This is a weird story. In 2006, police responded to a call placed by a motorist who claimed Dr. Michael Fitzgibbons was involved in a road rage incident. Dr. Fitzgibbons, an infectious disease specialist, consented to a search of his car. He was subsequently arrested in the parking lot of the hospital where he worked, Western Medical Center (WMC), after a gun and a pair of leather gloves were found.
A little over six years later, a jury found, after only five hours of deliberation, the owner of WMC acted with “malice, oppression, or fraud against Dr. Fitzgibbons” and was ordered to pay Dr. Fitzgibbons $5.2 million for emotional distress and $500,000 in punitive damages.
Dr. Fitzgibbons sued Integrated Healthcare Holdings, Inc (IHHI), which owned WMC, and alleged IHHI’s former CEO, Bruce Mogel, planted the gun in order to “humble” Dr. Fitzgibbons. DNA evidence apparently proved the gun and gloves did not belong to Dr. Fitzgibbons and he was never charged.
Dr. Fitzgibbons spoke out against IHHI, which apparently purchased four hospitals in 2005 despite not having much capital. From the Orange County Register:
Fitzgibbons and several other physicians railed against the IHHI bid, and especially against IHHI’s bidding partner, Hemet physician and medical entrepreneur Kali P. Chaudhuri. He had angered local physicians in 2000 when he abruptly closed KPC Medical Management, a group medical practice with an estimated 250,000 patients.
Their opposition forced IHHI into the arms of another partner — a Ponzi scheme, Tustin-based Medical Capital Holdings. MedCap provided most of the loans necessary to buy the hospitals. But when the Securities and Exchange Commission shut down MedCap in August 2009, IHHI was thrown into a severe cash crisis. In a court-ordered sale, Chaudhuri won control.
Around 2005, IHHI sued Dr. Fitzgibbon after he also voiced concern about the level of patient care at Western Medical Center. Dr. Fitzgibbon won that case in 2006, and it was then his problems began.
According to the Orange County Register:
Former IHHI president Larry Anderson testified that immediately after Fitzgibbons’ legal win, Mogel instructed him to make a $10,000 contract for unnecessary work on IHHI’s website with a man named Mikey Delgado. Delgado had come up in prior conversations, Anderson testified, as a “scary guy” who Mogel told him had the Santa Ana police on his payroll.
“So what did IHHI get for that $10,000?” Mathews asked the jury. “They got Dr. Fitz set up.”
Anderson testified that it was only after Fitzgibbons’ arrest that he realized that the $10,000 contract must have paid for the planted gun.
IHHI’s board learned of the $10,000 payment after Anderson described it in a 2008 deposition. But instead of firing Mogel, Mathews said, the board gave him an eight-month consultancy worth $43,750 per month.
The IHHI board “knew what Mogel did to Dr. Fitzgibbons,” Mathews told the jury. “They ratified it, and they gave him a golden handshake goodbye.”
It is not clear whether IHHI will be able to pay Dr. Fitzgibbons. It apparently reported a loss of $13.4 million in the 4th quarter of 2012 and is $86 million in debt.
There is also no word whether Dr. Fitzgibbons, who is returning to work at WMC, is also pursuing legal action against Mr. Mogel.