A doctor and president of Cardiothoracic Surgery Associates has filed suit against the law firm Greensfelder, Hemker and Gale, alleging attorneys at the firm used knowledge from serving as prior general counsel to CSA to the company's disadvantage in a lawsuit against it.
Dr. Bill B. Daily and CSA claim they used Greensfelder, Hemker and Gale to draft articles of incorporation and bylaws when they became an Illinois corporation on June 12, 1996.
According to the complaint filed July 30 in St. Clair County Circuit Court, Greensfelder, Hemker and Gale remained general counsel to Daily and CSA through May 26, 2004, providing years of extensive and personal and business legal services to Daily and CSA.
During their stent with the company, Greensfelder, Hemker and Gale helped to develop CSA's business model that provided non-solicitation provisions in CSA's hospital contracts and non-compete provisions in their surgeon employment agreements, the suit states.
The law firm was there to draft employment agreements with Dr. David Theodoro on July 1, 1997; with Dr. Selichi Noda on May 29, 1998; and with Dr. Hon Chi Suen on March 24, 1999, the complaint says.
Included in each employment agreement was a provision that the doctors agreed not to practice within 30 miles of CSA within one year after the termination of their employment.
While representing Daily and CSA, Greensfelder, Hemker and Gale also represented SSM Healthcare St. Louis, which owned SSM DePaul.
So, when Daily and CSA began entering into negotiations in 2003 with SSM DePaul in which CSA would become the exclusive provider of cardiovascular surgery at the hospital, Greensfelder, Hemker and Gale represented both sides during the negotiations, the plaintiffs claim.
Later, in 2004, Daily and CSA entered into similar negotiations with SSM's Kirkwood Hospital, according to the complaint.
Included in contracts with both SSM properties was a provision that SSM would not hire any CSA employee during the duration of the contract or for 18 months after the contract's expiration without first obtaining written permission from SSM, the suit says.
At SSM's request, Theodoro was designated anchor surgeon at DePaul while Noda was named the same at Kirkwood, the complaint says.
SSM had two other hospitals – St. Mary's and St. Joseph's – where Drs. Trevor Axford and Stephen D'Orazio held anchor surgeon positions. Both doctors worked for St. Louis Heart Institute and had non-compete clauses in their contracts, the complaint says.
But CSA reached a waiver of release agreement with St. Louis Heart Institute in which the institute released Axford and D'Orazio from their contracts and the doctors began to work for CSA. In exchange, CSA paid the institute an unspecified sum of money, the plaintiffs claim.
By July 1, 2006, CSA became the exclusive provider of cardiovascular surgery services at St. Mary's and St. Joseph's, but did not have a contract with either hospital, according to the complaint. However, CSA was in negotiations with both hospitals, the suit says.
Those negotiations began to fall apart in early 2007, though, when Greensfelder, Hemker and Gale distributed a list of non-negotiables to Theodoro, Noda, Axford and D'Orazio regarding a network agreement, the complaint says.
"That the four doctors subsequently retained attorneys Mark Goldenberg and Judy Cates; following an exchange of letters between Attorney Goldenberg and Dr. Daily's/CSA's then-counsel, Laura J. Kipnis, Dr. Theodoro and Noda filed suit on February 23, 2007, in the Circuit Court of St. Louis County, alleging – among other things – breach of fiduciary duty against Dr. Daily, as well as seeking a declaratory judgment that the non-competes in their respective employment contracts were unenforceable," the plaintiffs say in their suit.
On March 6, 2007, Greensfelder, Hemker and Gale filed a motion to intervene in Theodoro's suit on behalf of DePaul and Kirkwood.
According to the complaint, the law firm asked the court to enter a declaratory judgment against CSA that non-solicitation clauses in its contracts with DePaul and Kirkwood were unenforceable.
Greensfelder, Hemker and Gale intervened in the suit even though it was the law firm that originally drafted the non-compete and non-solicitation clauses in the CSA contracts, the complaint says.
So, CSA and Daily filed a motion to disqualify Greensfelder, Hemker and Gale from acting as attorney to SSM in the Theodoro complaint, but the matter has never been ruled upon, the suit says.
On May 16, 2007, settlement negotiations were held and concluded with a memorandum of understanding as to the settlement terms between the parties, which provided for mutual releases of all parties from claims in pending litigation, the complaint says.
"Kathi Chestnut (the attorney for Greensfelder, Hemker and Gale) drafted and inserted a provision that specifically included defendant as a released party," the suit says.
CSA and Daily are blaming Greensfelder, Hemker and Gale for breaching their fiduciary duty to CSA and Daily by representing a party adverse to a previous client in a similar matter, by using information obtained during the representation of a former client against that client, by subordinating CSA's and Daily's interest to its own by attempting to include itself as a released party in settlement documents and by coordinating strategy with attorneys adverse to CSA and Daily.
Because of the law firm's actions, Daily and CSA claim they have sustained severe damage to their financial well-being and professional reputation and have lost compensation, income and business opportunities.
In the two-count suit, CSA and Daily are seeking a judgment of more than $150,000 and punitive damages of more than $150,000, plus actual damages and costs.
Thomas Q. Keefe Jr. of Belleville will be representing them.
St. Clair County Circuit Court case number: 09-L-405.