Court finds doctors breached contract with St. Mary’s

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AUBURN — Three doctors who quit working for a local hospital and moved across town to a competing hospital were ordered this week to pay damages to their former employer.

The three doctors named in the lawsuit, Douglas Farrago, M.D., Carolyn Kase, D.O., and Raymond Stone, D.O., were ordered to pay Sisters of Charity Health Systems Inc. $100,000 apiece.

The parent company of St. Mary’s Regional Medical Center in Lewiston complained in a 2007 lawsuit filed in Androscoggin County Superior Court that the three doctors had breached their contracts when they went to work for Central Maine Medical Center, also in Lewiston.

The contract signed by the three doctors took effect in 2004 and prohibited them from practicing medicine within a 25-mile radius of the 99 Campus Ave. address of their former employer for a two-year period after leaving.

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A clause in the contracts provides the option of paying $100,000 to Sisters of Charity rather than waiting the prescribed two-year period. None of the doctors paid that money.

During the trial process, the court learned that CMMC had agreed to pay any damages the doctors might incur resulting from the suit, according to a footnote in the court’s decision and order.

The three doctors notified St. Mary’s that they planned to leave at the end of 2006. Their former employer learned the doctors expected to work for a local competitor.

Sisters of Charity said it never waived the waiting period requirements or the $100,000 damages fee.

According to the court’s decision, the doctors appeared to take with them to their new practices 1,374 of the 4,800 patients at Sisters of Charity’s Court Street Family Practice in Auburn where the doctors worked.

The doctors argued that the restrictions put on them by the contract were against public policy. A sympathetic Justice Thomas Delahanty II wrote in his decision that “in an ideal world, anybody should be free to go when and where they want to pursue and practice their profession, especially physicians, who, presumably, are providing for the public good.”

But Delahanty acknowledged that “medicine and health care today are big business and the governing corporate entities must act to protect their continued viability to provide for the overall well-being of its patient base and the community.”

The contract restrictions, Delahanty concluded, were “reasonable.”

He recognized that it takes several years for a replacement doctor to develop a full panel of patients and that patients might follow a doctor from one practice to another within a limited geographic area.

Delahanty wrote that preventing the doctors from practicing medicine locally and from referring or admitting patients to CMMC “would not be in the best interests of over 1,300 patients and is detrimental to their health care needs and the adverse impact to the patients would outweigh any harm” to Sisters of Charity.

He also awarded “reasonable” attorney fees to Sisters of Charity.

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