Three Houston-area doctors and an anesthesia company filed a malpractice lawsuit on May 22 seeking more than $1.8 million in damages from Gordon Rees Scully Mansukhani and three of its Houston lawyers. The plaintiffs allege that the defendants drafted a “woefully inadequate” settlement agreement in a business dispute that led to further, costly litigation.
The plaintiffs bring negligence and breach of fiduciary duty causes of action against Gordon Rees, Houston managing partner Joseph DiCecco, partner Glenn LeMay and senior counsel Christopher Raney, alleging that they “haphazardly” drafted a inadequate settlement agreement at the end of a long mediation.
“Rather than ending the dispute among the parties, the deficiencies in the settlement agreement—which was the product of over $250,000 in unreasonable attorney fees—caused an onslaught of continuing yet completely avoidable litigation amongst these same parties concerning the terms in the agreement and what the agreement was supposed to contemplate,” the plaintiffs allege in the petition, filed in the 269th District Court in Harris County.
“Even worse, due to the lack of specificity and protections in the agreement, the legal document was used as a proverbial license to steal, ultimately damaging plaintiffs over $1,800,000,” they allege in Medical Anesthesia Associates v. Gordon Rees Scully Mansukhani.
LeMay and Raney did not immediately respond to a telephone message or an emailed message seeking a comment.
DiCecco said, “We vehemently disagree with the assertions made in the pleadings, and look forward to the opportunity for the truth to prevail on the record.”
A call to Gordon Rees’ headquarters in San Francisco seeking a comment on the lawsuit was not immediately returned.
The plaintiffs include doctors Marvin Chang, Robert Sickler and Timothy Wong, and Medical Anesthesia Associates (MAA). Plaintiffs attorney Lance Kassab, of Kassab Law Firm of Houston, did not immediately return a telephone message seeking a comment. But David Kassab, an associate at the firm, said, “We look forward to helping the doctors out.”
The plaintiffs allege in the petition that they formed MAA along with three other doctors to provide anesthesia and pain management at medical facilities. The three plaintiff doctors allege that they and James Lai, Stuart Linde and Hugh Ker Thomson were all partners in MAA.
The plaintiffs allege that in June 2007, MAA entered into an “exclusive and lucrative” contract to provide anesthesia and other services to Sugar Land Surgical Hospital, on a one-year contract that would automatically renew unless one side provided notice. However, they allege, in the fall of 2011, hospital administrators informed MAA that Thomson and Linde “were trying to secure MAA’s exclusive provider agreements for themselves in violation of their duties to MAA.”
The plaintiffs allege that they and Lai hired DiCecco, LeMay, Raney and Gordon Rees to represent them in the dispute with Linde and Thomson, who had been terminated by MAA. On Oct. 10, 2011, Thomson and Linde sued Chang, Sickler, Lai and Wong and MAA, in a petition bringing causes of action including tortious interference and breach of fiduciary duty. The plaintiffs and Lai filed a counterclaim, bringing causes of action including tortious interference, breach of contract and breach of fiduciary duty, the plaintiffs allege in the petition.
The plaintiffs allege that on Oct. 14, 2011, the hospital notified MAA that it was terminating its contract as of Jan. 15, 2012, and they allege that cancellation cost MAA millions of dollars of revenue.
The plaintiffs allege that over a month and a half, the defendants “managed to churn fees in excess of $250,000 in attorney fees” to draft and file about 10 motions and/or pleadings, up until the Dec. 8, 2011, mediation. At that mediation, the plaintiffs allege, the lawyers advised Chang, Sickler, Lai and Wong to enter into a settlement agreement with Linde and Thomson that provided for a new company called Sugar Land Anesthesia (SLA) to hire MAA’s former employees to staff the practice, and the plaintiffs and Lai would receive an interest in the new company.
The agreement gave 75 percent ownership of SLA to Linde and Thomson, and the others would own 25 percent, but the plaintiffs allege that the settlement agreement failed to include terms to protect their interests.
“The lawyers’ failure to include definitive language in the settlement agreement concerning the new company agreement to bind the parties was fatally negligent and caused a clearly foreseeable onslaught of subsequent, yet entirely avoidable, litigation,” the plaintiffs allege in the petition.
The plaintiffs allege that Linde and Thomson used the settlement agreement as a “proverbial license to steal” and operated the company in a way that personally benefited them, including creation of wholly owned billing and staffing companies.
On Oct. 5, 2012, the plaintiff doctors and Lai sued Linde and Thomson and related companies for breach of the settlement agreement, among several causes of action, and they litigated that suit from Oct. 5, 2012, until April 1, 2015. They allege that they spent more than $1.3 million in attorney fees and expert fees “arguing about the vague terms contained within the settlement agreement and its overall incompleteness.”
The plaintiffs allege that they settled the underlying litigation with Linde and Thomson on April 1, 2015, with Linde and Thomson agreeing to pay $2,125,000 in settlement.
“This litigation, however, could have been completely avoided had the lawyers exercised a little diligence in drafting the settlement agreement rather than haphazardly throwing it together at the end of an 18-hour mediation,” the plaintiffs allege in the petition.
The plaintiffs seek $1.8 million in actual damages, plus unspecified punitive damages and fee forfeiture for “knowing and intentional breach of fiduciary duty.”