Matrix Anesthesia, Sean Kincaid, John Costello Sued
Matrix Anesthesia, Sean Kincaid, John Costello Sued
18 JUN 04 PM 3:48
l
KING COUNTY
SUPERIOR COURT CLER
2 E-FILED
CASE NUMBER: 1~2-14146-0 SEA
3
7
IN THE SUPERIORCOURTOFTHE STATE OF WASHINGTON
B IN AND FOR THE COUNTY OF KING
10 Plaintiff, COMPLAINT
11 \I.
15 Defendants.
16 Tien Thach, M.D., by and through her attorneys, FREY BUCK, P.S., alleges the follclwing
l7 facts and causes of action against the above-named defendants a.'j, follows:
18
I. PARTIES
19
LI Plaintiff Tien Thach, J:.~1.D. ('Thach") is a resident of Bellevue. King County,
20
Wa...hington.
21 Defendant Matrix Anesthesia, P.S. ('Matrix") is, on mfonnation and belief, a
1.2
22 Washington Corporation doing business in King County, Washington.
23
L3 Defendant Sean Kincaid, M.D. ("Kincaid") is, on information and belief, aresident
3 Matrix.
4 l.4 Defendant John Costello,l:.!.D. ("Costello") is. on information and belief, a resident
5 of King County, Washington. Dr. CosteUo is a member of Matrix Anesthesia Corpomtion and
6 acts as it-; Chief Financial Officer. Dr. Costello is also the President of Matrix Anesthesia
7 Overtake,
8 L5 John Does I-XX are currently unknown corpornte leaders of Matrix who were
11 2.1 This court has jurisdiction over thi~ matter because Matrix Anesthesia, P,S. is a
12 closely held corpor&tion headquartered and tmnsacting busines..~ in King County, Washington.
l3 Upon infonnalion and belief Matrix, Costello, Does and Dr. Thach all reside, work, and may be
)5 2.2 Venue in the, Superior Court of King Cuun ty, Washington is proper because all acts
16 and omiss1ons giving rise to plaintiffs claims occurred in King County, "washington.
18 3.1 Plaintiff Tien Thach, M.D., was originally employed by Matrix on October 3, 2010.
19 hfatrix has two divisions: Matrix Anesthesia Overlake ('MAO"), serving O,rerlake Hospital and
20 Medical Center in Bellevue, Wa.i;hington and Matrix Anesthesia Evergreen ('MAE") serving
21 Evergreen Hospital in Kirkland, Washington. Dt. Thach worked in the MAO division, originally
23 3.2 In August of 2013, the MAO divisional board asked Dr. Thach to accept the role of
2 position of MAO Board Tre.aimrerc>n August 25, 2016 for a rwo-yeartenn fr<>m 2017 to 2019.
4 addressing potential legal and practice-related compliance issues. Despite these responsibilities,
5 the Matrix board infonned Dr. Thach that she was not permitted lo contact corporate legal counsel
6 with questions or concerns.. C(lntacl with Matrix ,-ounsel was expressly limited to che CEO and
7 CFO. Dr. Thach was informed that chis rule was enacted by Defendant Kincaid as. president of
8 Matrix.
10 Defendant John Costello, M.D. and Dr. Dave Knoepfler, then the Chief Medical Officer of
J1 Overtake Hospital. Defendant Costello and Dr. Knoepfler announced that a new administrative
12 position, .MedicaJ Direct<'lr of Surgical Service.s, had been created at Overlake, and moreover, thac
14 3.5 The Medical Director of Surgical Services. salary structure described by Defendant
15 Costello concerned Dr. Thach in her role as compliance officer. Defendant proposed splitting his
16 time between ihe two positions; halftime a,..., an MAO anesthesiologist, and the other half in the
17 administrative role. However, Defendant sought to retain his full-time anesthesiologist salary of
J8 appmximarely $500,000. Because the new position included a S 150,000 stipend, and half-time
19 anesthesiology work would net approximately $250,000, Dr. Knoepfler suggested Matrix should
20 support Costello in the new po.... ition; Costello subsequently specifically indicated that to support
21 him in the new position MAO would have to make up the difference of approximately $100,000
22 in his prospective lost wages annually. Plaintiff was concerned that lhis financial arr.:1ngement
2 director position salary structure to Matrix Corporate C(,mpl iance Officer Raphael N. Rodriguez,
3 M.D,, in accord with proper procedure .md to assure IJansparency. Dr. Rodriguez confrnned that
4 defendant Costello wa-. asking Matrix to contribute approximately $100,000 to allow him to take
5 the new position without suffering a decrease in his usual earnings. Dr. Rodriguez reported that
6 .Matrix Counsel lee Th{)rson previously approved a similar amtngement for two MAE
7 anesthesiologists, and that :Mr. Thorson's blessing would be sought for the Costello arrangement.
8 Satisfied with Dr. Rodriguez's response, Dr. Thach did not pursue the matter further.
9 3.7 One of the two MAE anesthesiologists receiving a similar financial contribution to
10 the one proposed by Defendant Costell(l is, on information and belief, Defendant Sean Kincaid,
l2 3.8 ln January 2017 Dr. Thach attended lhe American Society of AnesthesiologisL-.
13 PrJ.ctice Management conference in Dallas, Tex.as in her role as divisional compliance officer. On
14 the last day of the conference, she attended a sess10n entitled "Anti-Kickback Statutes/Stark Law
15 Lecture" presented by Marc Vezina, Esq. The presentation provided detailed information on anti-
16 kickback rules and appeared to al least potentially impact the proposed rc1edical director position
17 that Dr. Thach had earlier discussed with Dr. Rodriquez. The presentation rekindled Plaintiffs
18 concerns that the arrangement could expose the group to legal liability given the proposed salary
19 "contributions" required to make up Defendant Costello's lessened earnings in the new position.
20 Dr. Thach, seeking t<., maintain confidentiality and to protect the group, anonymously approached
21 the presenting attorney at lecture's end to generally describe her concerns. She provided no
23 3.9 The presenting attorney informed Dr. Thach that she had good rea.wn lo be
3 3.10 On January 30, 2017, pursuant to her fiduciary duties as compliance officer and as
4 a shareholder of Matrix, Plaintiff contacted Dr. Rodriguez to ag-,1in express her concem over the
5 legality/propriety of the medical director ammgement given the information she had gle-aned at the
6 conference. Dr. Rodriguez expressed concem, assumed reliponsibility for all further investigation
7 and foJlow-up, and accepted Dr. Thach's offer to provide the presenting attorney's contact
8 information. Dr. Thach took no further action believing Dr. Rodriguez had the authority to
10 3.l l On March 28, 2017, v.'ithout warning and prompted by her report to Dr. Rodrigue'z,
11 Dr. Thach was publicly anacked at a Matrix Corporate Board meeting, Defendants Kincaid and
12 Costello displayed a Po\verPoint presentation through whic.h they accused plaintiff of a broad
14 supplement arrangements with Matrix that were the cause of Dr Thach's anti-kick-b::ickconcems,
15 m; properly presented to Dr. Rodri.1:,'Uez. Each defendant realized personal gain from the
16 arrangements. The defendants' presentation was factually imt.ccur.ite and knowingly false. lt
17 directly impacted Plaintiff in her prnfes..<.ion. Defendants accused Dr. Thach of several alleged
18 misdeeds:
21 • Failure to fulfill fiduciary duties to serve in the corporation's best interest; and,
22 • Impennissibly seeking outside legal counsel and ignoring the advice of "trusted
23 legal counsel."
2 actions - that she had expressed legitimate concerns through the appropriate corpor.:lle structure
3 that the group's agreements ""With 01rerlake and Evergreen Hospitals may be in violation of anti-
4 kickback laws. Defendants further failed to express orin anyway recognize that it was Dr. Thach' s
5 fiduciary duty to address such potential problems in her role a-. divisional compliance officer and
6 that it was in her inlerest as a shareholder of the corporntion to bring to light and avoid potential
7 COfJX)rate improprieties.
8 3.13 Plaintiff had received no warmng thal such attack was coming; defendants
10 3.14 On April 3, 2017, Corpcmile Compliance Chairman Rodriguez told Dr. Thach she
11 had indeed foll owed proper protocols by escalating the matter to him, and that he "got in trouble"
12 with Defendant Kincaid for inve.stigating the matter. Dr. Rodriguez i.ndicated that he would soon
14 3J5 On April 5,2017, the final board meeting minutes were published, but in deviation
15 from standard prnctice, were made available to MAO members only by written request, and then
16 only via hrurl copy. Dr. Thach had previously provided a detailed written response to the
17 inaccumte minute.s and the unfounded attack by defendants~ lhe approved minutes pmvided no
18 reference to her facts and corrections, Instead, the minutes simply reported that Plaintiff
19 "disagreed" that her efforts were inconsistent with her duties, and that she had presented "reasons"
20 for her disagreement The minutes did not provide the shareholders with notiL'e of the potential
22 3.16 Shocked at the attack by the defendanL"> a~ corporate leaders and their manipulation
23 of the corporale :structure to intimidate and oppress her in her role as divisional compliance officer
2 le uer of res.i,gnation from her positions as MAO Treasurer, Matrix Corporate Board Member, and
3 MAO Division C(}mpliance Officer. Dr. Thach subsequently turned her focus lo the care of her
4 patients.
5 3. J7 Dr. Thach remained an active and engaged shareholder,, exercising her shareholder
6 right.~ and re~1,pcmsibilities, she c(;ntinued to voice her opinions about issues sunounding the proper
7 governance of the group. Her statemenL" as a shareholder of the organization ,vere frequently
8 contrary to the defendants' positions on various issues but unifonnly presented in a respectful and
9 apprl)priate manner.
10 3.18 Among the issues facing the corporation wa~ a po!ential sale of the corporation to
11 an outside organization. Corporate leadership, including Cost.ello and Kincaid, strongly supported
12 the sale. Dr. Thach expressed her opinion to other shareholders that the terms of the sale would
13 not benefit the group in the long term. On information and belief, Matrix corporate officers
14 working to secure approval of the sale of the group to the outside company were to receive
15 s.ignificant personal bemuse~ from Lhe purchasing company, in addition t(> their share value. On
16 information and belief, Defondants C.Ostello and Kincaid were working to achieve the sale and
18 3.19 In addition, on infonnation and belief the payout to individual shareholders in the
19 event of a sale to the ouL~ide company would increase if the total number of shareholders were
21 ,,;harehoWers.
22 3.20 In January '.::O 18, according to the group's tradition, Dr. Thach began lo phm a
23 retirement party for a teUow shareholder. Defendant Costello responded to her communications
2 shareholders subsequently noted the propriety of Dr. Thach' s approach and its consistency with
3 prior group practice. Defendant Costeilo nevertheless steadfastly hewed to his inaccurate position
4 and directed the issue away from the board's consideration. Defendant Costello's resistance took
5 the character of retaliatory, personal attack bereft of factual support - much like the earlier
6 PowerPoint defamation.
7 3.21 On January 25, 2018, Plaintiff was told by lv!AO's scheduler that the ~4AO Board
8 intended to call her out of sef\l'ice for an impromptu "meeting." The warning stated that Plaintiff
9 wmild be pulled from the operating rt)om in the middle of the morning on January 26 to attend a
10 meeting with Dr. Dorothy Ling and Dr. Guy Kuo, rnlher than at an official board meeting. Dr.
11 Thach .located Dr. Ling on January 26 and inqmred after the meeting's purpose: Ling responded
J3 3.22 Dr. Thach was concerned about the aberrant meeting demand given her pa.-.t
14 treatment by the defendants and the Matrix boa.rd. To help avoid any new surprise alt.acb and to
15 support fairness and tnmsparency, on January 26, 2018 Dr. Thach delivered a i.vriuen message to
16 Defendant Costello stating that she was concemed about attending impromptu meetings and would
i7 not subject herself 10 another unprovoked surprise attack. Instead, she reque..-;ted written
18 notification of any planned meetings, including an agenda or at least some indkation of the topic
l9 and the names of those expected to attend. Plaintiff alw requested advance notice so that she could
20 invite counsel to attend if po$.<iible and stated that she wished "to fully cooperate .. and attend any
3.23 On March 13, :018, the Matrix board responded by terminating Dr. Thach's
23 employment, effective immediately, The Board subsequently sent a message to all shareholders
2 interest.._ of lhe corporalion. On information and belief, the mes.,:;age was written by and/or
3 approved by Defendants Costello, Kincaid and/or Does. The statement was utterly and knowingly
4 false.
5 3.24 On information and belief, Defendants subsequently started rumors that Plaintiff" s
6 termination was due to a "drug problem", that it was premised upon an alleged threat made by
7 Plaintiff's long-ti.me compamon, and that the companion had attempted to "hack" the group's
9 3.25 Matrix AnesLhe.-..ia, P.S. and the Matrix board are respt)nsible for violations of
10 ·washington law related to corporate governance, fiduciary obligations, and minority liliareholder
11 rightli. Defendants' actions also constitute the tort of Outrage and have defamed Dr. Thach in her
12 professional endeavors.
13 3.26 On March 13. ::wrn, Dr. Thach received an anonymous letter from "The Matrix
14 Board" infonning her that her shareholder rights had been tennimued. In terminating Dr. Thach' s
15 shareholder rights, defendants Matrix, Kincaid, Costello and Does I-XX violated the corporation's
16 bylaws. The termination was. beyond the authority of the board and unauthorized under the bylaws.
17
4 5.1 Defendants Kincaid, Costello and Does as coqx)rate officers had a fiduciary duty
5 to the corporntion and its shareholders and a duty of g<Xxi faith and fair dealin~ Matrix had a duty
6 lo treat minority shareholder Thach reasonably and fairly and acted solely through its corp<>r,lle
11 retaliating against plaintiff for her effort to bring: potentially significant legal issues lo I.he
13 5.3 Defendants acted oppres!".ively and in bad faith through pervasive intimidating and
14 retaliatory attacks upon Dr, Thach ent>ineered to protect their own interests over lhose of lhe
16 5.4 On information and belief, defendant-. Kincaid, Costello and Does also acted for
17 the benefit of their personal interests over those of Dr. Thach in further violation of their fiduciary
J8 duty.
]9 5.5 Defendant Matrix also had a duty to treat minority shareholders fairly and not
20 interfere with shareholders' rights and benefits as owners of the company unreasonably.
22 5,6 As a resuh of the violations of these duties, Dr. Thach has and continlles to be
23 injured.
6.1 The pattem of intimidation and reraJiation by Defendants CosteHo, Kincaid, Does
3
and Matrix againl-it Dr. Thach while she served the MAO boa.rd a.,;; its trea,;;urer and compliance
4
c,)ffic;~r and as$ board member of the Matrix board was burdensome, harsh and wrongful. This
5
conduct continued well after Dr. Thach' s resignation from the board and impacted her rights as a
6
shareholder. Defendant,,.· improper oppression eventually led to the usurpation of Dr. Thach's
7
shareholder status and the unfounded deprivation of her righL,;.; and benefits a.<; a shareholder.
8
Defendants' acts were not for the benefit of the corporJ.tion, but rather were for the benefit of
9
individual C(>rporn.te officers al the expense of a minority shareholder and in retalialion for Dr.
10
Thach's exercise of her rights and responsibilities as a shareholder.
1t
6.2 Defendants' efforts to diminish Dr. Thach and her diligent investigation of potential
12
anti-kickback statute violations by both Defendanls are incontrovertible evidence of a lack of
J3
probity and fair dealing in the affain; of Matrix Anesthesia, to the prejudice of irs members.
14
6.3 Defendants' ambush of Dr. Thach in front of her peen on the Matrix board and
15
defamatory slatements regarding her actions violated standard..., of fair dealing and fair play on
16
which every shareholder is entitled to rely.
17
6.4 Defendants' conduct meets or exceeds the standards of minority shaTeholder
18
oppression in Washington State.
19
6.5 As a result of the defendants' oppressive and wrongful conduct, Dr. Thach has and
20
continues to be injured.
21
VII. FOURTH CAUSE OF ACTION: WHISTLEBW\VER.
22
7, I Defendants' conduct as described in (his complaint constituted retaliation for Dr.
23
Thach's effort to evaluate and investigate potential corporate misfeasance.
CO.MPLAINT ~ 11 FREY BUCK, P.S.
1200 FIFTH AVENUE, SUIT£ EOG
SEATTU:, WA 98101
P, (206} 486~6000 F: (206) 902·9660
1 7.2 Dr. Thach's efforts were driven by her duty to the corporation as divisional
4 7.4 Defendants' wrongful actions have caused and continue to cause injury to Dr_
5 Thach.
7 8.1 Defendants deprived Dr. Thach of her shareholder status as a result of her efforts
8 lo prnlect Matrix and il'i shareholders from potential legal exposure under anti-kickback slatutes
9 and for voicing her opinions and opposition to defendants' corporate leadership. Defendants'
JO behavior was: extreme and outrageous, in violation of fiduciary responsibilities and utterly
13 subjecting: her, onarm(>Unced and tvithout warning, to a direc(, humiliating, ontounded and personal
14 attack in front of the Matrix board in retaliation for her act of exercising her responsibilily as a
15 divisional compliance officer and shareholder to as.sure that the corporntion was not operaling in
18 through relentless intimidation and character assassination even aft.er they oonstructivel)'' removed
19 her from her elected positions of trust as the MAO treasurer and a member of the Matrix lx>ard.
21 retaliating against her for pointing out potential legal incongruities in the corporation's business
22 a.ffairs, voicing her opinion contr.try to corpornle leadership and, on information and belief, in their
23 effort to personally gain through the direction of corporate affairs at the expense of Dr. Thach.
2 decency. It is atrocious and uucrly intolernble in a society where laws and regulations exist lo
4 8.6 Dr. Thach ha.-. i;uffered and continues to suffer severe emotional distress caused by
7 9.l Defendants exposed Plaintiff Tien Thach, M.D., to ridicule and injury to her
8 replltation by publicly and improperly castigating Dr. Thach in fronl uf all MAO shareholders,
9 surgical colleagues, nursing co-workers, and staff al Overtake Hospital 1fodkal Cenler, lhe Retinal
JO Surgery Center, and Proliance Highlands Surgical C.enter, v.,ithout factual basis and knmving thal
13 immediately terminating her employment and publicly informing others that the termination wa.~
M neces.-.ary due to either a Clinical issue or behavior that was contr.rry to the corporntion' s interests,
16 9.3 These act~ constirnte defamation per se as they have impacted Dr. Thach in her
l7 professional capacity.
23 4. All other relief a.'i lhe Court deems just and equitable.
3
FREY BUCK~ P.S.
4
6
By: -r~
Ted Buck, WSBA #22029
Attome.vfor Plaintiff
7
10
11
12
13
14
15
16
17
18
19
20
21
22
23