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Arizona Dental Practice Litigation

Litigation for dentists can be costly, stressful, and divert a dentist’s focus from where it belongs – on their practice and patients. We’ve seen litigation bankrupt a dentist, especially in instances where he or she tries to go it alone, without an attorney’s help.

The most common disputes involving dentists include:

Partnership Disputes

Many dentists make the mistake of failing to fully outline a legal framework when setting up a practice, relying on default statutory provisions and informal, handshake agreements to fill in the gaps.  Even dentists who have worked together for years can get into disputes over spending authority, income division, assets, workload of each dentist, misconduct by a partner, and/or how to dissolve a partnership if it’s no longer working for the partners. This can be a recipe for disaster as, if things go bad between partners, there are no clear rules for resolving the disagreement.

If there is an underlying operating agreement, it may require Alternative Dispute Resolution (ADR), such as mediation or arbitration. However, sometimes litigation is the only way to move towards resolution. Lawsuits between partners can be very personal and stressful, and difficult to resolve without attorney assistance.

Employment Disputes

Disgruntled employees make up another large category of dentist lawsuits/disputes. Causes of lawsuits include termination and pay disputes. It is important that you follow all laws in Arizona and federally, including those that address paid time off, FMLA, sick time, discrimination and harassment, and wages.

Arizona is an at-will state, meaning that an employer or employee can end the employment at any time for any (or no) reason (provided it is not a prohibited reason under Arizona or federal law – think age discrimination or a violation of ADA laws). However, this often does not stop employees upset at being let go from trying to challenge a dismissal in court.

The best way to defend yourself in a lawsuit is to have clear policies outlined in an employment contract. Examples of clauses to add to the employee handbook include how performance reviews are handled, HIPAA and patient privacy rules, vacation and sick pay, how compensation and raises are handled, how discipline is handled, and any termination procedures you want to put in place.

However, even if you have an employee handbook you may still be sued by unhappy employees. In these situations, ADR measures such as mediation or arbitration can sometimes be useful and less expensive than a lawsuit. But if a lawsuit is filed against you, it is important to get an attorney involved as soon as possible.

Contract Disputes

Contract disputes can cause significant disruption to your business—and potentially be costly, depending on the underlying contract. In addition to the employment and partnership disputes discussed above, typical contact disputes that may arise include:

  • Landlord Disputes. Issues that may arise if a contract isn’t carefully drafted can be who pays for property improvements/repairs, how rent increases are handled, and what termination of the lease or the eviction process looks like.
  • Non-Compete and Non-Solicitation Agreements. These are normally part of associate agreements or purchase agreements, but, because they are often points of contention, they bear a separate mention. Arizona does not have any “bright-line” rules about the enforceability of non-compete agreements. Rather, courts will look to whether the non-compete is reasonable or whether it imposes an undue burden, and this may need to be litigated.
  • Purchase Agreements. Litigation may ensue and monetary damages may be assessed if either the buyer or seller of a dental practice violates the terms of the purchase agreement. Common areas of contention include non-compete or non-solicitation agreements, tax allocation schedules, assumption of liabilities, how incomplete patient work will be handled and how outstanding debts will be collected, lease transfers, and how existing staff will be integrated, to name a few.
  • Associate Agreements. Dentists can end up in disputes with associates over matters of compensation, benefits, working hours, termination, whether an associate is an employee or a contractor, or whether an associate is subject to a non-compete if they leave the practice. Particularly in instances where the framework of the associate agreement is more of a “handshake” agreement and not in writing, things can get messy and require litigation to resolve.

Real Estate Disputes

Many dentists own the property and building that their dental office is located in, and some even lease out other spaces in the building to other tenants. Other dentists may be leasing from a landlord. In either instance, disputes and lawsuits can arise, including:

  • Breach of Contract Disputes. A sales contract outlines the terms and conditions that both the seller and buyer are bound to, including closing date, title clearance, assets that will be included in the sale, and financing. If one party fails to follow these terms, the other party may be able to sue for breach of contract.
  • Specific Performance Disputes. Contracts can easily fall apart when either the seller or buyer fails to perform an obligation(s) required under the contract. If this happens, the injured party has the right to file a specific performance lawsuit to force the non-performing party to comply with the contract terms.
  • Boundary Dispute. In some instances, the parties in a transaction may not have the property lines set correctly. For example, the property boundaries have not been correctly registered, or the lines being used are not consistent with the legally registered property line. In areas where parking is limited, adjacent landlords can also end up in disputes to secure parking for their own office, or their tenants’ offices.
  • Failure to Disclose a Defect on the Property. In Arizona, sellers must properly disclose any defects in the property. If there is a wrongful failure to disclose any defects, the buyer may have a fraud claim that could lead to punitive damages. Common property defects include mold, leaks, roof damage, and even improvements that have been made but didn’t receive the proper permits.

Patient Disputes/Malpractice Lawsuits

Lawsuits filed by dissatisfied patients can be a major headache for dentists. According to the American Dental Association, the most common reasons for filing a dental malpractice claim include: improper crown and bridge placement, prescribing incorrect drugs and dosages, improper tooth extraction, endodontic procedures, orthodontic treatment complications, improper treatment after procedures, failure to diagnose oral health issues, and dental anesthesia complications. If a patient suffers as a result of improperly performed dental procedure, he or she may be able to file a dentist malpractice claim – which could leave the dentist liable for compensation (including medical expenses, lost earnings, and pain and suffering).

Most of the time, your malpractice carrier will line up a defense attorney to address malpractice allegations. However, oftentimes malpractice suits arise when other related legal matters (e.g. Board complaints) also need to be addressed and coordinated with the attorney assigned by the malpractice carrier.

No matter the type of litigation that has been started against you, it is imperative that you have competent legal advice. If you are a dentist facing litigation, you should seek out assistance from an experienced healthcare litigation attorney as soon as possible.

Arizona Attorney Patrick Stanley

Pat Stanley

Attorney for Arizona Dentists

(480) 219-5481

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