Park Dental doctor group settles $130M lawsuit

Jan 6, 2008

The PDG dental group that operates the Park Dental and Dental Specialists clinics in Minnesota was awarded $130 million in a lawsuit with its administrative service provider, American Dental Partners (ADPI) and ADPI's Minnesota subsidiary, PDHC, on December 14.

"The lawsuit involved claims by the dental group that PHDC had overstepped its authority under Minnesota law and had improperly engaged in conduct constituting the practice of dentistry," according to a press release from the law firm representing PDG. PDHC over calculated its service fee, refused to give dentists access to their own funds, and took control of dental practices beyond administration by interfering with scheduling and patient complaints.

PGD also claimed that," the service provider had violated various provisions of the parties' contract and had improperly interfered with efforts by the dental group to establish new practices."

Following the jury verdict, the two parties reached a settlement in which PGD will receive the leases and associated assets of 25 out of 31 Park Dental facilities, and various trade names including Park Dental, from ADPI, instead of the $130 million. This settlement is contingent upon approval by the ADPI lenders.

ADPI expressed its disagreement with the verdict in a press release. However, "given the size of the verdict and its direct impact on our financing capabilities, as well as the significant amount of time, effort and money involved in continuing to pursue our legal alternatives ... it is in the best interests of the company ... to settle these matters expeditiously," said Gregory Serrao, chairman, CEO, and president of the company.

"All we ever wanted to do is provide top quality care to our patients in the way that the doctors -- not nondoctor administrators -- think is appropriate. Under the settlement, that is what we will be able to do," Dr. John Gulon, president of PDG, said.