Harrisburg-based Schutjer Bogar has filed suit in federal court against one of its former attorneys, alleging that following her departure she continued to do work for a firm client utilizing confidential methods developed by the firm but failed to pay Schutjer Bogar a cut of the revenue generated by that work as required by her employment agreement.
The suit also names the client as a defendant, alleging it aided the attorney in breaching her contract.
According to the eight-page complaint in Schutjer Bogar v. Hayes, filedin the U.S. District Court for the Middle District of Pennsylvania on January 29, defendant Kelly Kjersgaard Hayes was an attorney with Schutjer Bogar, which handled Medicaid eligibility and reimbursement claims for Kentucky-based defendant Kindred Nursing Centers East.
According to the complaint, Hayes, who joined Schutjer Bogar in 2008, did a significant amount of work for Kindred while with the firm and was therefore privy to the firm’s methods of handling Medicaid eligibility and reimbursement claims, which fell under the definition of "confidential information" in the firm’s employment agreement.
Part of Hayes’ work involved training Kindred employees so they could assist her in processing and prosecuting Medicaid claims, according to the complaint.
In September 2011, Hayes "abruptly" left Schutjer Bogar to work for South Carolina firm Maring & Moody, according to the complaint.
The complaint alleges that prior to leaving Schutjer Bogar, Hayes had arranged her employment with Maring & Moody and had gotten Kindred to agree to terminate its relationship with Schutjer Bogar and continue working with her.
The complaint further alleges that Hayes arranged to continue training Kindred employees using methods developed by Schutjer Bogar.
Hayes no longer works for Maring & Moody and the Pennsylvania Office of Disciplinary Counsel website lists her current firm as Burgeon Legal Group in South Carolina.
According to a filing on the South Carolina Secretary of State’s Office website, Burgeon appears to be a law practice that was started by Hayes.
While some sections of the complaint do allege that Hayes acted "either personally and/or through the law firms of Maring & Moody and/or Burgeon Legal Group Ltd. Co.," neither firm is named as a defendant.
Robert W. Maring, one of the principals of Maring & Moody, also did not return a call for comment.
At press time, no attorneys had entered an appearance on behalf of either Hayes or Kindred.
Neither Hayes nor a spokesperson for Kindred returned calls seeking comment.
Schutjer Bogar’s complaint includes a claim for breach of contract, alleging that, since leaving the firm, Hayes has continued to perform work for Kindred similar to the work she did while still with the firm but has failed to pay Schutjer Bogar a portion of the gross revenue generated by that work.
According to the complaint, the employment agreement Hayes executed with Schutjer Bogar when she joined the firm states that, if she were to leave, she would be required to pay Schutjer Bogar 40 percent of any revenue earned from its clients for a period of 18 months following her departure.
The complaint alleges that Hayes has not provided any accounting for that revenue nor paid any portion of that revenue to Schutjer Bogar since she terminated her employment with the firm.
The complaint also claims Hayes breached her fiduciary duty to Schutjer Bogar by continuing to use the firm’s confidential information to do work for Kindred and possibly other Schutjer Bogar clients.
"As a result of defendant Hayes’ breach of her fiduciary duties as noted, Schutjer Bogar has suffered loss of revenues and loss of potential additional revenues, including a percentage of fees earned on all Kindred and other Schutjer Bogar clients’ (as defined in the employment agreement) cases that she, or others in conjunction with her, worked for a period of at least 18 months from the date of the termination of her employment with Schutjer Bogar," the complaint alleges.
The complaint also includes claims against Kindred for aiding and abetting Hayes in breaching her fiduciary duties to Schutjer Bogar and for tortious interference with contractual relations, alleging Kindred conspired with Hayes to circumvent the terms of her employment agreement.
Schutjer Bogar is seeking compensatory and punitive damages from Kindred and Hayes, as well as a court order for an accounting of any payments made by Kindred either to Hayes or to any law firm she’s worked at since leaving Schutjer Bogar.
Schutjer Bogar’s attorney, Jonathan M. Crist of the Law Offices of Jonathan M. Crist in Hershey, Pa., declined to comment on the case.
The firm currently has another, separate suit pending against Kindred in the Middle District of Pennsylvania alleging breach of contract and fraud for unpaid legal fees.