ST. LOUIS – The Missouri Court of Appeals, Eastern District on Oct. 30 upheld a St. Louis County Circuit Court judgment overruling a medical company’s motion to compel arbitration from a doctor in a dispute over the alleged improper soliciting of an employee.
The Appeals Court opinion stated that Millennium Anesthesiology Consultants knew it had a right to arbitrate Dr. Brendan Walsh’s claims but acted inconsistently when it failed to seek arbitration for 10 months during a time when it litigated in St. Louis County Circuit Court and repeatedly opposed attempts by Walsh to arbitrate.
Thus, Walsh was prejudiced by Millennium’s conduct, the court opinion noted.
“When Walsh sought to arbitrate the entire controversy, Millennium opposed this which indicated its intention to litigate the entire dispute in court,” the court brief said. “...Millennium’s tardy effort to litigate its claims while requiring Walsh’s counterclaims to be arbitrated deprived Walsh of one of the principal benefits of arbitration; the quick and inexpensive resolution of disputes.”
In addition, the Appeals Court said requiring Walsh to arbitrate while allowing Millennium to litigate in court would require the parties to litigate the same facts before two separate tribunals.
“No policy favoring arbitration goes so far to allow or encourage parties to proceed simultaneously in multiple forms, risking divergent judgments,” the ruling stated.
The Appeals Court found Millennium’s interpretation of the arbitration clause “unconscionable and unenforceable” and affirmed the earlier Circuit Court judgment.
On Feb. 15, 2017, appellant Millennium Anesthesiology Consultants, an Illinois-based medical company serving the St. Louis area, filed suit against Walsh alleging the doctor violated an anti-solicitation provision agreement by asking a Millennium employee to leave and join his new business.
Walsh had been a manager and prior part-owner of Millennium and under a 2016 separation agreement, Millennium agreed to pay him $500,000 in installment payments, for which Walsh agreed to not solicit any Millennium employees.
The agreement included an arbitration clause to settle any potential disputes.
Officials at Millennium stopped making the installment payments to Walsh and alleged two counts of breach of contract and two judgment counts, asking the court to be relieved of obligations because of the breach.
In March 2017, Walsh filed a response denying he had improperly attempted to lure away a Millennium employee and made a counterclaim that the medical company had breached the contract by halting the payments. In addition, Walsh filed a motion to compel arbitration in the matter.
Millennium asked the court to deny the motion to compel arbitration and made no argument that Walsh’s counterclaims were subject to arbitration.
After Walsh renewed a motion to compel arbitration of the entire lawsuit in September 2017, the court denied his motion.
In December 2017, attorneys for Millennium changed their position regarding arbitration, answering counterclaims by Walsh, asserting that failure to arbitrate was an affirmative defense.
Millennium filed its own motion to compel arbitration of Walsh’s counterclaims, while maintaining its own claims were not subject to arbitration.
The Circuit Court denied Millennium’s motion and the company appealed to the Missouri Court of Appeals.
The ruling was written by James M. Dowd, with judges Sherri B. Sullivan and Lawrence E. Moody concurring.