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June 2, 2000


The opinion of the court was delivered by: McMAHON, District Judge.


After reviewing the evidence adduced during a two-day bench trial on this subject, I conclude, in an exercise of my discretion, that the application should be granted in part and denied in part.


I will assume that the reader is familiar with the Court's opinion dismissing the underlying qui tam action. See United States ex rel. Mikes v. Straus, 84 F. Supp.2d 427 (1999). What follows is the story behind that story.

(1) Dr. Mikes's Employment at PCCA

In the spring of 1991, Patricia Mikes, a board certified pulmonologist whose background lay primarily in academic medicine, began negotiating with Marc. J. Straus, an oncologist who, with two other physicians, ran a thriving, multi-location practice in Westchester County. Dr. Mikes had previously set up a pulmonology clinic at St. Vincent's Hospital, and she was eager to do the same in the more lucrative setting of a private practice. Drs. Straus, Ambinder and Friedman, who treated numerous patients with lung diseases (including lung cancer), were equally eager to have a colleague on staff who specialized in lung diseases, as that would increase the attractiveness of their practice. Dr. Mikes signed an employment contract with the defendants, operating under the name Pulmonary and Critical Care Associates ("PCCA"), on or about May 21, 1991.

During the negotiations over Dr. Mikes' employment contract, the parties had discussions about her desire to have the practice purchase about $40,000 of highly specialized pulmonary diagnostic and care equipment. I credit the testimony of Dr. Mikes that Plaintiff's Exhibit 44, a proposal for the development of a pulmonary clinic at Oxford Medical Group, P.C. (the name under which the defendants now practice), was prepared during the course of those negotiations. I also credit the testimony of Harold Burke, the lawyer who negotiated her employment contract, that Paragraph 10.F. of that contract, which provided for Dr. Mikes to pay liquidated damages to the partnership in the event she left her new job within three months, was included in the contract as a hedge against the possibility that Drs. Straus and his partners would expend substantial sums for equipment that they would be unable to use if Dr. Mikes left precipitously. I find Dr. Straus' testimony that the proposal was a recent fabrication, and that he never used the name Oxford Medical Group until a day or so before he incorporated his practice under that name, to be untrue.

Dr. Mikes joined the defendants' practice in mid-July 1991. As no one representing the defendants gave believable testimony about the equipment issue, I would be engaging in impermissible speculation by deciding which came first: Dr. Mikes' becoming testy as a result of her new employers' failure to go out and purchase the equipment she wanted, or defendants' quick realization that their new employee was not a very pleasant person to have around.

I could understand if the latter were the case, however, because I credit each and every bit of testimony I heard or read about her difficult personality. To put it bluntly, Dr. Mikes is not a very nice person. She comes across as someone who thinks herself quite superior to everyone else, in terms of both her intelligence and her ethics. Numerous staff members of the practice testified that she did not speak to them or interact with them, except to tell them that they did not know what they were doing. Dr. Carol Epstein, M.D., who was employed at Oxford at the same time as Dr. Mikes, testifying by affidavit,*fn1 described relator variously as "arrogant," "condescending to physicians, medical assistants and members of the staff," "an angry person," "confrontational," "hostile" and "derogatory." Norman Levine, who was employed by defendants as a medical assistant during Dr. Mikes's employment, averred that relator "made derogatory remarks about other physicians;" that relator once told him that all the physicians at St. Agnes Hospital were "stupid," "imbeciles," or "incompetent," and "incapable of practicing her quality of medicine;" and that patients complained to him that Dr. Mikes was "rude, abrupt, and cold." Having seen her on the stand, I believe every word of these characterizations.*fn2

Dr. Mikes appears to have been oblivious of her co-workers. To cite but one astonishing example, Dr. Mikes claimed never to have met Norman Levine, the foreign medical school graduate who served as chief medical assistant in the practice. She testified that she didn't know who he was back in 1991, and she claimed not to recognize him when he came into court. This testimony is simply incredible. For all that it had multiple locations, Oxford Medical Group was not an overly large practice. It employed about a dozen professionals and paraprofessionals (5 or 6 doctors, 5 medical assistants, a technologist). It would have been impossible to work there and not to know one's co-workers, especially one who was identified by all three partners in the practice as the person who made the practice function. Either Dr. Mikes is lying when she says she never met Mr. Levine (which I believe to be the case) or she is pathologically unable to relate to other people (which may also be the case). In any event, it is clear that she made no effort to enter into a collegial relationship with her co-workers.

The results were predictable. No one liked her or wanted to work with her. Levine, the chief medical assistant, testified, credibly, that Dr. Mikes was problematic from the first day of her employment, and that he had difficulty persuading his colleagues to work with her — so much so that he made the medical assistant with the least seniority work with her most of the time.

Dr. Mikes' difficulties with others were not solely within the practice. In paragraph 3.B. of her employment contract, Dr. Mikes agreed that she would obtain consulting and admitting privileges at several area hospitals where her new colleagues routinely admitted their patients: St. Agnes, Putnam, Dobbs Ferry, White Plains and Peekskill. Paragraph 10.A.ii. of the contract made the failure to obtain and/or maintain privileges at any of those hospitals (except White Plains Hospital) grounds for the immediate termination of her employment, so it can be said that hospital privileges were of the essence of the agreement. However, it proved difficult to get Dr. Mikes admitting privileges at those hospitals, due to her irritating manner and superior attitudes. Drs. Straus and Ambinder testified, credibly, that they were required to run interference for their new colleague with credentialing committees at St. Agnes and Putnam Hospitals after she offended committee members during her interviews. Dr. Kenneth S. Schwartz, Director of Radiology at the Hudson Valley Hospital Center and a member of the credentialing committee at Peekskill Hospital, submitted an affidavit in which he averred, "I do recollect that Dr. Mikes' behavior during her interview was strange, not only because she was arrogant and antagonistic, but primarily because it seemed as if she purposefully responded to the credentialing committee's questions in such a manner to ensure [sic] that the hospital would never grant her privileges." I credit that statement, as well as Dr. Straus' statement that Dr. Mikes did not obtain permanent privileges at Peekskill Hospital, in violation of her employment agreement (although she was accorded temporary privileges).

In the absence of any direct evidence, I decline to conclude definitively that Dr. Mikes' interpersonal difficulties played a role in her employers' reluctance to spend significant money for equipment that they would not need if she left the practice. Whatever the reason, having discussed the purchase of this equipment as part of their negotiations, Dr. Straus and his partners did not buy it. That decision had costly consequences.

(2) The Spirometry Question

To measure lung function in their pulmonary patients, the doctors at Oxford Medical Group used a device known as a spirometer. Although none of the witnesses could remember the name of the manufacturer of the spirometer that was in use during Dr. Mikes' tenure at the practice, the defendant produced an instruction manual and a maintenance manual for a Fukuda Model ST-90 spirometer, and the parties have litigated this action on the basis that the Fukuda machine was the spirometer in question. The Court so finds.

Norman Levine testified, and his employers confirmed, that he was the individual who selected the spirometer used in the practice. Levine testified, credibly, that he looked at five or six different spirometers before choosing the Fukuda. He selected it for several reasons, including its durability, portability (since it was moved among the several offices) and its efficiency. Most important was the fact that it came with a comprehensive service contract, pursuant to which the manufacturer would pick up the machine whenever the practice wanted it serviced and drop off a loaner. The manufacturer's representative recommended that the machine be sent in for service three times a year; Levine testified that he sent the machine in more often than that, including over all the Jewish holidays. Eventually, the practice had two of the machines in house, with one remaining at all times in the White Plains office. I find that Levine periodically sent the machines out for servicing, and that he did so at least three times a year as recommended by the manufacturer.

The parties marked the user's instruction and maintenance manuals as exhibits, and I have reviewed them. In pertinent part, they state that the machine is properly calibrated and, except for being checked periodically, needs no further adjustment. Thus, the Service Manual (PX-20) says, under the heading "Calibration:" "[n]o calibration is required since this machine is properly adjusted." Similarly, under the heading "Maintenance," it provides: "Since this instrument is properly adjusted at the time of production, no calibration is usually required unless the volume was changed by accident or the atmospheric pressure was changed." (Id., Section 15-1). The Instruction Manual, which one might suppose a user would read, states, "No calibration is required except for periodical check." (PX-21, Instruction Manual for ST-90, at page 6). And the product information booklet, identifies a 3 liter calibration syringe as an "optional device." (Id., page 2).

The same product information booklet announces that the ST-90 complies with the standards of the American Thoracic Society and all pertinent Federal regulatory agencies. (Id., page 1). The booklet does not qualify that statement in any way, including by a statement that frequent, even daily, calibration is needed in order to bring the machine into compliance with those standards.

In short, a purchaser of the Fukuda ST-90 who reviewed the manufacturer's instruction manuals, and who sent his machine back to the manufacturer for "periodical checks" (i.e., servicing), would have every reason to believe that he had no need to calibrate his machine on a daily basis in order to obtain accurate results. Norman Levine testified that the manufacturer's representative never said a word to him about needing to buy a syringe or calibrate the machine on a regular basis, including when he placed a special call in order to find out whether ...

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