The Axelrod Firm’s David Versus Goliath Commercial Defense Victory Is Published

The Axelrod Firm represented the defendant, a single individual, against the plaintiff, a large nursing company, Visiting Nurse Group, Inc.  “Pennsylvania Jury Verdict Review & Analysis” provides professional commentary and analysis on the most significant verdicts in Pennsylvania state and federal courts.  This excerpt is taken from page 14 of the October 2009 issue:

DEFENDANT’S VERDICT

Alleged breach of fiduciary duty in renting space to health care competitor – Claimed breach of non-compete agreement.

Philadelphia County, PA

The plaintiff, Visiting Nurse Group, Inc. (“VNG”), brought this action against one of its former owners, alleging a breach of fiduciary duty, as well as a purported breach of a non-compete agreement. The defendant denied that his actions in renting space to another health care provider, ACT Home Health Services, Inc. (“ACT”), breached any fiduciary duty or caused the plaintiff to sustain any damages. The defense also denied any breach of a non-compete clause which was contained in a buy-out agreement signed with the plaintiff after the space-renting issue arose and likewise denied that any actions alleged to have violated the non-compete clause caused the plaintiff to sustain any damages. The tenant, ACT, as well as one of its owners, a nurse who had been employed by the plaintiff, settled the plaintiff’s claims prior to trial.

Plaintiff, VNG, is a provider of nursing care services. The plaintiff alleged that the defendant’s leasing of space to an alleged competitor, ACT, at a time when the defendant held an ownership interest in the plaintiff company, was a breach of the defendant’s fiduciary duty to the plaintiff VNG. The plaintiff alleged a loss of patients, nurses and monies as a result of the defendant’s actions.

Once the plaintiff learned that the defendant was leasing space to an alleged competitor, the plaintiff and defendant entered into a buy-out agreement in which the plaintiff purchased the defendant’s shares of VNG. The buy-out agreement included a noncompete clause which the plaintiff claimed the defendant breached by purportedly assisting ACT.

The defendant argued that he acted merely as a landlord to ACT and that there was no evidence that ACT paid any more than market value rent, or received any advantage from its lease with the defendant. The defense also argued that the plaintiff could not establish any breach of fiduciary duty, breach of the non-compete clause or that the plaintiff suffered any financial loss as a result of any of the defendant’s actions.

The case was tried as a bench trial with a verdict for the defendant on all counts.

REFERENCE
Visiting Nurse Group, Inc. vs. Gaudite. Case no. 06-
11-01804; Judge Albert W. Sheppard, Jr., 7-15-09.

Attorney for defendant: Sheryl L. Axelrod of The
Axelrod Firm in Philadelphia, PA.