EquiMed, Inc. v. Genstler

925 F. Supp. 710, 1996 U.S. Dist. LEXIS 6352, 1996 WL 238907
CourtDistrict Court, D. Kansas
DecidedApril 16, 1996
DocketNo. 96-4046-RDR
StatusPublished
Cited by1 cases

This text of 925 F. Supp. 710 (EquiMed, Inc. v. Genstler) is published on Counsel Stack Legal Research, covering District Court, D. Kansas primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
EquiMed, Inc. v. Genstler, 925 F. Supp. 710, 1996 U.S. Dist. LEXIS 6352, 1996 WL 238907 (D. Kan. 1996).

Opinion

MEMORANDUM AND ORDER

ROGERS, District Judge.

This matter is presently before the court upon plaintiffs’ motion for preliminary injunction 1 and defendant’s motions for temporary restraining order.2 Having conducted hearings on these motions, the court is now prepared to rule.

This ease was filed on March 19, 1996. In the original complaint, plaintiffs EquiMed, Inc. and Dr. Douglas R. Colkitt sought de[712]*712claratory and injunctive relief as well as damages for actions taken by defendant Dr. Aria Genstler during the months of February and March 1996. Following the filing of the complaint, the court granted plaintiffs’ motion for temporary restraining order. The order provided as follows:

1. The defendant, Aria Genstler, her agents, representatives, or others receiving a copy of this Temporary Restraining Order are hereby ordered to immediately cease and desist from acting to interfere with the care and treatment of patients or with the power, electricity or phones of Center for Site (sic) of Topeka, P.A
2. The defendant, Aria Genstler, her agents, representatives, or others receiving a copy of this Temporary Restraining Order turn over all property she has taken from the offices of Center for Sight of Topeka, P.A, including all patient records, financial records, patient charts, billing information, computer information, floppy discs, computers, accounting records, account receivable records and documents other documents (sic) or information that she removed from the site along with all copies she has made of any of these documents to the offices of Center for Sight of Topeka, P.A. at Washburn Medical Park South, West suite, third Floor, 920 Wash-bum Avenue, Topeka, Kansas where they shall be maintained under the control of Dr. Michael Feifarek who is presently caring for patients.
8. The defendant, Aria Genstler, her agents, representatives, or others receiving a copy of this Temporary Restraining Order are hereby ordered to pay all money or proceeds collected from any account receivables or billings of Center for Sight of Topeka, P.A. into Court pending resolution of the ownership issues herein and further restrained from pledging, encumbering or assigning the assets of Center for Sight of Topeka, P.A., including all account receivables or billings.
4. The defendant, Aria Genstler, her agents, representatives, or others receiving a copy of this Temporary Restraining Order are hereby restrained from notifying any insurance carriers or other governmental agencies, including Medicare or Medicaid, to assign or otherwise transfer payments to Dr. Genstler or to anyone other than Center for Sight of Topeka, P.A.
5. The defendant, Aria Genstler, her agents, representatives, or others receiving a copy of this Temporary Restraining Order are further restrained from acting to interfere with EquiMed or Dr. ColMtt or to otherwise deny them or their representatives access to the books, medical records, financial documents or other records of Center for Sight of Topeka, P.A.

The TRO was extended upon the agreement of the parties until a hearing on plaintiffs’ motion for preliminary injunction could be heard. The hearing was subsequently scheduled for April 12,1996.

Several events have occurred since the filing of the TRO. Plaintiffs filed an amended complaint on March 21, 1996. In the amended complaint, plaintiffs added several causes of action for damages. On April 9, 1996, Dr. Colkitt voluntarily dismissed his claims against the defendant without prejudice pursuant to Fed.R.CivJP. 41(a)(1). While this action was pending, another action was filed in state court relating to the events involved in this litigation. Center for Sight of Topeka, P.A., an entity intimately involved in the circumstances which form the basis of this case, filed suit seeking to enforce a covenant not to compete against Dr. Genstler. On April 4,1996, the state court issued a temporary restraining order prohibiting Dr. Gen-stler from practicing medicine within fifty miles of the Center for Sight location. Dr. Genstler then filed a motion for temporary restraining order in this court seeking to stay the state court proceedings. The court conducted a hearing on this motion on April 11th. At that time, the court took the motion under advisement. Dr. Genstler filed another motion for temporary restraining order later that day. The court then heard evidence on the plaintiffs’ motion for preliminary injunction and defendant’s second motion for temporary restraining order on April 12th.

Having conducted a hearing on the pending motions, the court is now prepared to [713]*713issue the following findings of fact and conclusions of law.

FINDINGS OF FACT

1. In 1994, EquiMed, Inc., which was operating as EquiVision, Inc. at that time, purchased the assets of Dr. Bradford Prokop’s ophthalmology practice in Topeka, Kansas. As part of the transaction, Center for Sight of Topeka, P.A., a professional corporation organized and existing under the laws of the State of Kansas, was formed. Dr. Prokop was the Center for Sight’s sole shareholder. Dr. Prokop became an employee of Center for Sight and entered into a services agreement with EquiMed.

2. The services agreement provided that EquiMed would act as the exclusive business manager for the Center for Sight and would provide the office facilities, supplies, equipment and personnel necessary to operate an ophthalmology practice. The services agreement contained the following provision on fees:

As compensation for its management services under Section 2 of this Agreement, and as compensation for the provision of the office facilities, services, supplies, equipment, personnel and other goods and services pursuant to Section 3 hereof, Eye Center agrees to pay to Equi-Vision a flat management fee equal to $120,000 per annum (payable $10,000 per month on the tenth (10th) day of each month), plus reimbursement (on a cost pass through basis) of all costs and expenses associated with the practice and incurred pursuant to Section 2 or Section 3 hereof (including all lease expenses and obligations for all locations of the office practice, the cost of equipment, the payroll, fringe benefits and payroll taxes of all non-medical employees, the costs of all supplies, malpractice insurance premiums, and payments required under all service contracts), plus an amount measured by and equal to the remaining net income of Eye Center after payment of compensation and expense reimbursement owed by Eye Center under the Employment Agreement or other contracts or arrangement with physicians and other professionals approved by EquiVision. Payment for invoices for expense reimbursement for expenses incurred under Section 2 and Section 3 is due immediately upon receipt.

3. As security for payment of the management fees, Center for Sight granted EquiMed a security interest in all account receivables, inventory, equipment, machines, tools, fixtures, furnishings, leasehold improvements, furniture, accounts, contracts, contract rights, chattel paper and intangibles including the books and records, notes, instruments, licenses and trade names of the corporation. The services agreement also contained the following provision:

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Cite This Page — Counsel Stack

Bluebook (online)
925 F. Supp. 710, 1996 U.S. Dist. LEXIS 6352, 1996 WL 238907, Counsel Stack Legal Research, https://law.counselstack.com/opinion/equimed-inc-v-genstler-ksd-1996.