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Top Doctor Wins Bulk of Ruling

A Colton hospital's medical director was wrong to fire a surgeon to whom he had lent money, but did not cheat him, the jury says.

August 11, 2004|Hugo Martin | Times Staff Writer

The medical director of Arrowhead Regional Medical Center in Colton wrongfully terminated one of his surgeons but did not use his authority to cheat the doctor out of $130,000, a jury in San Bernardino decided Tuesday.

The verdict in the civil dispute was viewed by both sides as a significant victory for Dr. Appannagari Gnanadev, the medical director accused by the surgeon, Dr. David Colgrove, of manipulating earnings and expense records at the hospital to cheat Colgrove out of the money.

Colgrove's attorney promised to appeal the decision, saying Superior Court Judge Christopher Warner barred the jury from seeing several key documents that bolstered Colgrove's case.

"I'm very disappointed," Colgrove said after the verdict. "I don't think justice was served."

Arrowhead is a 373-bed facility run by San Bernardino County and the county's second-largest hospital.

Gnanadev has been the hospital's medical director since 2000. He is also president and sole owner of the Arrowhead Community Surgical Medical Group Inc., a for-profit company that is contracted by the county to provide all surgical services to the hospital. Gnanadev hired Colgrove as an ear, nose and throat surgeon in July 2000.

The lawsuit stemmed from a dispute over the $130,000, which Colgrove said Gnanadev loaned him to buy a home and launch a part-time medical clinic in Redlands.

Colgrove said he had an oral agreement with Gnanadev to pay off the two loans from Colgrove's hospital earnings and from profits he and Gnanadev agreed to split from the Redlands clinic. Colgrove said Gnanadev manipulated revenue and expense reports to make it seem as though Colgrove had made no progress in paying off the loans after two years of work.

Colgrove testified that when he hired an accountant in 2002 to confirm his suspicions, Gnanadev angrily fired him without giving him 60 days' notice. After he was fired, Colgrove said, he took over the Redlands clinic even though it was still in Gnanadev's name.

"I felt he betrayed me," Colgrove testified during the trial.

Gnanadev conceded that he loaned Colgrove $80,000 to buy a house but insisted that he did not loan Colgrove the $50,000 to launch the Redlands clinic. Instead, he said, he used the $50,000 to buy the clinic and simply assigned Colgrove to work there. Gnanadev said he never intended to turn the clinic over to Colgrove. After two days of deliberations, the jury declared that Gnanadev owes Colgrove $25,000 for firing Colgrove without the 60 days' notice.

But the jury also said Colgrove failed to prove that Gnanadev cheated him out of any earnings during his two years at the hospital. Instead, the jury ordered that Colgrove pay Gnanadev back the $80,000 for the home loan and the $50,000 that Gnanadev paid for the Redlands clinic.

Some jurors said the case was difficult to decide because the loans exchanged hands without any written agreements or terms for repayment.

"It was he-said, he-said," said juror Joseph Perez.

Several jurors also said they were swayed by the fact that Colgrove and Gnanadev signed a tentative agreement in August 2002 to settle the dispute. Under the agreement, Colgrove offered to pay Gnanadev $100,000 to settle the $80,000 loan and to take over ownership of the Redlands clinic. Colgrove later backed out of the agreement, saying he signed the deal only because Gnanadev's attorneys threatened to take away his home if he did not.

The judge barred Colgrove's attorney, Theresa Barta, from showing the jury the letters from Gnanadev's attorneys. She said that decision and others may give her grounds for an appeal.

But several jurors said the signed agreement appeared to be an admission by Colgrove that he still owed Gnanadev most of the money.

"Colgrove blew it," said jury foreman Jeffrey Kaiser.

During the trial, Barta tried to make the case that Gnanadev had a history of cheating business partners. While questioning Gnanadev, Barta asked him about a similar lawsuit he faced in 1995. But the judge blocked Barta from discussing the case in front of the jurors. In the 1995 case, Dr. Thomas Slemmer accused Gnanadev of refusing to share the revenue from a partnership between the two men and of skimming some of the profits for himself. Gnanadev settled the lawsuit by paying Slemmer $70,000, according to court records.

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