Murphy v. Lca–vision Inc.

• Decision Date: 04 March 2011
• Docket Number: No. 4:10cv00178 SWW.,4:10cv00178 SWW.
• Citation: 776 F.Supp.2d 886
• Parties: LASIKPLUS MURPHY, M.D., P.A., and David Murphy, M.D., individually, Plaintiffs,v.LCA–VISION, INC., Defendant.
• Court: U.S. District Court — Eastern District of Arkansas

776 F.Supp.2d 886

LASIKPLUS MURPHY, M.D., P.A., and David Murphy, M.D., individually, Plaintiffs,

v.LCA–VISION, INC., Defendant.

No. 4:10cv00178 SWW.

United States District Court, E.D. Arkansas, Western Division.

March 4, 2011.

Bradford D. Box, Todd D. Siroky, Rainey, Kizer, Butler, Reviere & Bell, Jackson, TN, David D. Wilson, Friday, Eldredge & Clark, LLP, Little Rock, AR, for Plaintiffs.Adam C. McNeely, Marcia Voorhis Andrew, Taft Stettinius & Hollister LLP, Cincinnati, OH, Amanda K. Wofford, Amy Lee Stewart, Rose Law Firm, Little Rock, AR, for Defendant.

MEMORANDUM AND ORDER

SUSAN WEBBER WRIGHT, District Judge.

Plaintiffs LasikPlus Murphy, M.D., P.A. (LasikPlus Murphy), and David Murphy, M.D. (Dr. Murphy), individually, bring this action against defendant LCA–Vision, Inc. (LCA) for alleged breach of contract, alleged breach of fiduciary duty, and other alleged tortious and criminal conduct. Before the Court is LCA's initial partial motion to dismiss plaintiffs' complaint [doc. # 7], which this Court deems as concerning and applying to plaintiffs' first amended complaint filed on December 28, 2010 [doc.# 28], and LCA's subsequent motion to dismiss Count Ten of plaintiffs' first amended complaint [doc.# 29]. ¹ Plaintiffs have responded in opposition to LCA's motions and LCA has filed replies to plaintiffs' responses. Having considered the matter, the Court grants in part and denies in part LCA's initial partial motion to dismiss [doc.# 7] and grants LCA's subsequent motion to dismiss Count Ten of plaintiffs' first amended complaint [doc.# 29].

I.

LCA is a Delaware corporation that provides laser vision correction services under the LasikPlus brand. Dr. Murphy is a licensed Arkansas ophthalmologist who owns and operates a private ophthalmology practice in Russellville, Arkansas.

According to the first amended complaint, LCA approached Dr. Murphy in 2007 regarding becoming affiliated as an eye surgeon to staff a new LasikPlus fixed-site laser vision correction center in Little Rock, Arkansas. At the time, Dr. Murphy had been affiliated with TLC Vision Corporation (TLC), a national competitor with LCA. Dr. Murphy agreed to affiliate with LCA and LCA arranged for Dr. Murphy to form LasikPlus Murphy, an Arkansas professional association of which Dr. Murphy was the sole shareholder. Plaintiffs state this was done in order for LCA to open a laser vision correction center in Little Rock without violating the Arkansas Corporate Practice of Medicine Laws.

On May 8, 2007, LasikPlus Murphy entered into a Master Practice Management Agreement (PMA) with LCA under which LCA provided LasikPlus Murphy with a turnkey Lasik surgery practice at LCA's Little Rock, Arkansas Center (the “Little Rock Center”). Under the PMA, LCA agreed to provide to LasikPlus Murphy, inter alia, equipment and space rental, management services, third-party payor contracting, billing, and staffing.

Also on May 8, 2007, LasikPlus Murphy entered into a Professional Services Agreement (PSA) with Dr. Murphy for Dr. Murphy to provide lasik and PRK (photorefractive keratectomy) vision correction services at the Little Rock Center. Dr. Murphy and LasikPlus Murphy began to provide such services at the Little Rock Center a few days after the parties entered into the PMA and PSA. ²

On December 12, 2008, Dr. Murphy was informed of LCA's plans to close the Little Rock Center in a conference call with Dr. Jason Schmidt, LCA Regional Vice–President, and Kris Taylor, also an LCA corporate representative. Plaintiffs state that Schmidt and Taylor advised Dr. Murphy orally that the Little Rock Center would be closing as of December 31, 2008. LCA states that it provided Dr. Murphy with both written and verbal notice that it was terminating the PMA effective February 17, 2009 and that it did not intend to staff the Little Rock Center after December 31, 2008 but that Dr. Murphy could consider performing treatments independently after that date.

Plaintiffs state that as of December 12, 2008, they had 52 patients scheduled in December and an additional 30 patients scheduled for surgery in January 2009 and that despite the scheduled closing, LCA encouraged Dr. Murphy to continue to perform eye surgery on patients scheduled between December 12, 2008 and December 31, 2008. In this respect, plaintiffs state that LCA advised them to operate on their scheduled patients the next day and not to inform patients of the Little Rock Center's closing until LCA had made the announcement public. Dr. Murphy, however, states he stopped operating as soon as he became aware of LCA's decision to close the Little Rock Center.

Plaintiffs state that they believe the decision to close the Little Rock Center was made by LCA well before December 12, 2008, and that unbeknownst to Dr. Murphy, LCA offered deeply discounted services to patients scheduled after LCA's established closing date for the Little Rock Center if patients would reschedule their procedures before the Little Rock Center closed. Plaintiffs state that LCA did not notify these patients of the closing of the Little Rock Center when making these discounted offers.

Plaintiffs state that at the conclusion of the conference call on December 12, 2008, Dr. Murphy received via email a letter from LCA purporting to give Dr. Murphy and LasikPlus Murphy 60 days' written notice of the closing of the Little Rock Center effective December 31, 2008. Plaintiffs state that Dr. Murphy was also given paperwork prepared by LCA, which he states he refused to sign, to dissolve LasikPlus Murphy and which would have effectively terminated LasikPlus Murphy and eliminated the 60–day written notice requirement for early termination under the PMA.

Plaintiffs state that following notification of LCA's intent to close the Little Rock Center, Dr. Murphy expressed his concern to LCA regarding continuity of patient care, noting that because of the nature of laser vision corrective surgery, significant post-surgical follow-up care is required for patients. In this respect, plaintiffs state they advised LCA on December 15, 2008 that they had significant concerns regarding continuity of care provided to patients, handling of post-surgical complications, fulfillment of the lifetime acuity warranty, access to medical records, and risk management issues regarding the abrupt closure of the Little Rock Center and patient abandonment claims.

Plaintiffs state that as manager of LasikPlus Murphy and Dr. Murphy's practice at the Little Rock Center, LCA represented that it would send out a patient notification letter to Dr. Murphy's patients notifying his patients of the closure of the Little Rock Center. Dr. Murphy and LasikPlus Murphy advised LCA that they wanted to review and sign off on the letter before it was sent to their patients, and that they would not approve the letter until LCA had come up with an acceptable follow-up care plan. Plaintiffs state that on December 15, 2008, Schmidt advised them that they would have the opportunity to review and approve the patient notification letter before it was sent to their patients.

On December 31, 2008, LCA sent Dr. Murphy a draft of a proposed patient notification letter. Dr. Murphy states he advised LCA that the content was unacceptable for a number of reasons, including that the proposed language of the letter purported to transfer follow-up patient care to a physician affiliated with TLC even though LCA represented to him and LasikPlus Murphy that LCA had not yet reached a formal agreement with another TLC-affiliated physician in Little Rock to provide follow-up care to Dr. Murphy's patients in Little Rock. Plaintiffs state that Schmidt nevertheless authorized the letter. The patient notification letter, dated January 1, 2009, provides as follows:

Thank you for the opportunity to participate in your laser vision corrective surgery, and hopefully a terrific transformation of your life. We are glad we were able to earn your trust, and have you join the ranks of the many that enjoy the care provided by our local Little Rock staff.

It is with regret and sadness that we announce the closing of our local Little Rock office, but want to extend our commitment to your continued care. We remain available to see you at any of the remaining 75 locations nationwide for any care needed. Additionally we have made arrangements for your remaining post-operative care to be provided by a local doctor at the TLC Center, located at 10809 Executive Center Dr, Suite 201, Little Rock, AR 72211.

Your care is extremely important, and we invite you to contact our call center to facilitate any needed care at 800–334–2224 or contact TLC at 888–TLC–2020. On call or after hours services can be reached by calling our emergency number at 1–800–204–3870.

Please be advised, benefits under our lifetime assurance policy will be provided locally at the TLC Center until May 1, 2009, or any time at one of our remaining 75 facilities. If you feel you need an enhancement please contact our call center at the toll free number listed above, or visit www. lasikplus. com for a list of locations.

The January patient notification letter contains the signature of Dr. Murphy, Ronny Bowman, O.D., and Susan Brummett, Director. Dr. Murphy, however, claims his signature was a forged digital signature.

Plaintiffs state that on January 15, 2009, Dr. Murphy independently discovered that LCA had already sent out the patient notification letter on January 1, 2009 and forged his digital signature to the letter without his knowledge or consent. Plaintiffs state that as with the December 31, 2008 draft of the patient notification letter, the letter that was actually sent out to Dr. Murphy's and LasikPlus Murphy's patients and which purported to be from Dr. Murphy did not, inter alia, state that LasikPlus Murphy and/or Dr. Murphy would be available to see their patients for follow-up care or even identify the name of the physician that would provide Dr....