EXHIBIT 5.2
[LETTERHEAD OF DOMINICK, FLETCHER, YEILDING, WOOD & LLOYD, P.A.]
February 13, 2003
MEDQUEST, INC.
4300 North Point Parkway
Alpharetta, Georgia 30022
O'MELVENY & MYERS, LLP
30 Rockefeller Plaza
New York, New York 10112
RE: REGISTRATION OF SECURITIES OF MEDQUEST, INC.
Ladies and Gentlemen:
Reference is made to the Registration Statement (the "Registration
Statement") on Form S-4 (File No. 333-101399) of MedQuest, Inc., a Delaware
corporation (the "Company") in connection with the Company's offer (the
"Exchange Offer") to exchange up to One Hundred Eighty Million Dollars
($180,000,000.00) principal amount of the Company's 11 7/8% Senior Subordinated
Notes due 2012 that have been registered under the Securities Act of 1933 (the
"New Notes"), which New Notes will be guaranteed (the "Guarantees") by, among
others, each of Imaging Services of Alabama, Inc., Dothan Diagnostic Imaging,
Inc. and Mobile Open MRI, Inc., each an Alabama corporation, and Montgomery Open
MRI, LLC and Norwood Diagnostic Imaging, LLC, each an Alabama limited liability
company (together, the "Alabama Guarantors"), for a like principal amount of the
Company's outstanding 11 7/8% Senior Subordinated Notes due 2012 (the "Old
Notes") which Old Notes have also been guaranteed by such Alabama Guarantors.
We have acted as special local counsel to the Alabama Guarantors solely in
connection with issuing this opinion in connection with the above-identified
transaction (the "Transaction"). We do not represent the Alabama Guarantors
generally, and did not represent the Alabama Guarantors in any other respect in
connection with the Transaction. This opinion letter is being delivered pursuant
to Item 601(b)(5) of Regulation S-K under the Securities Act of 1933, as
amended. In connection with this opinion, we have reviewed fully executed
originals, or copies represented to us as accurate, of the following documents:
February 13, 2003
Page 2
1. The Indenture, dated August 15, 2002 (the "Indenture"), among the
Company, MQ Associates, Inc., the Alabama Guarantors, the other subsidiary
guarantors of the Company, and Wachovia Bank, National Association, as Trustee,
including the Guarantees of the Alabama Guarantors as set forth in Article XI of
the Indenture;
2. The Purchase Agreement, dated August 8, 2002 (the "Purchase Agreement")
among the Company, MQ Associates, Inc. ("MQ Associates"), the Alabama
Guarantors, other subsidiary guarantors of the Company and the Initial
Purchasers named therein (the "Initial Purchasers");
3. The Registration Rights Agreement, dated August 15, 2002, among the
Company, MQ Associates, Inc., the Alabama Guarantors, the other subsidiary
guarantors of the Company and the Initial Purchasers named therein;
4. The First Supplemental Indenture, dated as of November 13, 2002, among
Town & Country Open MRI, LLC, Clayton Open MRI, LLC, Wisconsin Diagnostic
Imaging, Inc., Vienna Diagnostic Imaging, Inc., the Company, MQ Associates,
Inc., the Alabama Guarantors, the other subsidiary guarantors of the Company
party to the Indenture, and Wachovia Bank, National Association, as Trustee
under the Indenture; and
5. The Second Supplemental Indenture, dated as of December 20, 2002, among
Brunswick Diagnostic Imaging, LLC, the Company, MQ Associates, Inc., the Alabama
Guarantors, the other subsidiary guarantors of the Company party to the
Indenture, and Wachovia Bank, National Association, as Trustee under the
Indenture.
All of the documents identified above are referred to hereinafter,
collectively, as the "Transaction Documents". All references herein to the
Transaction Documents (or to other documents identified therein) shall be deemed
to refer only to such documents themselves and exhibits attached thereto and
provided to us, but exclusive of other documents referred to or incorporated by
reference therein. Terms used herein but not defined herein shall have the
meanings ascribed to them in the Purchase Agreement.
In our capacity as special local counsel to the Alabama Guarantors, we
have relied upon, among other things, the Alabama Guarantors' factual
representations in the following described Secretary's and Manager's
Certificate, delivered to us by or on behalf of each of the Alabama
Guarantors, and the following described Officer's Certificate delivered to us
by or on behalf of the Companies:
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Dothan Diagnostic Imaging, Inc., Imaging Services of
Alabama, Inc., Mobile Open MRI, Inc., Montgomery Open
MRI, LLC, Norwood Diagnostic Imaging, LLC Secretary's
and Manager's Certificate, dated February 13,
2003 (the "Secretary's and Manager's Certificate") and
Anderson Diagnostic Imaging, Inc., Asheville Open MRI, Inc.,
Bioimaging at Charlotte, Inc., Bioimaging of Cool Springs, Inc.,
Bioimaging at Harding, Inc., Cabarrus Diagnostic Imaging, Inc., Cape
Fear Diagnostic Imaging, Inc., Carolina Imaging, Inc. of
Fayetteville Chapel Hill Diagnostic Imaging, Inc., Chattanooga
Diagnostic Imaging, Inc., Dothan Diagnostic Imaging, Inc., Florida
Diagnostic Imaging Center, Inc., Grove Diagnostic Imaging Center,
Inc., Imaging Services of Alabama, Inc., Kansas Diagnostic Imaging,
Inc., Kenosha Diagnostic Imaging, Inc., Lexington Open MRI, Inc.,
Mecklenburg Diagnostic Imaging, Inc., MedQuest Associates, Inc.,
Missouri Imaging, Inc., Mobile Open MRI, Inc., Occupational
Solutions, Inc., Open MRI of Georgia, Inc., Open MRI & Imaging of
Georgia, Inc., Open MRI & Imaging of Richmond, Inc., Palmetto
Imaging, Inc., Phoenix Diagnostic Imaging, Inc., Piedmont Imaging,
Inc. (Forsyth), Piedmont Imaging, Inc., South Carolina Diagnostic
Imaging, Inc., Sun View Holdings, Inc., Texas Imaging Services of El
Paso, Inc., Triad Imaging, Inc., Tyson's Corner Diagnostic Imaging,
Inc., Virginia Diagnostic Imaging, Inc., Vienna Diagnostic Imaging,
Inc., Wisconsin Diagnostic Imaging, Inc., Northeast Columbia
Diagnostic Imaging, Inc., Carolinas Diagnostic Imaging, Inc., dated
February 13, 2003 (the "Officer's Certificate").
The Secretary's and Manager's Certificate and the Officer's
Certificate are herein collectively referred to as the "Officers' Certificates".
In addition, we have obtained and relied upon such certificates of public
officials as we have considered necessary or appropriate, including
specifically, Certificates of Existence for each of the Alabama Guarantors
issued by the Alabama Secretary of State,
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dated December 20, 2002, and Certificates of Good Standing for each of the
Alabama Guarantors issued by the Alabama State Department of Revenue, dated
December 18, 2002.
For purposes of this opinion, the phrases "to our knowledge" or "known by
us" shall have the meanings ascribed to them in the "Additional Assumptions,
Qualifications, Limitations and Exceptions" portion of this letter.
In connection with this opinion, we have investigated such questions of
law as we have deemed necessary or appropriate for the purposes of this opinion.
We have not examined any contracts to which any Alabama Guarantor is a party. We
have not searched or reviewed any files and records of or relating to the
Alabama Guarantors. We have not researched the plaintiff or defendant indices of
any county in Alabama or any other jurisdiction, whether state, federal, or
foreign. We have conducted no UCC filing, judgment lien, or real estate
recording search in any Probate Court in Alabama, nor with the Alabama Secretary
of State's office, nor any similar office located in any other jurisdiction. We
have examined only the Transaction Documents and the Officers' Certificate, the
organizational documents and minutes attached to such Officers' Certificate (the
"Organizational Documents"), and the certificates of existence and good standing
from Alabama public officials as referred to herein.
ASSUMPTIONS
For purposes of the opinions expressed herein, we have assumed (in
addition to any other assumptions stated elsewhere herein):
(i) the genuineness of the signatures of all persons signing any document,
instrument or certificate;
(ii) the accuracy and completeness as of the date of this opinion of all
factual matters set forth in the Transaction Documents and the Alabama
Guarantors' Organizational Documents;
(iii) that the Trustee and each Holder of the Securities either is
qualified to transact business in Alabama, or is not required to qualify to do
business in Alabama in order to enforce the Transaction Documents;
February 13, 2003
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(iv) that natural persons who are parties, or shareholders, officers,
directors, members or managers of parties to the Transaction, have requisite
legal capacity;
(v) that there has been no mutual mistake of fact or misunderstanding,
fraud, duress or undue influence on the part of the Trustee, any Holder of the
Securities, or any other party with respect to the Transaction or any other
matter contemplated by any of the Transaction Documents;
(vi) the authenticity and current effectiveness of all documents submitted
to us as originals, and the conformity to original documents of all documents
submitted to us as certified, conformed or photostatic copies, and the
authenticity and current effectiveness of the original of all such certified,
conformed or photostatic copies;
(vii) that the Trustee, any Holder of the Securities and any other party
to any of the Transaction Documents (other than the Alabama Guarantors) have all
requisite power and authority, and have taken all necessary action on their
parts, to entitle them to enforce any of the Transaction Documents to which they
are parties in accordance with the terms thereof, to duly execute, deliver and
perform such Transaction Documents, to effect the transactions contemplated
thereby and to make the Transaction Documents the valid, legal and binding
obligation of the Trustee, any Holder of the Securities, or any other party
(other than the Alabama Guarantors), enforceable against it or them in
accordance with the terms thereof;
(viii) performance by the Trustee, by any Holder of the Securities, or by
any other party to any of the Transaction Documents and all documents
contemplated thereby (other than the Alabama Guarantors) will not violate
applicable law;
(ix) due and proper execution of the Transaction Documents, in the form
reviewed by us, by all parties thereto;
(x) that all certificates and all telegraphic and telephonic confirmations
given by public officials have been properly given and are accurate;
(xi) that the Transaction Documents fully state the agreement between the
Alabama Guarantors and the other parties thereto;
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(xii) that the Transaction Documents, the Securities and all other
documents, instruments and agreements necessary to consummate the Transaction
(collectively, the "Additional Documents") have been duly executed and delivered
by the parties thereto;
(xiii) that as of the closing of the Transaction, all of the outstanding
shares of capital stock or equity interests, as the case may be, of each Alabama
Guarantor have been duly and validly authorized and issued, are fully paid and
non-assessable and are held of record by MedQuest, Inc., free and clear of all
Liens, charges, and encumbrances;
(xiv) that the execution, delivery and performance by each of the Alabama
Guarantors of each of the Transaction Documents to which each is a party, the
issuance of the Guarantees and compliance by each of the Alabama Guarantors with
the terms thereof and the consummation of the transactions contemplated thereby
will not result in the violation of any judgment, order, rule or regulation of
any court or arbitrator or governmental or regulatory authority applicable to
the Alabama Guarantors;
(xv) that the execution, delivery and performance of the Guarantees by
each of the Alabama Guarantors is necessary to enable each of them to accomplish
the objects for which they were created and are reasonably necessary or proper
in the conduct of each of their respective businesses;
(xvi) that each public authority document is accurate, complete and
authenticate and all official public records (including their proper indexing
and filing) are accurate and complete;
(xvii) that the Trustee and any Holder of the Securities and any agent
acting for any of the them in connection with the Transaction have acted in good
faith and without notice of any defense against the enforcement of any rights
created by, or adverse claim to any property or interest transferred or created
as a part of, the Transaction; and
(xviii) that there are no agreements or understandings among the parties,
written or oral, and there is no usage of trade or course of prior dealing among
the parties that would, in either case, define, supplement or qualify the terms
of the Transaction Documents.
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Based on the foregoing and subject to the additional assumptions,
qualifications and exceptions set forth below, we are of the opinion that:
1. Based solely on the Certificates of Existence and Good Standing
referred to herein, each of the Alabama Guarantors is duly organized, validly
existing (as of December 20, 2002), and in good standing (as of December 18,
2002) under the laws of the State of Alabama.
2. Based solely on the Organizational Documents, each of the Alabama
Guarantors has full right, corporate power and authority to execute and deliver
each of the Transaction Documents to which it is a party and to perform its
respective obligations thereunder; and all action required to be taken by the
Alabama Guarantors for the due and proper authorization, execution and delivery
of each of the Transaction Documents and the consummation of the transactions
contemplated thereby by the Alabama Guarantors has been duly and validly
taken.
3. The guarantees of the Alabama Guarantors relating to the Exchange
Securities required under Section 11.1 of the Indenture have been duly
authorized by each of the Alabama Guarantors.
4. The Indenture, as supplemented by the First Supplemental Indenture and
the Second Supplemental Indenture, which includes the Guarantees of the Alabama
Guarantors, relating to the Exchange Securities, has been duly executed by each
of the Alabama Guarantors.
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5. While the courts in Alabama exercise discretion in matters governing
conflicts of law, and to some extent the decisions of such courts are based upon
circumstances, facts and policies existing at the time of litigation, it is our
opinion that the courts of the State of Alabama would give effect to the
agreement contained in the Transaction Documents that each Transaction Document
shall be governed by and construed in accordance with the internal laws of New
York. This opinion is based upon the 1991 decision of the Alabama Supreme Court
in CHERRY, BEKAERT & HOLLAND V. BROWN, 582 So. 2d 502 (Ala. 1991), in which that
Court held:
Alabama follows the principle of "lex loci
contractus," which states that a contract is
governed by the laws of the state where it is
made except where the parties have legally
contracted with reference to the laws of
another jurisdiction. Alabama law has long
recognized the right of parties to an agreement
to choose a particular state's laws to govern
an agreement. . . However, this principle is
qualified by the principles set out in BLALOCK
V. PERFECT SUBSCRIPTION CO., 458 F.Supp. 123
(S.D. Ala. 1978), and the cases following it.
. . .
While parties normally are allowed to choose another
state's laws to govern an agreement, where application
of that other state' laws would be contrary to Alabama
policy, the parties' choice of law will not be given
effect and Alabama law will govern the agreement.
582 So. 2d at 506, 507 (citations omitted)(choice of North Carolina law in
accountant' covenant not to compete not enforceable against Alabama accountant
since such covenants violate Alabama public policy when applied to
professionals). ACCORD, EX PARTE EXXON CORP., 725 So. 2d 930, 933 (Ala.
1998)(parties may not, by contracting with reference to another state's law,
"circumvent the clear intent of the Alabama legislature").
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February 13, 2003
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ADDITIONAL ASSUMPTIONS, QUALIFICATIONS,
LIMITATIONS AND EXCEPTIONS
The foregoing opinions are subject to the following additional
assumptions, qualifications, limitations and exceptions:
1. Whenever in our opinions we indicate that the existence or absence of
facts is based on our knowledge, we are referring to the actual current
knowledge of partners and associates of Dominick, Fletcher, Yeilding, Wood &
Lloyd, P.A. who have had substantive involvement in the representation of the
Alabama Guarantors in connection with the Transaction contemplated by the
Transaction Documents. Except as expressly set forth herein, we have not
undertaken any independent investigation or verification of such matters (and we
have not caused to be made any review of any records of the Alabama Guarantors,
or any court files or indices) and no inference as to our knowledge concerning
such facts should be drawn from our representation of the Alabama Guarantors or
otherwise.
2. We express no opinion regarding any provision of any Transaction
Document which purports to vary or change by agreement any provision of
applicable law which may not, by the terms of applicable law, be varied or
changed by agreement.
3. We express no opinion as to the applicability or effect of federal or
state securities laws or any federal or state antitrust laws, except as
expressly set forth herein.
4. We express no opinions regarding any provision of any of the
Transaction Documents relating to waivers.
5. We express no opinion regarding any provision of any of the Transaction
Documents:
(i) relating to indemnity, powers of attorney, releases from
liability, exculpation, severability or set-off;
(ii) which purports to restrict, or to deny effect to, oral
amendments, consents or waivers;
(iii) which permits, or purports to permit, a party to select or
enforce multiple or inconsistent remedies;
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February 13, 2003
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(iv) which permits, or purports to permit, a party to select the
forum for the resolution of conflicts over the Transaction Documents or any of
them, or to submit to the jurisdiction of any court, or to waive its right to
trial by jury; or
(v) which specifies that the Trustee, or the Holder of any Security,
or any other person may apply funds to indebtedness in its discretion or in such
order as it may select, or providing for application of funds to principal,
charges or taxes prior to the application thereof to interest.
6. We express no opinion regarding the existence, adequacy, payment or
receipt of consideration.
7. We express no opinion regarding any provision of any Transaction
Document which purports:
(i) to permit any party to enforce any remedy thereunder except in
compliance with applicable provisions of the Alabama law, federal law, and other
state and local laws; or
(ii) to modify any standards of care imposed upon any person by
Alabama law, by applicable federal law or other state or local laws, or to
define such standards of care or to define standards of commercial
reasonableness, reasonable notification or the like.
8. We express no opinion regarding the accuracy or truth of any
representation or warranty of any Alabama Guarantor in any Transaction Document;
however, nothing has come to our attention to suggest that any representation or
warranty contained therein is not accurate or truthful.
9. Without limiting the generality of any other limitations set forth in
this opinion letter, and notwithstanding anything to the contrary set forth
herein, we do not express any opinion as to:
(i) the state of title to any real or personal property which may be
covered by the Transaction Documents, or the priority or perfection (or
continuation thereof) of any lien, security interest, security title or other
encumbrance purported to be created or perfected by the Transaction Documents;
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February 13, 2003
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(ii) any matter involving choice of law or conflicts of law;
(iii) any matter involving licensure or certificate of needs
statutes, rules or regulations; or
(iv) any matter involving state or federal securities statutes,
rules or regulations.
10. To the extent the law of the State of Alabama applies any of the
following rules to one or more of the provisions of any of the Transaction
Documents, this opinion is subject to the effect of generally applicable rules
of law that:
(i) limit the enforceability of provisions releasing, exculpating or
exempting a party from, or requiring indemnification of a party for, liability
for its own action or inaction, to the extent the action or inaction involves
gross negligence, recklessness, willful misconduct or unlawful conduct;
(ii) may, where less than all of a contract may be enforceable,
limit the enforceability of the balance of the contract to circumstances in
which the unenforceable portion is not an essential part of the agreed exchange;
(iii) govern and afford judicial discretion regarding the
determination of damages and entitlement to attorneys' fees and other costs;
(iv) may, in the absence of a waiver or consent, discharge a
guarantor to the extent that:
(A) action by a creditor impairs the value of collateral securing
guaranteed debt to the detriment of the guarantor, or
(B) guaranteed debt is materially modified; and
(v) may permit a party which has materially failed to render or
offer performance required by any Transaction Document to cure that failure
unless:
(A) permitting a cure would unreasonably hinder the aggrieved party
from making substitute arrangements for performance, or
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February 13, 2003
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(B) it was important in the circumstances to the aggrieved party
that performance occur by the date stated in the transaction document.
11. Any and all opinions rendered by this firm in this letter are limited
to the opinions expressly set forth herein, and no opinion is to be implied or
inferred beyond the matters expressly so stated. Without implying any limitation
upon the foregoing sentence, the following matters, including their effects and
the effects of noncompliance, are not covered by implication or otherwise in
this opinion letter, unless coverage thereof is specifically addressed herein:
(i) local law;
(ii) antitrust and unfair competition law;
(iii) securities laws;
(iv) fiduciary obligations;
(v) pension and employee benefit law (E.G., ERISA);
(vi) Regulations T, U and X of the Board of Governors of the Federal
Reserve System;
(vii) environmental law;
(viii) zoning, land use, subdivision and other development law;
(ix) Hart-Scott-Rodino, Exon-Florio and other laws related to filing
requirements, other than charter-related filing requirements such as
requirements for filing articles of merger;
(x) bulk transfer laws;
(xi) tax laws;
(xii) patent, copyright, trademark and other intellectual property
laws;
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February 13, 2003
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(xiii) racketeering laws, (E.G., RICO);
(xiv) criminal statutes of general application, (E.G., mail fraud
and wire fraud);
(xv) health and safety laws, (E.G. OSHA);
(xvi) federal and state laws, regulations and policies concerning:
(A) national and local emergency, and
(B) possible deference to acts of sovereign states; and
(xvii) labor laws.
12. In addition to, but not in limitation of, the qualifications,
limitations and exceptions contained elsewhere in this opinion, certain
provisions, waivers and remedies contained in the Transaction Documents may not
be enforceable, but such unenforceability will not render any such document
invalid as a whole or render inadequate the rights and remedies for enforcing
the practical benefits provided by such document.
13. Provisions in the Transaction Documents and any other related document
stating that determinations and notices are conclusive and binding for all
purposes in the absence of manifest error shall be read in the knowledge that
any party thereto may be entitled to request proper evidence or to present to a
court evidence to the contrary.
14. All opinions expressed herein are subject to:
(i) applicable bankruptcy, reorganization, receivership, insolvency,
fraudulent conveyance, fraudulent transfer, moratorium, assignment, and general
assignment for the benefit of creditors' laws, and other laws relating to or
affecting the rights of creditors generally;
(ii) general principles of equity (whether considered in an action,
suit or proceeding at law or in equity) and the availability of the remedies of
specific performance, injunctive relief, or other equitable remedies being
limited by statute and/or
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February 13, 2003
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being subject to the discretion of the court before which any proceeding
therefor may be brought; and
(iii) standards of good faith, fair dealing, reasonableness and
unconscionability which may be applied by a court to the exercise of certain
rights and remedies.
15. We are not licensed to practice in, and therefore express no opinion
as to the laws of, any jurisdiction other than the State of Alabama, or, to the
extent applicable, the laws of the United States of America.
16. The opinions expressed herein are limited to the matters stated herein
and no opinion may be implied or inferred beyond the matters expressly stated
herein. Such opinions are as of the date hereof and limited to present statutes,
laws and regulations and to the facts as represented to us. We assume no
obligation to update or supplement these opinions to reflect any facts or
circumstances which may hereafter come to our attention or any changes in law
which may hereafter occur.
This opinion letter is delivered solely for the benefit of the addressees
and the holders of the New Notes, and their successors and assigns, in
connection with the Transaction and the consummation of transactions
contemplated thereby and may not used, relied upon, quoted from, circulated or
delivered to any other person without our express prior written consent. We
hereby consent to the use of this opinion as an exhibit to the Registration
Statement. In giving this consent, we do not thereby admit that we are included
in the category of persons whose consent is required under Section 7 of the
Securities Act of 1993 or the rules and regulations promulgated thereunder.
Very truly yours,
/s/ DOMINICK, FLETCHER, YEILDING, WOOD & LLOYD, P.A.
Dominick, Fletcher, Yeilding, Wood & Lloyd, P.A.