Dermatologist allegedly owes more than $700K over breach of contract with business partner

GRETNA – A dermatology clinic and a doctor are suing a business partner over his alleged and breach of contract after he pulled out of the partnership after nearly 20 years to pursue a practice with his family.

Westside Dermatology Associates (A Professional Medical Corporation) and Gordon J. Russo M.D. filed suit against Daniel A. Marshall Jr. M.D. in the 24th Judicial District Court on Sept. 26.

Russo asserts that he and Marshall, both dermatologists, opened Westside Dermatology Associates together as half owners on Dec. 6, 1994 and each were given 100 shares in the company. The plaintiffs claim that Marshall approached Russo and asked to pay less than the 50 percent of the business’s overhead so that he could maintain a net income of $24,000 to meet personal expenses. Russo alleges he allowed Marshall to pay less for the business operations on the basis that Marshall would reimburse him over time and that upon his death or any work stoppage, any outstanding portion of the business expenses would be reimbursed. Due to the agreement, Russo contends that a loan was taken out to pay for Marshall’s obligation, which was calculated as $691,000. In 2008, the plaintiffs assert two additional dermatologists were brought into the practice and that this eliminated the need for Russo to overfund the business, but that when one of the newer partners left Marshall again underfunded the business by $34,000.

On July 1, 2014 Russo claims that Marshall abruptly left Westside Dermatology Associates to join Klinger & Marshall Dermatology, a practice that was created by his daughter and son-in-law. However, Russo asserts that Marshall leaving Westside Dermatology Associates was in violation of the shareholder agreement and that he has breached his duty to return the funds he has not paid to the business over the years.

The defendant is accused of breach of contract, breach of shareholders agreement’s non-compete and non-solicitation clauses, breach of fiduciary duty, detrimental reliance and violation of the Louisiana Unfair Trade Practices Act.

An unspecified amount is sought by the plaintiff all reasonable damages.

Westside Dermatology Associates and Russo are represented by Preston L. Hayes of Chehardy, Sherman, Ellis, Murray, Recile, Griffith, Stakelum & Hayes LLP.

The case has been assigned to Division G Judge Robert A. Pitre Jr.

Case no. 742-833.