Weier, In re, 81394
| Decision Date | 29 June 1999 |
| Docket Number | No. 81394,81394 |
| Parties | In re G. William WEIER, Respondent. |
| Court | Missouri Supreme Court |
Sam S. Phillips, Chief Disciplinary Counsel, Jefferson City, for Informant.
James B. Deutsch, John E. Bardgett, Marc H. Ellinger, Jefferson City, G. William Weier, St. Louis, for Respondent.
This case is an original disciplinary proceeding instituted by the 21 st Judicial Circuit Bar Committee and the Chief Disciplinary Counsel, Informant, against the Respondent, G. William Weier. The case arises from an information filed alleging that Mr. Weier violated Rules 4-1.7(a) and (b) and 4-1.8, Missouri Rules of Professional Conduct, with regards to a business transaction he organized. In this transaction, Mr. Weier formed a partnership of St. Louis urologists to purchase a particular medical device known as a lithotriptor. He then established a corporation in which he held a considerable financial stake to In a disciplinary proceeding, the master's findings of fact, conclusions of law, and recommendation are advisory. 1 This Court reviews the evidence de novo, determines independently all issues pertaining to credibility of witnesses and the weight of the evidence, and draws its own conclusions of law. 2 A preponderance of the evidence indicating professional misconduct is required before discipline will be imposed. 3
lease the lithotriptor from the partnership and manage its use. Mr. Weier failed to disclose his financial interest in the corporation to the partners upon their request.
In 1987, Dr. Bela Denes sought to obtain a lithotriptor that would be available to urologists in the St. Louis area. A lithotriptor is a medical device used for the treatment of kidney stones. While there was another lithotriptor in the St. Louis metropolitan area at Barnes Hospital, its use was prohibited by any non-Barnes physicians. Dr. Denes sought to obtain approval for a lithotriptor that would be available to all urologists in the St. Louis area. In order to obtain approval for the device, it is necessary to file a certificate of need (CON) with the Missouri Health Facilities Review Committee under section 197.300 et seq., RSMo 1986. 4 Dr. Denes contacted Mr. G. William Weier, an attorney with extensive experience in health care law and specifically with respect to CON procedures, to assist him in numerous aspects regarding obtaining the lithotriptor. Weier's contributions to the project included the filing of the CON, financing, purchase, preparation of necessary documentation, and the organization of any business entities that would be required for the project. The project became known as the Doctors Stone Group.
In order to secure the long-term profitability of the project, Mr. Weier determined that other urologists must be sought as partners and included in the project. Having other urologists in the ownership group would ensure that the lithotriptor would be used in their respective practices, thus guaranteeing the project's future profitability. To achieve this objective, Dr. Denes sent a letter to each member of the St. Louis Urological Society inviting them to attend an informational seminar on April 25, 1988, at Faith Hospital. The seminar specifically discussed Drs. Denes and Gregory's efforts to obtain an "open" lithotriptor owned by St. Louis urologists for the St. Louis area. The letter advised each doctor that Mr. Weier would be on hand to discuss the project. On the date of the meeting, Mr. Weier discussed the approval process for the CON and urged each doctor to write to the Missouri Health Facilities Review Committee suggesting the need for an "open" lithotriptor in the St. Louis area. Also at the meeting the possibility of forming a partnership of urologists to pursue the project was considered. At that meeting, Dr. Denes introduced Mr. Weier to the urologists present as "our attorney." Dr. Denes testified that he intended the term "our attorney" to refer only to he and Dr. Gregory, but at least one doctor testified that he was personally introduced to Mr. Weier by Dr. Denes as "our attorney."
On December 13, 1989, the CON for the Doctors Stone Group was issued by the Missouri Health Facilities Review Committee, and the Siemens Lithostar Lithotriptor was purchased, installed and rendered operational at the West County Surgery Center in St. Louis County.
Thirty-four St. Louis area urologists invested in the $1.5 million lithotriptor. As of the filing date of this case, the lithotriptor has generated in excess of $15 million.
In addition to the Doctors Stone Group Partnership that was created for the ownership of the lithotriptor, Weier also created the Doctors Stone Group, Inc., a corporation owned by Weier, his business associate Richard Winter, and Drs. Denes and Gregory in four equal shares. This corporation was to lease the lithotriptor from the partnership and secure a management company for the operation of the lithotriptor. The lease had a number of provisions favorable to the corporation including an option to purchase the lithotriptor from the partnership at fair market value and granting the corporation the discretion to determine any income that the partnership would receive in excess of its debt service.
The corporation then entered into an operating agreement with Financial Investments and Consultants, Ltd (hereinafter Financial) to conduct the daily operation of the lithotriptor. This agreement was later amended to substitute Larus Corporation, a health care management company 50% owned by Weier, as the service provider instead of Financial. Under the operating agreement, the Larus Corporation was to receive a management fee 6.5% to 7.5% of the project's profits.
All of the non-managing partners testified that they did not learn of the corporation, the lease between the corporation and partnership, or of Weier's interests that are permeated throughout this transaction until 1993 when several partners confronted Weier regarding what they perceived to be low profits resulting from the partnership. Weier did not distribute any documentation regarding his interests in either the Doctors Stone Group, Inc. or the Larus Corporation nor did he orally inform the partners of his interests. In lieu of affirmatively disclosing such information to the non-managing partners or sending copies of the lease agreement and operating agreements, Weier made knowledge of his ownership interest available at the January 1990 meeting in a ten inch volume of documentation, which the partners could peruse during the meeting.
Weier testified that he did explain all of the elements of the structure of the relationship between the Doctors Stone Group Partnership and the Doctors Stone Group, Inc. When asked specific questions about the structure or whether the venture would constitute a good investment, Weier testified that he instructed the partners to consult their individual attorneys or accountants. He also testified that he considered any information given during the meeting not to constitute legal advice. When asked specifically who owned the Doctors Stone Group corporation, Mr. Weier refused to offer an explanation stating that he was not authorized to disclose that information.
Weier is charged with violation of Rules 4-1.7(a) and (b) and Rule 4-1.8, Missouri Rules of Professional Conduct, with respect to possible conflicts of interest between Weier and the urologist-investors of the partnership. Weier contends that his representation flowed only to Drs. Denes and Gregory up until incorporation of Doctors Stone Group, Inc., and to that corporation anytime thereafter. He further submits that any actions that may have benefited the partnership, including setting up the partnership, submitting the CON, and negotiating the price and procurement of the lithotriptor, were only incidental to his representation of either Drs. Denes and Gregory or the corporation.
It is true that the interests of the corporation and those of the partnership are parallel in many respects, since the corporation relied upon the partnership's lithotriptor for its operation and the partnership in turn relied upon the daily management activity of the corporation. Nonetheless, the extensive contacts between Weier and the partnership rise above the level that could be deemed incidental to his representation of Drs. Denes and Gregory or the corporation. In fact, it is a stronger argument to say that such actions inured to the direct benefit of the partnership and only incidentally benefited the corporation or its shareholders.
Considering in aggregate Weier's invitation to the area urologists of the two investors meetings, his introduction at those meetings as "our attorney", his drafting of numerous partnership documents including the partnership agreement, his preparation of the Federal Employer Identification number for the partnership, and his negotiation and procurement of the lithotriptor to be owned by the partnership, there is little doubt that the scope of Mr. Weier's representation extended to the partnership as well as Drs. Denes and Gregory and the corporation. While the evidence may not be sufficient to show that Weier engaged in an intentional deception, his actions may still be subject to discipline. In Missouri, an attorney's transactions with a partnership must be held to a stringent review. He "must prove by clear proof that his adverse interest was disclosed to the client and was perfectly understood." 5 Furthermore, an attorney is bound to "scrupulous fidelity to the cause of the client which precludes the attorney from any personal advantage from the abuse of that reposed confidence," 6 and an attorney's reliance upon good faith does not "bear to dispel that predisposition" of the presumption of impropriety. 7
At best, the relationship between the partners and Weier was never clearly defined. Because Mr....
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