Kademian v. Marger

• Decision Date: 03 October 2014
• Docket Number: No. 25917.,25917.
• Citation: 20 N.E.3d 1176
• Parties: Michael T. KADEMIAN, M.D., Plaintiff–Appellant v. Donald MARGER, M.D., et al., Defendant–Appellees.
• Court: Ohio Court of Appeals

20 N.E.3d 1176

Michael T. KADEMIAN, M.D., Plaintiff–Appellant

v.Donald MARGER, M.D., et al., Defendant–Appellees.

No. 25917.

Court of Appeals of Ohio, Second District, Montgomery County.

Oct. 3, 2014.

James M. Hill, James M. Hill Co., L.P.A., Beavercreek, OH, for plaintiff-appellant.

Felix J. Gora, Rendigs, Fry, Kiely & Dennis, Cincinnati, OH, for defendant-appellees.

Opinion

DONOVAN, J.

{¶ 1} This matter is before the Court on the Notice of Appeal of Michael T. Kademian, M.D., filed September 19, 2013. Kademian appeals from the December 20, 2012 Verdict Entry of the trial court, issued following trial at which a unanimous jury found in favor of Appellee Donald Marger, M.D., on Kademian's claims for breach of fiduciary duty and conversion. Kademian also appeals from the August 20, 2013 Decision of the trial court that overruled his motions for judgment notwithstanding the verdict and for a new trial. We hereby affirm the judgment of the trial court.

{¶ 2} The lengthy factual history herein is set forth in this Court's March 9, 2012 Opinion reversing the decision of the trial court and remanding the matter on Kademian's direct appeal from the trial court's decision entering summary judgment in favor of Marger on Kademian's claims for conversion and tortious interference, and granting Marger's motion for a directed verdict, at the close of Kademian's case, on Kademian's claim of breach of fiduciary duty. Kademian, M.D. v. Marger, M.D., 2d Dist. Montgomery No. 24256, 2012-Ohio-962, 2012 WL 762316 (“Kademian I ”). Therein this Court noted that in ruling on Kademian's appeal, it “construed the transcripts of testimony and documents admitted at the conclusion of Dr. Kademian's case most strongly in Dr. Kademian's favor.” Id., ¶ 5. This Court set forth the following facts:

* * * Donald Marger, a radiation oncologist, formed [Marger and Associates (“M & A”) ] in 1983, for the purpose of practicing medicine. At the time, Marger was the sole shareholder in M & A. In 1983, Marger also began an association with Good Samaritan Hospital in Dayton, Ohio, and continued to practice radiation oncology at Good Samaritan until June 30, 2000.

Michael Kademian was also a radiation oncologist and became employed by M & A in January 1990. At the time, Marger had been working at St. Elizabeth's Hospital (later known as Franciscan Hospital), and at Good Samaritan. After Kademian became employed, the two doctors each spent one-half day at each hospital, switching locations at noon.

The following year, in January 1991, Kademian purchased 49% of the corporate shares, paying $2,500 as a down payment, and signing a promissory note for the remainder of the cost. The book value of the shares was derived by subtracting the assets from the liabilities and multiplying that amount by 0.49. The total price listed in the stock purchase agreement was $10,851.

In April 1992, both Marger and Kademian signed Amended and Restated Employment Agreements with M & A. The agreements are essentially identical, and in Paragraph 5, prohibit Marger and Kademian from engaging “in the practice of medicine, specifically therapeutic radiology, except as an Employee of the Employer unless otherwise authorized by the Board of Directors.” * * *.

Paragraph 9 of the agreements also contains a non-competition clause, which provides that:

9. Non–Competition. Without the express written consent of the Employer, the Employee shall not directly or indirectly own, manage, operate, join, control or participate in the ownership, management, operation or control of or be connected in any manner with the speciality practice of therapeutic radiology other than pursuant to the terms of this Agreement.

Upon termination of employment, the Employee covenants and agrees that except for the prior written consent of the Employer, the Employee will not engage in the practice of the speciality of therapeutic radiology, in any way, in St. Elizabeth's Hospital or Good Samaritan Hospital, both of Dayton, Ohio, nor with any other venture involving any hospital or institutions with which the Employer is or shall be associated, nor with any independent or free-standing facility within a geographic radius of ten (10) miles of St. Elizabeth or Good Samaritan Hospital, Dayton, Ohio. Such restrictions shall continue for a period of two (2) years from and after the termination of employment or existence of the Corporation or any successor thereto, including the death or retirement of the remaining shareholders of Employer, whichever time is shorter. * * *.

Marger and Kademian continued to practice together for a number of years, performing radiation oncology services at Good Samaritan and at St. Elizabeth's Hospital. Good Samaritan was an “open hospital,” which allows any radiation oncologist to obtain privileges and treat at the facility, because the hospital does not have an exclusive agreement with any one person or group. M & A had a strong relationship with Good Samaritan, as evidenced by the fact that Marger was the medical director of radiation oncology at Good Samaritan at the time of the events giving rise to the current litigation. Kademian had also been the medical director at Good Samaritan.

Around 1985, Dr. Robert Field was appointed as the medical director of radiation oncology at Miami Valley Hospital, a third hospital located in Dayton, Ohio. Field continued as medical director, and his group had an exclusive contract to practice radiation oncology at Miami Valley, between 1985 and the summer of 2000. This meant that only doctors in Field's group could treat patients in the radiation oncology department. Other doctors could be on staff at Miami Valley, but would not be allowed to treat patients in the department.

In 1995, Premier Health Partners was formed, joining Miami Valley and Good Samaritan in one holding company. Miami Valley was a 60% shareholder and Good Samaritan was a 40% shareholder in Premier Health. In 1997, Miami Valley and Good Samaritan hired consultants to evaluate their oncology programs. The consultants recommended, in late 1997, that Good Samaritan and Miami Valley integrate their radiation oncology programs. Administrators at both Good Samaritan and Miami Valley encouraged Field's group and M & A to merge. Consequently, in early 1998, Marger formed a limited liability company with Field's group. This was done over the objections of Kademian, who was concerned about Field's abilities as a physician. At least as early as 1994, Miami Valley also had concerns over Field's leadership and clinical practice. In 1994, Miami Valley's chief operating officer (COO) required Field to prepare a corrective action plan for the business and clinical practice. Miami Valley did not think much of Field as a clinician, felt Field had a slipshod approach to medicine, and was continually attempting to get Field to improve. Kademian was aware of Field's reputation prior to the merger discussions, and told Marger he did not believe Field was a good doctor.

Another issue with Field was that in 1997, the Ohio Department of Health had established a requirement that medical directors of radiation oncology must be certified by the American Board of Radiology (ABR). Field was not certified by ABR. Kademian had been board-certified by ABR for many years, and was appointed medical director of radiation oncology at Good Samaritan in May 1997. Kademian notified Good Samaritan (which at that time was part of Premier Health), about Field's lack of appropriate certification, but Field remained director at Miami Valley. The issue of Field's lack of board certification resurfaced during the merger discussions.

During 1998, Kademian received courtesy staff privileges at Miami Valley and began investigating Field's certification status. After Kademian called the president of Premier Health about Field's lack of ABR certification, Field was removed as medical director and was replaced by his associate, Dr. Duncan.

Also in 1998, ill will began to develop between Marger and Kademian as a result of the proposed merger and Marger's sale of Western Ohio stock that was owned by M & A. Marger received the entire distribution from the sale, rather than allocating 49% of the proceeds, approximately $60,000, to Kademian. At one point, Marger stated that he wanted to “get rid” of Kademian. In addition, Kademian testified that he had learned during discovery of a prediction Marger had made in July 1998, to M & A's corporate attorney. The prediction was that Kademian was going to be removed as medical director at Good Samaritan. This “prediction” came true. In early September 1998, Kademian was removed as medical director over an incident involving a hearing aid that a nurse had misplaced at work. Kademian contended that the matter was trivial and was not grounds for removal.

Marger was appointed as medical director of radiation oncology at Good Samaritan about a week after Kademian was removed. Between October and December 1998, Kademian and Marger discussed the possibility of Kademian leaving M & A, due to these issues, but nothing ever came of the discussions.

M & A had previously added Dr. Greg Rasp, another radiation oncologist, as an employee. Rasp was given a preliminary contract similar to the contract that Kademian originally had, and was supposed to be considered for partnership within a few years after his employment. When Rasp was considered for partnership, Marger wanted to retain his 51 % share in M & A and require Kademian to give or sell one-half of his shares to Rasp. Kademian refused to divest himself of his interest, and this issue was never resolved prior to the dissolution of M & A.

In January 1999, Rasp entered into a “restated” employment contract with M & A. This agreement provides that Rasp's employment would continue until terminated as provided in Section 10 of the agreement. * * *. Under the agreement, Rasp was to maintain staff privileges at Franciscan Medical Center–Dayton Campus (formerly known as St.

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