A 23-year-old woman reached a $1.8 million settlement in Lehigh Common Pleas Court last week over the sexual contact she had with her unlicensed psychotherapist and the allegedly negligent oversight the psychotherapist’s supervisors provided over the relationship.

Plaintiff Alyssa Thatcher’s attorneys said that she may be able to recover up to another $2 million because two of the defendants assigned their rights they have against their insurers in the accords Thatcher struck, respectively, with her former therapist, as well as with one of the therapist’s alleged supervisors.

The case of Thatcher v. Smith settled Jan. 31. Lehigh County Common Pleas President Judge Carol K. McGinley was the presiding judge.

Thatcher’s damages were entirely noneconomic damages, said plaintiff’s attorney Tom Kline of Kline & Specter in Philadelphia. Thatcher’s damages included the fact that she did not have the opportunity to receive beneficial treatment for her adolescent psychological disorders and she has post-traumatic stress disorder, as well as a deepening of her depression and anxiety, because of the sexual relationship, the plaintiff’s papers said. Plaintiff’s co-counsel was David K. Inscho of Kline & Specter.

Thatcher’s former therapist, Andrew Smith, agreed to enter a $1 million judgment against himself, and Smith assigned his right of recovery against his insurers, Executive Risk Indemnity and Chubb Health Care Insurance, to the plaintiff, Kline said.

Thatcher will argue that the exclusion in Smith’s Executive Risk policy for sexual contact between Smith and a client is an exclusion that is against public policy, Kline said. Thatcher now owns the claim Smith would have had against his insurer if there had been a large verdict against him, Kline said.

And one of the therapist’s supervisors, neurologist and psychiatrist Adnan Zawawi, agreed to enter a $2 million judgment against himself; Thatcher agreed to limit her right of recovery to Zawawi’s $500,000 medical malpractice policy with Physician Insurance Exchange and to Zawawi’s $500,000 coverage with the Medical Care Availability and Reduction of Error Fund, Kline said.

Zawawi also agreed to pay $800,000 through his general insurance carrier, Erie Insurance Exchange, Kline said.

Defendant Geoffrey Sherman agreed to pay $1 million through his insurer, CNA, Kline said.

Smith, the former therapist, agreed to personally pay Thatcher $7,245, which is about half of what was paid for Thatcher’s treatment, according to the consent agreement Smith entered into with Thatcher and read in open court.

One of Smith’s attorneys, Richard W. Yost, of Yost & Tretta in Philadelphia, wouldn’t confirm the details of the settlement reported by Kline & Specter. He declined further comment.

Smith treated Thatcher from the age of 13 to 18, starting with a stint from February 2001 to the end of 2002 and ending with a stint from the fall of 2004 until August 2005, according to the plaintiff’s pretrial memorandum. Smith first met Thatcher when she was admitted to the child inpatient mental health facility, KidsPeace Hospital, in 2001 because she was hurting herself and she was depressed and anxious, court papers said.

Smith was never licensed as a psychologist and he never applied for a psychologist license, the plaintiff’s papers said.

The improprieties in the therapeutic relationship heightened to a sexual relationship in 2004 when Smith had Thatcher perform oral sex on him, he purchased a sex toy for Thatcher on the eve of her high school graduation, and he took nude photographs of her, the plaintiff’s papers said.

Smith said in the consent agreement that he harmed Thatcher with willful and wanton misconduct; that his misconduct was unethical under the state’s law governing psychologists; and that the nude pictures he took of Thatcher were part of a larger design he had to “collect photographs of women naked and in poses for my private collection and enjoyment.”

When Smith started therapy with Thatcher again in the fall of 2004 at Zawawi’s practice, American Medical and Neuropsychiatric Services, Smith initiated a physical sexual relationship by daring Thatcher to kiss him during a therapy session, the plaintiff’s papers said. The sexual relationship progressed to include oral sex, and Smith gave Thatcher a ring as a gift around Christmas 2004, the plaintiff’s papers said.

The sexual relationship continued, the plaintiff’s papers said, when Smith went to work for Sherman at his Cedar Crest Counseling practice in April 2005 until August 2005 when Thatcher disclosed the relationship to her parents.

The supervising defendants were negligent because they were required to supervise Smith’s therapy because he was not licensed and they were negligent in hiring him because they did not verify his education credentials and his references, the plaintiff’s papers said.

Smith argued in his pretrial memorandum that Thatcher was contributorily negligent because she recognized the sexual conduct between her therapist and her was inappropriate. Smith also argued that Thatcher’s mother was contributorily negligent because, among other arguments, she let her daughter drive herself to therapy sessions and did not do more after Smith gave Thatcher a ring.

Defense psychiatric expert Dr. Barbara Ziv concluded that Thatcher had a consensual relationship with Smith; that none of the defendants had the ability to find out about or prevent the sexual relationship as part of a supervisory role; and that any ongoing problems Thatcher has are related to her long-standing mental health issues, not her sexual relationship with Smith, according to Zawawi’s pretrial memorandum.

Zawawi argued in his pretrial memorandum that Smith was allowed to rent a space at his office under the supervision of a licensed psychologist, but that his medical practice did not employ Smith.

Zawawi submitted health insurance claims for Smith’s treatment of Thatcher, and Zawawi exercised his Fifth Amendment rights to not answer questions regarding the receipt of payments for Thatcher’s therapy sessions, the plaintiff’s papers said.

Zawawi’s attorney, Charles J. Fonzone of Fonzone & Ashley in Allentown, did not respond to a request for comment.

Sherman argued in his pretrial statement that he supervised Smith in accordance with Pennsylvania law, including holding formal weekly supervisory sessions and being available throughout the work day to discuss patients. Sherman also argued that he had no idea that Smith was involved in an inappropriate relationship with Thatcher.

Sherman also argued that he put Smith on probation for making an inappropriate comment to a couple in marriage counseling, and he eventually fired Smith because of his continued tardiness and failure to appear at all for client appointments.

Sherman hired Smith because another therapist knew Smith from college, according to court papers.

Sherman’s counsel, Jeffrey P. Bates of Marshall Dennehey Warner Coleman & Goggin in Philadelphia, confirmed the settlement but declined comment on the case.

Thatcher said she was 17 when the sexual contact started, while Smith said she was 18 when they had two instances of oral sex, according to court papers. A criminal investigation revealed no evidence of a sexual relationship before Thatcher’s 18th birthday, Smith’s pretrial memorandum said.

Smith first treated Thatcher when he was working in the Allentown office of Philip Kinney from Feb. 24, 2001, to Jan. 23, 2002, and in the Lehigh Valley Associates in Psychology office of George Perovich from January 2002 to the end of 2002, the plaintiff’s papers said.

Kinney and Perovich were both dismissed by the plaintiff from the case, the plaintiff’s and defense attorneys said.

Kinney and Perovich had disclaimers in their policies for sexual misconduct and the firm felt they wouldn’t be able to reach those policies, Kline said. As well, the defendants were supervising Smith during a time in which there was no sexual misconduct, Kline said. The plaintiff’s papers did allege that during that time frame of treatment, Smith held Thatcher’s hand, placed his hand on her leg and hugged her during therapy sessions, as well as sending her e-mails and instant messages.

Kinney’s counsel, Suzanne M. Bachovin of Christie Pabarue Mortensen & Young in Philadelphia, noted that all claims against Kinney were voluntarily withdrawn by the plaintiff and an order was entered for Kinney’s dismissal with prejudice.

Kinney only rented space to Smith, Bachovin said, and it was uncontested that there was no sexual contact between Smith and Thatcher during the time that Smith was treating Thatcher at Kinney’s office.

Kinney billed Thatcher’s parents’ insurance for office visits performed by Smith, and Kinney exercised his Fifth Amendment right to not answer questions regarding the payment for Thatcher’s treatment at his office, the plaintiff’s papers said.

Perovich argued in his pretrial statement that Perovich as well as Thatcher’s mother were present during Thatcher’s therapy sessions when treating at his office and that there was not sexual contact during that time frame of the therapeutic relationship. Perovich also argued that Smith omitted details of his relationship with Thatcher during supervisory sessions with Perovich.

Perovich’s attorney, James W. Kraus of Pietragallo Gordon Alfano Bosick & Raspanti in Pittsburgh, confirmed that Perovich was dismissed voluntarily by the plaintiff. He said that Perovich participated in a dialogue with Thatcher’s mother, and there was no allegation that there was anything untoward said or done by Smith during that time frame of Thatcher’s treatment.

Perovich submitted claims for Smith’s treatment of Thatcher, the plaintiff’s papers said.

Thatcher’s case may highlight a problem with Pennsylvania laws governing who can carry out therapy, Kline said.

“I view this case as a poignant example to the legislature, that in fact, what is going on out in the psychological community is that we have these unlicensed therapists who are in offices of clinical psychologists, who are billing for services and not only not properly supervising, but not supervising at all” the unlicensed therapists’ treatment of patients, Kline said.

Smith was expelled from Seton Hall University because of an affair he had with a client’s mother, but the state Pennsylvania Licensing Board could not take action against Smith because he was an unlicensed psychologist, the plaintiff’s papers said.

In the consent agreement, Smith said he would destroy all images of naked women from his computers and he would provide an affidavit of compliance. Smith also promised to no longer attempt to practice psychotherapy anywhere in the United States and to no longer indicate that he is a doctoral degree candidate at Seton Hall.  •