Tomlinson v. Humana, Inc.

Citation495 So.2d 630
Parties1986-2 Trade Cases P 67,328 J.A. TOMLINSON v. HUMANA, INC., d/b/a Humana Hospital Russellville, et al. 85-175.
Decision Date12 September 1986
CourtAlabama Supreme Court

Henry H. Self, Jr., and Michael J. Bernauer, Florence, for appellant.

Frank V. Potts and T. Michael Putnam of Potts, Young, Blasingame & Putnam, Florence, for appellee Humana, Inc.

Andrew P. Campbell and S. Lynne Stephens of Leitman, Siegal & Payne, Birmingham, for appellees R.R. Braund, M.D., and Shoals Medical Laboratory.

JONES, Justice.

This is an appeal from a summary judgment which upheld the use of an exclusive service contract between a physician and a hospital. Dr. J.A. Tomlinson, a medical doctor with a specialty in pathology, sued Dr. Ralph Braund, also a pathologist; Braund's professional corporation, Shoals Medical Laboratory, Inc. (SML); and Humana, Inc., d/b/a Humana Hospital Florence, Humana Hospital Shoals, and Humana Hospital Russellville.

In 1981, Dr. Braund and SML hired Dr. Tomlinson as an associate pathologist. After being granted full staff privileges at the three Humana hospitals, Dr. Tomlinson began performing pathological services for Humana as Braund's employee under the exclusive service contract existing between Braund and Humana. By the terms of the contract, Braund was required to supply all primary pathology services needed at the three defendant hospitals on a 24-hour basis, and to administer and supervise the operation of the in-house hospital laboratories. This contract was reviewed and extended annually.

Tomlinson worked for Braund for approximately three years, until June 1984, when his employment was terminated. After his discharge by Braund, Tomlinson attempted to continue practicing pathology at the Humana hospitals, whereupon he was informed by the hospitals that he would no longer be allowed to perform primary pathology services at those hospitals because of the exclusive contract with Dr. Braund. He was allowed, however, to provide secondary pathology consultations when specifically requested by a patient or physician.

Tomlinson then attempted to negotiate a contract with Humana similar to the one held by Braund. When negotiations failed, he filed suit against the Defendants, alleging that the exclusive contract between Braund, SML, and Humana restrained him in the practice of his profession. Depositions and affidavits were filed by all parties; based upon them, the trial court granted a summary judgment in favor of all Defendants. This appeal followed.

It is Tomlinson's contention that the contract between Braund and Humana is void under Code 1975, § 8-1-1(a), as a restraint on the practice of a profession. Section 8-1-1(a) reads:

"Every contract by which anyone is restrained from exercising a lawful profession, trade or business of any kind than otherwise provided by this section is to that extent void."

Tomlinson argues that § 8-1-1(a) prohibits every contract (other than those specifically excepted by that section itself) which restrains the practice of a profession in any way.

Assuming, without deciding, that this statute applies to the facts of this case, this Court has long held that not every contract which imposes a restraint on trade or competition is void. Contracts which impose only a partial restraint on competition are permitted when the public welfare is not injured and the contract is properly restricted as to persons and territory affected. In Terre Haute Brewing Co. v. McGeever, 198 Ala. 474, 73 So. 889 (1916), this Court held that a contract, whereby a retailer agreed to buy all the beer he needed from the other party, was not void as a restraint on commerce or competition, because it amounted only to a partial restraint on trade and did not affect the public interest. Denton v. Alabama Cotton Co-op Ass'n, 30 Ala.App. 429, 7 So.2d 504 (1942), involved "an agreement by cotton warehousemen to recognize only the classification of cotton made by a cotton classer of their own selection to the exclusion of all other licensed classers."

In Denton, the Court of Appeals held that "it is not unlawful for any number of persons, without an unlawful object in view, to associate and agree that they will not work for, employ or deal with certain individuals or classes of individuals." 30 Ala.App. at 432, 7 So.2d at 507.

The evidence shows that hospitals generally provide pathology services as part of the routine care and treatment of patients. In the discharge of their obligations, they must provide pathology labs or facilities for carrying out these services. As a necessary incident thereto, hospitals require the services of a pathologist. It is the usual custom of hospitals to hire a staff pathologist or to contract with an outside laboratory or pathologist, such as SML or Braund, to provide the necessary pathology services. This Code section was not intended to hinder the carrying out of these obligations. We reject, therefore, Tomlinson's contention that this Code section should be given such a literal interpretation as to prohibit a contract like this.

It is undisputed that Humana's contract with Braund affected only a partial restraint and is properly restricted, under the definition of "restraint" found in Terre Haute Brewing Co., supra. The contract in question has no effect on Tomlinson's ability to practice pathology at any of the other area hospitals, nor do they completely prohibit him from practicing at the Humana hospitals. He may still render secondary pathology services upon request of the patients or other physicians.

Furthermore, Tomlinson has failed to show any adverse effect upon the...

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    • United States
    • Alabama Supreme Court
    • June 10, 1988
    ...789 (1953). We recognize that this Court has often said that contracts in partial restraint of trade may be allowed. Tomlinson v. Humana, Inc., 495 So.2d 630 (Ala.1986); Hoppe v. Preferred Risk Mutual Ins. Co., 470 So.2d 1161 (Ala.1985); Famex, Inc. v. Century Ins. Services, Inc., 425 So.2d......
  • Crown Castle Usa v. Howell Engin. and Surv.
    • United States
    • Alabama Court of Civil Appeals
    • August 19, 2005
    ...789 (1953). "We recognize that this Court has often said that contracts in partial restraint of trade may be allowed. Tomlinson v. Humana, Inc., 495 So.2d 630 (Ala.1986); Hoppe v. Preferred Risk Mutual Ins. Co., 470 So.2d 1161 (Ala. 1985); Famex, Inc. v. Century Ins. Services, Inc., 425 So.......
  • Holt v. Good Samaritan Hosp. and Health Ctr.
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    • Ohio Court of Appeals
    • September 18, 1990
    ...of numerous foreign jurisdictions. Redding v. St. Francis Medical Ctr. (1989), 208 Cal.App.3d 98, 255 Cal.Rptr. 806; Tomlinson v. Humana, Inc. (Ala.1986), 495 So.2d 630; Brandon v. Combs (Ky.1983), 666 S.W.2d 755; Radiology Professional Corp. v. Trinidad Area Health Assn. (1978), 195 Colo. ......
  • Crown Castle USA, Inc. v. Howell Engineering and Surveying, Inc., No. 2040076 (AL 8/19/2004)
    • United States
    • Alabama Supreme Court
    • August 19, 2004
    ...789 (1953). "We recognize that this Court has often said that contracts in partial restraint of trade may be allowed. Tomlinson v. Humana, Inc., 495 So. 2d 630 (Ala. 1986); Hoppe v. Preferred Risk Mutual Ins. Co., 470 So. 2d 1161 (Ala. 1985); Famex, Inc. v. Century Ins. Services, Inc., 425 ......
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2 books & journal articles
  • Alabama. Practice Text
    • United States
    • ABA Antitrust Library State Antitrust Practice and Statutes (FIFTH). Volume I
    • December 9, 2014
    ...(sustaining contract in which retailer agreed to buy all beer he required from a particular brewery); see also Tomlinson v. Humana, Inc., 495 So. 2d 630, 632 (Ala. 1986) (holding that hospital’s contract with pathologist was only a partial restraint); Springdale Gayfer’s Store Co. v. D.H. H......
  • Healthcare. Practice Text
    • United States
    • ABA Antitrust Library State Antitrust Practice and Statutes (FIFTH). Volume III
    • December 9, 2014
    ...corporation that was challenged as a restraint on the practice of a profession under ALA. CODE § 8-1-1); Tomlinson v. Humana, Inc., 495 So.2d 630 (Ala. 1986) (upholding exclusive service contract between pathologist and hospital that was challenged as a restraint on the practice of a profes......

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