Broward judge agrees to class certification
A Broward Circuit Court judge has certified a class in a lawsuit by physicians against one of the nation’s largest providers of emergency room doctors.
The suit filed by Dr. David Soria of Delray Beach claims emergency room contractor TeamHealth wrongfully deducted $5.4 million to $9 million from its doctors’ incentive paychecks in the five years before the lawsuit was filed in September 2006.
The class could number as many as 120 doctors across Florida who were employed by Knoxville, Tenn.-based TeamHealth, according to court documents.
The class action started as a counterclaim in a lawsuit filed by InPhyNet Contracting Services, the Fort Lauderdale-based division of TeamHealth, against Soria for alleged breach of contract, tortious interference and breach of fiduciary duty. InPhyNet claimed Soria’s actions led Wellington Regional Medical Center to terminate its contract and sign with a competitor.
Soria served as medical director for InPhyNet at Wellington Regional.
In addition, the InPhyNet lawsuit alleged Soria violated his employment agreement by jumping to Dallas-based competitor MedicalEdge Healthcare Group. InPhyNet sought an injunction, claiming a restrictive covenant in Soria’s employment contract prevented him from working for another company at Wellington Regional.
MedicalEdge also is named as a defendant in the initial lawsuit. InPhyNet claimed MedicalEdge and Soria conspired to bring the contract to Medical Edge.
The class action was severed from the initial lawsuit by Broward Circuit Judge Alfred Horowitz. Both cases have been consolidated for discovery in the complex business litigation division before Judge Robert Rosenberg.
In July, Rosenberg entered a gag order in the class action, saying, “The parties shall not directly or indirectly publicly disseminate information (excluding court filings) about this litigation.” The order came after a hospital that contracts with TeamHealth for emergency staffing services received a fax from a “Dr. Smith” saying TeamHealth was engaged in a class-action lawsuit because it “outright lied to us physicians about bonuses we should have been paid.” The order also said Soria should “cease and desist from participating in the sending of any communications to defendants’ hospital clients” that are similar to the faxes from Dr. Smith.
Soria’s attorney, Glenn Waldman of Waldman Trigoboff Marx & Calnan in Fort Lauderdale, declined comment.
TeamHealth attorney Peter Goldman of Broad and Cassel in Fort Lauderdale would not comment specifically on the case, but in an e-mail said: “It is always important to keep in mind that all orders granting class certification address procedural aspects of the case, only, and are not, in any way, shape or form meant to be a ruling, preliminary or otherwise, on whether the claims asserted have any merit.” He noted his clients respectfully disagree with the court’s certification ruling and intend to immediately appeal it.
Rosenberg certified the class Nov. 10 on the condition that Soria drop his nearly identical individual counterclaim against TeamHealth.
“Dr. Soria could possibly compromise the best interests of the class as a whole for a favorable result in his own personal lawsuit,” the judge wrote. “A class representative’s sole concern must be the best interest of the class as a whole.”
Soria filed a notice to dismiss Nov. 12, and the judge issued a final certification order Friday.
Rosenberg noted Soria said he would be willing to drop his claim if the class were certified.
The merits of the class action have a direct effect on the initial litigation because InPhyNet’s initial claims would be void if the class could prove the company breached the employment agreement first.
TeamHealth employs more than 5,000 physicians and staff in its business of contracting with medical facilities to provide staffing services.
The litigation began when InPhyNet sued Soria and Medical Edge in 2005. Claiming its medical directors are responsible for the relationship a provider has with a hospital, InPhyNet alleged Soria’s decision to work with a competitor cost it the contract.
InPhyNet claims Soria’s first attempt to get Wellington to contract with Medical Edge was in the spring and summer of 2004. That summer, the hospital briefly terminated its contract with InPhyNet before reinstating it.
A year later, Wellington terminated its contract with InPhyNet for good. Medical Edge, which was brought in, formed Emergency Specialists of Wellington. MedicalEdge, with Soria at the helm, started at the hospital Nov. 1, 2005.
InPhyNet alleges Soria breached his loyalty agreement in a 2004 employment contract. InPhyNet also claims Medical Edge should have known about the restrictive convenants.
In response to the lawsuit, Soria claimed he was not responsible for InPhyNet losing the Wellington contract. Soria, who started working for InPhyNet in February 2003, claimed his relationship with Wellington helped his employer retain the contract.
Soria also claimed Wellington had the right to terminate the contract, so there was no conspiracy. He also claimed he could seek new employment once InPhyNet no longer had a contract.
Soria claims in court documents he learned about InPhyNet’s alleged misconduct on incentive payments while responding to the lawsuit against him.
Physician incentive compensation plans are profit-sharing plans offering physicians 60 percent of the profits after deducting expenses each quarter, according to the class action claims. The more profitable an emergency room is, the more money doctors would make.
However, Soria claims TeamHealth increased the expenses by creating “a fictitious or unsubstantiated accounting category identified as ‘physician benefits’ or ‘other physician benefits.'” The class claims no such expenses exist.
In response, InPhyNet claims in documents that the incentive payments constitute a small portion of a physician’s annual compensation, the charge is unique to InPhyNet and does not exist elsewhere in TeamHealth.
This is not the first lawsuit against InPhyNet and TeamHealth alleging improper accounting practices. Waldman was involved in a separate case against the companies by the medical director of Westside Regional Medical Center in Plantation, which ended in confidential arbitration in 2006.
InPhyNet has maintained physician incentive plans for doctors assigned to at least 15 facilities in Florida. On a nationwide basis, it employs up to 4,000 physicians.
Jordana Mishory can be reached at (954) 468-2616.