Thanks for visiting! Welcome to a new way to research case law. You are viewing a free summary from Descrybe.ai. For citation and good law / bad law checking, legal issue analysis, and other advanced tools, explore our Legal Research Toolkit — not free, but close.
Walker Regional Medical Center, Inc. v. McDonald
Citations: 775 So. 2d 169; 2000 WL 1006979Docket: 1990554
Court: Supreme Court of Alabama; July 21, 2000; Alabama; State Supreme Court
The United States District Court for the Northern District of Alabama certified two questions to the Alabama Supreme Court regarding the legality of a provision in a Physician Recruitment Agreement. The first question asked whether the clause requiring the defendant, Dr. Daniel P. McDonald, to practice obstetrics and gynecology exclusively in Jasper, Alabama, for 48 months constituted an illegal restraint on his profession under Alabama Code § 8-1-1(a) and was thus void for public policy reasons. The Court answered this question in the negative, meaning the provision is legal. Consequently, the second question regarding the severability of this provision from the loan repayment terms was deemed unnecessary, and the Court declined to answer it. The background context includes a determination by the U.S. Department of Health and Human Services that Walker County has a physician shortage, leading to the agreement between Walker Baptist Medical Center and McDonald. The agreement included a loan for McDonald's residency, with stipulations for establishing and maintaining his practice in Jasper to qualify for loan forgiveness over four years, contingent upon his continued practice. The contract also featured an acceleration clause, which would require immediate repayment of the loans if McDonald breached the agreement. McDonald signed multiple promissory notes totaling $106,428.55, with default provisions allowing for immediate repayment upon default or termination of the agreement. The rights and remedies of the Holder under this Note are cumulative and may be exercised at the Holder's discretion. McDonald informed Walker Baptist on June 11, 1998, that he would not establish his practice in Jasper and refused to repay $106,428.55 he received. Walker Baptist filed a lawsuit against McDonald on December 29, 1998, for breach of contract and breach of promissory notes. The court's first certified question is whether a provision in the Physician Recruitment Agreement violates Alabama Code § 8-1-1(a), which voids contracts restraining lawful professions. McDonald contends the Agreement violates this provision as it requires him to practice “exclusively” in Jasper. While the statute broadly prohibits restraints on professions, exceptions exist, which do not apply here. However, the court finds that the Agreement does not violate § 8-1-1(a) as it aligns with legislative intent expressed in Alabama Code §§ 16-47-121 et seq., which promote agreements encouraging medical practice in underserved areas. Consequently, the court concludes that McDonald's obligation to establish his practice in Jasper for 48 months is not an illegal restraint on his profession and does not contravene public policy. The court answers the first question affirmatively and declines the second.