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Oct. 2015

David Rich Obtains $4.62M Ruling in Medical Center Contractual Dispute

David H. Rich obtained a $4.62 million ruling on behalf of a neurosurgeon and her related corporate entities based on their contractual dispute with a hospital and its corporate parent, as reported in Massachusetts Lawyers Weekly.

The case concerned the failure by a hospital, MetroWest Medical Center, and its corporate parent, Vanguard Health System, to follow through on their contractual obligations to develop a world class center for advanced brain and spine surgery at Leonard Morse Hospital in Natick, Mass. At their core, the agreements contemplated that MetroWest would supply the space, personnel and equipment sufficient for the plaintiffs to develop and operate a groundbreaking brain and spine institute in the suburbs of Boston.

However, when the neurosurgeon arrived at MetroWest in July 2011, she discovered that much of the equipment that MetroWest and Vanguard "assumed to be available at MetroWest" was not present, nor was the equipment to be "obtained for the institute" present.

In addition to procuring equipment, the defendants were also bound by the contract to obtain an academic affiliation, a full-time anesthesiologist, and other critically important components necessary to offer safe services. With the necessary components in place, the facility could attract and recruit the world's best neurosurgeons.

In May 2012, nearly one year after the contracts were in place, the defendants announced they could not live up to their contractual commitments and were "pulling the plug" on the project.

Following a three-week bench trial, Justice Christine Roach of the Massachusetts Superior Court's Business Litigation session issued a 78-page decision in favor of Attorney Rich's clients.

The judge concluded that the defendants repeatedly breached the parties' agreements, and that the hospital's chief executive had "either failed to use best efforts to Comply with the Agreements or actively undermined the Institute concept from (almost) its inception."

The judge concluded that the defendants' conduct caused the plaintiffs significant damages, and accepted, in part, the testimony of the plaintiffs' damages expert. The judge awarded the plaintiffs a $4.62 million award, comprised of $3 million in lost profit damages and $652,000 in unpaid management fee damages, along with $649,807 in attorneys' fees, and $316,052 in costs. The total amount awarded to the plaintiffs was $6.05 million with prejudgment interest added.

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