The Clinton Herald, Clinton, Iowa

July 3, 2013

Judge hears lawsuit

By Katie Dahlstrom Assistant Editor
The Clinton Herald

---- — CLINTON — The civil trial between a former Clinton doctor who is being sued by Medical Associates concerning $100,000 in alleged overpayment to him in the form of advances took place Tuesday in Clinton County District Court.

Medical Associates filed suit against Dr. Christopher Martin in late 2011 claiming he was in breach of contract for being overdrawn on his account with Medical Associates by more than $100,000 when he left the company in 2009, according to court documents.

Martin entered into a two-year contract to be an associate physician with Medical Associates that began on July 9, 2007. During the first year of his contract, Martin was to make an annual salary of no less than $250,000. In the second year of his employment as an associate physician, Martin would be paid according to his proportionate share of Medical Associates' net profits as determined by the company's policy, which essentially measures the physician's productivity and adjusted gross charges, court documents state.

Martin received "draw" checks every two weeks based on projected income for the given year, according to court testimony from Medical Associates CFO Jim Dobbyn on Tuesday.

"The draw is an advance against earnings, which are determined on an annual basis," Dobbyn said. "We advance money to physicians. It's a guestimate."

Dobbyn stated during court Tuesday that Martin would have received a monthly report detailing his productivity and that of the other physicians that would have given him an idea of what his draw should have been.

He went on to say that the draws are adjusted on a quarterly basis based on the company's income. Dobbyn also said that being overdrawn on an account is not a unique situation and that doctors typically cut Medical Associates a check for the amount or in the case of less significant amounts, the overpayment is accounted for in future draws.

According to court documents, Martin claimed he was given repeated assurances by Medical Associates' former CFO Jim Holstein in late 2008 that he was on track for his draws. But at the year's end, Holstein claimed Martin was overdrawn by $66,000 and his future bi-weekly draws would be cut from $10,416 to $5,208.

Martin's attorney, Mark Schweibert, pointed out that Holstein waited a number of months before informing Martin that he was overdrawn.

"Mr. Holstein botched that pretty seriously," Schweibert said.

In court documents, Martin alleged Medical Associate's decision to cut his pay forced him to resign. Martin submitted his letter of resignation on Feb. 20, 2009 announcing his intent to resign when his contract expired in July 2009.

On April 8, 2009, Martin was informed that based on earlier distributions and projected revenues, his draw for the next quarter would be zero. His last day at Medical Associates was May 4, 2009.

Court testimony suggested Martin was over another $42,000 in his draws for 2009, bringing the total amount he was allegedly overdrawn by the time he left Medical Associates to $108,000. Dobbyn testified that Martin has yet to repay any of the amount he was allegedly overdrawn.

In his counterclaim, Martin asserted representations were made by Medical Associates prior to his agreement being signed that the business for a general surgeon such as himself would be sufficient for him to make more than the $250,000 he made in the first year of his contract.

Martin also alleged Medical Associates failed to provide him referral and support services, including the needed staff to optimize income for Medical Associates and himself.

During the trial Tuesday, Martin's attorney argued details of his contract were contrary to the claims made in Medical Associate's suit, such as the amount that Martin was allegedly overdrawn and the deductions made from his earnings. He also alleged the company's non-competition policy, which stated he could not practice within a 50-mile radius once leaving Medical Associates, caused him financial damage.

According to court documents, Martin claimed $188,545 in damages from Medical Associates in the form of underpaid wages, relocation and other expenses.

Judge Nancy Tabor heard arguments from both parties on Tuesday and will make her ruling in the case within 60 days.