Family wins Pontiac General 'pay-for-play' residency case

An eight-member jury in federal court in Port Huron unanimously said Tuesday that Pontiac General Hospital breached a contract with the Canadian parents of an international medical school graduate who paid $400,000 believing their son would be accepted into the hospital's family medicine residency program.

Andrew Broder, a partner with Payne, Broder & Fossee P.C. in Bingham Farms, said Wednesday that his clients, Satish and Poonam Chopra, and their son, 33-year-old Varun, were happy with the jury's verdict and felt vindicated in the trial before U.S. District Judge Robert Cleland.

"My clients and I are gratified that the claims which we asserted in this case were vindicated by the jury's verdict. In fact, the jury found in favor of the plaintiffs on every claim which was tried in federal court during the past few days," Broder said in a statement.

CEO Sanyam Sharma of Pontiac General told Crain's Wednesday that the hospital is evaluating its options. "We disagree with the jury's verdict," he said, adding: "Since we got the verdict yesterday, I think it's a little too early to definitively comment on an appeal, but it is a strong possibility."

In a breach-of-contract lawsuit filed in 2017 in U.S. District Court in Detroit, the Chopras, who live in Brampton, Ontario, contended the family owners of Pontiac General asked for $400,000 in exchange for accepting Varun into the program in the fall of 2016. Chopra received a signed residency contract the same day his father paid the final of three checks, court records show.

"Two years ago, my clients paid the $400,000 required entry fee charged by Pontiac General Hospital as a condition of admitting Dr. Chopra into its residency program, Broder said. "An enforceable agreement was reached by the parties, by which Dr. Chopra would thus be admitted to the program. But the hospital thereafter breached the agreement by declining to let Dr. Chopra start the program, and to add insult to injury, the hospital refused to return the funds which my clients had paid. That is why this lawsuit was filed."

The trial, which lasted 24 hours, started last Wednesday and ran through Friday, with closing arguments on Tuesday. The jury deliberated about 3 1/2 hours before coming back with its unanimous verdict.

Broder called seven witnesses to the stand, including the three Chopras, Pontiac General's family owners CEO Sanyam Sharma and COO Priyam Sharma, hospital residency manager Carol Samson and Nikhil Hemady, M.D., hospital program director and chief of staff.

The jury rejected all defenses and claims by the Sharmas, answering "yes" to the questions "Did the plaintiffs prove existence of residency contract?" and "Did the plaintiffs breach the residency contract?" The jury found that Varun did not first breach the contract, as the Sharmas contended, according to the verdict form released Tuesday by the court.

The jury also awarded $484,564 in damages to the Chopras.

"I have practiced law for 45 years, both in and outside of the health care arena," Broder said. "Except for what was done by the hospital here, I have never, ever, heard of any hospital charging medical school graduates to get into a residency program. I hope that, as a result of this case, such an outrageous practice never occurs again."

Pontiac General emerged from bankruptcy in 2016 after the Sharmas bought the hospital and began turning it around. From 2009 to 2014, Pontiac General lost more than $73 million and had gone through several owners.

While Pontiac General is licensed for 306 beds, only about 30 of the licensed beds are staffed in a medical-surgical unit that ranges occupancy from 25 percent to 50 percent. It also operates a 30-bed adult psychiatric unit that averages more than a 90 percent occupancy rate.

"Family wins Pontiac General 'pay-for-play' residency case" originally appeared in Crain's Detroit Business.