In the circuit court of the thirteenth judicial circuit of
The state of florida, in and for hillsborough county
Civil division
JOE SAMUEL BAILEY, individually;
Laserscopic spinal centers of america, inc.
A Nevada corporation; LASERSCOPIC MEDICAL CLINIC, LLC,
A Florida limited liability company; LASERSCOPIC
SURGERY CENTER OF FLORIDA, LLC, a Florida limited
Liability company; LASERSCOPIC DIAGNOSTIC IMAGING
AND PHYSICAL THERAPY, LLC, a Florida limited liability
Company; laserscopic spinal center of florida, llc,
A Florida limited liability company, and LASERSCOPIC SPINE
CENTERS OF AMERICA, INC., a Nevada corporation,
Plaintiffs,
Vs. Case No. 06-08498 Division L
James s. St. Louis, d.O., individually; michael w. Perry, m.D.,
Individually; E.F.O. HOLDINGS, LP, a Texas Limited Partnership; EFO
GENPAR, INC., a Texas corporation; EFO LASER SPINE INSTITUTE,
LTD, a Florida limited liability company; LASER SPINE INSTITUTE, LLC,
A Florida limited liability company; LASER SPINE MEDICAL
CLINIC, LLC, a Florida limited liability company; LASER SPINE
PHYSICAL THERAPY, LLC, a Florida limited liability company, and
Laser spine surgical center, llc, a
Florida limited liability company,
Defendants.
/
Fourth amended complaint
Plaintiffs joe samuel bailey, laserscopic spinal centers of america, inc., laserscopic medical clinic, llc, laserscopic surgery center of florida, llc, laserscopic diagnostic imaging and physical therapy, llc, laserscopic spinal center of florida, llc, and laserscopic spine centers of america, inc., by and through their undersigned attorneys, sue defendants james s. St. Louis, d.O., michael w. Perry, m.D., e.F.O. Holdings lp, efo genpar, inc., efo laser spine institute, ltd., laser spine institute, llc, laser spine medical clinic, llc., laser spine physical therapy, llc., laser spine surgical center, llc, and allege:
I.introduction
1. This action seeks damages as a result of the complete destruction (and theft) of Plaintiffs’ business by Defendants, each of whom were either (i) employed by and acted as directors of Spinal and the Spinal Operating Companies (defined below); or, (ii) occupied a position of trust and confidence relative to Plaintiffs that created fiduciary duties on behalf of Defendants to Plaintiffs.in their positions, Defendants each obtained confidential, proprietary and trade secret information, which they used to form a competing business.
2. Spinal and the Spinal Operating Companies (defined below) were formed for and engaged in the business of owning and operating free-standing, self contained diagnostic and treatment centers for diseases of the spine and, in particular, to engage in minimally invasive spine surgery on an outpatient basis. At the heart of Spinal and the Spinal Operating Companies’ (defined below) business plan was the development and operation of multiple surgical centers that would be developed across the United States. Upon the successful development and operation those centers, Spinal planned to commence an Initial Public Offering (“IPO”) of Spinal’s stock.
3. The claims brought against Defendants arise out of their conspiracy to steal (and actual theft of) Plaintiffs’ business. Defendants took the plan, the people and, ultimately, the patients and opened a competing surgery center engaged in the very same business (minimally invasive spine surgery), using the business plan created by Plaintiffs and copying the identical business structure. As more fully set forth below, Defendants conduct was intentional, willful and wanton and resulted in significant damages including the demise of what would have otherwise been a multi-million dollar enterprise.
Ii. Jurisdiction and venue
4. This is an action for damages that in excess of One Hundred and Fifty Thousand Dollars ($150,000.00), exclusive of interest and costs. This Court has subject matter jurisdiction over this case pursuant to Article V, Section 5 of the Florida Constitution, Florida Statutes, Section 26.012, and in accordance with Florida common law.
5. Jurisdiction is proper in Hillsborough County because Defendant Laser Spine Institute, LLC’s principal place of business is in Hillsborough County.in addition, the improper use and disclosure of confidential information occurred in Hillsborough County, the theft of trade secrets occurred in Hillsborough County as did Defendants other tortious conduct. Finally, Defendants each conducted and continue to conduct business in Hillsborough County, Florida.
6. Venue is proper in this Court pursuant to §47.011, Florida Statutes, et seq. Because, among other things, many of the claims and causes of action accrued in Hillsborough County.
Iii. Parties
7. At all times material hereto, Plaintiff Laserscopic Spinal Centers of America Inc. (“Spinal”), was and is a Nevada corporation (closely held) doing business in Florida through its affiliates/subsidiaries. Spinal was formed as a holding company to own 100% of the interests in Plaintiffs Laserscopic Medical Clinic, LLC, Laserscopic Surgery Center of Florida, LLC, Laserscopic Diagnostic Imaging and Physical Therapy, LLC, and Laserscopic Spinal Center of Florida, LLC, each of which is a single member limited liability company (collectively, the “Spinal Operating Companies”).
8. Spinal and the Spinal Operating Companies were formed for the purpose of owning and operating multiple free-standing, self-contained diagnostic and treatment centers for diseases of the spine and, in particular, to engage in minimally invasive spine surgery on an outpatient basis and to provide other medically necessary treatments including pain management and physical therapy.
9. At all times material hereto, the Spinal Operating Companies were and are Florida limited liability companies, each of which was engaged in business in Pinellas County, Florida, under the parent company Spinal from June 3 to March 4.
10. Spinal was initially owned by Plaintiff Joe Samuel Bailey (27%); Defendant James S. St. Louis, D.O. (34%), Defendant Michael Perry, M.D. (5%) and Ted Suhl (34%) (“Suhl”). Each of the shareholders of Spinal was a director of the company.in the Fall of Suhl sold his interest in Spinal to Mark Miller (“Miller”). Miller then sold 17% of his 34% to Dr. Tim Langford (“Langford”) in early 2005.
11. For the reasons more fully discussed below, the majority shareholders of Spinal formed Plaintiff Laserscopic Spine Centers of America Inc. (“Spine”) in December. Like Spinal, Spine was and is a Nevada corporation (closely held) doing business in Florida through certain of the operating entities whose assets and liabilities were transferred from the Spinal Operating Companies (collectively the “Spine Operating Entities”). Laserscopic Surgery Center of Florida, LLC and Laserscopic Medical Clinic, LLC were sold to Spine. Laserscopic Spinal Center of Florida, LLC and Laserscopic Diagnostic Imaging and Physical Therapy, LLC were each assigned to Spine. Spine operated from March 4 until it ceased doing business in late 2006. Both Spinal and Spine are corporations in good standing.
12. At all times material hereto, Plaintiff Joe Samuel Bailey (“Bailey”), was a resident of the State of Arkansas; but also owned property in Florida. Bailey was and is a shareholder, officer and director in both Spinal and Spine. Specifically, Bailey was the Chief Executive Officer and President of both entities.
13. At all times material hereto, Defendant James S. St. Louis, D.O. (“St. Louis”) was and is a resident of Pinellas County, Florida, and is a shareholder and director of Spinal. He was also employed as an orthopedic surgeon performing medical services at Spinal, was its Medical Director, and was heavily involved in marketing the Spinal brand. Defendant St. Louis was Spinal’s Chief of Surgery and was listed as such in Spinal’s submissions to the ACHA licensing board. Defendant St. Louis resigned without notice on or about November 15 to establish a competing venture with the other named defendants. Although Defendant St. Louis still owns a 34% interest in Spinal and is a director, he is also a shareholder and, upon information and belief, an officer and director of certain of the defendant entities. Defendant St. Louis is employed by certain defendant entities as an orthopedic surgeon performing the same minimally invasive spine surgeries that he performed on behalf of Spinal and the Spinal Operating Companies.
14. At all times material hereto, Defendant Michael Perry, M.D. (“Perry”), was and is a resident of Pinellas County, Florida, and is a shareholder and director of Spinal. Defendant Perry was the internist who performed medical clearance and other professional services on behalf of patients and prospective patients at Spinal and the Spinal Operating Companies and was also involved in marketing the Spinal brand. Once Bailey learned of Defendants’ conspiracy to steal the business of Spinal and the Spinal Operating Companies and their intentional interference in its ongoing operations, Defendant Perry was terminated. Although Defendant Perry still owns 5% of Spinal and is a shareholder, he is also, upon information and belief, an officer and director of certain of the defendant entities. Defendant Perry is currently employed by certain of the defendant entities performing the identical professional services he performed for Spinal and the Spinal Operating Companies.
15. Defendants St. Louis and Perry formed Spinal and the Spinal Operating Companies in conjunction with Plaintiff Bailey in 2004 and were engaged in that business until approximately November of at which time Defendants St. Louis and Perry abandoned the business and formed Defendant EFO Laser Spine, Ltd and its subsidiaries and operating entities to engage in the identical minimally invasive spine surgery business.
16. Defendant EFO Holdings, L.P. Was at all times a foreign limited partnership doing business in Florida. “EFO” is an acronym for “Esping Family Office”; EFO is headed by manager and principal of the manager, non-party William Esping. (“Esping”). EFO Holdings, L.P. Holds itself out as being, among things, in the business of financing, lending and investing in largely non-medical ventures.
17. Defendant EFO Genpar, Inc. Was at all times relevant a Texas Domestic Business Corporation with its principal places of business in Texas. EFO Genpar, Inc. Was at all times relevant a General Partner of EFO and, as such, is liable for the debts, obligations, and tortious acts of EFO Holdings, L.P.
18. Defendant EFO Holdings, L.P. And EFO Genpar, Inc. Will collectively be referred to as “Defendant EFO” or “EFO.”
19. Defendant EFO purposefully availed itself of the privilege of conducting activities within Florida and thus invoked the benefits, liabilities, and protections of Florida law.
20. At all times material, Defendant EFO by and through various agents, including but not limited to Esping, Robert Grammen (“Grammen”), and Michael Surgen (“Surgen”), purposefully availed themselves of Florida’s jurisdiction by engaging in and investing in Florida businesses from which Defendant EFO derived substantial profits resulting in continuous and meaningful contacts with the State of Florida and its citizens.
21. Further, upon information and belief, Defendant EFO Laser Spine Institute, Ltd., discussed below, is owned in whole or in part by Defendant EFO and, as a result, Defendant EFO is liable for the tortious acts of its subsidiary and/or affiliate.
22. Upon information and belief, Defendant Laser Spine Institute, LLC, discussed below, is owned in whole or in part by Defendant EFO and, as a result, Defendant EFO is liable for the tortious acts of its subsidiary and/or affiliate.
23. At all times material hereto, Defendant EFO Laser Spine Institute, Ltd. (“LSI”) was and is a Florida corporation, authorized to do business in Florida. Defendant LSI maintains its principal place of business in Hillsborough County, Florida.
24. At all times material hereto, Defendant Laser Spine Institute, LLC, and its related defendant affiliates Laser Spine Medical Clinic, LLC, Laser Spine Physical Therapy, LLC and Laser Spine Surgical Center, LLC (collectively, the “LSI Operating Companies”) were and are Florida limited liability companies, authorized to do business and doing business in Hillsborough County, Florida.
25. Upon information and belief, non-party Grammen was and is the Senior Partner of Cypress Lending Group Ltd., a wholly owned subsidiary of Defendant EFO, and was and is a partner of Defendant EFO and Manager of EFO’s Florida operations.
26. Upon information and belief, among others, non-parties Esping and Grammen and Defendants St. Louis and Perry, among others, are each a shareholder, officer and director of Defendant LSI.
Iv. General allegations
27. Minimally invasive spine surgery is a less traumatic, less invasive, micro-spine laser surgery using a tiny incision and laser-assisted arthroscopic, endoscopic, and microspinal surgical techniques to relieve back and neck pain. As late as there were only a dozen or so physicians trained in this technique throughout the entire United States. It was a highly specialized surgical procedure and, even today, the ability to perform this unique surgery is limited.
28. Advanced minimally invasive spine surgery is performed at an outpatient surgery center with local or light, general anesthesia, involving a tiny incision. The entire procedure is performed through a small sleeve using micro spinal instruments; the actual operating time is approximately 30 to 90 minutes per nerve root, maximizing patient satisfaction with a reduction in residual symptoms.
29. The distinguishing characteristic of these advanced procedures over more common minimally invasive spine surgeries or traditional open spine surgery is the ability to not only remove soft tissue, such as a bulging disc by the use of a laser, but also the ability to effectively correct symptoms of spinal stenosis created by bone spurs or bony overgrowth of the spinal column.
30. From about 1996 through Bailey managed the marketing efforts for a surgery center engaged in a similar business to Spinal and the Spinal Operating Companies, to wit: a surgery center engaged in minimally invasive spine surgery located initially in Hudson, Florida.in that capacity, Bailey was successful in generating tens of millions of dollars in revenues in just a three year period.
31. Bailey met Defendant Perry in about 1994, and later worked with him at the same surgical center from approximately 1996 to 2001. Neither Bailey nor Defendants St. Louis or Perry had an ownership interest in that surgical center. Bailey left the company in 2001 to concentrate on other business ventures, but Defendant Perry continued his employment for another three years or so. Bailey met Defendant St. Louis after Bailey left that surgical center.
A. Formation of Spinal and the Spinal Operating Companies.
32. In Defendant St. Louis contacted Bailey asking whether Bailey would be interested in forming surgical center engaged in minimally invasive spine surgery. Although the suggestion was initially an aspiration in nature, when the facility where Defendants St. Louis and Perry worked was relocated from Hudson, Florida, to Port St. Joe, Florida, Defendants St. Louis and Perry were increasingly upset about being forced to travel a significant distance from their respective homes and families, among other things. As a result, the frequency and seriousness of Defendant St. Louis’ requests increased.
33. In his conversations with Bailey, Defendant St. Louis assured Bailey that if he would join with Defendant St. Louis and Perry—neither of whom had the ability to raise capital to start such a venture—to form the company, the venture would be extremely profitable given the unique nature of the procedure. As part of those discussions, it was always understood and agreed that Defendant St. Louis would act as the surgeon performing the surgery; Defendant Perry would review the films and MRI’s to determine whether a patient was a good candidate for surgery and otherwise ensure that the patient was cleared for surgery; and Bailey would oversee the marketing and other operational aspects of the company, although Defendants St. Louis and Perry would also have responsibility to market the facility and assist with branding the company.in early Winter of Bailey finally agreed and the three of them set about to form what became Spinal and the Spinal Operating Companies.
34. On February 16, Defendant St. Louis resigned from his then employer to work with Bailey, taking one of the first major steps in effectuating their plan to open a surgery center specializing in minimally invasive spine surgery. At the time, Defendant St. Louis was one of only a dozen or so surgeons in the United States who could perform the advanced techniques of minimally invasive spine surgery, using laser-assisted arthroscopic, endoscopic, and microspinal surgical techniques.
35. Bailey and Defendants St. Louis and Perry agreed that they were going to work jointly to obtain the necessary funding, find an appropriate site for a surgery center, market the new facility, obtain patients and take all other necessary steps to make their new venture a success. They then set about to make their dream of owning their own surgical center a reality. The plan was, as more fully codified and detailed in the confidential business plan, to open one surgical center and then follow up with multiple surgical centers once the initial center was up and running. As noted above, ultimately, the goal of Bailey and Defendants St. Louis and Perry was to take Spinal and the Spinal Operating Companies public.
36. During the period while the surgery center was being developed and the ground work for the business established, Defendant St. Louis was paid Seventy-Three Thousand Dollars ($73,000.00) per month. He received this compensation notwithstanding the fact that the surgery center was not yet opened and no revenue was being generated or collected.By agreement of the parties, Defendant Perry remained working at his job with the understanding that he would resign closer to the time their surgery center was ready to begin operations. Bailey did not receive a salary or other compensation, although he was reimbursed for certain out-of-pocket expenses.
37. Among other things, between February and the end of July of the following steps were taken by Bailey and Defendants St. Louis and Perry on behalf of Spinal and the Spinal Operating Companies: (1) the companies were formed; (2) an expert in the area of surgery center development and operations was retained to develop a strategic business plan and to consult on healthcare and operational issues; (3) the strategic business plan was prepared and then finalized; (4) numerous sites for the possible surgical center were toured and ultimately a site was selected; (5) a lease was executed on behalf of Spinal for approximately 15,000 square feet, which lease was guaranteed personally by Bailey; (6) significant capital was raised and possible additional investors were solicited including Defendant EFO; (7) many marketing seminars were conducted that resulted in dozens of candidates for surgery once the center was operational; (8) necessary equipment was purchased and installed; (9) the surgery center was built out and efforts were well underway to obtain an ACA license; and (10) a competent surgical team was hired so that once the facility was operational, Spinal and the Spinal Operating Companies could hit the ground running.
38. At significant expense, Bailey located (and Spinal retained) Larry Unger (“Unger”), an expert in the area of developing and operating ambulatory surgical facilities, to prepare a confidential business plan for Spinal and the Spinal Operating Companies. A draft of the business plan was finished by March and the final version was completed by June. Among other things, the confidential business plan was to be used to establish the business and to provide information confidentially to potential investors. The business plan and consulting fees to implement the plan for Spinal and the Spinal Operating Companies was more than Sixty-Seven Thousand Dollars ($67,000.00) excluding any cost associated with the time devoted by Bailey and Defendants St. Louis and Perry.
39. The Spinal and Spinal Operating Companies business plan is clearly marked “Confidential” on the cover page at the top; at the bottom of the cover page the following legend appears: “Confidentiality Statement: This document is not to be copied in whole or in part, distributed, emailed, faxed or discussed with individuals other than those authorized by the authors.”
40. The business plan contains the marketing strategy, financial projections, pro formas and details regarding the business model of Spinal and the Spinal Operating Companies, as well as other important confidential and proprietary information regarding the companies.
41. Various operating documents were also created including the Shareholders’ Agreement for Spinal, the limited liability company agreements for the Spinal Operating Companies and a Physician Services Agreement for Defendants St. Louis and Perry. Drafts of the agreements were exchanged between the parties for the purpose of codifying the terms of the parties’ oral understanding as to how the business would operate.
42. In June of the Articles of Incorporation of Spinal were filed with the Secretary of State of Nevada as were the Corporate Bylaws.By agreement of the parties, Bailey, Defendant St. Louis, Defendant Perry and Suhl (another investor) were elected as the four directors comprising the Board of Directors of Spinal. Bailey was elected as the Chief Executive Officer and the Secretary of Spinal. Defendant St. Louis was the Medical Director and Defendant Perry was the Chief of Internal Medicine.
43. At the time that Bailey and Defendants St. Louis and Perry agreed to form Spinal and the Spinal Operating Companies, Defendant St. Louis was one of the few surgeons qualified to perform the surgical procedure that Spinal and the Spinal Operating Companies’ business model was based on. As a result, Defendant St. Louis was an integral part of the strategic business plan and was a necessary component to the success of Spinal and Spinal Operating Companies. Were it not for Defendant St. Louis’ solicitation of Bailey and his repeated commitment to Spinal and Spinal Operating Companies, Bailey never would have agreed to move forward with the proposed venture or to invest significant capital and time in the company. Without a surgeon and surgical team, the business model could not succeed. It was precisely because of this fact that Defendants St. Louis and Perry’s commitment to the business was critical.
44. Having known each other for several years and based on their prior professional and personal relationships, a relationship of trust and mutual respect existed between Bailey and Defendants St. Louis and Perry. Based upon this relationship and the representations of Defendants St. Louis and Perry, Bailey agreed to move forward with Spinal and Spinal Operating Companies.
45. A professional service agreement was prepared for each of the key Spinal and Spinal Operating Companies’ principals (Bailey and Defendants St. Louis and Perry). Those agreements each contained non-competition and confidentiality provisions.
46. The Physician Services Agreement was executed by Defendant Perry in about August. Defendant St. Louis and Spinal were solidifying his agreement and, based upon Defendant St. Louis’ representations, an agreement was to be signed by him in short order.
47. Among other relevant terms, Perry’s Physician Services Agreement (as well as the draft presented to St. Louis) contained the following terms:
This Agreement is made pursuant to Florida Statute Section 542.335. The Associate hereby acknowledges that the Association’s engagement with the clinic will enable Perry to gain skill in Perry’s medical specialty and will provide access to certain trade secrets and proprietary information of the Clinic and will enable Perry to form certain relationships with individuals and entities within the geographical area in which Perry performs his services.in consideration of the above and including but not limited to the consideration set forth herein for this covenant, and the additional benefits to which the Association and Perry is entitled under this agreement and from engagement with the Clinic, and other valuable consideration the sufficiency and receipt of which are hereby acknowledged, the Association and Perry specifically agree that the Association and Perry shall not, directly or indirectly for the Association’s or Perry’s own benefit or on behalf of others during the Term and for a period of twenty-four (24) months immediately following the termination of this agreement, engage in the practice of internal medicine from a medical office established within the Service Area or provide any marketing or administrative services to any company or person engaged in a business competitive with the practice and business of the Clinic.
Attached as Exhibit “A” is a copy of Defendant Perry’s Physician Services Agreement.
48. Further, the Physician Services Agreement contains a confidentiality provision that states:
Confidentiality of Information. Immediately upon execution of this Agreement and at all times hereunder the Clinic will provide the Association and/or Perry with Confidential Information (as defined herein). The Association and Perry agree to keep confidential and not to disclose to others at any time the Confidential Information, except (i) with the written consent of the Clinic, (ii) if such Confidential Information is generally known to the public (other than through breach of this Section 2.11), or (iii) as expressly required by law. Confidential Information shall include, but shall not be limited to, the following: (a) the data bases of the Clinic including, but not limited to, patient names, addresses and telephone numbers; (b) the clinical and research protocols of the Clinic; (c) contractual arrangements between the Clinic and insurers or managed care associations or other payors and all marketing materials or ideas; (d) the hiring needs, salary levels and skills of employees of the Clinic; (e) the referral sources of the Clinic; end (f) any secrets, propriety or financial information, confidential technology, patient lists or trade secrets of the Clinic or its other physician employees, or any matter or information ascertained by the Association or Perry through their relationship with the Clinic, the use or disclosure of which might be construed to be contrary to the best interests of the Clinic, its shareholders, officers, directors, employees, affiliates, and other physicians (the "Confidential Information"). Immediately upon the execution of this Agreement and at all times thereafter, the Association and Perry further agrees that during the Term and as of the date termination of this Agreement, neither will take or retain, without the prior written consent of the Clinic, any papers, slides, data (electronic or otherwise), records, patient lists, files, computer diskettes, research data, business plans and marketing studies or other demographic analysis, information regarding payor contracts entered or under consideration by the Clinic, or other documents or copies thereof or other Confidential Information of any kind belonging to the Clinic pertaining to its business, payers, customers, patients, financial condition, or activities. The Association and Perry acknowledge that a remedy at law for any breach by the Association and/or Perry of this provision will be inadequate, and the Association and Perry hereby agrees that the Clinic shall be entitled to seek injunctive relief in case of any such breach in addition to all other relief that may be available to the Clinic.
49. Although Defendant St. Louis was presented with the same agreement, he suggested certain minor changes and modifications to the document. Counsel for Spinal and the Spinal Operating Companies and counsel for Defendant St. Louis were working to finalize the agreement, but, for the reasons set forth below, Defendant St. Louis did not ultimately sign the agreement.
50. After significant expense and effort, the surgery center and related medical operations of Spinal and Spinal Operating Companies began operations in August.in the first month of operation, Spinal and Spinal Operating Companies performed numerous surgeries and regularly saw prospective patients; this activity continued in September, October, and part of November. It was expected that Spinal and Spinal Operating Companies would be in the black consistent with projections in the business plan.
51. Within a month after the surgery center opened, through significant time and expense of Spinal and the Spinal Operating Companies, a prospective patient list (persons interested in receiving the advanced surgeries performed by Spinal and the Spinal Operating Companies) was created. The list was comprised of potential patients obtained through the seminars conducted by Spinal and the Spinal Operating Companies as well as from other marketing efforts initiated by the companies. The list of patients was confidential, proprietary and trade secret information of Spinal and the Spinal Operating Companies.
52. Spinal and the Spinal Operating Companies created their business plan, patient lists and patient leads and other confidential business information (the “Spinal Confidential Information”) at considerable time and expense. The Spinal Confidential Information was extremely valuable to Spinal and the Spinal Operating Company and, as a result, Spinal and the Spinal Operating Companies took steps to protect the Spinal Confidential Information from dissemination to the public at large.
53. As more fully discussed below, in contravention of their fiduciary obligations to Spinal and Spinal Operating Companies, Defendants St. Louis and Perry abandoned Spinal and Spinal Operating Companies to form a competing surgical center with Defendant EFO.
B. The relationship between Spinal, Spinal Operating Companies and Defendant EFO formed.
54. In April of Bailey contacted Robert Grammen (“Grammen”) at EFO to discuss Spinal and Spinal Operating Companies and determine whether Defendant EFO was interested in investing and/financing in the companies. Bailey generally described to Grammen the business model and concepts of Spinal and Spinal Operating Companies. Defendant EFO (through its principals, non-parties Esping and Grammen) expressed interest in making a significant investment in the companies.
55. Several meetings and numerous telephone conversations occurred between Bailey, Defendants St. Louis and Perry and Defendant EFO (through its non-party principals Esping and Grammen) between April and May including, without limitation, meetings where the parties jointly toured possible locations suitable for a surgery center in various cities.
56. After becoming more familiar with the nature of the business, Defendant EFO represented that it was excited and interested in the possibility of investing in Spinal and Spinal Operating Companies and began extensive discussions with Bailey relating to such an investment. Defendants St. Louis and Perry were part of these discussions.
57. As part of the due diligence, Bailey and Defendants St. Louis and Perry provided Defendant EFO with a copy of the confidential business plan of Spinal and the Spinal Operating Companies. At the time that this confidential, proprietary and trade secret information was provided to Defendant EFO (through its non-party principals Esping and Grammen), they were advised that the business plan was to be kept in the strictest confidence and was only being provided for the purpose of allowing them to evaluate whether to invest in the companies. Defendant EFO (through its non-party principals Esping and Grammen) agreed to maintain the business plan and any other documents in the strictest confidence. Larry Unger was involved in these conversations as well.
58. In April of Defendant EFO submitted an initial offer to Bailey and Defendants St. Louis and Perry for investment in Spinal and the Spinal Operating Companies. Bailey and Defendants St. Louis and Perry rejected the initial proposal, but the parties continued to engage in discussions and negotiations in hopes that an agreement could be reached. Negotiations broke off for a time period and then were renewed in or about September.
C. The conspiracy to form LSI and the LSI Operating Companies commenced.
59. As noted above, Bailey and Defendants St. Louis and Perry met and had numerous discussions with Defendant EFO on behalf of Spinal and the Spinal Operating Companies on numerous occasions for the express purpose of having Defendant EFO invest in the companies.
60. During those meetings, Bailey and Defendants St. Louis and Perry provided Defendant EFO with the Spinal Confidential Information and discussed in detail with Defendant EFO the business model. Among other things, Defendant EFO was advised that there were only a handful of surgeons trained in this procedure and, accordingly, Defendant St. Louis was integral to the business plan.
61. At all times material, Defendant EFO (and thereafter Defendants LSI and the LSI Operating Companies) knew that Defendants St. Louis and Perry were directors in Spinal and the Spinal Operating Companies and were critical employees as well.
62. From April through early November of Defendant EFO repeatedly and continually represented to Bailey, Spinal and the Spinal Operating Companies that they were interested in making a multi-million dollar investment. As late as October of EFO (through its non-party principal Esping) advised Bailey to “stop looking for other funding” because EFO was without question investing in Spinal and the Spinal Operating Companies.
63. It was as a result of these repeated assurances and representations that Bailey, Spinal and the Spinal Operating Companies provided Defendant EFO with the Spinal Confidential Information and opened up the companies’ books and financial records.
64. Specifically, based upon the relationship of trust and confidence that developed between Bailey, Spinal and the Spinal Operating Companies, on the one hand, and Defendant EFO, on the other hand, as well as the repeated assurances of Defendant EFO with respect to its investment in Spinal and the Spinal Operating Companies, which assurances were relied upon by Bailey, Spinal and the Spinal Operating Companies, Surgen (a representative of Defendant EFO) and Grammen were provided unfettered access to the financial books and records of Spinal and the Spinal Operating Companies.
65. Under the guise of conducting “due diligence, ” Defendant EFO requested and Spinal and the Spinal Operating Companies supplied the Spinal Confidential Information as well as other confidential and proprietary information including the companies’ then current ownership interests, lease agreements, operating agreements, and financial statements, so that Defendant EFO could provide a revised term sheet.
66. At the time this information was provided, Defendants EFO, St. Louis and Perry concealed from Bailey, Spinal and the Spinal Operating Companies that they were secretly having discussions as to how they could undermine and destroy Spinal and the Spinal Operating Companies and open a competing surgical facility. Had Defendants made such a disclosure, obviously Bailey, Spinal and the Spinal Operating Companies could have taken necessary steps to protect themselves and the Spinal Confidential Information.
67. Thereafter, in October Defendant EFO (through its non-party principal Esping) communicated to Bailey to “stop looking elsewhere for funding, ” and that Defendant EFO would meet the financing/capital needs of the company through a loan. Further, because Defendant EFO knew the other deal points that were unacceptable to Bailey, Spinal and the Spinal Operating Companies, it made clear that it would present a proposal that would be acceptable to all.
68. Defendant EFO knew that Bailey, Spinal and the Spinal Operating Companies would rely on those representations including, without limitation, that it would cease efforts to obtain alternative financing because Defendant EFO was committed to Spinal and the Spinal Operating Companies.indeed, the representations of Defendant EFO were expressly designed to cause Bailey, Spinal and the Spinal Operating Companies not to close with any of the other financing options, which Defendant EFO hoped would place Bailey, Spinal and the Spinal Operating Companies into a precarious financial position. This would enable Defendant EFO to acquire a substantial interest in Spinal for pennies on the dollar.
69. On October 27, Defendant EFO faxed a second proposed term sheet for financing to Bailey. Contrary to Defendant EFO’s prior commitments and representations, the second term sheet proposed Defendant EFO as the majority shareholder and controlling interest:
Bailey 10%
Defendant Perry 5% (paid in capital)
Defendant Perry 5% (vested interest)
Defendant St. Louis 25% (vested interest)
Defendant EFO Holdings 55%
70. Bailey, Spinal and the Spinal Operating Companies rejected the October 27, term sheet since it contradicted Defendant EFO’s representations and because it was not in the companies’ best interest, despite Defendant St. Louis’ urging that Bailey, Spinal and the Spinal Operating Companies accept the deal.
71. Unbeknownst to Bailey, Spinal and the Spinal Operating Companies, only a short time after the surgery center opened its doors in August of Defendant EFO (through non-party principals Esping, Grammen, and Surgen) and Defendants St. Louis and Perry actually began a conspiracy to: (1) form Defendant LSI and the LSI Operating Companies, a competing surgery center specializing in minimally invasive spine surgery; (2) misappropriate the confidential, proprietary and trade secret information of Spinal and the Spinal Operating Companies including the Spinal Confidential Information; (3) improperly solicit virtually all of Spinal and the Spinal Operating Companies key surgical and other employees; (4) look for locations for a competing surgical facility in the event that they could not usurp the leased premises of Spinal and the Spinal Operating Companies; (5) undermine and defame Bailey with employees of Spinal and the Spinal Operating Companies by, among other things, make defamatory and slanderous statements about Bailey; (6) conduct secret meetings at the Vinoy Hotel in St. Petersburg (where Defendant St. Louis resided) and elsewhere in an effort to further their conspiracy by discussing plans to open their competing venture.
72. Defendants St. Louis and Perry began canceling patients scheduled for surgery or would otherwise no show up for scheduled surgeries so that such patients could ultimately be diverted to their soon to be open competing center. Defendants LSI and the LSI Operating Companies would benefit from such wrongful condcut even in event that Defendant EFO could not force Spinal and the Spinal Operating Companies to accept their term sheet. Defendant St. Louis also delayed signing a professional services agreement as he conspired with the other co-defendants to destroy Spinal.
73. Behind Bailey, Spinal and the Spinal Operating Companies’ proverbial back, Defendant EFO (who knew that Defendants St. Louis and Perry were shareholders, employees, and directors of Spinal), held secret meetings for the purpose of interfering in the relationship between Spinal and the Spinal Operating Companies and Defendants St. Louis and Perry.
74. Because Defendants St. Louis and Perry were employees of Spinal and the Spinal Operating Companies, they each had a duty of loyalty to the companies. They were also directors, and as such each had a fiduciary duty to Spinal and the Spinal Operating Companies. These duties include: duty of good faith, duty of loyalty, duty to refrain from self-dealing, duty of full disclosure, and the duty to use the amount of care that an ordinary careful and prudent director would use in managing a corporation’s affairs. These duties precluded them from, among other things, opening a competing facility and stealing Spinal and the Spinal Operating Companies’ employees and confidential, proprietary and trade secret information.
75. Notwithstanding their duties to Spinal and the Spinal Operating Companies, Defendants St. Louis and Perry engaged in numerous meetings and conversations with Defendant EFO (through its non-party principals Esping and Grammen and also through Surgen) for the purpose of soliciting them to sever their relationship with Spinal and the Spinal Operating Companies and forming Defendants LSI and the LSI Operating Companies.
76. Defendant EFO (including its non-party principals Esping and Grammen and also Surgeon) knew that Defendants St. Louis and Perry were employees, shareholders and directors of Spinal and the Spinal Operating Companies. Without Bailey, Spinal and the Spinal Operating Companies’ knowledge, Defendants EFO, St. Louis and Perry interfered with the advantageous business relationships with the employees of Spinal and the Spinal Operating Companies by, among other things, (1) using these employees—during regular business hours as well as after hours—to help Defendants EFO, St. Louis and Perry locate a property at which to open their competing surgical center; (2) soliciting them to join their soon to be opened competing facility—Defendants LSI and the LSI Operating Companies; (3) making defamatory and slanderous statements about Bailey in an effort to undermine Bailey and question the security of remaining as an employee of Spinal and the Spinal Operating Companies; (4) making defamatory and slanderous statements about Bailey, Spinal and the Spinal Operating Companies to third parties including Spinal’s landlord and its third party vendors; (5) interfering with the patient relationships with Spinal and the Spinal Operating Companies including, without limitation, as discussed below, the theft of approximately 200 patient leads that were taken to use at Defendants LSI and the LSI Operating Companies; and (6) interfering with Spinal and the Spinal Operating Companies’ retention of a new physician to replace Defendant St. Louis.
77. Defendants’ meetings and discussions occurred over approximately a two month period beginning in or about September. Through their discussions and inspection of numerous possible locations, Defendants learned that it was not going to be as easy as they suspected to find a location suitable to open a competing surgical center. Unless Defendants were lucky enough to find a vacant surgical center with an ACHA license, they were going to lose a significant amount of time in building their own surgery center, a fate that they wanted to avoid at all costs. Defendants coveted the Spinal surgery center because it was built for ACHA approval at substantial time and expense, which, if they could obtain the center, would be a significant benefit.
78. Other alternatives, and the course that Defendants chose, was to either force Spinal and the Spinal Operating Companies to sell the company for pennies on the dollar, or if that did not succeed, Defendants would simply force Spinal and the Spinal Operating Companies out of business by committing the tortious acts described below. If either effort succeeded, Defendants expected to end up with the surgery center operated by Spinal and the Spinal Operating Companies.
79. Beginning at least as early as October of and upon information and belief even as early as August of Defendants St. Louis and Perry began to undermine Bailey and Spinal by representing to the employees of Spinal and the Spinal Operating Companies that Bailey is a convicted felon, that he uses 13 aliases; that Bailey is bankrupt; that Bailey was stealing money from Spinal and the Spinal Operating Companies and that Spinal and the Spinal Operating Companies are going to fail. Defendants St. Louis, Perry and non-party Dr. Hamburg (the anesthesiologist brought by Defendants St. Louis and Perry to Spinal and the Spinal Operating Companies) made the statements to not just employees, but also to third party vendors. At the time these statements were made, Defendants St. Louis and Perry knew or should have known that the statements were false.
80. The timing of the statements was not accidental, but was in fact deliberate. Because Defendants desperately needed to either acquire Spinal and the Spinal Operating Companies or at least get its surgery center with its ACHA built out infrastructure, the statements were deliberately designed to help Defendants to achieve their goals.
81. In the beginning of November of Defendant EFO (through its non-party principals Esping and Grammen), without disclosing to Bailey, Spinal or the Spinal Operating Companies their clandestine plan to open a competing center with Defendants St. Louis and Perry (both of whom were employees, shareholders and directors of Spinal), tried to coerce Bailey to strike a deal with Defendant EFO regardless of whether it was in the best interests of Spinal or the Spinal Operating Companies. Defendants EFO, St. Louis and Perry effectively attempted a hostile takeover of Spinal and the Spinal Operating Companies and Defendant EFO used Defendants St. Louis and Perry to help accomplish its goal.
82. Among other things, the proposed deal required that Defendant EFO would control the board of directors and it would result in a significant reduction in Bailey’s ownership which would have went from 27% to 10%. The proposed transaction would have only reduced Defendant St. Louis’ interest from 34% to 25%.in other words, Bailey would be reduced by a substantial 63% of his ownership interest under EFO’s proposal; Defendant St. Louis would have been reduced by only 26.5%. This, despite the fact that it was Bailey, Spinal and the Spinal Operating Companies that developed the Spinal Confidential Information, furnished the seed capital used to get the business off the ground, assembled a surgical team that was clearly talented (otherwise Defendants EFO, LSI and the LSI Operating Companies would not have raided it), equipped and licensed a surgery center, and spent at a minimum 2000 hours of time (at no salary) in getting the business going.
83. Spinal rejected the proposal. Because EFO’s efforts to acquire a controlling interest in Spinal failed, Defendants collectively moved forward with their joint plan to open the competing center. However, they still hoped to get the surgical center developed by Spinal and the Spinal Operating Companies by driving the companies out of business.
84. After Defendants St. Louis and Perry literally went to the bank and cashed their November paychecks (as opposed to deposit them in the bank for processing as they had historically done), Defendant St. Louis announced his resignation. At the time this happened, Defendants’ plan quickly unfolded as roughly half of Spinal and the Spinal Operating Companies’ staff resigned with him including the main members of the surgical team. The staff that resigned included, without limitation, Defendant St. Louis, Defendant Perry, Dr. Glen Hamburg (anesthesiologist), Jim Stafford (scrub tech), Guy Lepine (Marketing Director), Stacy Danahy (charge nurse), Roy Leathem (business manager), Roxanne Wendt (billing, coding collections), Carl Erisman (Xray technician), Colin Pick (certified nurse anesthetist), and Cheryl Pierson (Defendant Perry’s nurse).
85. Defendants asked Defendant Perry to stay behind at Spinal to act as a mole and gather more of Spinal’s Confidential Information; however, as soon as Spinal and the Spinal Operating Companies learned that Defendant Perry was part of the conspiracy, he was terminated.
86. Spinal and the Spinal Operating Companies were on the ropes given that the center only opened three (3) months earlier. Bailey, Spinal and the Spinal Operating Companies had expended significant time and money to develop the Spinal Confidential Information, form the companies and make them operational. As a result, losing the entire surgical team was quite a blow given that few doctors were qualified to perform the minimally invasive technique and the importance of the surgical team to Spinal and the Spinal Operating Companies business model. Further, significant capital was expended in development of the surgical center and paying Defendant St. Louis during the start-up period while the center was not opened and generating revenue.
87. Defendants did not just open a competing facility, however. They recruited Guy Lepine (“Lepine”), who was responsible for marketing and his relationship with vendors at Spinal and the Spinal Operating Companies. Lepine wrongfully took all of Spinal and the Spinal Operating Companies patient leads with him to start Defendant LSI and the LSI Operating Companies. Further, Lepine and others took with them Spinal’s Confidential Information including its business plan.
88. Lepine was also responsible, in part, for setting up the surgery center of Spinal and the Spinal Operating Companies. Defendants were able to recruit Lepine because they, among other things, told him that that: Bailey is a convicted felon, he has 13 aliases, he was stealing money from Spinal and the Spinal Operating Companies and the companies were going to fail. Given Defendants St. Louis and Perry’s position with the companies, Lepine believed the statements about Bailey at the time and grew concerned about his position with Spinal and the Spinal Operating Companies.
89. These same false statements were made to each of the other employees of Spinal and the Spinal Operating Companies that resigned including Defendant Perry, Dr. Glen Hamburg (anesthesiologist), Jim Stafford (scrub tech), Guy Lepine (Marketing Director), Stacy Danahy (charge nurse), Roy Leathem (business manager), Roxanne Wendt (billing, coding collections), Carl Erisman (X-ray technician), Colin Pick (certified nurse anesthetist), and Cheryl Pierson (Perry’s nurse). Other employees that heard the false statements but elected to stay with Spinal include but are not limited Robert McNalley, Florence Barbie, Fred Weaver, Diane Mears, Candace Cummings, Aaron Plumb and Kim McCown.
90. These individuals, including Defendant St. Louis, Defendant Perry, Dr. Glen Hamburg (anesthesiologist), Jim Stafford (scrub tech), Stacy Danahy (charge nurse), Roxanne Wendt (billing, coding collections), Carl Erisman (Xray technician), Colin Pick (certified nurse anesthetist), and Cheryl Pierson (Perry’s nurse), comprised the bulk of the surgical team at Spinal and the Spinal Operating Companies.
91. At all times material, Defendant EFO knew that Defendants St. Louis and Perry were employees, shareholders and directors of Spinal, but nonetheless used wrongful means and further encouraged Defendants St. Louis and Perry to sever their employment with and loyalty to Spinal and the Spinal Operating Companies and enter into a similar competing business financed and/or controlled by Defendant EFO.
92. Further, Defendants EFO, St. Louis and Perry knew that the employees that they solicited to resign and join forces with them at Defendants LSI and the LSI Operating Companies were employees of Spinal and the Spinal Operating Companies and that these individuals had an advantageous business relationship with Spinal and the Spinal Operating Companies.
93. At least as early as the date that Defendant St. Louis resigned, each of the Defendants began making defamatory and slanderous statements to third parties including the vendors Prism Physical Therapy, GE Healthcare, Ultra Open MRI, Alsco, and Mercury Medical amongst others that serviced Spinal and the Spinal Operating Companies and its landlord. Those statements included those mentioned above, e.G., that Bailey is a convicted felon, he has 13 aliases, he is bankrupt, he was stealing money from Spinal and the Spinal Operating Companies and that the companies were going to fail.
94. Spinal and the Spinal Operating Companies had advantageous business relationships with its vendors and its landlord. Defendants knew or should have known of the advantageous relationships with these vendors at the time the false and defamatory statements were made, but made such statements anyway.
95. Indeed, Defendant EFO and, thereafter, Defendants LSI and the LSI Operating Companies contacted the landlord of Spinal and the Spinal Operating Companies in an effort to encourage and solicit the landlord, Kevin McCallum, into severing his company’s relationship with Spinal and the Spinal Operating Companies. Among other things, Defendant EFO and, thereafter Defendants LSI and the LSI Operating Companies told the landlord that if the landlord would refuse to accept rent from Spinal and the Spinal Operating Companies, Defendants LSI and the LSI Operating Companies would lease the entire facility (as opposed to approximately half, which is what Spinal and the Spinal Operating Companies was leasing). Further, Defendant EFO and, thereafter, LSI and the LSI Operating Companies told the landlord that if these terms were not accepted, that Spinal and the Spinal Operating Companies would fail, that no rent would be forthcoming and that the landlord would be left with no tenant.
96. Further, after October 27 and continuing through to November Defendants EFO, St. Louis, Perry, LSI and the LSI Operating companies contacted Miller, Suhl, and other business relations of Spinal and the Spinal Operating Companies, and told them false and defamatory statements concerning Bailey, Spinal and the Spinal Operating Companies, including and without limitation, (1) that Bailey, Spinal and the Spinal Operating Companies could not obtain financing; (2) that foreclosure on Spinal and the Spinal Operating Companies’ lease of its surgery center was impending; (3) that GE Capital was about to foreclose on Spinal and the Spinal Operating Companies’ equipment; (4) that Bailey had stolen from the company and had spent time in jail (5) that Bailey was operating under assumed names including even female names; (6) that Bailey had filed for bankruptcy; and (7) that Bailey had improperly organized Spinal and the Spinal Operating Companies, thus making financing and operations difficult. At all times material hereto, Ted Suhl and Mark Miller were investors in Spinal.
97. At times throughout November Defendant EFO contacted Miller and Suhl and informed them that if they did not cooperate with Defendant EFO, then Defendant EFO would take the doctors and start their own competing business, leaving Spinal and the Spinal Operating Companies with no surgeon, physicians or staff. At the time these statements were made, Defendant EFO knew that Miller had entered into a contract to make a significant capital contribution to the company. Defendant EFO knew or should have known that the statements made were false.
98. The same defamatory statements were made by Defendants EFO (by its employees, agents, or representatives), St. Louis, Perry, LSI and the LSI Operating Companies to other business relationships including those both in Florida and those out-of-state including the landlord Kevin McCallum in St. Petersburg, Fred Bergman of Ultra Open MRI, and Ron Chism of Prism Health.
99. Defendants St. Louis and Perry, while serving on the Board of Directors of Spinal, wrongfully participated along with Defendant EFO to launch a competing spine surgery clinic (Defendants LSI and the LSI Operating Companies) that was financed by Defendant EFO.
100. On November 9, Andrew N. Meyercord, corporate counsel to Spinal, sent a letter to Esping at Defendant EFO, advising that Defendants St. Louis and Perry were directors of Spinal and as such owed a series of fiduciary duties to Spinal and the Spinal Operating Companies. Mr. Meyercord demanded that there be no further contact between EFO and Defendants St. Louis and Perry regarding the sale of their ownership interests in Spinal or any other matter related to the operation of a minimally invasive surgery center.
101. In that same letter, Mr. Meyercord further demanded the immediate return of all confidential information provided to Defendant EFO in connection with its proposed investment in Spinal and instructed that such materials should not be used by EFO for any purpose. Mr. Meyercord clearly advised Defendant EFO, at that time, that Spinal and the Spinal Operating Companies had undertaken efforts to maintain the confidentiality of such materials and that Defendant EFO’s continued possession and any use of those materials was not permitted.
102. Defendant LSI and the LSI Operating Companies were formed using the Spinal Confidential Information including, without limitation, its business plan and the patient lists and leads, each of which was created at a significant expense to Spinal and the Spinal Operating Companies. This information was maintained confidential by Spinal and the Spinal Operating Companies.
103. Defendants LSI and the LSI Operating Companies were formed by effectively taking more than half of Spinal and the Spinal Operating Companies’ team (including the entire surgical team) and transplanting them at Defendant LSI and the LSI Operating Companies. Defendants also took the Spinal Confidential Information including its list of prospective patients and business plan, the later of which it copied virtually verbatim. Defendants also copied and used various other forms of Spinal and the Spinal Operating Companies and structured Defendants LSI and the LSI Operating Companies in the identical manner. Defendants even purchased the identical equipment, used the same surgical supplies from the same vendors. Thus, when it opened, LSI and the LSI Operating Companies had the benefit of the tremendous effort of Bailey, Spinal and the Spinal Operating Companies.
104. These egregious acts were accomplished with the assistance of the improper conduct of Defendants St. Louis and Perry as well as agents for Defendant EFO such as Grammen and Surgen. On November 15, on the date of Defendant St. Louis’ resignation, while still members of the board of directors, Defendants St. Louis and Perry engaged in activities to interrupt, disrupt, interfere, disturb, and/or destroy Spinal and the Spinal Operating Companies by attempting to enter the restricted and confidential business office (storing Bailey’s files) in Spinal and the Spinal Operating Companies’ clinic in St. Petersburg, Florida. Defendants St. Louis and Perry threatened to break down the door if they were not given a key, and again defamed Bailey by telling employees that Bailey had stolen from the company but that “everything would be fine once Bailey is removed.”
105. Moreover, on November 16, Defendant James St. Louis left the clinic with a metal briefcase containing approximately $30,000 worth of surgical equipment, whereupon being informed that the police were called and a police report was being filed, he later returned all or part of the equipment.
106. Although Defendants were conspiring for several months, on November 18 agents for Defendant EFO filed for corporate status with the state of Florida for Defendants LSI and the LSI Operating Companies.
107. Approximately ten days after Defendant St. Louis’ resignation, on November 24, Spinal and the Spinal Operating Companies discharged Defendant Perry as an employee for a) engaging in activities that were interrupting, disrupting, interfering, disturbing, destroying, and/or usurping the business opportunities of Spinal and the Spinal Operating Companies; b) using proprietary and confidential information for his own purposes including the Spinal Confidential Information; and, c) canceling patients that were scheduled to come to the St. Petersburg clinic (over the course of several days before Defendant St. Louis resigned) for the benefit of Defendants.
D. Spinal and the Spinal Operating Companies attempted to mitigate its damage by hiring Dr. Wolff but Defendants’ conspiracy to destroy the company continued.
108. After Defendants’ wrongful conduct, Spinal and the Spinal Operating Companies had no surgeon to perform the procedures and, hence, it was effectively out of business unless it could quickly find another qualified surgeon to perform the unique surgery that was at the heart of its business plan.
109. It was not as simple as just replacing a surgeon or surgery team, however. Because of the false statements made by Defendants to vendors, the landlord and other third parties, even if Spinal and the Spinal Operating Companies could replace the surgeon, it would take much more to right the ship. Because the marketing efforts of Spinal and the Spinal Operating Companies focused on the expertise and experience of Defendant St. Louis, rebuilding Spinal and the Spinal Operating Companies would require it to rebrand itself and market a new surgeon at a time when Spinal and the Spinal Operating Companies had already expended significant sums to market and develop the center based on the expertise its shareholder, employee and directors, Defendants St. Louis and Perry.
110. In addition to staging a collective “walk out” of the entire surgical team, Defendants maliciously disseminated defamatory statements about Bailey, misappropriated Spinal Confidential Information, and stole the list of approximately 200 prospective patient that were generated by Spinal and the Spinal Operating Company at great expense and effort. Lepine, on behalf of Defendants subsequently contacted each one of them, soliciting them to come to the new competing facility. A public notice was also published in an alleged effort to mislead potential and former patients of Spinal. A substantial number of the patients ultimately had surgery at Defendants LSI and the LSI Operating Companies. This list of prospective patients was not readily available to the public and was generated by Spinal and the Spinal Operating Companies through its significant marketing efforts.
111. The conduct of Defendants significantly harmed Bailey, Spinal and the Spinal Operating C
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