TLC the Laser Center, Inc. v. Midwest Eye Institute II, Ltd.

714 N.E.2d 45, 306 Ill. App. 3d 411, 239 Ill. Dec. 487
CourtAppellate Court of Illinois
DecidedJune 15, 1999
Docket1-98-2648
StatusPublished
Cited by19 cases

This text of 714 N.E.2d 45 (TLC the Laser Center, Inc. v. Midwest Eye Institute II, Ltd.) is published on Counsel Stack Legal Research, covering Appellate Court of Illinois primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
TLC the Laser Center, Inc. v. Midwest Eye Institute II, Ltd., 714 N.E.2d 45, 306 Ill. App. 3d 411, 239 Ill. Dec. 487 (Ill. Ct. App. 1999).

Opinion

PRESIDING JUSTICE GORDON

delivered the opinion of the court:

Pursuant to Supreme Court Rule 304(a) (134 Ill. 2d R. 304(a)), plaintiffs TLC The Laser Center, Inc. (TLC, Inc.), and TLC Midwest Eye Laser Center, Inc. (TLC-Midwest) (collectively, TLC or plaintiffs), appeal from the trial court’s entry of partial summary judgment in favor of defendants. The court determined that TLC did not possess a “protectable interest” which would support a claim for a preliminary injunction. For the reasons given below, we affirm.

FACTS

On January 20, 1998, TLC filed an 11-count verified complaint against defendants. It sought injunctions under section 15 of the Trademark Registration Act (also known as the Anti-Dilution Act) (765 ILCS 1035/15 (West 1994)) 1 and the Illinois Uniform Deceptive Trade Practices Act (815 ILCS 510/1 et seq. (West 1994)) (counts I and II); and under restrictive covenants contained in written “Confidentiality and Non-Competition Agreements” between defendants and plaintiffs (count IV). In addition to injunctive relief plaintiffs also sought monetary damages for common-law unfair competition (count III), breach of contract (count V), unjust enrichment (count VI), tortious interference with contractual relations (count VII), breach of fiduciary duty (count VIII), inducement of breach of fiduciary duty (count IX), tortious interference with prospective business relations (count X), and conversion (count XI). None of the monetary damage counts are before us on this appeal, however.

According to the complaint defendants Herman D. Sloane, M.D., and Allen M. Pielet, M.D., are ophthalmologists practicing in Illinois. Prior to December 1996, Sloane, Pielet and five other ophthalmologists with whom Sloane and Pielet shared facilities at Midwest Eye Institute, Ltd. (MEI), in Palos Heights, Illinois, and Midwest Eye Institute II, Ltd. (MEI II), in Westchester, Illinois, were managing their practices and facilities without administrative support. However, in December 1996 TLC purchased “substantially all of the nonprofessional assets of MEI and MEI II from its [sic] shareholders, including Sloane and Pielet.” Among the assets purchased were the leasehold interests in the MEI and MEI II facilities and all “rights, title and interest in and to the tradenames ‘Midwest Eye Institute, Ltd.’ and ‘Midwest Eye Institute II, Ltd.’ ” The precise provisions of the transaction were memorialized in a document entitled “asset purchase agreement,” which was attached as an exhibit to the complaint.

Shortly thereafter, in January 1997, Sloane and Pielet entered into a “confidentiality and non-competition” agreement with plaintiffs. The noncompetition agreement, a copy of which was also attached as an exhibit to the complaint, provided in relevant part:

“During the two (2) years after the date hereof, the Covenantors [(Sloane and Pielet)] shall not, without the prior written consent of Companies [(TLC)], provide excimer laser surgical professional or technical services within a 30 mile radius of the Premises. For purposes of this Agreement ‘Premises’ shall include MEI II’s facility [in] Westchester, Illinois and MEI’s facility [in] Palos Heights, Illinois. The parties hereto acknowledge and agree that the covenant contained herein shall not be effective if the Covenantors terminate the Practice Administrative Service Agreement between Covenantors and TLC Midwest pursuant to the terms of Section 8.3 of that Agreement.”

The “Practice Administrative Service Agreement” (service agreement) to which the noncompetition agreement referred was also attached to the complaint. This document provided that TLC would train Sloane and Pielet to perform excimer laser surgery at TLC’s expense and would equip the Westchester facility to perform excimer laser surgery. According to the complaint, excimer laser surgery is different from traditional ophthalmological practice, in that, rather than treating an ocular disease, excimer surgery is elective and is designed to improve the vision of persons with otherwise healthy eyes. The complaint alleged that “neither MEI nor MEI II had excimer laser technology service and performed relatively few excimer laser procedures” prior to 1997.

In the service agreement TLC also licensed to Sloane and Pielet’s practice the right to operate under the name “Midwest Eye Institute” (which name TLC had obtained the rights to in the asset purchase agreement). Sloane, Pielet, and the practice covenanted in return:

“During the term of this Agreement and for a period of two (2) years after the termination of this Agreement for any reason other than termination pursuant to Section 8.3 hereof, the Practice and the Surgeons shall not, without the prior written consent of TLC Midwest within a 30-mile radius of each site of the Premises provide excimer laser surgical professional or technical services at any location other than the Premises.”

Sloane, Pielet, and their practice also agreed:

“The Practice and the Surgeon acknowledge and agree that TLC is entitled to prevent the disclosure of Confidential and Proprietary Information. [2] The Practice and the Surgeon agree at all times during the term of this Agreement and thereafter to hold in strictest confidence and not to disclose to any person[,] firm or cooperation [sic], other than to Practice Professional Employees, to Physician Resource Group, Inc. and its affiliates and persons engaged by TLC Midwest to further the business of the Practice, and not to use except in the pursuit of the business of TLC Group, Confidential and Proprietary Information, without the prior written consent of TLC Midwest; unless (i) such information becomes known or available to the public generally through no wrongful act of the Practice or the Surgeon or its employees, (ii) disclosure is required by law or the rule, regulation or order of any governmental authority under color of law, provided, that prior to disclosing any Confidential and Proprietary Information pursuant to this clause (ii), the Practice and the Surgeon shall, if possible, give prior written notice thereof to TLC Midwest and provide TLC Midwest with the opportunity to contest such disclosure, or (iii) the Practice and the Surgeon reasonably believe that such disclosure is required in connection with a lawsuit to which the Practice or the Surgeon is a party.”

Plaintiffs agreed to furnish the practice with services incident to the medical practice (including, e.g., purchasing, billing, bookkeeping) and to advance to the practice sufficient funds to pay all expenses. However, Sloane and Pielet retained sole and exclusive control of “all aspects of their practice of medicine and the delivery of medical service at the TLC Facilities.” Sloane and Pielet agreed to compensate plaintiffs for their services and repay advances and agreed that for a period of five years they would not transfer their shares of the practice nor would they terminate it. They also covenanted to work no fewer than 25 hours per week at TLC.

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Cite This Page — Counsel Stack

Bluebook (online)
714 N.E.2d 45, 306 Ill. App. 3d 411, 239 Ill. Dec. 487, Counsel Stack Legal Research, https://law.counselstack.com/opinion/tlc-the-laser-center-inc-v-midwest-eye-institute-ii-ltd-illappct-1999.