misappropriation of trade secrets, breach of contract, tortious interference with Osler's business relations and prospective economic advantage, tortious interference with Osler's contractual relations, tortious interference with fiduciary duty and duty of loyalty, and civil conspiracy.

[¶3] On September 14, 2005, the circuit court entered a consent decree between Osler and Miller, Stanley, McIntosh, and Nighthawk. The consent decree barred Miller, Stanley, McIntosh, and Nighthawk from: competing with Osler; soliciting, contacting, or contracting with any employee of Osler; and acquiring, utilizing or disclosing, directly or indirectly, Osler's trade secrets or confidential information obtained while Miller, Stanley, and McIntosh were employed by Osler. The consent decree also provided:

" 1. The Court has jurisdiction over the subject matter herein and has personal jurisdiction over all parties to this action pursuant to 765 ILCS § 1065/1 et seq. and 735 ILCS § 5/2-209(a)(1), (a)(2), (a)(7), (a)(11) and/or (b).
2. Venue is proper in this Circuit pursuant to 735 ILCS § 5/2-101.
3. The term of this Consent Decree is 36 months from the date of entry.
4. The geographic scope of this Consent Decree is the United States of America.
* * *
16. This Court retains jurisdiction of this action for the purpose of enforcing or modifying this Consent Decree and for the purpose of granting such additional relief as may be necessary or appropriate."

[¶4] On May 8, 2006, Osler gave notice that it would present a verified petition for rule to show cause before the circuit court. The attached petition alleged that Miller had violated the consent decree by serving as a faculty member for one of Osler's competitors, MD Exam Prep, and by unlawfully disclosing Osler's confidential information and proprietary trade secrets to MD Exam Prep. Specifically, Osler alleged that MD Exam Prep was offering the same course as Osler, " Radiation Oncology," in the same city as Osler, Louisville, Kentucky, with the same faculty as Osler, on almost exactly the same days as Osler.

[¶5] On May 26, 2006, Osler filed a fee petition based on the violation alleged in its verified petition for rule to show cause. The fee petition alleged that Osler learned of Miller's violation of the consent decree the week of May 1, 2006. The fee petition also totaled the attorney fees and costs incurred as a result of the violation. The petition stated that, " [c]onsistent with the Consent Decree, Osler reserves the right to seek additional attorneys' fees and other expenses and costs incurred in connection with enforcing the degree for its remaining term, or until September 14, 2008."

[¶6] In August 2006, the circuit court entered an order that Miller was to pay Osler a total of $13,379.35, the final payment being due on September 21, 2006. The order also stated that the court retained jurisdiction to enforce the terms of the 2005 consent decree.

[¶7] On September 26, 2008, 12 days after the 2005 consent decree ...


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