Baby docs duel over corporate break-up

By Steve Korris | Mar 7, 2007

Doctors about to face juries in malpractice trials usually focus all attention on their defense, but not Tina Gingrich of Maryville Women's Center.

On March 5, as Circuit Judge Nicholas Byron began trial in a malpractice suit against the obstetrician-gynecologist, she sued former partner Christina Midkiff.

Gingrich alleged that Midkiff breached a contract they signed in 1999, by breaking a covenant not to compete.

The suit opens a new route for conflict that has divided the doctors for years.

Gingrich formed a corporation for her practice in 1996, as sole shareholder.

In 1996 she hired physician Marlene Freeman. In 1998 she hired Midkiff. She guaranteed them $200,000 a year.

In 1999 Gingrich, Midkiff and Freeman signed a stock purchase agreement so each would own a third of the practice.

The agreement included a covenant not to compete for five years if they split up.

Midkiff agreed to pay Gingrich $125,000 for a third of the goodwill.

In 2002 Midkiff and Freeman sued Gingrich. Attorney Mark Goldenberg of Edwardsville blamed Gingrich for irreconcilable differences that damaged his clients.

Attorney George Marifian of Belleville answered with a counterclaim accusing Midkiff and Freeman of bad faith, unclean hands and defamation.

Nevertheless the three doctors kept working together. They signed an interim agreement to manage the practice through the litigation.

Associate Judge Ralph Mendelsohn took the case, which did not qualify for a circuit judge because the doctors filed it in chancery court.

Gingrich filed notice that she would buy all shares of Midkiff and Freeman under a clause of the 1999 agreement allowing her to buy them at fair value.

The doctors could not agree on fair value, so Midkiff and Freeman turned it down.

The doctors tried arbitration in 2004, but that broke down in 2005.

Mendelsohn held a bench trial last September. He asked for briefs.

Without waiting for him to nail down the numbers, Gingrich bought Midkiff's shares in December and Freeman's shares in January.

Midkiff started her own practice Jan. 1, at 4949 Autumn Oaks in Maryville. Her staff from the Women's Center moved with her.

On Jan. 25, Mendelsohn ordered Gingrich to pay Midkiff $206,898 for her third of the practice. He also ordered adjustments at Gingrich's expense.

His 13-page order divided dollars and assets to a microscopic degree, though he drew a line at specifying which furniture should go where.

He wrote, "The Court believes that the parties know and agree which property belongs to the Corporation and which is personal property of Dr. Midkiff, and thus this Order does not identify the individual items."

His order did not flatter Gingrich.

In denying her claim for credit due to workers relocating with Midkiff, he wrote that the workers "wouldn't go to work for Dr. Gingrich if offered."

He refused to enforce the covenant not to compete. Gingrich wanted him to ban Midkiff from continuing to practice at Anderson Hospital.

Mendelsohn wrote, "…such a restriction may do more harm to the public than provide benefit to Dr. Gingrich."

He wrote that Anderson Hospital administrator Keith Page testified that he wanted to retain all his obstetrician gynecologists and hire more.

Mendelsohn wrote that additional travel would take Midkiff away from her family, her practice and her patients.

He wrote, "Dr. Gingrich will have an unfettered opportunity to grow her practice by adding new providers and obtaining new patients."

On two points Mendelsohn agreed with Gingrich.

He denied Midkiff's claim for return of the $125,000 goodwill payment.

He ordered Midkiff to transfer to the corporation any patient data the corporation needed for insurance audits and collection of accounts receivable.

Gingrich moved Feb. 23 to enforce the data transfer.

Midkiff answered Feb. 28 with a motion to strike the motion.

Five days after that Gingrich sought to reverse their roles. Her suit over the covenant not to compete turned her into a plaintiff and Midkiff into a defendant.

Gingrich's attorney, Jason Johnson of Edwardsville, argued that Midkiff's office and Anderson Hospital were within the area the covenant restricted.

He wrote that Gingrich suffered damages in excess of $50,000.

He asked for an injunction keeping Midkiff out of the restricted area.

As Johnson filed suit for Gingrich on the first floor of the courthouse, attorney Ransom Wuller prepared to defend her in Byron's court on the third floor.

Plaintiff Wendy Wiggins claims Gingrich failed to detect cancer at an office visit in 2002. Patricia Zimmer represents Wiggins and husband Todd Wiggins.

Byron received pretrial motions March 5. Jury selection continued March 6.

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