Mohanty v. St. John Heart Clinic, S.C.

866 N.E.2d 85, 225 Ill. 2d 52, 310 Ill. Dec. 274, 25 I.E.R. Cas. (BNA) 859, 2006 Ill. LEXIS 1689
CourtIllinois Supreme Court
DecidedDecember 21, 2006
Docket101251
StatusPublished
Cited by202 cases

This text of 866 N.E.2d 85 (Mohanty v. St. John Heart Clinic, S.C.) is published on Counsel Stack Legal Research, covering Illinois Supreme Court primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Mohanty v. St. John Heart Clinic, S.C., 866 N.E.2d 85, 225 Ill. 2d 52, 310 Ill. Dec. 274, 25 I.E.R. Cas. (BNA) 859, 2006 Ill. LEXIS 1689 (Ill. 2006).

Opinions

JUSTICE BURKE

delivered the judgment of the court, with opinion.

Chief Justice Thomas and Justices Fitzgerald and Kilbride concurred in the judgment and opinion.

Justice Karmeier specially concurred, with opinion, joined by Justice Carman.

Justice Freeman concurred in part and dissented in part, with opinion.

OPINION

Dr. Jyoti Mohanty and Dr. Raghu Ramadurai (plaintiffs) appeal the judgment of the appellate court reversing the circuit court of Cook County’s denial of a preliminary injunction to St. John Heart Clinic and its owner, Dr. John Monteverde (defendants), to enforce the restrictive covenants contained in their medical practice employment contracts. 358 Ill. App. 3d 902. Plaintiffs, in opposition to the injunction, ask this court to declare restrictive covenants in medical practice cases void as against public policy. In the alternative, plaintiffs argue that the restrictive covenants contained in their employment contracts are not enforceable because the restrictions are unreasonably overbroad in time and activity, or because the defendants materially breached the employment contracts, thereby discharging plaintiffs from their obligations under the contract.

For the reasons stated below, we affirm the judgment of the appellate court and remand for further proceedings consistent with this opinion.

BACKGROUND

St. John Heart Clinic (the Clinic) is an Illinois professional medical corporation founded by Dr. John Monteverde in 1978. Dr. Monteverde is board certified in internal medicine and cardiology and the sole shareholder and owner of the Clinic, which has two offices in Chicago, one at St. Mary of Nazareth Hospital and one at Norwegian American Hospital. Dr. Monteverde also has privileges at St. Elizabeth and Sacred Heart hospitals in Chicago and has practiced at these hospitals since 1978.

Dr. Ramadurai began working at the Clinic in 1989 as an independent contractor. At that time, Dr. Ramadurai was not board certified in cardiology. Thus, initially, Dr. Ramadurai worked under the direction and supervision of Dr. Monteverde. In 1993, Dr. Ramadurai became an employee of the Clinic. The employment contract he signed provided that he would receive an annual salary of 50% of his gross receipts.1 In addition, the contract contained a “non-compete” clause, or restrictive covenant, which provided that, upon termination, Dr. Ramadurai “shall not” practice medicine within a two-mile radius of any Clinic office or at any of the four hospitals where the Clinic operated, i.e., St. Mary of Nazareth, Norwegian American, St. Elizabeth, and Sacred Heart (the restricted hospitals), for a period of three years.

Dr. Mohanty joined the Clinic in July 2000 after he completed training in nuclear cardiology at Cook County Hospital. When Dr. Mohanty began his employment with the Clinic he was not yet board certified in cardiology, had no medical practice of his own and no staff privileges at any of the restricted hospitals. Pursuant to his employment contract, Dr. Mohanty received an annual salary of 50% of his gross receipts, with a guaranteed minimum of $160,000.2 The contract also contained a restrictive covenant, similar to the one in Dr. Ramadurai’s contract, which provided that, upon termination of the agreement, Dr. Mohanty “shall not” practice medicine within a five-mile radius of any Clinic office or at any of the four restricted hospitals for a period of five years.

On March 12, 2003, Drs. Mohanty and Ramadurai sent letters to Dr. Monteverde, serving him with notice of their intention to terminate their employment with the Clinic after 120 days, in accordance with their employment contracts. In their letters, Drs. Mohanty and Ramadurai stated that they were terminating their employment because Dr. Monteverde breached their employment contracts by refusing to give them partnership interests in the Clinic and because Dr. Monteverde was billing under his name for patients they saw, which caused them to be shortchanged on their bonuses.

In May 2003, prior to leaving the Clinic, Drs. Mohanty and Ramadurai filed complaints for declaratory relief in the circuit court of Cook County. In the complaints, they alleged that the restrictive covenants in their employment contracts should be declared void as against public policy and unenforceable because Monteverde breached their employment agreements by various means, including refusing to give them partnership interests in the Clinic and billing improperly which caused them to receive less compensation than they were due. Dr. Mohanty’s complaint further alleged that the restrictive covenant in his employment agreement was invalid because “the duration of the restrictive covenant, that is five (5) years, and its geographical limits, that is five (5) miles, are unnecessary to protect the economic or business interest of either St. John or Dr. Monteverde and therefore are excessive, unjust, unreasonable, unlawful, and unenforceable.” The plaintiffs’ declaratory actions were later consolidated by order of the court.

Defendants answered the complaints, denying all of plaintiffs’ claims. Defendants averred that no promises had been made to either Dr. Mohanty or Dr. Ramadurai concerning a partnership interest in the Clinic. Moreover, defendants contended that, even if oral promises had been made, the failure to keep such promises would not constitute a breach of the employment contract. Defendants also denied that its billing practices were unethical, unprofessional or improper. Defendants then filed a countercomplaint for declaratory, injunctive and other relief against the plaintiffs. In addition to seeking preliminary and permanent injunctions to restrain Drs. Mohanty and Ramadurai from violating the restrictive covenants in their contracts, the countercomplaint raised claims of misappropriation and unjust enrichment and sought a declaration regarding the Clinic’s responsibility for providing medical malpractice “tail coverage.” Defendants also filed an emergency motion for a temporary restraining order (TRO) and preliminary injunction to immediately enjoin the plaintiffs from further violating the restrictive covenants in their employment contracts.3

The trial court granted defendants a TRO, which was later amended to permit Drs. Ramadurai and Mohanty, for a limited time, to provide critical care to their hospitalized patients. The trial court also required defendants to post a $100,000 surety bond. The matter was then set for hearing on whether defendants were entitled to a preliminary injunction.

Plaintiffs filed answers to defendants’ countercomplaint and also raised affirmative defenses to defendants’ request for injunctive relief, alleging, as they had done in their declaratory judgment actions, that the restrictive covenants were unenforceable. The dates set for hearing on the motion for preliminary injunction were continued from time to time to permit plaintiffs to conduct extensive discovery, particularly with regard to defendants’ billing practices. When discovery was completed, plaintiffs filed a “Trial Brief In Opposition To Counter-Plaintiffs’ Request For A Preliminary Injunction.” In this document, plaintiffs restated their position that defendants were not entitled to injunctive relief because the restrictive covenants were not enforceable.

Free access — add to your briefcase to read the full text and ask questions with AI

Related

People v. Vining
2025 IL App (1st) 241264-U (Appellate Court of Illinois, 2025)
Horn v. Housing Authority of Champaign County
2025 IL App (5th) 250539-U (Appellate Court of Illinois, 2025)
MKM Oil, Inc. v. Welk
2025 IL App (4th) 240284-U (Appellate Court of Illinois, 2025)
Barriga v. Ivanova
2025 IL App (1st) 251131-U (Appellate Court of Illinois, 2025)
Topco Associates, LLC v. Cascades Holdings US Inc.
2024 IL App (1st) 221704-U (Appellate Court of Illinois, 2024)
In re Estate of Georgacopoulos
2024 IL App (1st) 230776-U (Appellate Court of Illinois, 2024)
People v. Ramos
2023 IL App (1st) 210258-U (Appellate Court of Illinois, 2023)
PML Development LLC v. Village of Hawthorn Woods
2023 IL 128770 (Illinois Supreme Court, 2023)
McNicholl Counseling, P.C. v. Jenkins
2023 IL App (5th) 220732-U (Appellate Court of Illinois, 2023)
People v. Erwin
2023 IL App (1st) 200936 (Appellate Court of Illinois, 2023)
Alwan v. Kickapoo-Edwards Land Trust
2023 IL App (4th) 220088-U (Appellate Court of Illinois, 2023)
Direct Auto Insurance Co. v. O'Neal
2022 IL App (1st) 211568 (Appellate Court of Illinois, 2022)
People v. Pirtle
2022 IL App (5th) 200382-U (Appellate Court of Illinois, 2022)
People v. Harris
2021 IL App (4th) 200095-U (Appellate Court of Illinois, 2021)
Keystone Montessori School v. Village of River Forest
2021 IL App (1st) 191992 (Appellate Court of Illinois, 2021)
Guns Save Life, Inc. v. Raoul
2019 IL App (4th) 190334 (Appellate Court of Illinois, 2020)
Early v. Allant Group, Inc
2020 IL App (1st) 181561-U (Appellate Court of Illinois, 2020)
Giambruno v. Tribune Media Co.
2020 IL App (1st) 190859-U (Appellate Court of Illinois, 2020)
Shaker v. Butler
2020 IL App (1st) 190967-U (Appellate Court of Illinois, 2020)
City of Elgin v. Elgin Memory Care, LLC
2020 IL App (2d) 200070-U (Appellate Court of Illinois, 2020)

Cite This Page — Counsel Stack

Bluebook (online)
866 N.E.2d 85, 225 Ill. 2d 52, 310 Ill. Dec. 274, 25 I.E.R. Cas. (BNA) 859, 2006 Ill. LEXIS 1689, Counsel Stack Legal Research, https://law.counselstack.com/opinion/mohanty-v-st-john-heart-clinic-sc-ill-2006.