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April 10, 2001

NO. 4-00-0123

IN THE APPELLATE COURT

OF ILLINOIS

FOURTH DISTRICT

JUSTICE COOK delivered the opinion of the court:

Plaintiff, Illinois Department of Public Health (Department), brought thisaction against defendant, April Jackson, M.D., alleging that she had violatedthe terms of her scholarships under the Family Practice Residency Act (Act) (110ILCS 935/1 through 10 (West 1998)) in that she had failed to practice medicinein a "[d]esignated [s]hortage [a]rea." 110 ILCS 935/3.07(d) (West1998). The Department sought treble damages. See 110 ILCS 935/10 (West 1998). OnJanuary 14, 2000, the circuit court entered summary judgment in favor of theDepartment in the amount of $67,175, plus prejudgment interest of $14,911.16.Jackson appeals, arguing that she substantially performed her obligations underthe scholarship agreements and that the imposition of treble damages on thefacts of this case is contrary to public policy. We reverse and remand.

The Department presented the following facts in support of its motion forsummary judgment. Jackson is a physician, who received her medical degree fromthe University of Illinois Medical School at Peoria in 1989. While she was inmedical school, Jackson and the Department entered into written contractspursuant to the Act. Under those contracts, the Department paid the medicalschool $40,305 on Jackson's behalf for the three academic years prior to 1989.

Section 3.07(d) of the Act (110 ILCS 935/3.07(d) (West 1998)) defines an"eligible medical student" as one who "agrees to practicefull-time in a [d]esignated [s]hortage [a]rea as a primary care physician oneyear for each year he or she is a scholarship recipient."

Jackson completed her residency in internal medicine on June 30, 1992. ThomasA. Yocom, the Department's coordinator of the Medical Student ScholarshipProgram, stated in an affidavit that "between 1986 and 1995, no proposalfor practice in a designated shortage area was received by the affiant or theDepartment from April Jackson before she commenced medical practice inIllinois." Beginning April 1, 1994, Jackson practiced medicine at HolyCross Family Medical Center (Holy Cross) in Chicago. Jackson left Holy Cross inOctober 1994 and began practicing at Chatham Health Associates (Chatham) inChicago, continuing to practice at that location through March 31, 1997. Jacksonaccordingly practiced at Holy Cross and Chatham for three years. The Departmentfiled this action on April 3, 1998. Jackson's practice at Holy Cross and Chathamwas in a "primary care" specialty and was a "full-time"endeavor. Holy Cross and Chatham were located in a "designated shortagearea" (110 ILCS 935/3.04 (West 1998)). However, Jackson did not obtainwritten approval from the Department prior to her commencement of medicalpractice, nor did Jackson practice medicine in Illinois between the June 1992completion of her residency and the April 1994 commencement of her practice atHoly Cross. The record fails to account for Jackson's activities during thatperiod.

The Department, in its motion for summary judgment, sought treble damages of$120,915. The Department stated, however, that "except for the defendant'sfailure to seek and obtain [the Department's] advance approval of her specificpractice site or location, her 16 months of service would have partiallyfulfilled her contractual service obligation." Accordingly, the Departmentwas willing to grant Jackson a credit of $53,740 for her 16 months of practicewhich fell within the first three years after her residency. The credit reducedthe amount of damages to $67,175, and the trial court granted summary judgmentin that amount.

The record does not reflect whether the Department was aware that Jackson wasworking at Holy Cross or at Chatham. Nor does the record reflect whether theDepartment had any contact with Jackson while she was doing that work, orwhether the Department was aware that Jackson expected credit for that work. TheDepartment did not order Jackson to work at any location other than Holy Crossor Chatham. The record does not indicate why the Department waited until April1998 to file this action.

The Department argues in its brief that Jackson breached her contract andthat the Department was damaged in that "it was deprived of the medicalservices for which it bargained." The Department argues that Jackson wasrequired to work in an area that the Department approved, not wherever shewanted, and that Jackson was required to begin her service within 30 days afterher residency ended, not when she felt like it.

The Act lists among its purposes the providing of "a loan repaymentprogram for physicians who will agree to practice in areas of the Statedemonstrating the greatest need for more professional health care." 110ILCS 935/2 (West 1998). A scholarship recipient who fails to fulfill thepractice requirement "shall pay to the Department a sum equal to [three]times the amount of the annual scholarship grant for each year the recipientfails to fulfill such obligation," and "shall have 30 days from thedate on which that failure begins in which to enter into a contract with theDepartment that sets forth the manner in which that sum is required to bepaid." 110 ILCS 935/10 (West 1998). The Department's regulations providethat "service shall be deferred by the Department until recipient completesa primary care residency; service shall begin no later than 30 days aftercompletion." 77 Ill. Adm. Code