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Morristown Heart Consultants, PLLC v. Patel

Court of Appeals of Tennessee, Knoxville

July 24, 2019

MORRISTOWN HEART CONSULTANTS, PLLC, ET AL.
v.
PRAGNESH PATEL, M.D.

          Assigned on Briefs May 1, 2019

          Appeal from the Circuit Court for Hamblen County No. 15-CV-185 Robert E. Lee Davies, Senior Judge.

         We granted this Tennessee Rule of Appellate Procedure 9 interlocutory appeal to consider whether the Trial Court erred in ordering disclosure of the representation file maintained by attorney Troy L. Bowlin, II, during his representation of Morristown Heart Consultants, PLLC ("MHC") to a member of MHC. We find and hold that the Trial Court did not err in determining that MHC had not properly authorized the hiring of Mr. Bowlin and that attorney-client privilege did not apply to prevent disclosure of Mr. Bowlin's legal file to a member of MHC with fifty percent financial rights and thirty-three percent governing rights to the company. We, therefore, affirm the Trial Court's order permitting the member to acquire Mr. Bowlin's legal file concerning MHC and conduct relevant discovery concerning that representation.

         Tenn. R. App. P. 9 Interlocutory Appeal; Judgment of the Circuit Court Affirmed; Case Remanded

          Troy L. Bowlin, II, Morristown, Tennessee, for the appellants, Morristown Heart Consultants, PLLC, and Sunil T. Ramaprasad, M.D.

          F. Clinton Little, Knoxville, Tennessee, and Matthew B. Evans and Matthew W. Sexton, Morristown, Tennessee, for the appellee, Pragnesh Patel, M.D.

          D. Michael Swiney, C.J., delivered the opinion of the court, in which Frank G. Clement, Jr., P.J., M.S., and Kenny W. Armstrong, J., joined.

          OPINION

          D. MICHAEL SWINEY, CHIEF JUDGE

         Background

         MHC is a closely-held professional limited liability company operating in Tennessee. In 2007, Sunil Ramaprasad, M.D. ("Dr. Ramaprasad") began MHC. In August 2009, Dr. Ramaprasad and Pragnesh Patel, M.D. ("Dr. Patel") entered into the "Operating Agreement of Morristown Heart Consultants, PLLC" ("Operating Agreement"). The Operating Agreement provided in pertinent part:

Management. The Company shall be Member-managed in accordance with this Agreement.
** *
Members. The Members of the Company at this time are Sunil Ramaprasad, M.D. (herein, "Sunil") and Pragnesh Patel, M.D. (herein, "Pragnesh") Their capital contributions and their percentage interest in the Company are noted on EXHIBIT A, which is attached hereto. The Members acknowledge that, simultaneously with the execution hereof, the Members entered into that certain Membership Interest Purchase Agreement (the "Purchase Agreement"), through which Sunil agreed to sell, and Pragnesh agreed to purchase, a fifty (50%) percent Membership Interest in Company pursuant to the terms and conditions of the Purchase Agreement. In accordance with the Purchase Agreement, Sunil shall grant, and Pragnesh shall receive: (i) on the execution date of the Purchase Agreement (the "Execution Date"), a one (1%) percent Membership Interest in Company; (ii) on the twelve (12) month anniversary of the Execution Date, a twenty-four (24%) percent Membership Interest in Company, and, on the twenty-four (24) month anniversary of the Execution Date, an additional twenty-five (25) percent Membership Interest in company. Pragnesh's compensation for the 1st three (3) years of his membership in Company shall be governed by the Purchase Agreement.
** *
ARTICLE 7 MEETINGS OF MEMBERS
1. Annual Meeting. The annual meeting, if any, shall be held at a time and place as decided by a majority of the Members.
2. Special Meetings. Meetings of the Members may be called by any Member owning TEN PERCENT (10%) or more of the Company. The place and time of the meeting shall be determined by the Member calling for the meeting.
3. Voting by Members. Members shall be entitled to vote on all matters which provide for a vote of the Members in accordance with each Member's Membership interest.
4. Written Consent. Action of the Members or Officers may be accomplished with or without a meeting. If a meeting is held, evidence of the action shall be by Minutes or Resolution reflecting the action of the Meeting and signed by the requisite number of Members needed to consent to the proposed action. Action without a meeting may be evidenced by a written consent signed by the requisite number of Members needed to consent to the proposed action.
5. Majority Required. Unless otherwise stated in this Agreement, a majority vote of all the Membership Interests of the Company at that time shall be required to authorize the proposed action.
6. Notice. Notices of meetings shall be in writing stating the date, time and purpose of such meeting. Notices shall be delivered either personally, by mail or electronic mail to each Member of the Company. Such notices must be delivered at least Twelve (12) business days but not more than Thirty (30) business days prior to such meeting date, and shall be deemed delivered when deposited in the mail postage paid and properly addressed, upon hand delivery or upon an electronic mail transmission. Actual notice, no matter how delivered, shall suffice.
7. Waiver of Notice. Whenever a notice is required in this Agreement, a Member may waive the notice requirement in writing either before or after the time that the notice was due. If a Member attends such meeting, then notice shall be presumed received.

(Other paragraph numbering omitted.)

         At some later point, Dr. Patel's physician privileges were temporarily suspended by Morristown-Hamblen Healthcare System. The record on appeal does not specify the reasoning behind the suspension. Following the suspension of Dr. Patel's privileges, Dr. Patel and Dr. Ramaprasad signed a Memorandum of Understanding ("MOU") on June 2, 2015. The MOU provided "certain amendments and clarifications" to the Operating Agreement. Specifically, the MOU provided in relevant part:

Whereas certain events occurred on or about May 13, 2015 that have caused a requirement on the part of Patel that he participate in a mini-fellowship during a ninety day leave of absence from the ...

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