Docs battle Medical Center over partnership agreement

Kelly Holleran Mar. 9, 2010, 5:00am

The Medical Center of Southeast Texas

A group of doctors find themselves battling the Medical Center of Southeast Texas as the hospital seeks to terminate their shares because they are also limited partners in a Port Arthur cath lab.

The P.J. and J.P. Morbia Children's Trust, Dr. Mohammed Amirul Islam, Ferdues Fatima Islam and Dr. Nabeel Abdullah filed a lawsuit Feb. 25 in Jefferson County District Court against The Medical Center of Southeast Texas and Iasis Healthcare Holdings.

The plaintiffs claim they are physicians and members of the Gulf Coast Cardiology Group and, as such, purchased a limited partnership interest in the medical center.

"Specifically, the Trust acquired 240 shares, Mohammed Islam acquired 15 shares, and Abdullah acquired five shares by entering into the Amended and Restated Limited Partnership Agreement of the Medical Center of Southeast Texas," the suit states. "In mid-2006, Mohammed Islam assigned seven of his shares to his wife, Ferdues Islam."

Later, on March 23, 2009, Abdullah became a limited partner in the Port Arthur Cardiac Cath Lab, which provides cardiac catheterization services on an outpatient basis only. Mohammed Islam and Morbia Trust also became limited partners on March 31 and April 6, respectively, according to the complaint.

On Nov. 3, the medical center became aware of the doctors' and trust's partnership in the cath lab, so the center attempted to obtain a transfer agreement stating emergency services would be permitted to transfer cath lab patients to the medical center when necessary, the complaint says.

Three months later, the medical center sent notices to the plaintiffs, demanding they assign their shares in the center to it for repurchase, the plaintiffs claim.

In the letters, the medical center declared the plaintiffs had violated their partnership agreement, which prohibits partners from investing in a business that competes with the partnership, because of their partnership in the cath lab, according to the complaint.

But the plaintiffs contend they did not violate the agreement because the cath lab does not compete with the medical center.

"Specifically, Medical Center only provide inpatient heart catheter services," the suit states. "The Cath Lab only provides outpatient heart catheter services. As a result, the two do not compete."

In addition, the medical center knew of the plaintiffs' partnership in the cath lab as early as Nov. 3 and should have acted faster to provide notice of their alleged violations, the complaint says.

"Once Medical Center had notice of this alleged Adverse Terminating Event, it was required to send notice and had 60 days to repurchase the Plaintiffs' shares," the suit states. "However, the Medical Center waited almost 90 days after having notice of this allege Adverse Terminating Event to send notice to the Plaintiffs, asserting that it then had an additional 60 days to repurchase. Medical Center cannot be allowed to sit on its hands and declare the Adverse Terminating Event to have occurred whenever it chooses, especially where, as here, it clearly had notice of the alleged event almost three months prior to making its demand."

In their two-count complaint, the plaintiffs seek a temporary restraining order prohibiting the defendants from reassigning their partnership in the medical center. In addition, they seek attorneys' fees, costs and other relief the court deems just.

B. Adam Ferrell of Weller, Green, Toups and Terrell in Beaumont and Richard A. Illmer and Chad A. Johnson of Brown McCarroll in Dallas will be representing them.

The case has been assigned to Judge Milton Shuffield, 136th District Court.

Jefferson County District Court case number: D186-134.

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