Aduz Healthcare Servs., P.C. v. Herbert U. Ojiaku, M.D., of Aduz Healthcare Servs., P.C.
| Decision Date | 01 April 2014 |
| Docket Number | NO. 32,555,32,555 |
| Parties | ADUZ HEALTHCARE SERVICES, P.C., A New Mexico Professional Corporation, NII TETTEH ADDY, as an officer and director of ADUZ HEALTHCARE SERVICES, P.C. and in his individual capacity, and GRACE MBONDE-KANGE, as an officer and director of ADUZ HEALTHCARE SERVICES, P.C. and in her individual capacity, Plaintiffs-Appellees, v. HERBERT U. OJIAKU, M.D., as shareholder, officer, and director of ADUZ HEALTHCARE SERVICES, P.C., Defendant-Appellant. |
| Court | Court of Appeals of New Mexico |
This memorandum opinion was not selected for publication in the New Mexico Appellate Reports. Please see Rule 12-405 NMRA for restrictions on the citation of unpublished memorandum opinions. Please also note that this electronic memorandum opinion may contain computer-generated errors or other deviations from the official paper version filed by the Court of Appeals and does not include the filing date.
APPEAL FROM THE DISTRICT COURT OF EDDY COUNTY
Doerr & Knudson, P.A.
Randy Knudson
Portales, NM
Greig & Richards, P.A.
W.H. Greig
Clovis, NM
for Appellee
Caren I. Friedman
Santa Fe, NM
for Appellant
{1} Defendant Herbert Ojiaku appeals the judgment of the district court finding and concluding that he converted monies for his own use and owes his former partners in Aduz Healthcare Services, P.C. (Aduz), Nii Tetteh Addy and Grace Mbonde-Kange (Plaintiffs), $157,387.33 plus interest at a yearly rate of fifteen percent. Defendant argues that the court's application of a spoliation inference was error, that the judgment of the court was not supported by sufficient evidence, that the dismissal of Defendant's counterclaims by partial summary judgment was error, and that both the grant to Plaintiffs of attorney fees and post-judgment interest at the rate of fifteen percent were error. We affirm the judgment of the district court.
{2} Unable to continue doing business together, Defendant and Plaintiffs, all doctors, disbanded their family healthcare clinic approximately one year from itsopening. After Defendant stated his intention to begin billing separately for the patients he saw, Plaintiffs decided to withdraw from the business. Subsequently, on March 29, 2010, the three partners and their respective counsel met formally, pursuant to the bylaws of the partners' closely held corporation, Aduz. At that meeting, basic terms of dissolution were agreed upon by a vote of two to one, which was sufficient to bind Aduz. Defendant cast the contrary vote. By the terms of the agreement, Defendant was authorized to utilize the office building for his practice for up to ninety days after Plaintiffs left. A non-party, Rebecca Baeza, was assigned broad financial and accounting duties of Aduz for this period and was granted complete and unfettered access to the tools required to perform this function, including access to the company computer systems, incoming payments, and corporate bank account. Baeza was authorized to make all deposits of the corporation, to pay or ensure payment of the bills of the corporation, and to provide a detailed accounting. Defendant was authorized to use the existing corporate structure, but all monies earned from his medical practice were to be deposited first to the corporation, and then timely forwarded to Defendant by Baeza. Defendant was obligated to account for all cash co-payments received for medical services.
{3} Defendant almost immediately diverted from the agreed-upon corporate structure by opening two additional bank accounts in the name of Aduz withoutauthorization and without informing Plaintiffs. Defendant also changed the credit card processing of the corporation to deposit payments into the new bank accounts and, seemingly, diverted one of the payment streams from the authorized Aduz account into one of the accounts controlled solely by Defendant. Less than one month after the meeting outlining dissolution terms, Plaintiffs filed suit against Defendant seeking an injunction to enforce corporate decisions, to prohibit interference with corporate decisions, an accounting, breach of fiduciary duties, and conversion. Plaintiffs' complaint alleged, in essence, that Defendant seized control of the income stream, denied Baeza access to the mail and corporate billing records, and substantially prevented Baeza from performing the financial and accounting duties assigned to her.
{4} Pursuant to various motions by both parties, the district court held a pre-trial hearing on May 19, 2010. The result of that hearing was a July 26, 2010 order for preliminary injunctive relief ordering a full accounting of all records of Aduz by July 29, 2010, including an accounting of the two unauthorized corporate accounts opened and controlled unilaterally by Defendant. The court also ordered full access to the programs and accounts through which payments for medical services are received. The court's order for production was detailed, including, for instance, disclosure of not only bank statements, but "deposit records, withdrawal records, and checksissued" on "any accounts opened by any of the shareholders which have corporate monies deposited therein[.]" The court also ordered Defendant to provide the initial account set-up records and signature cards for the unauthorized corporate accounts. Additionally, the court ordered the parties to agree on a special master to develop an accounting report for Aduz. Among the duties assigned to the special master were to: (1) detail what monies were earned by each of the doctors prior to their separation, including payments for prior services received after the separation; (2) review and evaluate the monies already received by Defendant and placed into the unauthorized bank accounts; (3) establish a mechanism to delineate the earnings of Defendant for the time period after the separation from the collective earnings prior to the separation; (4) establish an agreement and mechanism whereby the funds earned by Defendant after April 1, 2010 would be retained by or distributed to Defendant; (5) establish an agreement and mechanism whereby the earnings of the three members of Aduz prior to April 1, 2010 would be retained and deposited into the corporate bank account; and (6) contact all insurance companies and providers doing business with the clinic and obtain claim reports from them. Defendant was to provide a weekly accounting to the special master and Plaintiffs for one of the unauthorized bank accounts. We note that, in the time between the April 1, 2010 separation and the eventual order of July 26, 2010, many of the duties of the special master became moot because the separationof the partners was by then nearly four months past and Defendant stayed in the building less than a week after the order.
{5} Pursuant to a December 1, 2010 hearing on multiple motions and a mediation the following day, the court issued an additional series of orders on December 9, 2010. Among the motions heard was a motion to compel filed by Plaintiffs. Plaintiffs sought production of bank records, particularly deposit slips and copies of checks, from the two unauthorized corporate accounts opened by Defendant—records Defendant did not dispute were to be produced to Plaintiffs under the court order of July 26, 2010. Plaintiffs also sought records of Defendant's personal accounts. Although Defendant testified at deposition that he had no money in any accounts and no assets besides his house, personal accounts with more than $30,000 of recent deposits came to light during discovery, leading Plaintiffs to seek the source of those funds. After receiving briefs and hearing argument on the matter, the court reiterated the order requiring complete and detailed production of records from the unauthorized accounts. The court noted that Plaintiffs scheduled depositions with the banks that maintained relevant accounts in an attempt to get detailed account information from a source other than Defendant, and ordered Defendant to promptly supply anything additional "[s]hould . . . counsel for Plaintiff[s] feel that they have not received the entire file" from the banks. The court also noted that Defendant may have to re-senddocuments. The court ordered Defendant to provide "all records" pertaining to all personal accounts within seven days, including cancelled checks and deposit slips. Under a stipulated order and judgment resulting from the mediation, Defendant was held in contempt, and a judgment was rendered against him for failure to comply with a previous court order to personally pay his share of the mortgage on the office building, totaling $11,116.82. Defendant was also ordered to reimburse Plaintiffs for the shortfall Plaintiffs covered from the sale of the office building. Defendant stipulated to tortious and willful misconduct. Any additional claims between the parties other than the ordered payments by Defendant and the "accounting/audit matter" were dismissed with prejudice. Defendant's counsel was granted leave to withdraw and, from that point, Defendant proceeded pro se.
{6} The court's clear order to Defendant did not end the tussle over discovery. On January 24, 2011, the court held a hearing on a motion to compel filed by Plaintiffs. The court heard argument that Defendant did not produce certain information related to his various Wells Fargo accounts, including deposit slips, thus forcing Plaintiffs to attempt to obtain detailed information from the bank. Plaintiffs were ordered to continue the attempt to obtain the information from Wells Fargo, and Plaintiffs' request for attorney fees related to obtaining this information was taken under advisement.
{7} The special master issued his report on April 13, 2011. The report was based on documents generated from the Aduz AMS billing system. The period covered by the report appears to be March 10, 2010 to July 10, 2010. The report summarized the amounts deposited into the two...
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