$340K arbitration award for doc who split with business partner
Defendant’s attempt to avoid mandatory arbitration failed
By: Phillip Bantz May 24, 2016
A physician who had a falling out with his business partner has received a nearly $340,000 arbitration award after quashing the defense’s effort to try the case in front of a jury.
The legal dispute between Dr. Rajinder Parmar and Dr. Balbir Minhas arose when the two disagreed over the amount of money that Minhas owed to Parmar after they parted ways. They had been equal owners of Midlands Gastroenterology and Midlands Endoscopy Center as part of a 2011 operating agreement.
In 2014, Minhas exercised his right under the agreement to buy out Parmar for the $350,000 that Parmar had paid three years earlier to become a 50-percent owner of the practices. He also gave Parmar about $43,000 in interest as part of the agreement.
“My guy [Parmar] really shouldn’t have signed” the operating agreement, said Eric Bland of Bland Richter in Columbia. He said the practices earned nearly $3 million annually.
Parmar was bound by the agreement. But he argued that Minhas also owed him more than $300,000 for his half of the practices’ outstanding accounts receivable, operating accounts and several other assets.
The operating agreement contained a mandatory arbitration provision. But in an attempt to take the case to trial, Minhas and his attorney, Joel Collins of Collins & Lacy in Columbia, argued that the operating agreement was “superseded and invalidated” by the 2014 buyout agreement.
Under the latter agreement, Parmar and Minhas temporarily set aside their fight over splitting the practices’ assets with the understanding that the dispute would be resolved in mediation or arbitration, according to Bland.
Minhas’ original attorney, Edward White of Nelson Mullins in Columbia, had confirmed that understanding in email correspondence with Parmar before he sold off his interest in the practices.
But Minhas later terminated White and hired Collins, who “inexplicably declined to arbitrate the matter and would not agree to accept service of the arbitration complaint,” Bland and his law partner Ronnie Richter of Charleston wrote in a motion asking Richland County Circuit Court Judge DeAndrea Benjamin to compel arbitration.
Collins asserted that Minhas had the right to choose a jury over an arbitrator because the buyout agreement did not contain language that required arbitration. Collins is the past president of the American Board of Trial Advocates, which opposes forced arbitration.
“Our position was that unless you had specifically and expressly waived the right to trial by jury you still have that constitutional right,” Collins said in an interview.
But Benjamin disagreed. She granted Parmar’s motion to compel arbitration, finding that the 2011 operating agreement remained valid, and an arbitrator subsequently awarded Parmar $339,568.
The arbitrator also denied five counterclaims that Minhas brought against Parmar, including one for breach of fiduciary duty alleging that Parmar had overbilled Medicare.
“The only hard evidence of overbilling was one office visit for something less than $100,” Richter said. “The rest was speculation and extrapolation on what the rest of the patient population could look like.”
Minhas self-reported the overbilling allegations to the government based on the findings of an Atlanta-based firm that he had hired to review his office’s Medicare claims, according to Collins.
Now, if the government were to turn its attention to Minhas and accuse him of overbilling Medicare he could not seek indemnity from Parmar, Richter said.
“He’s tried that issue against Parmar to conclusion,” he added.
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COMPEL ARBITRATION – CONTRACT DISPUTE
Case name: Rajinder Parmar v. Balbir Minhas
Court: Richland County Circuit Court
Case No. 2014-CP-40-06017
Judge: DeAndrea Benjamin
Arbitrator: James Kelly
Date of award: May 17
Attorneys for plaintiff: Eric Bland, Ronnie Richter and Scott Mongillo of Bland Richter in Columbia and Charleston
Attorneys for defendant: Joel Collins and Meghan Hall of Collins & Lacy in Columbia