Health Professionals, Ltd. v. Johnson, 3-02-0925.
Decision Date | 04 June 2003 |
Docket Number | No. 3-02-0925.,3-02-0925. |
Citation | 274 Ill.Dec. 768,791 N.E.2d 1179,339 Ill. App.3d 1021 |
Court | United States Appellate Court of Illinois |
Parties | HEALTH PROFESSIONALS, LTD., an Illinois Corporation; Stephen A. Cullinan, M.D.; and Theresa M. Falcon-Cullinan, M.D., Plaintiffs-Appellees, v. Norman JOHNSON, MD.; Brenda J. Johnson; and Advanced Correctional Healthcare, Inc., an Illinois Corporation, Defendants-Appellants. |
Robert M. Riffle (argued), John S. Elias, Janaki Nair, Elias, Meginnes, Riffle & Seghetti, P.C., Peoria, for Advanced Correctional Healthcare, Inc., Brenda J. Johnson, Norman Johnson, M.D.
Stephen D. Gay (argued), Jeffrey Alan Ryva, Husch & Eppenberger, Peoria, for Stephen A. Cullinan, M.D., Theresa M. Falcon-Cullinan, M.D., Health Professionals, Ltd.
Defendants Dr. Norman Johnson and Brenda Johnson (the Johnsons) and Advanced Correctional Healthcare, Inc. (ACH) appeal from an order of the circuit court granting a preliminary injunction prohibiting defendants from violating a noncompetition agreement. Defendants assert that the agreement violates both the Illinois Procurement Code (30 ILCS 500/1-1 et seq. (West 2000)) and the Illinois Antitrust Act (740 ILCS 10/1 et seq. (West 2000)), and that its terms are unreasonably restrictive. We affirm as modified.
Prior to April 18, 2002, plaintiff Health Professionals, Ltd. (HPL), a business providing managed healthcare services to jails and correctional facilities, was owned by plaintiffs Stephen Cullinan and Theresa Falcon-Cullinan (the Cullinans) and by the Johnsons. On that date, the Cullinans agreed to purchase all outstanding shares of HPL owned by the Johnsons. As part of the purchase agreement, contracts to provide healthcare services at certain jails and correctional facilities (the exempted facilities) were assigned by HPL to ACH. Defendant Dr. Johnson established ACH around the time of the agreement to service the exempted facilities. The exempted facilities were located in the Illinois counties of Coles, Knox, Lee, Livingston, Peoria and Woodford, as well as in Tippecanoe, Indiana and Kenosha County, Wisconsin. The parties also executed a "Noncompetition, Nondisclosure and Nonsolicitation Agreement" (the noncompetition agreement) which stated in part:
In July of 2002, a representative of ACH contacted various jails and correctional facilities in Illinois and Wisconsin, including customers of HPL, offering to provide healthcare services. In addition, Dr. Johnson spoke with Cornell Companies concerning consulting work. Plaintiff subsequently filed a complaint for damages and injunctive relief on July 26, 2002, followed by a motion for a preliminary injunction. After a two-day hearing, the trial court granted a preliminary injunction prohibiting the defendants from violating the terms of the noncompetition agreement. The evidence introduced at the preliminary injunction hearing will be presented as it becomes relevant to resolving the issues raised on appeal.
Whether the noncompetition agreement violates the Illinois Procurement Code or the Illinois Antitrust Act are questions of statutory interpretation which require neither factual determinations nor the exercise of judicial discretion. Statutory construction is a question of law subject to de novo review. Robidoux v. Oliphant, 201 Ill.2d 324, 266 Ill.Dec. 915, 775 N.E.2d 987 (2002). On the other hand, "[w]hen the appellate court reviews the issuance of a preliminary injunction, the sole issue is whether the trial court abused its discretion." Harper v. Missouri Pacific R.R. Co., 264 Ill.App.3d 238, 249, 201 Ill.Dec. 760, 636 N.E.2d 1192, 1201 (1994). The abuse of discretion standard has specifically been applied in reviewing a preliminary injunction based on a noncompetition covenant. See Central Water Works Supply, Inc. v. Fisher, 240 Ill.App.3d 952, 181 Ill.Dec. 545, 608 N.E.2d 618 (1993).
Defendants first contend that the noncompetition agreement is void and unenforceable because it violates section 50-25 of the Illinois Procurement Code (Procurement Code) which provides:
30 ILCS 500/50-25 (West 2000).
Despite plaintiffs' arguments to the contrary, we believe that, to the extent the noncompetition agreement prohibits defendants from bidding on contracts with the Illinois Department of Corrections, it violates the plain language of section 50-25. Clearly, plaintiffs paid money and gave other valuable consideration to defendants to induce them to enter into the noncompetition agreement, which by its terms prohibits defendants from bidding on Department of Corrections contracts. That the noncompetition agreement was only one part of the overall sale of defendants' interest in HPL does not alter its nature. Although plaintiffs maintain that section 50-25 should not be read literally, where the language of a statute is unambiguous, the only legitimate function of the courts is to enforce the law as enacted by the legislature. Bridgestone/Firestone, Inc., v. Aldridge, 179 Ill.2d 141, 227 Ill. Dec. 753, 688 N.E.2d 90 (1997). Plaintiffs' argument that section 50-25 should not be applied to restrictive covenants because doing so would impair the ability of business owners who have state contracts from selling their businesses is unavailing. Only businesses which depend heavily on state business would be affected, and even those would simply have to adjust their asking price. In any event, a court is not free, in the face of unequivocal statutory language, to read in exceptions, limitations, or conditions that the legislature did not express. See Davis v. Toshiba Machine Co., America, 186 Ill.2d 181, 237 Ill.Dec. 769, 710 N.E.2d 399 (1999). Therefore, we hold that the noncompetition agreement is void and unenforceable insofar as it purports to prohibit defendants from bidding on Illinois Department of Corrections contracts or any other contract with another state agency. We do not, however, find that the entire noncompetition agreement is void. The record indicates that many of HPL's clients are county jails, and the agreement prohibits defendants from providing healthcare services to those jails. In Court Street Steak House, Inc. v. County of Tazewell, 163 Ill.2d 159, 164, 205 Ill.Dec. 490, 643 N.E.2d 781, 783 (1994), our supreme court stated that the Illinois Purchasing Act (30 ILCS 505/1 et seq. (West 1992)) did not apply to a food service contract at a county jail because the Purchasing Act applied only to state agencies, not to units of local government such as counties. When the Purchasing Act was repealed (see 30 ILCS 500/95-25 (West 1998)), most of its provisions were reenacted, with some modifications, in the Illinois Procurement Code, including the definition of "state agency" relied on in Court Street. Compare 30 ILCS 505/3 (West 1992) with 30 ILCS 500/1-15.100 (West 1998). Accordingly, we believe that the Procurement Code, like the Purchasing Act, does not apply to county jails. See 30 ILCS 500/1-5 (West 1998) ( ); 1999 Ill. Att'y Gen. Op. 008 ( ) Since the noncompetition agreement contains a severability clause which provides that the invalidity of any provision or term does not affect the remaining provisions or terms, we find that the agreement's prohibition against providing healthcare services to county jails or other entities that are not state agencies is unaffected by section 50-25 of the Procurement Code. In addition, the Procurement Code obviously has no bearing on the restrictions placed on defendants concerning jail and correctional facilities in other states.
Defendants next contend that the noncompetition agreement is an illegal "horizontal" market and...
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