Davis v. Southern Illinois Hospital Services , 2024 IL App (5th) 230841-U ( 2024 )

NOTICE
2024 IL App (5th) 230841-UNOTICE
Decision filed 11/18/24. The
This order was filed under
text of this decision may be NO. 5-23-0841 Supreme Court Rule 23 and is
changed or corrected prior to
not precedent except in the
the filing of a Petition for IN THE limited circumstances allowed
Rehearing or the disposition of
under Rule 23(e)(1).
the same.
APPELLATE COURT OF ILLINOIS
FIFTH DISTRICT
______________________________________________________________________________
DENNON W. DAVIS, M.D., ) Appeal from the
) Circuit Court of
Plaintiff-Appellee, ) Williamson County.
)
v. ) No. 22-MR-73
)
SOUTHERN ILLINOIS HOSPITAL SERVICES and )
SOUTHERN ILLINOIS MEDICAL SERVICES, NFP, ) Honorable
) Jeffrey A. Goffinet,
Defendants-Appellants. ) Judge, presiding.
______________________________________________________________________________
JUSTICE McHANEY delivered the judgment of the court.
Justices Welch and Moore concurred in the judgment.
ORDER
¶1 Held: Where the issue regarding the employment agreement and its included restrictive
covenant has become moot, we dismiss that portion of the appeal. The trial court’s
award of attorney fees to the plaintiff is affirmed.
¶2 Southern Illinois Hospital Services (SIHS) and Southern Illinois Medical Services, NFP
(SIMS) appeal from the trial court’s September 5, 2023, order which (1) found that a letter SIHS
sent to Dennon W. Davis, M.D. (Dr. Davis) on June 1, 2022, stating SIMS’s intent not to renew
its employment agreement with Dr. Davis which was set to contractually end on October 31, 2022,
amounted to a termination of the contract; (2) sua sponte determined that a restrictive covenant
within the employment agreement was unreasonable; and (3) awarded Dr. Davis attorney fees. We
affirm the award of attorney fees to Dr. Davis and find that the remaining issues are moot.
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¶3 I. BACKGROUND
¶4 Dr. Davis is an Illinois licensed physician who is board certified in family medicine.
Southern Illinois Hospital Services (SIHS) is a not-for-profit health system that owns hospitals, a
cancer center, and multiple medical practices. Southern Illinois Medical Services, NFP (SIMS) is
a not-for-profit entity that employs physicians who provide services at the facilities owned by
SIHS.
¶5 Dr. Davis and SIMS entered into an employment agreement on October 31, 2011, in which
he agreed to provide medical services to patients on behalf of SIMS. Pursuant to the employment
agreement, Dr. Davis was assigned to a practice in West Frankfort. The initial term of the
employment agreement was five years, with two automatic extensions of three years each unless
between 90 and 120 days before the initial agreement or either of the extensions expired Dr. Davis
or SIMS sent the other a notice of intent not to renew the agreement. Neither party opted out of
the two automatic extensions.
¶6 On June 1, 2022, Darrell Bryant, vice president and chief operating officer of SIHS, sent
Dr. Davis a letter on behalf of SIMS to remind him that the employment agreement was scheduled
to end on October 31, 2022. The letter was captioned as a “120-day notice of EMPLOYMENT
AGREEMENT TERMINATION” and stated, inter alia, “please accept this letter as SIMS’s notice
of termination of the agreement without cause,” and that SIMS would be presenting him with a
new agreement for “future employment under new terms.”
¶7 Dr. Davis and SIMS attempted to negotiate a new employment agreement in the late
summer/early fall of 2022. On October 27, 2022, Dr. Davis notified SIHS that he intended to cease
negotiations and would not be entering into a new employment agreement. The employment
agreement thus expired on October 31, 2022.
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¶8 On October 28, 2022, SISH’s general counsel sent Dr. Davis a letter indicating SIMS’s
intent to enforce its covenant not to compete clause in the employment agreement. Section 6.1 of
this agreement contained a restrictive covenant of two years’ duration and restricted Dr. Davis
from “(i) practicing medicine within 25 miles of his primary practice site with SIMS, and (ii)
serving as a healthcare consultant, medical director or advisor within 25 miles of his primary
practice site with SIMS.”
¶9 On November 4, 2022, Dr. Davis filed this declaratory judgment case against SIHS and
SIMS asking the trial court not to enforce the covenant not to compete. He does not dispute that
SIMS fully performed its obligations under the employment agreement until its conclusion on
October 31, 2022. He does not dispute that the employment agreement contained a covenant not
to compete clause. Dr. Davis argues that the letter sent by SIHS’s counsel on June 1, 2022,
amounted to a termination of the employment agreement. Thus, he contends that SIMS cannot
enforce the restrictive covenant because of the express terms of section 5.1 of the contract:
“This agreement shall automatically renew for two (2) successive terms of three
(3) years each (the ‘Renewal Term’), unless this Party delivers to the other Party written
notice of its intent not to renew this agreement at any time between one hundred twenty
(120) days and ninety (90) days prior to the end of the Initial Term or the then applicable
Renewal Term or unless this Agreement is terminated earlier pursuant to this Section 5
[Termination by Corporation for Cause].”
In short, Dr. Davis contends the letter sent to him by counsel for SIHS on June 1, 2022, terminated
his employment agreement before its natural expiration date of October 31, 2022. He relies upon
to section 6.1 of the employment agreement which states that SIMS “shall not enforce the Non-
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Competition Covenant if either party gives notice of non-renewal of this Agreement pursuant to
Section 5.1.”
¶ 10 Both Dr. Davis and SIHS/SIMS filed motions for summary judgment. On July 24, 2023,
the trial court granted Dr. Davis’s motion for summary judgment finding that the June 1, 2022,
letter terminated the employment agreement as a matter of law before the agreement’s completion
date, was a material breach of the contract, and thus, relieved Dr. Davis of the covenant not to
compete. Although Dr. Davis failed to allege that the restrictive covenant was unreasonable, the
trial court sua sponte made that determination.
¶ 11 On August 17, 2023, Dr. Davis filed his motion for attorney fees and costs. On September
5, 2023, the trial court granted the motion and awarded Dr. Davis $10,390.25. SIHS and SIMS
appeal from both court orders.
¶ 12 II. ANALYSIS
¶ 13 At issue are the terms of the employment agreement between Dr. Davis and SIMS and
whether the restrictive covenant was enforceable. However, we are unable to address the merits of
these issues because they have become moot. “An appeal is moot if no actual controversy exists
or when events have occurred that make it impossible for the reviewing court to render effectual
relief.” Commonwealth Edison Co. v. Illinois Commerce Comm’n, 2016 IL 118129, ¶ 10. “As a
general rule, courts of review in Illinois do not decide moot questions, render advisory opinions,
or consider issues where the result will not be affected regardless of how those issues are decided.”
In re Barbara H., 183 Ill. 2d 482, 491 (1998). “This court will not review cases merely to establish
a precedent or guide future litigation.” Madison Park Bank v. Zagel, 91 Ill. 2d 231, 235 (1982).
“When a decision on the merits would not result in appropriate relief, such a decision would
essentially be an advisory opinion.” Commonwealth Edison Co., 2016 IL 118129, ¶ 10. The
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employment agreement expired by its own terms on October 31, 2022. The duration of the
restrictive covenant was two years, which expired on October 31, 2024. Accordingly, Dr. Davis is
free to practice wherever his medical license allows. Since events have occurred that make it
impossible for this court to grant effectual relief, this portion of the appeal has been rendered moot
and is dismissed.
¶ 14 Parties are generally responsible for their own legal fees. J.B. Esker & Sons, Inc. v. Cle-
Pa’s Partnership, 325 Ill. App. 3d 276, 281 (2001). “Contractual provisions for an award of
attorney fees must be strictly construed, and the court must determine the intention of the parties
regarding the payment of fees.” Id. Generally, “the construction, interpretation, or legal effect of a
contract is a matter to be determined by the court as a question of law.” Avery v. State Farm Mutual
Automobile Insurance Co., 216 Ill. 2d 100, 129 (2005) (citing 12A Ill. L. & Prac. Contracts § 264,
at 107 (1983)). On appeal, we consider the issue de novo. Id. (citing Hessler v. Crystal Lake
Chrysler-Plymouth, Inc., 338 Ill. App. 3d 1010, 1017 (2003)).
¶ 15 Here, section 7.1 of the employment agreement provided: “In case of an enforcement action
arising under or related to this Agreement, the prevailing Party shall be entitled to reasonable
attorneys’ fees, costs and necessary disbursements in addition to any other relief to which it may
be entitled.” SIHS and SIMS argue that Dr. Davis was not entitled to attorney fees as a “prevailing
party” because of the explicit wording of section 7.1 of the agreement mandating that the legal
action must be an enforcement action pursuant to the agreement. Specifically, Dr. Davis was not
seeking to enforce any provision of the agreement in his declaratory judgment suit. Instead, he
asked the court to find that the restrictive covenant was not applicable.
¶ 16 The trial court admitted in its judgment that using the plain and ordinary meaning of the
term “enforcement action,” Dr. Davis would not be eligible for an award of attorney fees because
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he was asking the court to find the restrictive covenant unenforceable. However, it then concluded
that because SIMS sought declaratory and injunctive relief in its counterclaim, those requested
forms of relief constituted enforcement actions against Dr. Davis, and since Dr. Davis was
defending against this injunctive relief and prevailed, he was therefore entitled to an award of
attorney fees. SIHS and SIMS conceded that Dr. Davis was not in violation of the restrictive
covenant. We agree with the trial court.
¶ 17 III. CONCLUSION
¶ 18 For the foregoing reasons, we dismiss the portion of the appeal regarding the employment
agreement and restrictive covenant as moot, and we affirm the trial court’s award of attorney fees
award in favor of Dr. Davis.
¶ 19 Dismissed in part and affirmed.
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