Court Opinion

ID: 3135367
Source: CourtListenerOpinion
Date Created: 2015-10-22 17:36:23.844813+00
Date Added: 2024-06-11T11:54:09.087346
License: Public Domain

Docket No. 98763.

                       IN THE
                  SUPREME COURT
                         OF
                THE STATE OF ILLINOIS

THE PEOPLE OF THE STATE OF ILLINOIS ex rel. THE
DEPARTMENT OF PUBLIC HEALTH, Appellee, v. THELMA E.
               WILEY, M.D., Appellant.

                 Opinion filed January 20, 2006.

   JUSTICE McMORROW delivered the judgment of the court,
with opinion.
   Chief Justice Thomas and Justices Freeman, Fitzgerald, Kilbride,
Garman, and Karmeier concurred in the judgment and opinion.

                            OPINION

    The Illinois Department of Public Health (Department) filed suit
in the circuit court of Cook County against Thelma E. Wiley, M.D.,
alleging that Wiley violated scholarship contracts she entered into
with the Department pursuant to the Family Practice Residency Act
(110 ILCS 935/1 et seq. (West 2002)), and that the Department was
entitled to treble damages under section 10 of the same statute (110
ILCS 935/10 (West 2002)). The circuit court granted summary
judgment in favor of the Department. The appellate court affirmed.
348 Ill. App. 3d 809. For the reasons that follow, we affirm the
judgment of the appellate court.

                         BACKGROUND
    Enacted in 1977, the Family Practice Residency Act (Act) (110
ILCS 935/1 et seq. (West 2002)) states that its purpose is to
             Aestablish a program in the Illinois Department of Public
         Health to upgrade primary health care services for all citizens
         of the State, by providing grants to family practice and
         preventive medicine residency programs, scholarships to
         medical students and a loan repayment program for
         physicians who will agree to practice in areas of the State
         demonstrating the greatest need for more professional
         medical care. The program shall encourage family practice
         physicians to locate in areas where health manpower
         shortages exist and to increase the total number of family
         practice physicians in the State.@ 110 ILCS 935/2 (West
         2002).
    To further this purpose, section 4.03 of the Act (110 ILCS
935/4.03 (West 2002)) authorizes the Department to Aestablish a
program of medical student scholarships and to award scholarships to
eligible medical students.@ An A[e]ligible medical student@ is defined,
in part, as a person who Aagrees to practice full-time in a Designated
Shortage Area as a primary care physician one year for each year he
or she is a scholarship recipient.@ 110 ILCS 935/3.07(d) (West 2002).
Thus, rather than awarding conventional scholarships, which do not
have to be repaid, the Department awards Ascholarship contracts,@
whereby students agree to a service commitment in exchange for
receiving funds for medical schooling.
    In addition to authorizing the creation of scholarship contracts,
the Act also includes a penalty provision for scholarship recipients
who fail to fulfill their statutory service obligation. Section 10 of the
Act states that if a scholarship recipient fails to fulfill the obligation
of serving as a full-time primary care physician in a designated
shortage area, then the recipient Ashall pay to the Department a sum
equal to 3 times the amount of the annual scholarship grant for each
year the recipient fails to fulfill such obligation.@ 110 ILCS 935/10
(West 2002).
    In the case at bar, Wiley attended medical school from 1985
through 1989. During each of her four years of school, Wiley entered
into a scholarship contract with the Department as authorized by the
Act. The combined amount of the scholarships awarded to Wiley

                                  -2-
during the four years totaled $52,465.
    Although the language in portions of the four contracts varies
somewhat, the central obligation under the agreements is the same.
Each contract states that, in exchange for receiving scholarship funds,
Wiley agrees
         Ato serve as a full-time primary care physician in direct
         patient care in only the designated shortage areas in Illinois
         approved as a practice site(s).@
    Each of the four contracts also contains the following provision
regarding the starting date of Wiley=s term of service:
         AStudent=s service term shall begin within thirty (30) days of
         Student=s licensure to practice medicine, except that service
         may be deferred until completion of an approved residency
         program in primary care. In all cases where service is
         deferred, service shall begin within thirty (30) days after
         Student leaves residency program.@
    In addition, each of the contracts states that the Act is fully
incorporated into the terms of the agreements and that, if the student
fails to fulfill the terms of the contract, the Department is entitled to
three times the amount of the scholarship awarded. Finally, each
contract states that, if the student is required to reimburse the
Department monetarily, then A[p]ayments shall begin within 30 days@
from the date when the failure to perform occurs.
    Wiley graduated from medical school in June of 1989. A month
after her graduation, she began a three-year residency in internal
medicine at the University of Illinois Medical Center at Chicago. The
residency program was approved by the Department and thus, under
the terms of her scholarship contracts, Wiley=s service obligation was
deferred until 30 days after the completion of the residency, i.e., until
the beginning of August 1992.
    In January of 1990, the Department sent Wiley a copy of a
directory, prepared by the Department, which listed designated
shortage areas in which scholarship recipients could fulfill their
service obligations. In a cover letter that accompanied the directory,
the Department noted that Wiley could Areceive Departmental
approval of [her] selected practice location up to 18 months
preceding the completion of [her] residency.@
    In deposition testimony, Wiley stated that sometime near the end

                                  -3-
of her residency, she had Aat least a couple@ of phone conversations
with Tom Yocum, the individual in charge of the scholarship
program at the Department. 1 Wiley testified that, during these
conversations, she told Yocum she was thinking about pursuing a
postresidency fellowship at the University of Illinois at Chicago in
gastroenterology, a subspeciality of internal medicine dealing with
the digestive system. Wiley stated that Yocum told her the fellowship
Awasn=t approved but he indicated that some agreement could be
worked out as far as repaying the service.@ Wiley understood this to
mean that Aduring or after [her] fellowship, [she] would be able to
work as a primary care or in the field of primary care to repay [her]
service debt.@ Wiley also testified that she did not actually apply for
the fellowship until speaking with Yocum. According to Wiley,
Yocum Aindicated that possibly something could be worked out later
on@ and, after that, she applied for the fellowship. Wiley did not
receive any document memorializing her conversations with Yocum.
In September of 1991, Wiley signed an agreement with the
University of Illinois at Chicago to do the postresidency fellowship.
    Six months before Wiley=s residency ended, in January 1992, the
Department sent Wiley a letter in which it stated that it did not yet
have Aany indication from [her] regarding [her] selection of an
underserved practice site.@ The Department asked Wiley to Aplease
notify program staff at once@ if she had decided upon a practice
location, so that the Department would have sufficient time to verify
that the practice site met the requirements of her scholarship
contracts. The Department also noted that other scholarship recipients
were seeking approval of practice locations and that A[t]he time
required to locate a site, receive Departmental approval and make
final contractual agreements with those at your practice locations is
growing short.@ The Department offered to assist Wiley in selecting a
practice location and enclosed a recent copy of the directory listing

   1
     The appellate court below stated that this conversation took place in
February 1992. 348 Ill. App. 3d at 813. However, Wiley=s deposition
testimony placed the conversation sometime prior to September 1991.

                                  -4-
designated shortage areas. Wiley did not respond to this letter.
    Just prior to the end of her residency, in June 1992, the
Department sent Wiley another letter in which it again stated that she
needed to choose a practice location and have it approved by the
Department. The Department reminded Wiley that her scholarship
obligation was deferred only until the end of her residency and that
she would have to begin repaying her obligation, either through
service or with money, within 30 days after the residency ended.
Wiley did not respond to this letter.
    On July 1, 1992, Wiley began her fellowship in gastroenterology
at the University of Illinois at Chicago. The fellowship lasted three
years, until June 1995.
    Three months after she began her fellowship, in October 1992,
the Department sent Wiley a letter in which it noted that her service
commitment was to have begun in August 1992. The Department
stated that, because it had no indication that Wiley had started her
service commitment, it presumed that she had Aelected to monetarily
repay [her] scholarship obligation.@ The Department noted that Wiley
was required to pay three times the amount of scholarships, or
$157,395. The Department also stated that it was in the process of
preparing a repayment contract for Wiley which it would be sending
to her. Wiley did not respond to this letter.
    In December 1992, the Department sent Wiley a repayment
contract. The contract stated that Wiley had Aelected to repay required
funds in lieu of completing practice commitment,@ that the total
amount owed, $157,395, would be paid off in 36 installments, and
that the first payment was due January 1, 1993. In a cover letter, the
Department asked Wiley to sign the contract and return it as soon as
possible. Wiley did not return the contract or respond to the letter.
    On January 29, 1993, the Department sent Wiley a certified letter
which stated that, because she had not responded to any of the
Department=s previous letters, her account would be referred to a
collection agency or the Illinois Attorney General for further action.
    On February 13, 1993, the Department=s accounts receivable
division sent Wiley a letter which again noted that the Department
had not received any response to its previous letters and that Wiley
had not returned the repayment contracts. The letter stated that the
Department Awould appreciate a check for $157,395 within the [next]

                                 -5-
fifteen (15) days,@ and that legal or collection procedures would be
initiated if the check was not received. The letter also noted that all
Department accounts which had to be referred to a collection agency
were also automatically referred to the Illinois Comptroller=s office
for involuntary withholding. Wiley did not respond to this letter.
     In March 1993, the Department=s collection agency informed the
Department that it had contacted Wiley but that she refused to deal
with them. Thereafter, the Department referred Wiley=s account to the
Comptroller=s office, requesting that money be involuntarily withheld
from Wiley=s monthly paychecks to satisfy her payment obligation
under the scholarship contracts. The Department also referred the
matter to the Illinois Attorney General.
     In April 1993, Wiley phoned Yocum to discuss her scholarship
contracts. Yocum told her that her case had been referred to the
Attorney General and that she should contact the Attorney General=s
office.
     In her deposition testimony, Wiley stated that she contacted the
Attorney General=s office and spoke to an individual about satisfying
her scholarship obligations through a payment plan. Wiley stated that
they discussed how much she Acould afford right then@ and agreed
upon $100 a month. Wiley further testified that, although she Amade
some agreement for payment@ with the Attorney General, her Aplan
was to still try to work out some deal with repaying the service.@
Wiley stated that she told someone from the Department of her intent
to repay her debt with service but that she did not inform anyone in
the Attorney General=s office. Wiley also acknowledged that
whomever she spoke with at the Department indicated that her debt
could no longer be repaid with service.
     In June of 1993, the Attorney General sent Wiley an AInstallment
Agreement.@ The agreement stated that Wiley owed the Department
$157,395 and that she would satisfy the debt by paying $100 per
month for 24 months, followed by $4,305 per month for 36 months.
The first $100 payment was due July 15, 1993, and subsequent
payments were due monthly. The agreement also stated that if Wiley
failed to make a timely payment, the entire balance would become
due immediately. In addition, the agreement stated that A[u]pon
payment in full, Dr. Thelma Wiley shall be entitled to a full release
from any further obligation on this matter.@ Accompanying the

                                 -6-
installment agreement was a cover letter that asked Wiley to sign the
agreement and return it Aas soon as possible with [the] first payment
of $100.00 which is due on July 15, 1993.@ Wiley received the
installment agreement but failed to return it, and failed to contact the
Department or Attorney General=s office, by the July 15 due date.
     On August 23, 1993, the Comptroller=s office sent Wiley a notice
that $524.56, or 25% of her monthly paycheck, was being withheld,
and would continue to be withheld, until the $157,395 that she owed
the Department was paid in full. The notice informed Wiley that she
had a right to protest the withholding within 30 days. Wiley did not
file a protest and the withheld funds were sent to the Department.
     Approximately a week after the involuntary withholding began,
on September 1, 1993, Wiley sent a signed copy of the installment
agreement to the Attorney General=s office, along with a money order
for $100. In her deposition testimony, Wiley stated that she could not
recall why she was late in returning the installment agreement and
sending the first payment. The Department received the installment
agreement and money order and credited the funds toward Wiley=s
outstanding balance. Because the payments under the installment
agreement were already in arrears, the involuntary withholding was
continued.
     On October 18, 1993, Wiley phoned the Department and asked if
she could proceed with payments under the installment agreement
instead of continuing with involuntary withholding. The Department
declined the request. The Department concluded that it would ask the
Attorney General to Aterminate the repayment contract and that in
lieu of court action to recover the entire amount, they agree that the
Department should continue to offset for $500 monthly.@ The
Department notified Wiley of its decision on October 22, 1993,
stating that Ait was in the best interest of the Department to continue
with the offset at $500 a month, rather than $100 a month payment
through the Attorney General=s office and that the Department had
requested termination of the repayment contract.@ The Attorney
General agreed to terminate the installment agreement on November
1, 1993.
     On October 28, 1993, Wiley sent a protest letter to the
Comptroller=s office. Wiley wrote that Ait is true that the above sum
of money [$157,395] is owed.@ However, she maintained that other

                                  -7-
payment arrangements Awere already in progress@ in the form of an
installment agreement with the Attorney General. Wiley also wrote
that she Awas not notified prior to withholding that such action would
occur if payments were late@ under the installment agreement.
    The Comptroller=s office sent a letter to Wiley and the
Department on November 4, 1993, acknowledging receipt of the
protest letter, asking the Department for a response, and noting that
Wiley would have the chance to reply. The Department responded to
Wiley=s protest with a letter, a memorandum setting forth the history
of the matter, and supporting documents. The Department explained
to the Comptroller that it was pursuing involuntary withholding
against Wiley because she already had not complied with the terms of
the installment agreement and because she had been given many
opportunities to fulfill her obligations on other terms. Wiley=s protest
was denied and involuntary withholding continued through December
1994.
    In July 1995, after her fellowship was completed, Wiley began
working full time as a physician at the University of Illinois Medical
Center at Chicago, and part-time at the Veteran=s Administration
West Side Medical Center. Wiley=s practice was in gastroenterology
and hepatology, which is a subspecialty of gastroenterology dealing
exclusively with liver diseases. In her deposition testimony given in
1997, Wiley stated that her work consisted of attending an inpatient
gastroenterology ward six months a year at the University of Illinois
at Chicago, attending a general internal medicine ward at the
Veteran=s Administration hospital one month a year, seeing
outpatients three half-days a week, performing endoscopy procedures
a half-day a week, and teaching and performing clinical research all
year long. 2 Wiley=s salary in 1997 was $103,000. Wiley
acknowledged that, even after her fellowship ended, she never
received approval of a practice location for her service from the
Department. She also acknowledged that she did not contact the
Department to discuss repaying her scholarship obligations.

   2
       The record does not indicate what Wiley=s current work responsibilities
are.

                                      -8-
    On August 17, 1995, the Department filed a two-count verified
complaint against Wiley in the circuit court of Cook County. Count I
alleged that Wiley breached the four scholarship contracts by, inter
alia, failing to serve, within 30 days after her residency, as a full-time
primary care physician in a designated shortage area approved by the
Department. Count I further alleged that, pursuant to the Act, the
Department was entitled to treble damages of $157,395. Count II
alleged that Aon or about September 1, 1993, plaintiff and defendant
entered into an >Installment Agreement= *** for the purpose of
settling claims in accordance with the >Illinois Family Practice
Residency Act= @ and that Wiley breached this agreement.
    The circuit court concluded that the Department abandoned the
installment agreement when it asked the Attorney General to
terminate the agreement and then pursued involuntary withholding.
Accordingly, the court granted Wiley=s motion to dismiss count II.
    Wiley and the Department filed cross-motions for summary
judgment with respect to count I. The circuit court determined that
there was no question of material fact that Wiley failed to fulfill her
service obligation because neither the type of medicine she practiced
nor the locations where she practiced satisfied the terms of the
scholarship contracts and the Act. The circuit court therefore entered
judgment in favor of the Department on count I in the amount of
$157,395.
    On appeal, Wiley argued that the installment agreement was a
settlement agreement that merged all claims based on the scholarship
contracts and, therefore, the Department was precluded from
proceeding under count I. The appellate court rejected this argument,
concluding that the installment agreement was a payment plan, rather
than a settlement. 348 Ill. App. 3d at 818-19. In addition, the
appellate court held that there was no question of material fact that
Wiley breached the four scholarship contracts. Specifically, the court
held that Wiley Abreached the contracts when she did not (a) obtain
the Department=s approval of her fellowship, (b) obtain a deferment
of her service obligation during her fellowship, (c) obtain approval
for her practice at the University of Illinois or [Veteran=s
Administration] location, regardless of whether those sites were in
underserved areas, and (d) commence repayment of her service
obligation within 30 days of the end of her residency as required

                                  -9-
under the contracts.@ 348 Ill. App. 3d at 820.
    The appellate court additionally held that, pursuant to the
scholarship contracts and the Act, Wiley was required to reimburse
the Department three times the amount of the scholarships awarded.
In so holding, the appellate court noted that the treble damages
provision in the contracts arose from a statutory directive, rather than
through negotiations of the parties. Thus, the appellate court
determined that common law contract defenses, such as the doctrine
of substantial performance, could not be raised in an attempt to avoid
the treble damages requirement. In reaching this conclusion, the
appellate court rejected the reasoning of Department of Public Health
v. Jackson, 321 Ill. App. 3d 228, 237 (2001), wherein the court held
that treble damages are appropriate only in cases Awhere there has
been a substantial failure to perform.@

                             ANALYSIS
    This case arises from the circuit court=s grant of summary
judgment in favor of the Department. Summary judgment should be
granted whenever the pleadings, depositions, admissions, and
affidavits on file, viewed in the light most favorable to the
nonmoving party, show that there are no disputed material facts
between the parties and that the moving party is entitled to judgment
as a matter of law. Home Insurance Co. v. Cincinnati Insurance Co.,
213 Ill. 2d 307, 315 (2004). Our review of the circuit court=s entry of
summary judgment is de novo. Home Insurance Co., 213 Ill. 2d at
315.

                        Installment Agreement
    As she did in the appellate court, Wiley argues that the circuit
court erred in granting the Department summary judgment on count I
of the Department=s complaint because the Department settled any
and all claims that it had against Wiley under the scholarship
contracts when it entered into the installment agreement with Wiley
in September of 1993. Wiley contends that, under the doctrine of
compromise and settlement, the Department is precluded as a matter
of law from pursuing claims under the scholarship contracts that it
previously settled. See, e.g., Towne v. Town of Libertyville, 190 Ill.
App. 3d 563, 569-70 (1989).

                                 -10-
     AA compromise is an agreement to terminate, by means of mutual
concessions, a claim that is disputed in good faith or unliquidated.
15A Am. Jur. 2d Compromise & Settlement '1 (1976). >It involves an
agreement that a substituted performance is acceptable instead of
what was previously claimed to be due; thus, each party yields
something and agrees to eliminate both the hope of gaining as much
as he previously claimed and the risk of losing as much as the other
party preciously claimed.= 15A Am. Jur. 2d Compromise &
Settlement '1 (1976).@ Collection Professionals, Inc. v. Logan, 296
Ill. App. 3d 959, 964-65 (1998). In other words, a compromise is an
agreement that a substitute performance will be accepted in place of
what was previously claimed to be due each party. An agreement is
not one for compromise and settlement, however, if the parties do not
dispute the original claim, merely reaffirm their existing obligations,
and make no mutual concessions. Collection Professionals, 296 Ill.
App. 3d at 965.
     We agree with the appellate court=s conclusion that the
installment agreement was a payment plan expressly contemplated by
the scholarship contracts and not a settlement of claims under those
contracts. See 348 Ill. App. 3d at 818-19. As the Department points
out, Wiley agreed in the scholarship contracts that if she did not
fulfill her service obligation, she would pay the Department three
times the scholarship funds received, or $157,395. Wiley also agreed
that, if this occurred, she would enter into another contract with the
Department to set forth the terms of payment. Each scholarship
contract expressly stated that the terms of the repayment agreement
would be in equal monthly installments for three years Aor as
otherwise approved by the Department.@
     Consistent with this language, Wiley entered into an installment
agreement that required her to pay $100 per month for the first 24
months and then $4,305 per month for the following 36 months. At
the time Wiley discussed the installment agreement with the Attorney
General=s office, she did not dispute that she had not yet fulfilled the
service obligation or that she was obligated to fulfill the payment
obligation. Further, as the appellate court noted (348 Ill. App. 3d at
818-19), the installment agreement stated that Wiley would be
Aentitled to a full release from any further obligation on this matter@
only A[u]pon payment in full.@ Wiley and the Department agreed,
therefore, that she owed the entire amount due under the scholarship

                                 -11-
contracts and that she would be released from her obligations under
those contracts only when she fully paid that amount.
    All that the installment agreement did, then, was to reaffirm
Wiley=s existing obligation under the scholarship contracts and
provide her with a monthly installment plan to fulfill that obligation.
The installment agreement was clearly a means for the Department to
enforce its rights under the scholarship contracts, not a means to
surrender any of its rights against Wiley in exchange for rights
surrendered by her.
    Wiley also contends, however, that the Department is precluded
from arguing that the installment agreement was not a settlement,
based on a statement made by the Department in its verified
complaint that Wiley and the Department Aentered into an
>Installment Agreement= *** for the purpose of settling claims in
accordance with the Illinois Family Practice Residency Act.@
According to Wiley, this statement shows the Department=s intent to
enter into a settlement with Wiley and is a binding judicial admission
that the installment agreement was in the nature of a settlement
contract.
    Whether the installment agreement was, in fact, a settlement
agreement presents a question concerning the proper interpretation of
a contract. The construction of a contract is a question of law. See,
e.g., Farm Credit Bank of St. Louis v. Whitlock, 144 Ill. 2d 440, 447
(1991) (AThe intention of the parties to contract must be determined
from the instrument itself, and construction of the instrument where
no ambiguity exists is a matter of law@); Klein v. Caremark
International, Inc., 329 Ill. App. 3d 892, 902 (2002). As the appellate
court below observed, a party is not bound by admissions regarding
conclusions of law since it is for the courts to determine the legal
effect of the facts adduced. 348 Ill. App. 3d at 819, citing Charter
Bank & Trust of Illinois v. Edward Hines Lumber Co., 233 Ill. App.
3d 574, 579 (1992). Thus, as the appellate court correctly concluded,
the Department=s statement in its verified complaint was not a judicial
admission that the installment agreement was a settlement agreement
between the parties. 348 Ill. App. 3d at 819. Accordingly, because
there was no settlement, the Department was free to pursue the
present action against Wiley for breach of the scholarship contracts.
See, e.g., Kruse v. Kuntz, 288 Ill. App. 3d 431, 435 (1996).

                                -12-
                 Breach of the Scholarship Contracts
    Wiley also argues that the circuit court erred in granting the
Department summary judgment on count I because there are material
questions of fact as to whether she breached any of the scholarship
contracts. As noted, the appellate court rejected this argument,
holding that, among other things, Wiley breached the scholarship
contracts by failing to work in a location approved by the Department
and by failing to begin her service commitment within 30 days of the
completion of her residency. 348 Ill. App. 3d at 820.
    Each of Wiley=s scholarship contracts required her to work as a
full-time primary care physician in a designated shortage area
Aapproved as a practice site(s)@ by the Department. Each contract also
required Wiley to begin fulfilling her service obligation within 30
days of the completion of her residency. Wiley did not fulfill either of
these requirements. After her residency, Wiley began a fellowship in
gastroenterology at the University of Illinois at Chicago. In her
deposition testimony, Wiley acknowledged that Yocum told her the
fellowship was not an approved practice location. This fact was
confirmed in the Department=s January 1992 letter to Wiley, which
stated that she did not yet have an approved practice site, and again in
the Department=s June 1992 letter, which repeated the same
statement. Further, Wiley did not obtain the Department=s approval
for her subsequent position at the University of Illinois at Chicago or
with the Veteran=s Administration. In addition, Wiley did not begin
her service commitment at an approved practice site within 30 days
of the completion of her fellowship.
    Wiley argues, however, that obtaining approval from the
Department for a practice site and beginning her service obligation
within the 30 day period are merely Aadministrative requirements@
and that the failure to fulfill those requirements resulted in no harm to
the Department. Wiley then points to the common law doctrine of de
minimis non curat lex, 3 a doctrine which provides that if a breach of
contract causes only slight harm, then no remedy exists. See, e.g.,
Pacini v. Regopoulos, 281 Ill. App. 3d 274 (1996) (applying the

   3
    Meaning, Athe law does not concern itself with trifles.@

                                  -13-
doctrine to a shopping center sale contract where 95% occupancy was
required and 94.9953% was achieved); 4 A. Corbin, Corbin on
Contracts '946, at 813 (1951). Relying on this doctrine, Wiley
contends that she did not breach the scholarship contracts.
    The Department, in response, contends that the defense of de
minimis non curat lex is not available in this case because common
law contract defenses may not be applied to contracts whose terms
are established by the Act, rather than through negotiations conducted
by the parties. In support of this contention, the Department cites to
several federal court decisions that discuss the National Health
Service Corps scholarship program (42 U.S.C. ''254l through 254s
(1988)), a program similar to the one created by the Act. These
decisions generally hold that, because the contractual terms and
conditions imposed upon a federal scholarship recipient arise from
statutory directives, rather than negotiations, common law contract
principles are inapplicable. Instead, the governing principle is
statutory intent. See, e.g., United States v. Vanhorn, 20 F.3d 104 (4th
Cir. 1994); United States v. Melendez, 944 F.2d 216 (5th Cir. 1991);
United States v. Bloom, 925 F. Supp. 426 (E.D. La. 1996). In
addition, the Department argues that, even if Wiley may raise the
doctrine of de minimis non curat lex in this case, she cannot prevail
because the breaches which she committed were not trivial and real
harm was caused.
    With respect to the contractual requirements of obtaining
approval from the Department for a practice site, and beginning the
service commitment within a 30 day period, we agree with Wiley that
common law contract principles apply. Each of Wiley=s scholarship
contracts expressly incorporates the Family Practice Residency Act
into the terms of the agreements. The Act, in turn, gives the
Department a general power A[t]o establish a program of medical
student scholarships and to award scholarships to eligible medical
students.@ 110 ILCS 935/4.03 (West 2002). However, other than the
term A[e]ligible medical student@ (110 ILCS 935/3.07 (West 2002))
and the treble damages requirement (110 ILCS 935/10 (West 2002)),
the Act does not specify what the terms or conditions of the
scholarship contract must be. This is in contrast to the detailed
scheme set forth in the statutes governing the National Health
Services Corps program. See, e.g., 42 U.S.C. '2541(f)(1)(B)(iv)
(1988) (the federal scholarship contract must contain a provision that

                                -14-
the recipient agrees to serve in a health professional shortage area Ato
which he is assigned by the Secretary as a member of the Corps@); see
also Department of Public Health v. Jackson, 321 Ill. App. 3d 228,
232 (2001) (noting that the Act contains far less detail than the
federal statutes that govern the National Health Services Corps
program).
    Although they are part of Wiley=s scholarship contracts, both the
requirement that the Department approve of the scholarship
recipient=s practice site and the 30-day start date are not found in the
Act. Because these requirements have not been imposed by the
General Assembly, we conclude that ordinary contract principles
apply to them and that Wiley may raise the doctrine of de minimis
non curat lex.
    However, while Wiley may invoke this defense, it is not
successful here. The requirements that the Department approve the
scholarship recipients= practice locations and that the service
commitments begin in a timely fashion are critical to the efficacy of
the scholarship program. Departmental approval of a practice site is
needed to ensure that medical services are being distributed
throughout the state and being provided to those who are most in
need. The Department must be able to retain control over where and
when the scholarship recipients serve or the program will be
ineffective and the purpose of the Act frustrated. See Jackson, 321 Ill.
App. 3d at 232; see also Vanhorn, 20 F.3d at 114 (under the National
Health Service Corps program, scholarship recipients may not
Aunilaterally, without proper approval, decide where they wish to
serve if the program is to be effective@); United States v. Duffy, 879
F.2d 192, 197 (6th Cir. 1989) (if Arecipients are able to demand
assignment to a particular location, then the purpose of the [federal]
scholarship program is defeated@). Wiley=s failure to obtain approval
of her practice location and begin working within 30 days were not
Aslight@ or Atechnical@ matters. Rather, these were material breaches
of core obligations contained in the scholarship contracts.
Accordingly, we decline to find that the doctrine of de minimis non
curat lex is applicable in this case. We therefore affirm the judgment
of the appellate court that Wiley breached the scholarship contracts.

                                 -15-
                            Treble Damages
     Wiley also contends that the circuit court erred in awarding the
Department treble damages. Wiley notes that, under Illinois law,
damages may not be recovered in an action for breach of contract if
the purpose of those damages is merely to secure a party=s
performance of the agreement. See Hidden Grove Condominium
Ass=n v. Crooks, 318 Ill. App. 3d 945, 947 (2001). Such damages are
considered Aan unenforceable penalty unless: (1) the amount so fixed
is a reasonable forecast of just compensation of the harm that is
caused by the breach; and (2) the harm caused is difficult or
impossible to estimate.@ Crooks, 318 Ill. App. 3d at 947. Wiley
argues that the treble damages at issue here are an improper penalty
and may not be imposed.
     Wiley also relies on Department of Public Health v. Jackson, 321
Ill. App. 3d 228 (2001). In that case, the appellate court concluded
that treble damages under the Act should be imposed in those
instances Awhere there has been a substantial failure to perform@ on
the part of the scholarship recipient. Jackson, 321 Ill. App. 3d at 237.
Wiley maintains that she substantially performed under the
scholarship contracts and, therefore, that treble damages are
inappropriate.
     Wiley may be correct that, at common law, the treble damages
provision in her scholarship contracts would be unenforceable.
However, we need not consider that issue here because the imposition
of treble damages in this case is not governed by common law.
Rather, the treble damages are required by statute.
     Each of Wiley=s scholarship contracts incorporates the Act into
the terms of the agreements. In addition, three of the four contracts
specifically state that the treble damages requirement is imposed Ain
accordance with the Family Practice Residency Act.@ Section 10 of
the Act states: AScholarship recipients who fail to fulfill the
obligation described in subsection (d) of Section 3.07 of this Act shall
pay to the Department a sum equal to 3 times the amount of the
annual scholarship grant for each year the recipient fails to fulfill
such obligation.@ 110 ILCS 935/10 (West 2002). Subsection (d) of
section 3.07, in turn, states that an A[e]ligible medical student@ is a
person who Aagrees to practice full-time in a Designated Shortage
Area as a primary care physician one year for each year he or she is a

                                 -16-
scholarship recipient.@ 110 ILCS 935/3.07(d) (West 2002). Wiley
does not argue that the legislature may not, as a general matter,
modify the common law on the issue of damages for breaches of
scholarship contracts, nor does she contend that section 10 of the Act
is unconstitutional. We are not free to ignore the requirements set
forth by the General Assembly in constitutionally valid legislation.
Accordingly, we conclude that, so long as the statutory requirements
of section 10 of the Act are met, treble damages may be imposed in
this case.
    Further, we decline to apply the position advanced in Jackson
that, in determining whether treble damages may be imposed, the
relevant inquiry is whether the scholarship recipient failed to
substantially perform the scholarship contract. The question in this
case is not whether Wiley did, or did not, substantially perform the
terms and conditions of her scholarship contracts. Instead, in
accordance with sections 10 and 3.07(d) of the Act, the question is
whether Wiley (1) practiced full time (2) as a primary care physician
(3) in a designated shortage area. See 110 ILCS 935/10, 3.07(d)
(West 2002).
    The Department contends that there is no question of material fact
that Wiley failed to fulfill each of the foregoing requirements.
According to the Department, Wiley did not work as a primary care
physician because her practice was in gastroenterology, a
subspecialty of internal medicine, and hepatology, a sub-subspecialty
of internal medicine. The Department also maintains that, even if
portions of her practice were in primary care, she was not working as
a primary care physician full time. Finally, the Department contends
that Wiley was not working in a designated shortage area because her
practice locations were not listed in any of the directories of
designated shortage areas prepared by the Department.
    Wiley, in response, maintains that testimony from expert
witnesses obtained during discovery raises questions of material fact
as to whether she was practicing full time as a primary care
physician. Moreover, Wiley argues that, under the definition of
designated shortage area contained in section 3.04 of the Act, she
satisfied the requirement that she practice in a designated shortage
area as well. We address this latter contention first.
    The Act defines a designated shortage area as

                                -17-
             Aan area designated by the Director as a physician
         shortage area, a medically underserved area, or a critical
         health manpower shortage area as defined by the United
         States Department of Health, Education and Welfare, or as
         further defined by the Department to enable it to effectively
         fulfill the purpose stated in Section 2 of this Act. Such areas
         may include the following:
             (a) an urban or rural area which is a rational area for the
         delivery of health services;
             (b) a population group; or
             (c) a public or nonprofit private medical facility.@ 110
         ILCS 935/3.04 (West 2002).
    Wiley argues that the requirement of designation by the Director
of the Department applies only to the first clause in section 3.04, i.e.,
Aphysician shortage area,@ and not to any of the successive clauses.
Thus, according to Wiley, the phrase Amedically underserved area@ is
defined independently of any designation by the Director. Wiley then
points to Census Bureau statistics, undisputed by the Department,
which show that the median family income in the neighborhood
where the University of Illinois at Chicago and Veteran=s
Administration medical centers are located is approximately one-
third of the median citywide family income and that 55% of the
population in the neighborhood live below the poverty line. Wiley
further notes that a large percentage of the patients she treated
received public assistance and had no other form of insurance. Wiley
argues that it is precisely this type of low-income population that
experiences difficulty receiving medical care because of its lack of
resources. Thus, according to Wiley, her practice location was in a
Amedically underserved area@ and treble damages are unwarranted.
We disagree.
    In light of the purpose of the Act, Wiley=s reading of section 3.04
is not a reasonable one. Consider, for example, that a large and highly
respected research hospital, though located in an impoverished
neighborhood, may have no difficulty filling available medical
positions because of the salary and career opportunities that those
positions provide. A community clinic located in the same
neighborhood, however, cannot offer the salaries and career options
that the hospital can, and may struggle to hire physicians. The

                                 -18-
purpose of the Act is to improve primary health-care services in those
areas Awhere health manpower shortages exist.@ 110 ILCS 935/2
(West 2002). Although both the large hospital and the community
clinic may be located in the same neighborhood, they may face very
different levels of Amanpower shortages.@ For this reason, it cannot be
left up to the scholarship recipient to determine, on her own, that her
statutory service obligation has been met because the neighborhood
in which she works is an impoverished one. The purpose of the Act
cannot be effectuated unless the Director can designate those places
where health services are actually needed. Consequently, we reject
Wiley=s interpretation of section 3.04. We conclude that a Adesignated
shortage area@ means just thatBan area designated by the Director of
the Department as suffering from a shortage of professional medical
care.
     In this case, it is undisputed that Wiley=s practice locations in
gastroenterology and hepatology at the University of Illinois at
Chicago and the Veteran=s Administration medical centers were not
in the directory of designated shortage areas prepared by the
Department. Accordingly, Wiley violated section 10 of the Act and
the Department is entitled to treble damages. Because we have
determined that Wiley was not working in a designated shortage area,
we need not consider whether she was working full time as a primary
care physician.

                          CONCLUSION
    For the foregoing reasons, the judgment of the appellate court is
affirmed.

                                                             Affirmed.

                                -19-