Cancel v. Sewell v. Cancel – March 2015 (Summaries)

FIDUCIARY DUTY/FRAUD

Cancel v. Sewell, No. A12A1950, et al. (Ga. Ct. App. Mar. 29, 2013)

Four anesthesiologists brought suit against their practice group after they were not selected for continued employment as part of a restructured anesthesiology department. The anesthesiologists claimed that they were wrongfully terminated for reporting their concerns over fraudulent billing practices of their coworkers to both the practice group and the hospital involved. They filed suit against numerous individuals and entities. And, as stated by the court: “A barrage of summary judgment motions filed by the defendants challenged the plaintiffs’ claims on various grounds.”

The appellate court ruled on numerous decisions made by the lower court. One principal outcome was that one of the lead plaintiffs could no longer be a part of the lawsuit, as both the lower and appellate court found against him in all rulings. In addition, acting on the barrage of summary judgment rulings made by the lower court, the appellate court affirmed one, reversed in part the judgment of another, and also dismissed that case in part.

Sewell v. Cancel, No. A12A1951 (Ga. Ct. App. Mar. 30, 2015)

Three of the physicians accused of engaging in a conspiracy that led to the anesthesiologists’ termination challenged the denial of their motion for summary judgment to dismiss the claims of breach of fiduciary duty and fraud. The defendant physicians argued that the decision to terminate the anesthesiologists’ contracts was the result of a decision made by the directors and shareholders of the practice group, i.e., all of its physicians, and was not a breach of contract or fiduciary duty.

The court agreed that the physicians’ acts in question “amounted to an exercise of their business judgement, based upon facts available at the time and the advice of counsel.” The court found the defendant physicians were entitled to summary judgement on the issue of breach of fiduciary duty.  The court also found that the anesthesiologists offered no evidence to support their claim that they were fraudulently induced to sign termination agreements by the defendant physicians.

Faulk v. Cancel, No. A12A1952 (Ga. Ct. App. Mar. 30, 2015)

Hospital defendants challenged the denial of their joint motion for summary judgment over the claims of breach of fiduciary duty and fraud, arguing that the anesthesiologists failed to produce evidence in support of their claims. They also argued that they were entitled to immunity because they were performing peer review activities.

The court determined that the evidence did not establish whether the peer review committee was engaged in the evaluation of medical care quality and efficiency. The court, therefore, vacated the trial court’s denial of summary judgment and remanded in order to determine if the peer review committee was, in fact, evaluating the quality and efficiency of medical care.