A jury in Harris County on Tuesday determined a group of doctors are entitled to $25.6 million in damages from HCA Healthcare for violations of a noncompete agreement.
The group of doctors, Fondren Orthopedic, and HCA, a Nashville for-profit operator of healthcare facilities across the country, were in a limited partnership that owns and operates Texas Orthopedic Hospital. Fondren filed suit in October 2021, accusing HCA of violating a noncompete agreement by allowing 10 competing hospitals in the Houston area to offer similar services.
The jury that heard three weeks of testimony deliberated for about five hours over Friday and Tuesday before returning the verdict, awarding Houston-based Fondren all the damages it had requested.
A separate bench trial on attorney fees will be conducted by Harris County District Judge Jeralynn Manor at a later date, Joe Ahmad of Ahmad, Zavitsanos & Mensing, who represents Fondren, told The Texas Lawbook in an interview Tuesday. He said the firm will be seeking $4.47 million in fees and expenses.
A few things contributed to the three-year delay in getting the case to trial, Ahmad said, noting the suit was filed at the tail end of the pandemic and several continuances were granted.
“We were actually set to go to trial on July 8 this year,” he said. “And that was the day [Hurricane] Beryl hit.”
He said this case was a “unique” noncompete dispute for two reasons, including the relatively large amount of damages awarded.
“And it wasn’t a noncompete arising out of employment, but out of a partnership agreement,” he said.
Ahmad said the partnership agreement that the two parties inked in 1993 worked well until around 2017 when HCA began employing orthopedic surgeons at the competing hospitals.
“HCA had the size, the scale and the power and basically felt they could do what they wanted. The hospital contract with Fondren was for 57 years and about halfway through they just broke the contract,” he said. “HCA owned 60 percent of the hospital with Fondren, but 100 percent of their improperly opened competing hospitals and sent business to their fully owned places.”
Among the defenses raised by HCA were that Fondren had waited too long to bring the lawsuit over the alleged wrongful conduct and that HCA wasn’t in violation of the agreement because none of its competing facilities were earning 50 percent or more of its revenues from orthopedic surgeries.
Counsel for HCA did not immediately respond to a message seeking comment Tuesday afternoon.
Fondren is also represented by Paul Turkevich, Kelsi Stayart White, Kyle Poelker, Hilary Greene and Karina Sanchez-Peralta of Ahmad, Zavitsanos & Mensing.
HCA is represented by Sean M. Berkowitz and Kevin M. Jakopchek of Latham & Watkins and Paul Smith of Ware, Jackson, Lee, O’Neill, Smith & Barrow.
The case number is 2021-68404.