Sisters of St. Francis Health System, Mishawaka, Ind., is suing the physician leaders of its partner in a surgery center in Indianapolis over the orthopedic group's plans to open a new surgery center four miles away.
Plans for surgery center prompt lawsuit in Ind.
The lawsuit alleges breach of contract, loyalty and fiduciary duties, as well as fraud and conspiracy, on the part of three physicians described in the complaint as managers of the joint venture and members of the partner, Indiana Orthopaedic Hospital. “We believe the lawsuit has no merit and we're going to defend it vigorously, and that's that,” said David Herzog, a lawyer representing OrthoIndy, the practice whose physicians are majority owners of Indiana Orthopaedic Hospital.
The system entered the joint-venture agreement in 2001 with a group called OI South to become equal partners in a surgery center on the Indianapolis campus of the system's St. Francis Hospital and Health Centers, according to a complaint filed in Hamilton County Superior Court in Noblesville, Ind. The facility, doing business as Indiana Orthopaedic Surgery Center, opened in 2005.
OI South later merged into Indiana Orthopaedic Hospital, which replaced OI South as the hospital's partner. In late 2008 OrthoIndy and Indiana Orthopaedic Hospital announced plans to build a new surgery center, which is under construction in nearby Greenwood, Ind., and scheduled to open in winter 2010. St. Francis contends the new facility will offer duplicate services.
The physicians named in the complaint—Scott Gudeman, Robert Falender and Jeffery Whitaker—are alleged to have kept the plans secret, leaving St. Francis leaders to learn about them from a news release.
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