Advanced Imaging Center of Northern Illinois Limited Partnership v. Cassidy

Case Date: 12/11/2002
Court: 2nd District Appellate
Docket No: 2-02-0265 Rel

No. 2--02--0265


IN THE

APPELLATE COURT OF ILLINOIS

SECOND DISTRICT


ADVANCED IMAGING CENTER OF  ) Appeal from the Circuit Court
NORTHERN ILLINOIS LIMITED ) of McHenry County.
PARTNERSHIP, )
)
              Plaintiff, )
)
v. ) No. 00--LA--256
)
GEORGE E. CASSIDY, )
)
           Defendant and Third-Party )
           Plaintiff and Counter- )
           defendant-Appellant )
)
(Spiros Gerolimatos, Third-Party )
Defendant and Counterplaintiff- )
Appellee; Craig Palmquist and )
Omega Diagnostic Imaging )
Management, Inc., Defendants and )
Counterdefendants; Diagnostic )
Imaging Services, Inc., Barrington )
Imaging, Ltd., CCG Corporation, )
Comprehensive Imaging Services, ) Honorable
Inc., and Suburban Imaging Center ) Michael T. Caldwell,
Limited Partnership, Defendants). ) Judge, Presiding.

JUSTICE McLAREN delivered the opinion of the court:

In this interlocutory appeal, defendant and third-partyplaintiff and counterdefendant, George E. Cassidy, M.D., seeksreview of the trial court's denial of his petition to stayproceedings after Cassidy made an election to buy the interests ofthird-party defendant and counterplaintiff, Spiros Gerolimatos,M.D., in certain jointly owned companies. We affirm.

The facts are taken from the record. Gerolimatos and Cassidy,both practicing radiologists in Illinois, were business partners intwo diagnostic imaging centers, facilities that perform magneticresonance imagings (MRIs), mammograms, ultrasounds, bone marrowdensity tests, and other diagnostic tests.

This suit arises out of a 15-count complaint filed by one ofthe businesses in which Gerolimatos and Cassidy shared an interest,namely, plaintiff, Advanced Imaging Center of Northern IllinoisLimited Partnership (Advanced Imaging). Advanced Imaging named asdefendants Cassidy; Craig Palmquist, Advanced Imaging's manager;Omega Diagnostic Imaging Management, Inc. (Omega), Palmquist'smanaging company; and various companies owned in whole or in partby Cassidy. Some of the companies sued by Advanced Imaging wereco-owned by Cassidy and Gerolimatos. Cassidy then brought a third-party action against Gerolimatos, seeking contribution orindemnification against Advanced Imaging's claims. Believing thatCassidy wrongfully obtained money from the jointly owned companiesand that these acts threatened to render the companies insolvent,Gerolimatos filed a six-count counterclaim against Cassidy,Palmquist, and Omega. Count I sought an accounting; count IIsought a declaratory judgment regarding Barrington Imaging, Ltd.,and reimbursement from Cassidy for diverting money from thecompany; count III alleged breach of fiduciary duty against Cassidyrelated to the jointly owned companies; count IV, against all threenamed defendants, sought the appointment of a receiver pursuant tocommon law and section 12.56 of the Business Corporation Act of1983 (Act) (805 ILCS 5/12.56 (West 2000)); count V, againstPalmquist and Omega, alleged aiding and abetting Cassidy's breachof fiduciary duty; and count VI, against all three defendants,alleged a conspiracy between Omega, Palmquist, and Cassidy. Theparties obtained an agreed order for a complete audit andaccounting of the jointly owned companies named by Gerolimatos inhis complaint. Subsequently, Cassidy filed an election to purchaseGerolimatos's shares of stock in four jointly owned companies,under section 12.56 of the Act (805 ILCS 5/12.56(a) (West 2000)). Cassidy offered $500 for each of the four companies: CCGCorporation, Comprehensive Imaging Services, Inc., Suburban ImagingCenter Limited Partnership, and Diagnostic Center, Ltd. Except forDiagnostic Center, Ltd., these companies are named defendants inAdvanced Imaging's complaint. Cassidy also sought a stay of theentire action premised on his election pursuant to the Act. Afterhearing argument, the trial court denied Cassidy's motion to stay,and Cassidy filed this timely interlocutory appeal.

On appeal, Cassidy argues that the trial court erred bydenying his motion to stay all counts against him, that is, notonly the count based on section 12.56 of the Act, but the common-law counts as well. Cassidy asserts that section 12.56(f) mandatesa stay of all of Gerolimatos's claims and the trial court had noauthority to deny the petition. We disagree with Cassidy.

Generally, the scope of review in an interlocutory appeal islimited to an examination of whether the trial court abused itsdiscretion. Hamlin v. Harbaugh Enterprises, Inc., 324 Ill. App. 3d612, 616 (2001). However, where a question of law is presented, areviewing court examines the issue de novo. See In re Lawrence M.,172 Ill. 2d 523, 526 (1996).

In interpreting a statute, a court begins with its language,which must be given its plain and ordinary meaning. People v.Baltzer, 327 Ill. App. 3d 222, 229 (2002). If there is doubt as tothe interpretation of a legislative enactment, the doubt must beresolved in favor of the interpretation that supports the statute'svalidity. Forest Preserve District of Du Page County v. BrownFamily Trust, 323 Ill. App. 3d 686, 692 (2001). Thus, a statutewill be construed to avoid an unconstitutional result. In reApplication for Judgment & Sale of Delinquent Properties for theTax Year 1989, 167 Ill. 2d 161, 168 (1995).

Subsections 12.56(a) and (b)(11) of the Act permit ashareholder of a nonpublic corporation to elect to purchase theshares of the other shareholders in certain circumstances. 805ILCS 5/12.56(a), (b)(11) (West 2000).

Section 12.56(f) provides in relevant part:

"At any time within 90 days after the filing of thepetition under this Section, or at such time determined by thecourt to be equitable, the corporation or one or moreshareholders may elect to purchase all, but not less than all,of the shares owned by the petitioning shareholder for theirfair value." 805 ILCS 5/12.56(f) (West 2000).

Section 12.56(f)(6) provides that, if the parties are unable toreach an agreement on the value of the shares, the "court, uponapplication of any party, shall stay the proceeding undersubsection (a) and shall determine the fair value of thepetitioner's shares." (Emphasis added.) 805 ILCS 5/12.56(f)(6)(West 2000).

The statute expressly limits its scope to "the proceeding."Nothing in this subsection, or any other part of the Act, indicatesthat the court must stay every claim raised by a shareholder. Nothing in the statute supports Cassidy's position that all claimsbetween the parties must be stayed. We agree with the followinganalysis of the Appellate Court, Third District:

"It is apparent that the drafters of the Model Actintended for any additional claims of the shareholder notbrought pursuant to section 12.56(a) to continue through theadjudication process even after the shareholder's shares havebeen purchased and the section 12.56(a) petition dismissed." Hamlin v. Harbaugh Enterprises Inc., 324 Ill. App. 3d 612, 620(2001) (analyzing the official comment to section 14.34 of theModel Business Corporation Act Ann. (3 ABA Model BusinessCorporation Act Ann.,