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#101 From: YRDoc <yrdoc@...>
Date: Sun Nov 22, 2009 4:17 am
Subject: The Eternal Optimists 		yrdoc
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In the August 26, 2009, post, mention was made of the Wetzel case.  OCA asked the judge to reconsider his ruling.  Apparently not able to gain any traction using that approach, OCA is reportedly now appealing the Wetzel decision.   I believe OCA has lost three separate cases based on the legality of their involvement with orthodontic practices in Texas, including one appeal to the Ffth Circuit.  Yet they're still willing to appeal the Wetzel verdict.  Their maintaining a "lawyer's full employment program"  appears to continue unchecked.  I wonder just what part of "NO" they don't understand.
 
According to their BLOG, they appear to have brought on 3 new management staff.  No mention of who has departed.  Anyone have any information on how many docs they've recruited and how many have departed?
 
The foregoing is entirely my personal opinion.  Interested parties should verify information directly.


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#100 From: YRDoc <yrdoc@...>
Date: Fri Oct 30, 2009 7:28 pm
Subject: Update on Apple Founder 		yrdoc
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Apple Orthodontix was one of several orthodontic management companies founded in the late 1990s.  I believe the total number of docs got up to about 68 - 70 by the time the company filed for bankruptcy in the year 2000.  About 12 of the docs took OCA's offer to join up following the bankruptcy filing, including the Packard group in Texas, who still use the original Apple name and logo.
 
It looks like Apple's founder is again "flying high."  According to a press release by Sierra Aviation, Jack has ordered a Sierra conversion Cessna Citation jet.  The quote on the Cessna Citation Forum website states:
"with multiple clinics in several widely separated southwestern cities, my practice demands fast, reliable long-range air travel.  The amazing performance of the FJ44 powered Citation makes it possible to visit clinics in 3 or 4 different cities - even in diferent states - all in a single day!  I love the Stallion's increased speed and range, and the reduced fuele burn is the icing on the cake" said Dr. Vondrak with a grin.  "Higher performance, reduced maintenance and lower operating cost - for me, it's a no-brainer." 
 
This particular jet is an older one, derisively referred to as "a near jet" or Cessna "slow 'tation."  The upgrade apparently helps bring performance up a more acceptable level.  Price is about $1,7 - $1.8 million, plus the substantial operating costs of a pure jet.
 
Though he reportedly brushed  questions aside, a model of a Citation jet was supposedly clearly in evidence on his desk when the Apple affiliates were invited to visit corporate headquarters in Texas in about 1999.  (Interestingly, the docs had to pay their own way, as the company purportedly couldn't afford to pick up the tab at that time.)  Rumor had it that he'd custom ordered the aircraft, but was unable to take delivery due to the downward slide of the company's fortunes.   Though used and relatively entry-level, it looks like he finally got his jet.
 
Bart's jet appears to be gone.  Presumably, he's dialed back his lifestyle somewhat now that the affiliates aren't around to continue subsidizing it?  I've forgotte, but I think it may have been a similar model Citation.
 
Entirely my own, personal opinion, based on information which is hopefullly reliable, but should be independently verified by the reader. 


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#99 From: YRDoc <yrdoc@...>
Date: Mon Sep 28, 2009 4:46 am
Subject: Barts Update 		yrdoc
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Things have been rather quiet regarding OCA as of late.  Even their blog www.orthodon.com hasn't had much activity.  One can't help but wonder if they're having any success recruiting, or if they're suffering attrition of their affiliate base?
 
It would apear to that the company has taken back the foreign operations from the founders?  Anyone know anything about what's happening with them these days?
 
There was an attempt to start a successor company to OCA called Practice Health.  www.practicehealth.com  However, looking at the current website, it's even more spartan than it was originally, and the contact address is now a residence instead of the previous business suite.  (The address is presumably the residence of Bart, Sr?)
 
There is, however, a new business venture under way.  Due to a lack of jr. or sr. on the name, it's not possible to tell whether father or son is involved with the operation.
http://sunglassconsulting.com  The SEC stipulation from a year or so ago would suggest to me that at least Bart, Jr., was attempting to keep OCA stockholders in the dark on the status of the company?  Perhaps a venture into sunglasses would be a logical progression?
 
The forgoing is entirely my own, personal opinion.  Anyone interested should do their own research, and form their own opinions on anything discussed.


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#98 From: YRDoc <yrdoc@...>
Date: Mon Aug 31, 2009 6:22 pm
Subject: Ortho Newsline Defunct? 		yrdoc
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Orthosynetics was a major sponsor of OrthoNewsline.  (www.orthonewsline.com.)  As nearly as I tell, the publication started publishing in October, 2008, and went defunct in February, 2009.  At least there's no further publications available after the February date, nor are they taking subscriptions for e mail clients, even though OrthoSynetics continues to include them on their website.  OSI was apparently subsidizing them to a significanta degree.  Another OCA failure?
 
I'd thought that OSI was no longer offering opportunities for prospective affiliates and associates, but they've moved the site to their BLOG page.  They also note that they have nearly 350 affiliated offices.  Given the number of offices run by many of their affiliates, it would be interesting to know just how many docs are actually signed up and performing under their service contracts.  Roussos notes that in a blog post on their website that OCA is winning their court battles.  (No way to ascertain when it was posted, as the link to the full article is no longer extant.)   Strangely, they seem to generally omit their losses courtroom losses?
 
Entirely my own, personal opinion based on information which is hopefully reliable.
 


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#97 From: YRDoc <yrdoc@...>
Date: Thu Aug 27, 2009 1:17 am
Subject: OCA Loses AGAIN! 		yrdoc
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Apparently ever the optimists, on August 13, 2009, OCA asked Judge Yeakel to reconsider his ruling in the Wetzel case.  On August 24, the judge denied the request.  Will OCA appeal the decision?  Given their past behavior, it's highly likely.
 
Is that it that they enjoy spending money on legal fees?  One possibility might be the fact that according to their website, I count 9 doctors and 14 offices who are still listed as affiliates.  Could it be they're worried that if they allow the loss to stand, there's a danger of the Texas Dental Board forcing the other docs to quit sending them money or risk losing their Texas dental licenses?  I believe three separate courts have ruled that the OCA Business Services Agreement violates applicable Texas law forbiding the unlicensed ownership of a dental office, so it would seem the precedents are pretty compelling.  I'd think the Board could push the current affiliates in Texas to drop their connection with OCA/Orthosynetics with relative ease legally?
 
There are several other docs whose cases would also be affected by the Wetzel ruling.  I wouldn't be surprised if OCA is still hoping they can somehow be induced to either rejoin, or leave a substantial amount of money on the table to induce OCA to give them their freedom without further legal battles. 
 
In looking at OrthoSynetics recently revised web site, there's no longer a tab for docs looking to join OCA listing the "opportunities" in various geographic areas.  Or at least I couldn't find it.  I wonder how they're doing recruiting-wise?  Their blog isn't crowing about being innundated with docs wanting to join up.  Nor is there any mention of how many docs are exiting. Now that the company is no longer public, their disclosure requirements regarding numbers of affiliates are much less stringent.
 
There's still no sign of Dr. Bush as one of their affiliates in Georgia.  If I remember correctly, their announcement of his rejoining made it sound like everything was again wonderful.  Could it be that their pronouncement was a little over-optimistic?
 
Entirely my own, personal, non-lawyers opinion.


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#96 From: YRDoc <yrdoc@...>
Date: Mon Aug 3, 2009 1:39 am
Subject: OCA Loses Another Case in Texas 		yrdoc
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Things have been relatively quiet on the OCA (Orthosynetics) front as of late.  However, on July 30, they lost yet another case in the Federal District Court of Texas Judge Lee Yeakel.
 
If memory serves me correctly, OCA lost three separate cases in three Texas courts, all of which found that their contract or Business Services Agreement was in violation of Texas law forbidding ownership of a dental practice by an unlicensed corporate entity.  They appealed at least one of those cases, and lost.  However, in October, 2005, they went after a Dr. Wetzel, claiming that despite the illegality of the contract, and despite the fact that courts don't typically assess damages once a contract has been found to be illegal, he still owed them money for "unjust enrichment" and other claims.  Judge Yeakel found that since the contract was illegal, the court would leave the parties where it found them. 
 
Several other Texas doctors also had exposure for similar claims.  Presumably, unless OCA decides to appeal this decision, they can breath a collective sigh of relief?
 
Since I'm not a lawyer, any questions regarding what this ruling means should be directed to a licensed attorney.  The rulings in OCA vs. Wetzel, Cause A-06-CA-626-LY can presumably be found in their entirety on PACER.
 
Since OCA/Orthosynetics is a private company, they don't have to disclose details like they used to when they were publically traded. But I can't help but wonder if they're even recruiting enough docs to replace those who are leaving?   I wonder how much longer they can keep the doors open absent significant growth?
 
The forgoing is entirely my own, personal, non-lawyer's opinion.


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#95 From: YRDoc <yrdoc@...>
Date: Fri Jun 5, 2009 7:34 pm
Subject: What Happened to Dr. B? 		yrdoc
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At one time, former OCA Board of Directors member Dr. Hector Bush challeged the company and tried to exit.  The Company, as is their usual practice, sued and used legal process to apparently force him back into the company. 
 
Despite a Company announcement that Dr. B. had come back aboard, a check of affiliates in Georgia on the Orthosynetics web site doesn't show him as connected with the Company.  Could it be that his appeal was successful and that he's no longer involved?  Anyone have any sort of update?  
 
My reading of the company announcement is that he they had worked out their differences, and that he was happy to return to the fold.  But somehow, being involved in litigation tends to sour relationships, so I quesitoned what I saw as a rosy picture painted by the Company. 
 
Entirely my own, personal opinion.


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#94 From: YRDoc <yrdoc@...>
Date: Wed Apr 15, 2009 6:53 pm
Subject: Correction! 		yrdoc
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Correction...  The attorney in Miami who was recently able to settle things with OCA on behalf of his clients is Richard Goldstein. 
 
My mistake!


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#93 From: YRDoc <yrdoc@...>
Date: Mon Apr 13, 2009 11:08 pm
Subject: OCA Settlements 		yrdoc
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The word is that doctors represented by Miami Attorney Ron Goldman have settled.  The number of docs is reportedly 30+.  The terms of settlement?  As usual, that's confidential. 
 
Rumor has it that OCA is still trying to get money out of other former affiliates, despite  their BSAs having been declared illegal in their respective states or perhaps some other form of clear legal victory.  I don't think I've ever heard anyone suggest that OCA isn't richly endowed with optimism and pure chutzpah when it comes to trying to bleed former affiliates.  Somehow, I doubt they'll have any significant success. But given OCA's past pattern of secrecy, we'll probably never know.
 
OCA (aka OrthoSynetics) claims to have picked up some new recruits this year.  I wonder if they're including docs who've been forced back into the company via legal process, or whether they're brand new recruits not previously involved with OCA?  Again, there probably won't be any information forthcoming on their blog or other public communications?
 
As usual, entirely my own, personal opinion.


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#92 From: YRDoc <yrdoc@...>
Date: Wed Mar 4, 2009 8:04 pm
Subject: OCA/Palmisano/Verret Lose OCA Securities Litigation 		yrdoc
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On March 2, 2009, Judge Vance approved a settlement of $6.5 million in favor of purchasers of OCA stock between May 18, 2004 and June 6, 2005.  I don't pretend to understand the legal technicalities, but to my non-lawyer's mind, it would seem to me that the court found that Palmisano Jr, Sr., and David Verret misrepresented OCA's financial condition, and the court felt that this payment was recompense for this activity. 
 
Unfortunately (in my opinion,) the money is going to be paid by two insurance companies, and not the individuals involved in the alleged misrepresentation.  It would seem to me, though, that it would establish a finding of guilt on the part of OCA's management, and perhaps invite further action by the SEC?  (I believe Jr's agreement with the SEC involved accounting activities around the year 2000.  This action involved improprieties in  2004 and 2005?)


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#91 From: YRDoc <yrdoc@...>
Date: Sun Feb 8, 2009 11:46 pm
Subject: OCA Loses in Florida & Massachussetts 		yrdoc
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On February 6, 2009, Judge Vance found the OCA contracts in Massachussetts (OCA vs. Starr) and Florida (Cupo vs. OCA) to be illegal. 
 
In MA, OCA lists 4 offices.  Her honor found that since the contract was illegal, the court would "leave the parties where it found them," thus disallowing any possible OCA claims for conversion, unjust enrichment, quantum meruit, fraudulent conveyance, etc.  OCA's website lists 4 offices in MA run by 3 different orthodontists.
 
In FL, I count OCA listing  25 offices run by Dr. Shoopak, 5 by Dr. Litowitz, 4 each by Drs. Kapley & Kopuri, 2 each by Drs. Montini and Protrover, and 2 office run by orthodontists as their sole location.  If my arithmetic is correct (never a sure thing,)  that's 44 locations.  (Feel free to verify directly - OCA's patient website is www.4braces.com.)  If OCA hopes to continue things in Florida, I'd think they'll have to re-negotiate any contracts not already redone?  I'd also think they'd be forced to renegotiate a much lower fee structure, thus hurting their cash flow?  (Since I'm not privy to any details, this is pure speculation on my part.)
 
There were two previous FL rulings in the Oulette and Yaffey cases which failed to find any illegality. However, Judge Vance believes that the fee split under the typical older OCA contract is sufficient grounds for a ruling of illegality despite the earlier rulings.
 
While the ruling on the Florida case invalidates the contract, a cursory reading didn't turn up any reference to an intent to "leave the parties where they are."  This might leave Dr. Cupo and others in Florida vulnerable to OCA claims for unjust enrichment, etc.?
 
I'm not a lawyer, and don't pretend to have the legal expertise to interpret or understand the rulings, which are available on PACER.  But as a lay person, I would think the rulings have hurt OCA significantly.
 
I'm told that due to more lenient Georgia law, Judge Vance has asked the parties there to have one more go at negotiating a settlemnt prior to the trial date.  If the case does go to trial, will that free Dr. Bush from his obligations?  (OCA was quite proud that Dr. Bush, a former member of OCA's Board of Directors, was forced back into complying with his BSA. It appears to have frightened some other docs into submission as well?)
 
Entirely my own, personal, non-lawyer's opinion.  Please verify things by reviewing the rulings on Pacer and/or consulting a licensed attorney able to better interpret the meaning of the recent rulings.
 
 


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#90 From: YRDoc <yrdoc@...>
Date: Mon Feb 2, 2009 6:01 am
Subject: Orthosynetics Launches New Division 		yrdoc
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According to the website www.orthodon.com, look who's bloggin tab, the company is launching a new division "Synetics Group Creative," in an attempt to offer marketing and perhaps other service to the healthcare industry outside of orthodontics.  Hmmm.  Bart assured everyone that his similar idea for expansion was sure to create dramatic growth for the company.   I wonder if this new attempt will fare any better?    Somehow I'm not holding my breath!
 
But then that's just my own, personal opinion.


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#89 From: YRDoc <yrdoc@...>
Date: Mon Feb 2, 2009 5:50 am
Subject: New Orthosynetics Litigations 		yrdoc
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Orthosynetics (OCA) continues to be involved in litigation. 
 
On 11/5/08, a doctor in Illinois filed a complaint, asking the court to order OCA to reimburse over $200,000 in rent paid on their behalf.  It's complicated by the fact that  ruling of the bankrutpcy court in New Orleans is still under appeal.  But OCA appears to be mounting a vigorous defense of their refusal to pay.  
 
On 1/16/09, Orthosynetics filed in Colorado against a Dr. Mason.  Even though the contract has been declared illegal in that state, they're still trying to recover money lent him for various purposes including putting together 2 offices.
 
About the only thing definite is that OCA is still involved in keeping members of the legal profession busy!  Given rather unimpressive results of their recruiting efforts and continuing losses in court, I wonder how long they can keep this up?
 
Entirely my own, personal opinion.  For anyone interested in details on the above suits, the documents are available on Pacer.


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#88 From: YRDoc <yrdoc@...>
Date: Fri Jan 2, 2009 7:21 pm
Subject: Pennsylvania Decision Details 		yrdoc
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In reading the December 20, 2008, decision regarding the doctor in Pennsylvania (Apollon, DMD, vs. OCA, et al) Judge Vance made what sounds to me like a very strong statement regarding the illegality of OCA contracts in states where applicable law forbids an unlicensed person or entity from being a partner in a dental practice.  She even cites language from the recent Fifth Circuit decision in support of her finding.
 
In this case, the court found that as a result of the doctor's year 2000 Business Services Agreement, "OCA was receiving a 40% share of the practice's profits."  She further quoted from the Fifth Circuit decision, stating "...BSAs create an interlocking set of obligations that required OCA to exercise considerable control over the Orthodontists' practices. ... In exchange for these services, OCA charged a fee that was tied to the profits of the practices.  The BSAs provide little to no ability for the Orthodontists to oversee any of OCA's decisions related to the practice.  Ultimately, the orthodontists were essentially only left with control over diagnosising and treating their patients." 
 
Judge Vance then summarizes by stating "The Fifth Circuit had little difficulty concluding that the BSA violated a Texas statute prohibiting unlicensed persons from owning, operating, or maintaining a dental pracatice. id. Similarly here, OCA effectively operated and controlled the business aspects of the practice.  OCA's degree of control over the practice and share of its profits evidence a partnership relationship."
 
In addition to its decision finding the contract illegal, the court declined to award anything to either side, stating it "...will leave the parties where it found them." 
 
As always, the foregoing is entirely my own personal, non-lawyer's opinion.  For legal advice, consult a licensed attorney.  For a copy of the complete ruling, go to PACER.  www.pacer.psc.uscourts.gov.  Anyone can sign up to retrieve documents at about 8 cents a page.


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#87 From: "yrdoc" <yrdoc@...>
Date: Wed Dec 31, 2008 2:47 pm
Subject: Happy New Year for Pennsylvia Docs? 		yrdoc
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Word has it that Judge Vance has just ruled the Pennsylvania
Orthosyntecs contract illegal.  Unlike the bankruptcy court, it doesn't
appear that OCA is doing too well in Judge Vance's court!

Entirely my own, personal opinion, based on information which appears
to be reliable.  Check it out directly for confirmation.

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#86 From: YRDoc <yrdoc@...>
Date: Sun Dec 14, 2008 10:42 pm
Subject: Fifth Circuit Ruling and Upcoming Trials 		yrdoc
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I believe there are a number of trials scheduled in the not-too-distant future scheduled before Judge Sarah Vance.  Her District Court is in New Orleans, and thus subject to precedents in the Fifth Circuit.  So even though the upcoming trials may involve docs from other states located outside the Circuit, I would think that the ruling regarding the Texas docs would only tend to help their cases?
 
News of the latest ruling hasn't made it to OCA's website as yet.  Perhaps everyone at corporate headquarters is too busy to get it posted? 
 
Entirely my own, personal, non-lawyers opinion.


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#85 From: YRDoc <yrdoc@...>
Date: Sat Dec 13, 2008 4:31 am
Subject: Santa Clause Stops By New Orleans Early in 2008? 		yrdoc
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Today (12/12/08,) the Fifth Circuit Court of Appeals released their ruling on the legality of the OCA/OrthAlliance/PedoAlliance contract. The previous ruling by the bankruptcy court in New Orleans that the contract was illegal under Texas law was AFFIRMED.
 
By my count, the case orginally involved 14 doctor appellees, with at least 5 others affected by the outcome.  3 of the original docs settled under some sort of new agreement with OCA/Orthosynetics prior to oral arguments last April, and were dismissed from the case.  But given the number of offices, and possible affect on Texas affiliates who were not litigating, I'd think the effect of the loss on OCA would be very significant. 
 
Since OrthoSynetics is now privately held, they do not have to offer public disclosure of their business condition. However, given what I beleive to be a relative lack of success in recruiting new affiliates, plus the attrition of existing affiliates, I wonder how much longer they can hang on?  I understand via the grapevine that they're now writing or re-writing contracts which unlike the old Business Services Agreements  have a 7 year lifespan and allow the doctor to retain ownership of the office, fixtures and equipment, plus pay significantly lower fees.  If they could offer a level of service which keeps docs on board and improves their reputation in the orthodontic community, plus charge a reasonable management fee, there may be a chance they can eventually survive and grow?  Only time will tell.
 
Entirely my own, personal opinion based on facts I hope are reliable.  For further information, contact the Ninth Circuit ruling and/or a licensed attorney.


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#84 From: YRDoc <yrdoc@...>
Date: Tue Nov 4, 2008 3:40 am
Subject: Where is the So. Carolina Case 		yrdoc
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On Monday, 11/3, OCA notes in its blog that a doctor with two offices has rejoined OCA.  However, no mention of the loss in So. Carolina.  I guess two losses in a row are too painful to acknowledge?
 
Entirely my own, personal opinion.


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#83 From: YRDoc <yrdoc@...>
Date: Sun Nov 2, 2008 8:08 pm
Subject: Texas Appeal by OCA 		yrdoc
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Mr. Forsyth, counsel for one of the doctors in the Texas legality appeal filed by OCA, has thoughtfully sent a copy of the recent South Carolina ruling to the Fifth Circuit. The honorable  justices are due to decide on the legality of the Texas contract following oral arguments - which were heard last March.
 
Watch Pennsylvania for an upcoming decision by Judge Vance. 
 
I wonder how many losses OCA can handle before they give serious consideration to closing their doors?
 
I also wonder if the latest loss will be posted on their blog?
 
Entirely my own, personal opinion.


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#82 From: YRDoc <yrdoc@...>
Date: Fri Oct 31, 2008 4:55 pm
Subject: OCA loses in So. Carolina? 		yrdoc
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My sources tell me that OCA's contract in So. Carolina has been declared illegal by Judge Vance, with the parties left where the court found them.  This decision would appear to mirror the recent Alabama decision.  She has several more cases before her.  And OCA does not appear to be faring nearly as well in her court as they did in the bankruptcy court of Judge Brown.  Could this how the rest will turn out?  There's no way to know for sure, of course, since each state's laws are different regarding unlicensed ownership of a dental practice.  But I'd think that OCA's senior management would be more than a little concerned!  As nearly as I can tell, their recruiting has enjoyed only minimal success.  And the losses of existing affiliated practices certainly don't help!
 
Perhaps OCA's CEO will see fit to include a link to the actual decision on their blog?
 
Entirely my own, personal opinion, of course, based on sources I believe to be reliable.
 
 


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#81 From: YRDoc <yrdoc@...>
Date: Mon Oct 27, 2008 8:11 pm
Subject: OCA Blog Post 		yrdoc
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To OCA's credit, they actually posted Friday's decision in which the Alabama doctor's contract was found to be a violation of applicable state law.  A link to the decision was even included.
 
Some spin was to be expected.  The CEO claims that the contract was an old one, and that newer contracts would comport better with state laws.  However, the fact that remains that many, if not most, states specifically forbid an unlicensed individual, corporation, or other entity from owning and sharing in a percent of revenue or profits from a dental practice.  The Dental Practice Acts that I've read seem to suggest that a licensed health care professional (in this case a dentist) are focused on the best good for the patient, whereas an outsider is focused on profit and the likely expense of the patient's best interests.  Decisions I've read have found that OCA exercises entirely too much control and takes a percentage rather than a flat fee like a landlord might do, all of which point to them being an unlicensed partner in a doc's orthodontic practice.
 
Georgia was specifically mentioned, which is the state where Dr. Bush lost.  I believe their laws are such that they don't take a strong a stand against unlicensed ownership of a dental practice.  I'd think that given the strong tone of Judge Vance's opinion, this loss may be only the first of several.  There's the case in Texas, wherein 3 courts found OCA's arrangement illegal under the Texas Dental Practice Act, only to have OCA appeal in hopes that somehow the Fifth Circuit appeals court would go against three separate lower courts. That ruling is due any time. OCA has already lost in Colorado, Washington State, and Illinois on illegality of the contract in light of applicable state law.  There may be other states as well where they've lost.  I believe the only wins on that basis have been Georgia and Indiana, the latter of which is likely to be challenged again soon.
 
OCA has enjoyed some signicant successes in the bankruptcy court, but whether they'll find the same success in courts not focused on keeping the company doors open remains to be seen.  (Legal experts tell me that bankruptcy courts typically focus on trying to keep troubled companies afloat, in an apparent effort to avoid having former employees out on the street and in the unemployment line.)
 
Could their reputation of using legal process to try and squash any docs who dare to challenge them be a major cause of their lack of success in recruiting?  
 
All entirely my own, personal opinion.  For legal evaluation and advice on the latest ruling,  consult an attorney familiar with a particular state's dental practice act.


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#80 From: YRDoc <yrdoc@...>
Date: Sun Oct 26, 2008 10:39 pm
Subject: OCA Loses A Significant Case 		yrdoc
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On Friday, October 24,  Judge Sarah Vance handed down a ruling on a Motion for Summary Judgment in Amason et al, vs. OCA, et al, Case 06-2933, US District Court for the Eastern District of Louisiana.  The honorable Judge Vance found that the OCA contract is illegal under Alabama law.  This ruling appears to reverse a previous ruling by Judge Brown in the bankruptcy court, where OCA ended up after their Chapter 11 filing on March 14, 2006.
 
Several of the cases previously in bankruptcy court have been moved to Judge Vance's court.  (The proceedure is referred to legally as "withdrawing the reference.")  Although Judge Brown was apparently unwilling to accept the arguments that OCA's contract created an illegal partnership under Alabama law, Judge Vance appears to have seen the matter quite differently.  Her ruling even goes so far as to note that the Alabama code "provides that disciplinary action shall be taken against dentists who are 'guilty of division of fees' except the division of fees between dentists in a partnership or when one licensed dentist employes another."  Her opinion appears to suggest that she viewed OCA's extensive control of the doctor's practice as a clear violation of applicable law.  She also finds that the contract cannot be reformed.  "As the agreement creates a partnership between OCA and Amason, the nature of the business arrangement itself is illegal under Alabama law.  Accordingly, as the very purpose of the BSA is void, the agreement cannot be reformed."
 
She finds that since the contract is illegal and therefore unenforceable, "...the Court will leave the parties where it found them."  I believe that means they both walk away, without the ability for press for enforcement of any provision of the contract.
 
I'm not an attorney, and don't pretend to understand the fine points of the law.  From my lay perspective, I'd think OCA would have grave concerns about further rulings in Judge Vance's court.  But that's purely my personal, uninformed, non-lawyer's decision.  For anyone wishing further commentary on the meaning of the ruling in light of their own particular state's laws or as precendent, consult a licensed attorney!  Since the ruling occurred in Federal Court, the documents relating to the case should be available on PACER.  www.pacer.uscourts.gov. (Any questions regarding wording or other specifics should be taken directly from the original document.)


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#79 From: YRDoc <yrdoc@...>
Date: Sat Oct 11, 2008 1:09 am
Subject: OCA/Orthosynetics Wins Another Round 		yrdoc
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On October 8, 2008, bankruptcy Judge Brown in New Orleans signed a Memorandum Opinion, finding in favor of OCA and against Dr. Darrin Cupo on an alleged violation of the Second Order.  [US Bankruptcy Court Eastern District of Louisiana, case 06-10179.]   According to the MO, the doctor hadn't filed any sort of notice of default of termination or default prior to OCA's filing of bankruptcy in March, 2006.  The court ordered all affiliates who hadn't objected to continue performing under the contract. (Second Order P-46) Dr. Cupo signed a stipulation agreeing to continue performance under his BSA.
 
According to the MO in June, 2007, Dr. C sent OCA a notice of default stating that he'd learned that OCA was planning on opening another office less than 1 mile from his office.  The Business Services Agreement (contract) apparently prohibited OCA from being involved with any office less than 5 miles from Dr. C's office.  In July, he stopped depositing and sent a Notice of Termination and filed a lawsuit in federal court in Florida.  OCA responded by filing an action against the doctor.
 
The court didn't rule on the doctor's claim that OCA had violated the terms of his contract, leaving that decision for the District Court in Florida.  It did, however, award OCA $168,553.21 in sanctions, plus interest, plus an estimated $27,956 in attorneys' fees incurred by OCA.  The sanctions amount was calculated based on service fees which would have been received by OCA had the doctor continued depositing.  The bankruptcy court was unwilling to force Dr. Cupo to continue performance under his BSA, that matter presumably being in the hands of the Florida District Court.
 
OCA is continuing to attempt to recruit new affiliates, though they don't appear to be having all that much success?  (Are they even keeping up with attrition of the existing affiliate base?) Could it be that events like this continue to tarnish their already negative reputation?  Their brochures appear to promise above average income, less days in the office, and decreased management headaches, and less stress generally.  Of course there's no mention of the hundreds of unhappy docs, lawsuits, and exceedingly stressful experiences encountered by unhappy affiliates since their going public in the mid 90s.  Nor is there any mention of their overcharges and accounting irregularities, as evidenced by Jr.s' recent admission before the SEC and by docs who have successfully challenged them.  I'd suspect that their reputation won't allow much success in recruiting new docs for quite some time to come? 
 
The forgoing is entirely my own, personal opinion, based on my non-lawyer's reading of the October 8, 2008, Memorandum Order and past experiences with OCA.   For further information, the Memorandum Order and all other related OCA litigation documents are presumably available on PACER.  For legal advise and case analysis, consult a licensed attorney.
 
 


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#78 From: YRDoc <yrdoc@...>
Date: Tue Sep 9, 2008 7:30 pm
Subject: Fifth Circuit Appeal for Texas Doctors 		yrdoc
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It would appear that the Fifth Circuit it taking an unusually long time to issue an opinion on the legality of the contract between OCA et al and their former affiliates in Texas.  As I understand it, the case revolves around whether the Business Services Agreement violates applicable Texas law regarding the unlicensed practice of dentistry.  I believe that the rulings of three separate courts in Texas have found for the doctor(s).  The appeal is currently in the John Minor Wisdom United States Courthouse in New Orleans.
 
Case:  Jordan et al v. OrthAlliance, New Image et al
 
Docket #:  07-30430    
 
Pertinent dates:
      Filed:                     5/15/07
      Oral Arguments:     3/31/08
      Briefing Complete:    4/1/08 
 
The Practitioners Guide to the U S Court of Appeals for the Fifth Circuit, page 71, states "The median time from the time of oral argument until decision for all cases is about 2 months."  That would suggest the opinion might have been expected at the end of June?
 
Although the complete docket report is a little confusing for a non-attorney, I believe I counted over a dozen doctors who were mentioned in the appeal, and I believe it will affect others as well.  Does anyone have any sort of feedback from anyone on why it's taking so long?  Inquiring minds would like to know.
 
For further information, the Fifth Circuit has a web site which allows retrieval of the practitioners guide and a summary docket sheet. There's also a phone number which allows updated information.  (504) 310-8514  I'm guessing the opinion will be available there at such time as the judges get around to issuing their ruling?
 
The forgoing, as usual, is entirely my own personal opinion.  Refer to Pacer, the Fifth Circuit website, or a licensed attorney for more definitive information.


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#77 From: YRDoc <yrdoc@...>
Date: Mon Aug 25, 2008 1:19 am
Subject: OrthoSynetics First Lawsuit? 		yrdoc
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Orthosynetics has continued the lawsuits started by OCA, but now they're adding to that litigation load with at least one new one, filed against an Arizona doctor.  (Two other suits have been filed by doctors, with the other Arizona filing having been dismissed and the Florida filing from April, 2008 currently awaiting trial in Judge Vance's court in early 2010.)  Documents picked up from PACER contain some interesting information.  Understandably, the initial Complaint (by OCA) and response by the doctor attempt to make their respective cases as convincing as possible, with the court left to figure out what the real facts are.  But they nonetheless make interesting reading.
 
OrthoSynetic's Complaint, opening Case CIV08-01027-LOA, filed 6/2/08 in Federal District Court for Arizona, points out that they entered into 40 year contract with the doctor and his PC 7/1/97.  They allege that the doctor hired an associate, then went out and built a competing office with the associate sometime after 2002. Item #29 alleges that "on or about June, 2006" Dr. D has failed to "devote their full professional time and attention to the practice as required... by the BSA."  They also allege in item #60 that "Defendents have greatly benefited from their affiliation with OrthoSynetics."
 
In the doctor's Counterclaim, item #4 states that "At all relevant times Dr. Davis has been disabled, such that his 'practice' of his orthodontic specialty has been limited to consultation," and in item #5 "As a result of his disability, Dr. Davis has been unable to work in a "solo" practice since prior to July 1, 1999."
 
The doctor apparently was signed by "nationally renowned" Dr. Roncone, who allegedly actually signed the contract on behalf of OCA. It is alleged that OCA knew full well of the doctor's disablity and need for appropriate assistance.  The counterclaim also alleges that OCA knew that the clause cancelling the contract in case of bankruptcy "was unenforceable under federal law."  (For those of you new to OCA, Dr. Roncone was reportedly hired by OCA to open an upscale division, only to have the relationship sour in relatively short order.  If I remember correctly, OCA sued him, though he ultimately prevailed, departing the company some $12 million dollars richer.) 
 
Item #20 states that "Dr. Davis specifically requested the level of office consultation he had been promised by Dr. Roncone.  Counterdefendants refused to provide any consulting sevices, much less consulting services on a par with the consulting services Dr. Davis was to receive from Dr. Roncone." 
 
The countercomplaint alleges that over time, the practice declined along with the neighborhood, with the referral base of dentists departing the building where the office was located.  Dr. D. alleges that not only did the practice decline due to a decline in the location,  with OCA unwilling to step in and help reverse the trend, but to make matters worse, OCA entered into a contract with a competing orthodontic office, which hurt him even further.  They purportedly failed to even list Dr. D on their web site.
 
Item #30 states that "On March 26, 2003, Dr. Davis notifed counterdefendants that he intended to retire" and asked OCA to help find a replacement orthodontist, which he alleges they failed to do.  On April 20, 2008, he indicates that he formally retired, which should have terminated the contract.  It would appear that he cooperated with his former associate to make sure that patients could receive continuing care in the new office?
 
For anyone interested in the full documentation, go to PACER (pacer.psc.uscourts.gov) where - after registration - documents can be retrieved by anyone interested at about 8 cents a page.  This commentary makes no attempt to ascertain the relative merits of either side, nor evaluate the legal strengths of the respective arguments.  However, from my own, personal, non-lawyers perspective, it would appear that the new entity now doing business as Orthosynetics may not be quite as warm and fuzzy as they'd like to have people believe??
 
And since I don't believe that Pacer currently covers all Federal Courts, there may be other lawsuits or information regarding OCA/Orthosynetics I'm not aware of.
 
 


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#76 From: YRDoc <yrdoc@...>
Date: Wed Jul 23, 2008 6:45 pm
Subject: Roussos 7/22 Blog Post 		yrdoc
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An interesting post appeared on the OrthoSynetics Blog yesterday over the name of their CEO:

 

http://www.orthosyneticsblog.com/1107-update-on-the-doctor-litigation-front 

 

Some thoughts and questions:

 

Why the post now?  District Court Judge Sarah Vance appears to be quite aggressive about getting the trials set and out of the way.  A bankruptcy court, referred to in the opening sentence of the blog post, tends to be biased (among other reasons) toward keeping a company's doors open in order to avoid throwing employees into unemployment lines.  Is OCA worried that the docs will do a lot better in a more neutral District Court?

 

Is lawyer greed entirely responsible for creating OCA's current litigation load?  Could  things like service which fell below what the doctors were led to expect have been a factor?   Could things like overcharges (via inflated corporate allocations,) inflated stock used to purchase offices (as noted in the SEC actions against Bart., Jr,) and other unpleasant experiences that would tend to alienate affiliates be a cause?   The last sentence in the second paragraph "...the new company is committed to serving their practices in a way that creates real economic value for them" (emphasis mine) certainly suggests to me a tacit admission that the old OCA failed to deliver in the past.  Yet they continue to expect docs to honor their contracts in full, despite lack of past performance and most probably a failure to fully perform on their end.  My information suggests it's a whole lot easier to get affiliated with OCA than it is to exit once they have you bound with a contract!

 

The author mentions "the obligatory appeals process."  Gee...  I;'d always thought an appeal was optional, based on a desire of one of the litigating parties to keep up the fight after losing a court battle.  All OCA has to do is accept the court ruling, or make an agreement with the winning affiliate which both can live with.  The fact that three separate courts in Texas have found the OCA contract illegal, and that OCA is still appealing to the Fifth Circuit would suggest to me that OCA is more than willing to use legal process to grasp at any available straw if it can prolong the inevitable day of reckoning?

 

OCA would have the reader believe that the docs who have been frightened/intimidated/forced back into OCA's embrace are now somehow gloriously happy?

I haven't seen any quotes from any of them.  But I wonder what they're telling their colleagues? (Can OCA hope to grow given this sort of negative publicity?)  If an orthodontist needs help running a practice, there are a number of competant consultants out there who can be fired with relative ease if they don't perform as promised.  Getting a "divorce" from OCA/OrthoSynetics is a very different matter indeed?  Why would any orthodontist want to get involved with a company who will seek to destroy him or her financially if they decide the relationship isn't working out as they'd hoped or expected?  It would appear to me that the "new" company is using legal process to keep unhappy docs in line just like they always have?  Has anything really changed?

 

The forgoing, which refers to the company known as OCA or OrthoSynetics interchangeably, is entirely my own, personal, non-lawyer's opinion.



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#75 From: YRDoc <yrdoc@...>
Date: Fri Jul 4, 2008 11:53 pm
Subject: Rather Quiet These Days? 		yrdoc
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It's been pretty quiet on the litigation front with OCA. Their blog announces a new location in Farmington, NM, at 3751 N. Butler Ave., but doesn't give any details about the former affiliate, whose office is located at 3780 N. Butler Ave.  (He was still litigating last I heard.)  There's a telephone scheduling conference with Judge Vance's deputy on July 10 for lawyers representing a dozen or so docs in her U S District Court.  Oral arguments before the Fifth Circuit took place recently, which would suggest that a final ruling on the legality of the Texas contract is imminent.  But so far, nothing.

 

The outcome of the securities litigation will be interesting, but there's no word on when that might happen.   I'd think that Junior signing a document with the SEC acknowledging questions regarding OCA's accounting should strengthen the case for the plaintiffs who allege malfeasance on the part of OCA's directors and officers?

 

Anyone with updated information is invited to post.  It would seem to me that OCA/Orthosynetics is going to coninue their policy of reporting only carefully selected news items regarding the company, barring any negative comments to their blog posts, and generally portraying the company only in a favorable light?  Personally, I'd like to have a little more complete picture of what's really happening in Metairie and elsewhere in the company.

 

Entirely my own, personal opinion, of course. 



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#74 From: YRDoc <yrdoc@...>
Date: Tue Jun 3, 2008 1:01 pm
Subject: OCA Litigation Update 		yrdoc
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On June 2, 2008, OCA entered a "post Confirmation Narrative Report for OCA,Inc., with bankruptcy court in New Orleans.  The list active cases under the following headings:

 

Cases set for trial before Judge Brown:  5

 

Cases set for trial before Judge Vance: 7

 

Cases pending before Judge Vance set for Prelminary Conference: 27

   (Two cases may have settled?)

 

Cases pending before Judge Vance not yet set for Prelminary conference: 24

   (One case may have settled?)

 

Judgments in BSA Litigation with Pending Appeals:  16

 

If my calculator is working correctly, that's 79 cases, possibly minus 3 settlements.  Judge Brown is the bankruptcy judge, Judge Vance is the District Court judge who has had several cases transfered to her court.

 

Actions against former OCA officers and directors are:

 

   1. Securities & Derivative Ligation  Civil Action 05-2165, US District Court, Eastern

       District of Louisiana.

 

   2. OCA vs. OCA International  06-01289, US Bankruptcy Court, Eastern District of LA.

 

   3. FTI Consulting Inc as Trustee for OCA Chapter 11 Plan vs. Bart Palmisano, Sr.

       Adversary 06-1290.

 

The document notes that a settlement in principal has been reached in the FTI Consulting case, with final documentation expected by June 30, 2008. 

 

OCA's website, which has a new promotional video, would seem to want everyone to believe that affilated docs are for the most part very happy with their involvement with OCA.  The amount of unresolved litigation suggests to me a large pool of rather unhappy current or former affiliates who might well disagree with OCA/Orthosynetics claims for the advantages of signing up as an affiliate.  (Go to their website www.orthodon.com for specifics on their claims regarding why an orthdontist should sign up with them.)

 

The forgoing is based upon my own, personal,non-lawyers opinion.  For supporting documentation, check the PACER website, which makes all Federal Court filings available to anyone interested for under 10 cents a page.

 



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#73 From: YRDoc <yrdoc@...>
Date: Fri May 23, 2008 7:11 pm
Subject: Anderson Orthodontics 		yrdoc
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An interesting brief was filed two days ago regarding an orthodontist wanting to retire from his OCA affiliated office in Anderson, SC.  (Case # 06-10179 (B) Chapter 11, Jointly administered with Case #s 06-10180 thru 06-10223.)

It would appear that the case arose out of the numerous docs who were sued when OCA went bankrupt back in 2006, with Dr. Bush being the lead plaintiff.  Some of the notable points in the brief are:
 
1. The doctor is in a single owner professional association.  The relationship began with Premier Orthodontics in 1997, which evolved into OrthAlliance, which was in turn bought by OCA. The doctor "amended" his service agreement in July, 2002 following the OCA merger  and was presumably governed by the standard OCA contract thereafter.  (I believe OCA offered significant OCA stock if an OrthoAlliance doctor would agree to be subject to "corporate allocations charges" and other additional OCA levies.)
 
2. The doctor gave OCA written notice July 12, 2006 that he wished to retire and asked them to find a successor. The brief allegest that they have been unable to do so.
 
3. The doctor has "repeatedly acknowledged his obligation to repay the actual debt due to OCA under the parties agreement."  OCA has allegedly stated that they have no currently ownership interest in the physical assets (FFE) of the doctor's 2 offices.
 
Ordinarily, when a doctor decides to retire, he finds a younger doctor to buy his practice, sells, and enjoys his golden years.  With OCA, however, there's an almost 2 year old lawsuit, and what would appear to be a major obstacle finding a young doctor who is willing to assume the obligations of the ongoing OCA contract.  So this particular doctor will presumably walk away with empty pockets?
 
In looking at the brochures passed out last week-end at the AAO meeting Denver, Orthosynetics promises less stress, more money, less time in the office, and several other wonderful things for those willing to sign a contract. (It looks to me like the promises are about the same as they've been making for many years now.) I don't believe anything was mentioned about the possibility that actual experience of being an OCA affiliate fact that it might not deliverthe experience that is being promised?  But there certainly appears to be a major difference between their historical promises and the actual experience of being an OCA affiliate?  Perhaps the fact that they manage to recruit only 1 new affiliate at the meeting would suggest that the word is out among members of the orthodontic community?
 
All my own, personal opinion.


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#72 From: YRDoc <yrdoc@...>
Date: Wed May 21, 2008 5:06 pm
Subject: OCA at Denver AAO Meeting 		yrdoc
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OrthoSynetics had a booth in the exhibit hall at the annual AAO meeting in Denver which concluded yesterday.  The new brochures appeared to me to promise the same incentives to join they always have - higher income, greater efficiency, less time devoted to management and more time to see patients, greater income, less stress, less time in the office, and more time to spend in pursuing personal interests. It noted some comparison statistics dating back to 2001, purportedly based on statistics from the Journal of Clinical Orthodontics and OCA's own numbers.  (In my mind, at least some of those statistics are suspect after Jr. getting busted by the SEC for accounting irregularities and Sr's sworn testimony that the numbers quoted in his introductory statement on their old web site were - if memory serves me correctly - based on income before subtracting OCA's fees and only in case of offices which followed all of OCA systems?)
 
In addition, OCA's offerings also included a reprint of the Dental Tribune puff piece which interviewed their current CEO and lacked any significant investigative reporting on the less pleasant aspects of the OCA's history.  (# of lawsuits, bankruptcy, purchases of practices using inflated stock, millions of dollars paid by former affiliates to buy their freedom, etc.)  The reps also had a laminated document listing the numerous OCA practices which are for sale.
 
The brochure didn't discuss stress levels and income changes (after payment of legal fees) in doctors who have litigated with OCA in the past and are doing so in the present.  Nor did it discuss how many doctors have litigated with OCA since its founding, nor what they have had to pay OCA/OrthoSynetics for their freedom.  (I've never talked with anyone who OCA allowed to just return the money and unwind the transaction - from what I've heard, OCA wants a whole lot more than they originally paid for the doctor to walk away.)+
 
The booth started out with several reps in dark suits, and I think included OCA's current CEO on the first day (Saturday.)  By the last day, I didn't see any significant activity around the booth, and could spot only two OCA reps.  It's hard to say if the people talking to reps were serious prospects, or just curious to see what OCA is currently up to.
 
A couple of reported changes are that they apparently are no longer paying significant money for offices. (When they were a publicly traded company, they could pay for an office with OCA stock plus a little cash if needed to make the transaction happen.)  Now that they're private, they no longer have stock available to pay.)  Another reported change is that they're only obligating doctors for 7 years.  Somehow, I'd suspect that a doc would have to find a replacement before he or she could leave, but I don't have definitive information on that piece of the puzzle.  Has anyone else heard details on how they're handling practice acquisitions?
 
Entirely my own, personal opinion, based on hopefully reliable information.  For specifics on current OrthoSynetics policies, contact them directly.
 
 
 


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