Case 20-33918 Document 150 Filed in TXSB on 08/25/20 Page 1 of 18
IN THE UNITED STATES BANKRUPTCY COURT FOR THE SOUTHERN DISTRICT OF TEXAS HOUSTON DIVISION
In re: § Chapter 11 § BENEVIS CORP., et al.,1 § Case No. 20-33918 (MI) § Debtors. § (Jointly Administered)
MOTION FOR RELIEF FROM THE AUTOMATIC STAY TO PROCEED WITH PENDING LITIGATION
THIS IS A MOTION FOR RELIEF FROM THE AUTOMATIC STAY. IF IT IS GRANTED, THE MOVANT MAY ACT OUTSIDE OF THE BANKRUPTCY PROCESS. IF YOU DO NOT WANT THE STAY LIFTED, IMMEDIATELY CONTACT THE MOVING PARTY TO SETTLE. IF YOU CANNOT SETTLE, YOU MUST FILE A RESPONSE AND SEND A COPY TO THE MOVING PARTY AT LEAST 7 DAYS BEFORE THE HEARING. IF YOU CANNOT SETTLE, YOU MUST ATTEND THE HEARING. EVIDENCE MAY BE OFFERED AT THE HEARING AND THE COURT MAY RULE.
REPRESENTED PARTIES SHOULD ACT THROUGH THEIR ATTORNEYS.
A HEARING WILL BE CONDUCTED ON THIS MATTER ON SEPTEMBER 18, 2020 AT 9:00 AM (CT) BEFORE THE HONORABLE ISGUR IN COURTROOM 404, 515 RUSK STREET, HOUSTON, TX 77002. IF YOU OBJECT TO THE RELIEF REQUESTED, YOU MUST EITHER APPEAR AT THE HEARING OR FILE A WRITTEN RESPONSE PRIOR TO THE HEARING. OTHERWISE, THE COURT MAY TREAT THE PLEADING AS UNOPPOSED AND GRANT THE RELIEF REQUESTED.
PLEASE NOTE THAT ON MARCH 24, 2020, THROUGH THE ENTRY OF GENERAL ORDER 2020-10, THE COURT INVOKED THE PROTOCOL FOR EMERGENCY PUBLIC HEALTH OR SAFETY CONDITIONS.
IT IS ANTICIPATED THAT ALL PERSONS WILL APPEAR TELEPHONICALLY AND ALSO MAY APPEAR VIA VIDEO AT THIS HEARING. AUDIO COMMUNICATION WILL BE BY USE OF THE COURT’S REGULAR DIAL-IN NUMBER. THE DIAL-IN NUMBER IS +1 (832) 917-1510. YOU WILL BE RESPONSIBLE FOR YOUR OWN LONG- DISTANCE CHARGES. YOU WILL BE ASKED TO KEY IN THE CONFERENCE ROOM NUMBER. JUDGE ISGUR’S CONFERENCE ROOM NUMBER IS 954554.
1 The Debtors in these chapter 11 cases, along with the last four digits of each Debtor’s federal tax identification number, are as follows: Benevis Corp. (0242); LT Smile Corporation (2818); Benevis Holding Corp. (0222); Benevis Affiliates, LLC (7420); Benevis, LLC (5524); Benevis Informatics, LLC (7833) (collectively, the “Debtors”). The address of the Debtors’ headquarters is 1090 Northchase Parkway S.E., Suite 150, Marietta, GA 30067.
10702172 Case 20-33918 Document 150 Filed in TXSB on 08/25/20 Page 2 of 18
PARTIES MAY PARTICIPATE IN ELECTRONIC HEARINGS BY USE OF AN INTERNET CONNECTION. THE COURT UTILIZES GOTOMEETING FOR ALL VIDEO HEARING. TO CONNECT TO A HEARING, YOU MAY CONNECT USING THE LINK ON JUDGE ISGUR’S HOMEPAGE ON THE SOUTHERN DISTRICT OF TEXAS WEBSITE OR CONNECT DIRECTLY VIA THE GOTOMEETING APP.
TO CONNECT TO A HEARING, YOU SHOULD ENTER THE MEETING CODE “JUDGEISGUR”. IT IS RECOMMENDED THAT YOU DOWNLOAD THE FREE GOTOMEETING APP ON EACH DEVICE THAT WILL BE USED TO CONNECT TO A HEARING. CONNECTING VIA WEB BROWSER ONLY MAY LIMIT THE AVAILABILITY OF SOME GOTOMEETING FEATURES.
ONCE CONNECTED TO GOTOMEETING, A PARTICIPANT MUST CLICK THE SETTING ICON IN THE UPPER RIGHT CORNER AND ENTER YOUR NAME UNDER THE PERSONAL INFORMATION SETTING.
To the Honorable Marvin Isgur, United States Bankruptcy Judge:
Joseph and Veronica Gastelum (collectively, the “Gastelums”) file this Motion for Relief from the Automatic Stay to Proceed with Pending Litigation (the “Motion”).
SUMMARY OF THE RELIEF REQUESTED
Joseph Gastelum is the plaintiff in a lawsuit pending in the Maricopa County, Arizona
Superior Court arising from the wrongful death of his son, Zion Gastelum (hereinafter, the “State
Court Lawsuit”).2 Joseph Gastelum has named over 15 defendants responsible for the death of his son, including Debtors Benevis, LLC, Benevis Holding Corp., and Benevis Corp. (the “Debtor
Defendants”). The Gastelums ask this Court to lift the automatic stay to allow the State Court
Lawsuit to proceed against the Debtor Defendants.
The Gastelums do not seek stay relief to enforce their claims against the Debtors but only to proceed with the pending litigation and liquidate their claims, if any, against the Debtors.
2 The State Court Lawsuit is Case No. CV2018-011975 and Case No. CV2019-015618 (consolidated) pending in the Maricopa County, Arizona Superior Court (the “State Court”).
10702172 Case 20-33918 Document 150 Filed in TXSB on 08/25/20 Page 3 of 18
JURISDICTION
1. This Court has jurisdiction over this matter pursuant to 28 U.S.C. § 1334. This is a core proceeding pursuant to 28 U.S.C. § 157(b)(2)(A), (G) and (O).
2. Venue for this Motion is proper pursuant to 28 U.S.C. §§ 1408 and 1409. The Court may grant the relief requested in this Motion pursuant to 11 U.S.C. §§ 105 and 362(d).
FACTUAL BACKGROUND
A. The State Court Lawsuit
3. The State Court Lawsuit is a wrongful death suit brought by the father of two-year- old Zion, who died following a dental procedure performed under anesthesia at the Kool Smiles
Dental Clinic in Yuma, Arizona.3 The father, Joseph Gastelum is the statutory plaintiff, asserting wrongful death claims on his own behalf and for the Arizona statutory beneficiaries, including
Veronica Gastelum, Zion’s mother.
4. Gastelum alleges that the defendants (including the Debtor Defendants) devised and executed a business plan to create a chain of 130 Kool Smiles branded pediatric dental clinics that targeted children receiving government health benefits. Part of the business plan was to reward unnecessary procedures, force dangerous over-scheduling, employ untrained staff to perform medical functions, set production quotas for invasive procedures such as root canals and crowns, terminate and discipline personnel for generating less than a set dollar amount per patient, and encourage the negligent maintenance of essential medical equipment. The Kool Smiles business model targets children in lower-income families throughout the country, because those children are dependent on government-funded SCHIP Programs for their dental care. Kool Smiles
3 Exhibit A is the First Amended Complaint in Case No. 2018-011975. Exhibit B is the Complaint in consolidated Case No. CV2019-015618.
10702172 Case 20-33918 Document 150 Filed in TXSB on 08/25/20 Page 4 of 18
then overtreats, underperforms, and overbills such government-funded SCHIP Programs for the dental services it renders.
5. A key part of the Kool Smiles business model is to maximize the productivity of each clinic by scheduling the child-patients back-to-back, resulting in an insufficient amount of time between each child-patient for cleaning of the stations, monitoring of children who are recovering from various forms of anesthesia, and even to allow time for staff members to use the bathroom facilities.
6. Kool Smiles has a documented history of recommending unnecessary crowns and root canal treatments in small children, instead of less expensive, safer, and more appropriate methods to treat cavities in baby teeth. Upon information and belief, Kool Smiles has ignored such less expensive and less dangerous treatment options for its own financial gain.
7. Operating under this business model, the Yuma Kool Smiles clinic told Zion’s parents that Zion needed pulpotomies (baby root canals) and crowns on three of his baby teeth, and these procedures would require the use of general anesthesia. Kool Smiles made this decision to perform the procedures without truly informed consent of his parents, without any discussion of available, less-invasive (and much less expensive) alternate treatment methods of lesser risk that were the standard of care at the time, and without contemporaneous X-rays to confirm whether the expensive, invasive procedures were necessary.
8. On December 16, 2017, Kool Smiles placed Zion under general anesthesia
(rendering him unconscious and unable to breathe on his own) and performed procedures on nine of his baby teeth, which included root canals and crowns on six baby teeth and an enameloplasty procedure (a cosmetic dental procedure – also called tooth recontouring – where the size and/or shape of an existing tooth’s enamel surface is reshaped or recontoured for improved appearance) on three other baby teeth.
10702172 Case 20-33918 Document 150 Filed in TXSB on 08/25/20 Page 5 of 18
9. After the procedure, Zion was taken to a recovery room, left with untrained staff, and hooked up to an empty oxygen tank. Based on records from the Arizona State Board of Dental
Examiners, the dentist-anesthesiologist was intubating another child-patient within as little as two minutes after Zion’s extubation.
10. Two-year-old Zion was left alone in the recovery room for 5-10 minutes, or possibly longer. When Veronica, Zion’s mother, was later taken back to the recovery room by a member of the Kool Smiles staff, Veronica observed that Zion had an oxygen mask on his face and his toe was connected to a monitor. The monitor in question was a pulse oximeter device, which is used to monitor the patient’s pulse and oxygen saturations. Veronica heard the sound of the monitor’s alarm as she and the staff member entered the room, which was then immediately silenced by the staff member. Shortly thereafter, the alarm went off an additional three to four times – each time silenced by the Kool Smiles staff member – until the staff member finally removed the monitor from Zion and stated that the device does not work on children.
11. It was then that Veronica first noticed Zion’s chest was not moving. Despite
Veronica’s lack of medical training, she grabbed her son’s wrist to check his pulse and found none.
At that point, the Kool Smiles staff member finally realized something was amiss and left to get assistance. Zion was later diagnosed with severe hypoxic ischemic encephalopathy (brain damage caused by a lack of oxygen). Two-year-old Zion never regained consciousness and died a few days later on December 20, 2017. Kool Smiles billed Medicaid $2,800 for Zion’s care and treatment.
12. In the State Court Lawsuit, Joseph Gastelum asserts claims for dental malpractice, negligent hiring and supervision, negligence per se, consumer fraud, aiding and abetting, and civil conspiracy. The consumer fraud, aiding and abetting, and conspiracy claims allege the defendants’ business model provided incentives for dentists to perform medically unnecessary procedures.
10702172 Case 20-33918 Document 150 Filed in TXSB on 08/25/20 Page 6 of 18
Those claims also assert that the defendants’ business model was designed to defraud Medicaid through reimbursements for medically unnecessary and excessive procedures to maximize returns for its investors. Because Medicaid pays only 30 to 40% of the commercially available rate, to provide investors with above market returns, these defendants developed practices that rewarded or punished employees to the extent they achieved procedure goals correlated to a desired financial return. This practice compelled employees to resort to unnecessary procedures and other improprieties that resulted in filing false Medicaid claims.
13. At almost the same time when the Kool Smiles clinic in Yuma was engaging in the dental treatments that led to Zion’s death, Kool Smiles and its affiliates were settling a False
Claims Act lawsuit pending against them by the federal government, under which Kool Smiles paid $23,900,000.
14. The defendants in the State Court Lawsuit include employees and owners of the
Kool Smiles clinic in Yuma, other individuals and companies that participated in the tortious care of Zion, the Debtor Defendants, and certain beneficial owners of Debtor Benevis Holding Corp.
The remaining defendants are KS AZ-2, P.C., Benevis, LLC, Benevis Holding Corp., Benevis
Corp., Dale Mayfield, DMD and Jane Doe Mayfield, Paul Walker, DDS and Jane Doe Walker,
David Vieth, DDS and Jane Doe Vieth, Marcos A. Cervantes, DDS and Jane Doe Cervantes, Lucia
Rojas and John Doe Rojas, Mark Auerbach, DDS and Jane Doe Auerbach, and Cheryl Lynn Webb and John Doe Webb (represented by Jones, Skelton & Hochuli, P.L.C.); Stephen Montoya, DDS and Jane Doe Montoya (represented by Gust Rosenfeld, P.L.C. and Green Law Offices, LLC);
Aaron Roberts, DMD and Jane Doe Roberts (represented by Dickinson Wright, PLLC); Desert
State Dental Anesthesia, LLC (represented by Farhang & Medcoff); and FFL Partners, LLC,
Friedman Fleischer & Lowe Capital Partners, L.P., and Friedman Fleischer & Lowe Capital
10702172 Case 20-33918 Document 150 Filed in TXSB on 08/25/20 Page 7 of 18
Partners II, L.P. (represented by Willkie Farr & Gallagher LLP and Osborn Maledon, P.A.). Certain defendants were dismissed for lack of personal jurisdiction.
15. On July 31, 2020, the parties4 submitted a Joint Report (Exhibit C), identifying the discovery that had been taken to date and the anticipated discovery. The parties stated that the case would be ready for trial by November 8, 2021. The Gastelums believe it will take 30 to 35 days to the try the case to the jury. The State Court set a trial setting conference for March 16, 2021.
B. The Bankruptcy Case and Subsequent Proceedings
16. Days after the Joint Report, on August 2 and 3, 2020, the Debtors filed voluntary petitions for relief under Chapter 11, Title 11 of the United States Code in this Court.
17. On August 3, 2020, the Debtor Defendants filed their Notice of Filing Bankruptcy and Imposition of Automatic Stay in the State Court Lawsuit.
18. The State Court issued a Stay Order as to the Debtor Defendants and ordered the claims against the Debtor Defendants placed on the Dismissal Calendar for dismissal on February
1, 2021. The State Court ordered that the claims would be dismissed “unless prior to the scheduled dismissal date Plaintiffs demonstrate they have moved to lift the stay but the request has not been ruled upon or has been denied; or they have sought to reduce the claim(s) against the debtor to judgment in the Bankruptcy Court in an adversary proceeding and the adversary proceeding has not yet been resolved despite diligence in seeking such a resolution; or they have obtained severance of the claim(s) against the debtor from the claim(s) against the other parties to the action,
4 Of note, the Joint Report was signed by Chris Stuart as Attorney for Defendants Kool Smiles, P.C., Kool Smiles Holding Corp., KS AZ-2, P.C., Benevis, LLC, Benevis Holding Corp., Benevis Corp., Dale Mayfield, DMD and Jane Doe Mayfield, Tu Tran, DDS and Jane Doe Tran, Paul Walker, DDS and Jane Doe Walker, David Vieth, DDS and Jane Doe Vieth, Marcos A. Cervantes, DDS and Jane Doe Cervantes, Lucia Rojas and John Doe Rojas, Mark Auerbach, DDS and Jane Doe Auerbach, and Cheryl Lynn Webb and John Doe Webb.
10702172 Case 20-33918 Document 150 Filed in TXSB on 08/25/20 Page 8 of 18
if any; or they have demonstrated a reasonable basis for continuance of the case on the Dismissal
Calendar.” See Exhibit D.
RELIEF REQUESTED
19. The Gastelums seeks relief from the automatic stay under 11 U.S.C. § 362 to allow the pursuit of pending claims against the Debtor Defendants in the State Court Lawsuit.
20. Pursuant to Section 362(d)(1) of the Bankruptcy Code, a court shall grant relief from the automatic stay for cause. Cause under Section 362(d)(1) is to be determined on a case- by-case basis. In re Reitnauer, 152 F.3d 341, 343 n.4 (5th Cir. 1998). “‘Cause’ is an intentionally broad and flexible concept that permits the bankruptcy court, as a court of equity, to respond to inherently fact-sensitive situations.” In re Tex. State Optical, Inc., 188 B.R. 552, 557 (Bankr. E.D.
Tex. 1995). In the context of modifying the stay so that preexisting litigation can continue in another forum, bankruptcy courts have generally considered the following factors set forth by the
Second Circuit in In re Sonnax Industries, Inc., 907 F.2d 1280 (2d Cir. 1990):
(1) whether relief would result in a partial or complete resolution of the issues;
(2) lack of any connection with or interference with the bankruptcy case;
(3) whether the other proceeding involves the debtor as a fiduciary;
(4) whether a specialized tribunal with the necessary expertise has been established to hear the cause of action;
(5) whether the debtor's insurer has assumed full responsibility for defending it;
(6) whether the action primarily involves third parties;
(7) whether litigation in another forum would prejudice the interests of other creditors;
(8) whether the judgment claim arising from the other action is subject to equitable subordination;
(9) whether movant's success in the other proceeding would result in a judicial lien avoidable by the debtor;
10702172 Case 20-33918 Document 150 Filed in TXSB on 08/25/20 Page 9 of 18
(10) the interests of judicial economy and the expeditious and economical resolution of litigation;
(11) whether the parties are ready for trial in the other proceeding; and
(12) impact of the stay on the parties and the balance of harms.
Id. at 1285 (citing In re Curtis, 40 B.R. 795, 799-800 (Bankr. D. Utah 1984)); see also In re Xenon
Anesthesia of Tex., PLLC, 510 B.R 106, 112 (Bankr. S.D. Tex. 2014); In re Deep, 279 B.R. 653
(Bankr. N.D.N.Y. 2002); In re Fowler, 259 B.R. 856, 859 (Bankr. E.D. Tex. 2001); In re U.S. Brass
Corp., 176 B.R. 11, 13 (Bankr. E.D. Tex. 1995).
21. All twelve factors may not be relevant in a given case. Moreover, these factors need not be assigned equal weight and only those factors relevant to the particular case need be considered. In re U.S. Brass, 176 B.R. at 13. Each factor is discussed below.
(1) Whether relief would result in a partial or complete resolution of the issues
22. Granting the Gastelums relief from the automatic stay would result in a complete resolution of the issues in the State Court Lawsuit. It would allow the State Court to fully adjudicate the issue of liability for the wrongful death of Zion and liquidate the amount of the
Gastelums’ claims against the Debtor Defendants. To not modify the stay would result in piecemeal litigation and possible inconsistent liability findings against the Debtor Defendants and non-debtor defendants. There are claims of negligence, consumer fraud, aiding and abetting, and civil conspiracy alleged against the Debtor Defendants that should be tried with those same claims against the non-debtor defendants. Accordingly, this factor weighs in favor of lifting the stay.
(2) Lack of any connection with or interference with the bankruptcy case
23. The State Court Lawsuit will not interfere with the bankruptcy case. No chapter 11 plan has been filed and, once a chapter 11 plan is filed, the pendency of the State Court Lawsuit will not prevent such plan from being confirmed. Allowing the State Court Lawsuit to proceed
10702172 Case 20-33918 Document 150 Filed in TXSB on 08/25/20 Page 10 of 18
will not have a material impact on the Debtors’ administration of the estate. To the contrary, allowing the State Court Lawsuit to proceed will serve to promptly adjudicate the liability for the wrongful death of Zion, liquidate the amount of the Gastelums’ wrongful death claims against the
Debtor Defendants, and facilitate resolution. Moreover, on information and belief, defense costs in the State Court Lawsuit are currently being funded by the Debtors’ insurance and, accordingly, lifting the stay will not create a significant financial burden to the estates. This factor weighs in favor of lifting the stay.
(3) Whether the other proceeding involves the debtor as a fiduciary
24. The State Court Lawsuit does not involve claims against the Debtors as a fiduciary.
Accordingly, this factor is neutral.
(4) Whether a specialized tribunal with the necessary expertise has been established to hear the cause of action
25. This Court lacks authority to decide the Gastelums’ claims against the Debtors.
Specifically, wrongful death claims are non-core proceedings and may not be adjudicated in this
Court. See 28 U.S.C. § 157(b)(2)(B), (b)(2)(O), (b)(5). Accordingly, between this Court and the
State Court, the State Court, which can hear wrongful death cases, is a specialized tribunal with the expertise to hear the Gastelums’ claims against the Debtor Defendants.
26. Even if the State Court is not a specialized tribunal, this Court should consider interests of comity. The State Court is well-versed in the facts of the State Court Lawsuit and the
Arizona common law and statutory law governing the dispute. The State Court Lawsuit has been pending for nearly two years and involves 14 other named non-debtor defendants. The State Court has already addressed jurisdictional motions, pleading issues, and discovery disputes and recently issued a lengthy opinion denying the summary judgment motion of one of the named defendants.
10702172 Case 20-33918 Document 150 Filed in TXSB on 08/25/20 Page 11 of 18
See Exhibit E (Docket Sheet); Exhibit F (Order Denying Summary Judgment). This factor weighs in favor of lifting the stay.
(5) Whether the Debtors’ insurer has assumed full responsibility for defending it
27. As stated above, upon information and belief, the Debtor Defendants’ insurer has assumed full responsibility for defending them in the State Court Lawsuit. The same counsel representing the Debtor Defendants continues to represent other defendants in the State Court
Lawsuit. This factor weighs in favor of lifting the stay.
(6) Whether the action primarily involves third parties
28. There are over 15 named defendants in the State Court Lawsuit; the Debtors are only three of those named defendants. The State Court Lawsuit primarily involves third parties, and thus, this factor weighs in favor of lifting the stay.
(7) Whether the litigation in another forum would prejudice the interests of other creditors
29. Other creditors will not be prejudiced. Proceeding with the State Court Lawsuit will result in a timely adjudication of claims against the Debtors and will not delay the administration of the Debtors’ chapter 11 bankruptcy. This factor weighs in favor of lifting the stay.
(8) Whether the judgment claim arising from the other action is subject to equitable subordination
30. The judgment claim would not be subject to equitable subordination. Accordingly, this factor weighs in favor of lifting the stay.
(9) Whether the movant’s success in the other proceeding would result in a judicial lien avoidable by the Debtor
31. The Gastelums are not aware of any judicial lien that would result from the State
Court Lawsuit that could be avoided by the Debtors. This factor weighs in favor of lifting the stay.
10702172 Case 20-33918 Document 150 Filed in TXSB on 08/25/20 Page 12 of 18
(10) The interests of judicial economy and the expeditious and economical resolution of litigation
32. The State Court has already invested substantial time and resources in the State
Court Lawsuit. See generally Exhibit E. Because the State Court Lawsuit has been on the State
Court’s docket for nearly two years and the State Court has resolved numerous contested motions, the State Court has detailed knowledge about and familiarity with the claims asserted and the numerous parties involved. See generally id. Allowing the State Court Lawsuit to proceed against all defendants, including the Debtor Defendants, will allow the State Court to reach an expeditious and economical conclusion that may not be possible without the Debtor Defendants’ involvement.
33. Further, as addressed above, this Court cannot resolve the wrongful death claims against the Debtor Defendants. Forcing the Gastelums to start again in a federal district court against the Debtor Defendants alone would be a waste of judicial resources and unnecessarily delay the resolution of the wrongful death claims. The State Court Lawsuit has not been removed and would be subject to mandatory abstention if it was removed. See 28 U.S.C. § 1334(c)(1).
Moreover, as previously discussed, allowing the claims to proceed separately may result in inconsistent findings. The State Court Lawsuit includes claims for aiding and abetting and civil conspiracy among the Debtor Defendants and the remaining defendants. Finally, the Gastelums estimate that it will take 30 to 35 trial days to try the case to the jury. This should not be done twice. Accordingly, this factor weighs in favor of lifting the stay.
(11) Whether the parties are ready for trial in the other proceedings
34. Discovery has commenced in the State Court Lawsuit, and the parties have a discovery cutoff date of July 16, 2021. When compared to starting again in a federal district court, this factor weighs in favor of lifting the stay.
(12) Impact of the stay on the parties and the balance of harms
10702172 Case 20-33918 Document 150 Filed in TXSB on 08/25/20 Page 13 of 18
35. There will be no harm to the Debtors if the automatic stay is lifted. The Defendant
Debtors are represented by counsel in the State Court Lawsuit. As previously discussed, upon information and belief, the Defendant Debtors’ insurance carrier is providing a defense in the State
Court Lawsuit. That same counsel is already representing other parties in the State Court Lawsuit.
36. Conversely, if the stay is not lifted, the Gastelums will be harmed by not being able to expeditiously reach a final judgment in the State Court Lawsuit that has been pending for nearly two years against mostly non-Debtor parties. Having to complete discovery in two cases and try the issues twice to a jury will result in significant harm to the Gastelums. Accordingly, this factor weighs in favor of lifting the stay.
CONCLUSION
37. In conclusion, each of the 12 factors for this Court to consider weighs in favor of lifting the automatic stay or is neutral. No factor weighs against lifting the automatic stay.
38. Accordingly, the Gastelums respectfully requests the Court enter an order (i) lifting the automatic stay to allow the prosecution of the claims in the State Court Lawsuit; and
(ii) granting such other and further relief as may be just.
Dated: August 25, 2020.
10702172 Case 20-33918 Document 150 Filed in TXSB on 08/25/20 Page 14 of 18
Respectfully submitted,
PORTER HEDGES LLP
/s/ Joshua W. Wolfshohl Joshua W. Wolfshohl State Bar No. 24038592 Aaron J. Power State Bar No. 24058058 Jonna N. Summers State Bar No. 24060649 1000 Main Street, 36th Floor Houston, Texas 77002 Telephone: (713) 226-6000 Facsimile: (713) 226-6295 [email protected] [email protected] [email protected]
and
POLI, MOON & ZANE, PLLC Michael N. Poli, #006431 Lawrence R. Moon, #017000 2999 North 44th Street, Suite 325 Phoenix, Arizona 85018 [email protected] [email protected]
and
BURG SIMPSON ELDREDGE HERSH & JARDINE, P.C. Michael Burg, #031437 David TeSelle, # 032057 40 Inverness Drive East Englewood, Colorado 80122 [email protected] [email protected]
Ronda Kelso, #023301 2390 E Camelback Road, Ste. 403 Phoenix, Arizona, 85016 [email protected] [email protected] COUNSEL TO JOSEPH GASTELUM AND VERONICA GASTELUM
10702172 Case 20-33918 Document 150 Filed in TXSB on 08/25/20 Page 15 of 18
CERTIFICATE OF CONFERENCE I conferred with counsel for the Debtors regarding the requested relief. The parties were unable to reach an agreement as to the relief sought.
/s/ Joshua W. Wolfshohl Joshua W. Wolfshohl
CERTIFICATE OF SERVICE I hereby certify that a true and correct copy of the foregoing instrument was duly served by electronic transmission to all registered ECF users appearing in the case on August 25, 2020.
This will certify that a true and correct copy of the foregoing document was forwarded by United
States mail, postage prepaid, on this the 25th day of August 2020, to the parties listed on the attached Service List.
/s/ Joshua W. Wolfshohl Joshua W. Wolfshohl
10702172 Case 20-33918 Document 150 Filed in TXSB on 08/25/20 Page 16 of 18 Benevis Corp - Master Service List 08/24/2020 Ballard Spahr LLP Bmo Harris Bank, Na Branscomb PLLC Attn: Dustin Branch 111 W Monroe St Attn: Patrick H. Autry Attn: Jessica Simon Chicago, IL 60603 8023 Vantage Dr, Ste 560 2029 Century Park E, Ste 800 San Antonio, TX 78230 Los Angeles, CA 90067-2909 [email protected] [email protected] Counsel to BMO Katten Muchin Counsel to New Mountain Proskauer FortyFour LLC Rosenman LLP Attn: David Hillman Attn: Betsy Skelton Attn: Geoff AuYeung Esq Attn: Lucy Kweskin 44 Russel St NE 525 W Monroe St Ste 1900 Eleven Times Square Atlanta, GA 30317 Chicago, IL 60661 8th Ave & 41st St New York, New York 10036-8299 [email protected] [email protected]; [email protected] [email protected] Henry Schein, Inc. Hoover Slovacek LLP Jones Walker LLP Attn: Tom Walsh Attn: Melissa Haselden Attn: Joseph E. Bain 135 Duryea Rd Attn: Angeline Kell Attn: Gabrielle A. Ramirez Melville, NY 11747 Galleria Tower II 811 Main St, Ste 2900 5051 Westheimer, Ste 1200 Houston, TX 77002 Houston, TX 77056 [email protected] [email protected] [email protected] Katten Muchin Rosenman LLP Kessler & Collins Kurtzman Steady, LLC 2029 Century Park E Attn: Howard Rubin Attn: Jeffrey Kurtzman Los Angeles, CA 90067 2100 Ross Ave, Ste 750 401 S 2nd St, Ste 200 Dallas, TX 75201 Philadelphia, PA 19147
[email protected] [email protected] [email protected] Law Offices of T.H. Kelley, P.C. Linebarger Goggan Blair & Sampson, Linebarger Goggan Blair & Sampson, Attn: Teri H. Kelley LLP LLP 6750 W Loop S, Ste 920 Attn: Diane W. Sanders Attn: Don Stecker Bellaire, TX 77401 PO Box 17428 112 E Pecan St, Ste 2200 Austin, TX 78760-7428 San Antonio, TX 78205 [email protected] [email protected] [email protected] Linebarger Goggan Blair & Sampson, Linebarger Goggan Blair & Sampson, Locke Lord LLP LLP LLP Attn: Aaron C. Smith Attn: Elizabeth Weller Attn: Tara L. Grundemeier 111 S Wacker Dr 2777 N Stemmons Freeway PO Box 3064 Chicago, IL 60606-4410 Ste 1000 Houston, TX 77253-3064 Dallas, TX 75207 [email protected] [email protected] [email protected] Locke Lord LLP Locke Lord LLP Medicor Imaging Attn: Philip G. Eisenberg Attn: W. Steven Bryant 1927 South Tryon Street 600 Travis St, Ste 2800 600 Congress Ave, Ste 2200 Charlotte, NC 28203 Houston, TX 77002 Austin, TX 78701
[email protected] [email protected] Moritt Hock & Hamroff LLP Munsch Hardt Kopf & Harr, P.C. Office Of The Attorney General Attn: Leslie A. Berkoff Attn: Deborah M. Perry 200 St Paul Pl 400 Garden City Plaza 500 N Akard St, Ste 3800 Baltimore, MD 21202 Garden City, NY 11530 Dallas, TX 75201-6659
[email protected] [email protected] [email protected] Office Of The Attorney General Office Of The Attorney General Office Of The Attorney General 2005 N Central Ave 202 N 9th St 30 E Broad St, 14th Fl Phoenix, AZ 85004 Richmond, VA 23219 Columbus, OH 43215
[email protected] [email protected]
Page 1 Case 20-33918 Document 150 Filed in TXSB on 08/25/20 Page 17 of 18 Benevis Corp - Master Service List 08/24/2020 Office Of The Attorney General Office Of The Attorney General Office Of The Attorney General 40 Capitol Sq SW 441 4th St NW 55 Elm St Atlanta, GA 30334 Washington, DC 20001 Hartford, CT 06106
[email protected] Office Of The Attorney General Office Of The Attorney General Office of the United States Trustee P.O. Box 12548 State of Florida Attn: Hector Duran, Jr Austin, TX 78711-2548 PL-01 The Capitol 515 Rusk St, Ste 3516 Tallahassee, FL 32399-1050 Houston, TX 77002
[email protected] Office of the United States Trustee Paul Elkin Perdue, Brandon, Fielder, Collins & Attn: Stephen Statham Attn: Paul Elkin Mott, L.L.P. 515 Rusk St, Ste 3516 22 Lyndon Place Attn: Owen M. Sonik Houston, TX 77002 Melville, NY 11747 1235 N Loop W, Ste 600 Houston, TX 77008 [email protected] [email protected] [email protected] Perdue, Brandon, Fielder, Collins & Perdue, Brandon, Fielder, Collins & Perdue, Brandon, Fielder, Collins & Mott, LLP Mott, LLP Mott, LLP Attn: Laura J. Monroe Attn: Mollie Lerew Attn: Owen M. Sonik P.O. Box 817 P.O. Box 8188 Attn: Melissa E. Valdez Lubbock, TX 79408 Wichita Falls, TX 76307 1235 N Loop W, Ste 600 Houston, TX 77008 [email protected] [email protected] [email protected] Porter Hedges LLP Potter County Tax Office Proskauer Rose LLP Attn: Joshua W. Wolfshohl Attn: D’Layne Carter Attn: Brooke H. Blackwell Attn: Aaron J. Power c/o Perdue, Brandon, Fielder, Collins 70 West Madison, Ste 3800 1000 Main St, 36th Fl and Mott, LLP Chicago, IL 60602 Houston, TX 77002 P.O. Box 9132 Amarillo, TX 79105 [email protected] [email protected] [email protected] Proskauer Rose LLP Ritter Spencer LLC Sagal, Filbert, Quasney & Betten, P.A. Attn: David M. Hillman Attn: David D. Ritter Attn: Kimberly Manuelides Attn: Lucy F. Kweskin 15455 Dallas Pkwy, Ste 600 Attn: Alan Betten 11 Times Square Addison, TX 75001 600 Washington Ave, Ste 300 New York, NY 10036 Towson, MD 21204 [email protected] [email protected] [email protected] Sagal, Filbert, Quasney & Betten, P.A. Spencer Fane LLP Streusand, Landon, Ozburn & Lemmon, Attn: Kimberly Manuelides Attn: Jacob Sparks LLP Attn: Alan Betten 5700 Granite Parkway, Ste 650 Attn: Sabrina L. Streusand 600 Washington Ave, Ste 300 Plano, TX 75024 1801 S MoPac Expy, Ste 320 Towson, MD 21204 Austin, TX 78746 [email protected] [email protected] [email protected] Sun Life The Internal Revenue Service The Internal Revenue Service Attn: Usman Bajwa, Managing Director 2970 Market St Centralized Insolvency Operations Sun Life Capital Management Mail Stop 5-Q30-133 P.O. Box 7346 One York St, Ste 3200 Philadelphia, PA 19101-7346 Philadelphia, PA 19101-7346 Toronto, ON M5J 0B6 Canada [email protected] the US Attorney’s Office for the The US Dept of Health Tiaa Commercial Finance, Inc Southern District of Texas & Human Services 10 Waterview Blvd Attn: Ryan K Patrick 200 Independence Ave SW Parsippany, NJ 07054 Attn: Richard A Kincheloe Washington, DC 20201 1000 Louisiana Ste 2300 Houston, TX 77002 [email protected] Case 20-33918 Document 150 Filed in TXSB on 08/25/20 Page 18 of 18 Turner Law APC Wells & Cuellar, P.C. Wolfe Law, LLC Attn: John M. Turner Attn: James E. Cuellar Attn: Eliyahu E. Wolfe 550 W C St, Ste 1160 440 Louisiana, Ste 718 1201 W Peachtree St NE, Ste 2300 San Diego, CA 92101 Houston, TX 77002 Atlanta, GA 30309
[email protected] [email protected] [email protected]
Page 2 Case 20-33918 Document 150-1 Filed in TXSB on 08/25/20 Page 1 of 79
1 POLI, MOON & ZANE, PLLC Michael N. Poli, #006431 2 [email protected] Lawrence R. Moon, #017000 3 2999 North 44th Street, Suite 325 Phoenix, Arizona 85018 4 BURG SIMPSON ELDREDGE 5 HERSH & JARDINE Michael Burg, #031437 6 [email protected] David TeSelle, # 032057 7 [email protected] 40 Inverness Drive East 8 Englewood, Colorado 80122 [email protected] de los 9 Attorneys for Plaintiff 10
11 ARIZONA SUPERIOR COURT 12 MARICOPA COUNTY 13 14 JOSEPH MARTIN GASTELUM, father 15 of Zion Gastelum, individually and for and on behalf of STATUTORY 16 BENEFICIARY VERONICA RENEE Case No. CV 2018-011975 GASTELUM, mother of Zion Gastelum, (Consolidated with Case No. CV2019- 17 and on behalf of their deceased son, Zion 015618) Gastelum, 18 Plaintiffs, FIRST AMENDED COMPLAINT 19 vs. 20 (Assigned to Hon. Sherry Stephens) KOOL SMILES, P.C. a foreign 21 corporation; KOOL SMILES HOLDING CORPORATION, a foreign corporation; 22 KS AZ-2, P.C. a domestic professional corporation; FFL PARTNERS, LLC, a 23 foreign corporation; FRIEDMAN FLEISCHER & LOWE CAPITAL 24 PARTNERS II, L.P.; BENEVIS, LLC, a foreign entity; BENEVIS HOLDING 25 CORP; a foreign entity; DALE MAYFIELD, DMD and JANE DOE 26 MAYFIELD, husband and wife; TU TRAN, DDS and JANE DOE TRAN, 27 husband and wife; PAUL WALKER, DDS, and JANE DOE WALKER, 28 husband and wife; DAVID VIETH, DDS,
Case 20-33918 Document 150-1 Filed in TXSB on 08/25/20 Page 2 of 79
1 and JANE DOE VEITH, husband and wife; STEPHEN MONTOYA, DDS and 2 JANE DOE MONTOYA, husband and wife; 3 AARON ROBERTS, DMD and JANE DOE ROBERTS, husband and wife; 4 DESERT STATE DENTAL ANESTHESIA, LLC, a domestic 5 company; MARCOS A. CERVANTES, DDS and JANE DOE CERVANTES, 6 husband and wife; LUCIA ROJAS and JOHN DOE ROJAS, wife and husband; 7 MARC AUERBACH, DDS and JANE DOE AUERBACH, husband and wife; 8 CHERYL LYNN WEBB and JOHN DOE WEBB, wife and husband; FFL DOES 1- 9 50; FFL DOE COMPANIES 1-50; BENEVIS DOES 1-50; 10 BENEVIS DOE COMPANIES 1-50; KOOL SMILES DOE COMPANIES 11 1-50; KOOL SMILES DOES 1-50; ABC COMPANIES 1-50; 12 Defendants. 13 14 15 16 INTRODUCTION AND GENERAL FACTUAL OVERVIEW 17 Plaintiff Joseph Gastelum (“Joseph”) (for ease of reference, the first reference to a 18 defined term will be emphasized with bold type), individually and on behalf of Statutory 19 Beneficiary Veronica Gastelum (“Veronica”), for his First Amended Complaint against 20 the Defendants, hereby alleges and states as follows: 21 1. On December 20, 2017, just one week before Christmas, two-year-old Zion 22 Gastelum (“Zion”) died as a result of injuries he sustained while being treated at a Kool 23 Smiles Dental Clinic in Yuma, Arizona on December 16, 2017. 24 2. Upon information and belief, the dental clinic in question was owned and 25 operated by one or more of the Kool Smiles Defendants, as defined below. 26 3. In Zion’s case, after evaluating him on only two prior occasions (February 7, 27 2017 and October 2, 2017), Kool Smiles told Zion’s parents, Veronica and Joseph, that 28
2
Case 20-33918 Document 150-1 Filed in TXSB on 08/25/20 Page 3 of 79
1 Zion needed pulpotomies (baby root canals) and crowns on three of his baby teeth, and 2 these procedures would require the use of general anesthesia. 3 4. Kool Smiles made this determination and recommendation without: 4 (a) a truly informed consent from the parents; 5 (b) any discussion of available, less-invasive (and much less expensive) 6 alternate treatment methods of lesser risk that were the standard of care at the time; 7 (c) contemporaneous X-rays to confirm whether the invasive procedures 8 recommended by Kool Smiles were even necessary (while X-rays were purportedly 9 taken of Zion in February, approximately ten months before the invasive treatment 10 that resulted in his death, those X-rays did not support such invasive treatment, and 11 no contemporaneous X-rays were taken in the Fall of 2017 to justify the need for 12 the invasive – and expensive – treatment plan of Kool Smiles); and 13 (d) documentation to show that the invasive approach adopted by Kool 14 Smiles, requiring the use of general anesthesia on a two-year-old child, would 15 provide a better outcome over available, less expensive, and less invasive 16 approaches which were then the current standard of care in the pediatric dental field. 17 5. Even though the invasive procedures recommended by Kool Smiles were 18 unnecessary and lacked a proper informed consent, Kool Smiles placed Zion under general 19 anesthesia (rendering him unconscious and unable to breathe on his own) and performed 20 procedures on nine of his baby teeth, which included baby root canals and crowns on six 21 teeth and an enameloplasty procedure (a cosmetic dental procedure – also called tooth 22 recontouring – where the size and/or shape of an existing tooth’s enamel surface is 23 reshaped or recontoured for improved appearance) on three other teeth. 24 6. Once these invasive procedures were complete, Zion was extubated and 25 taken to a separate room for recovery from general anesthesia. Despite the fact that Zion 26 was not awake and had not regained the ability to breathe on his own, the Kool Smiles 27 dentists chose to leave Zion alone in order to begin procedures on the next child-patient(s). 28
3
Case 20-33918 Document 150-1 Filed in TXSB on 08/25/20 Page 4 of 79
1 Based on records from the Arizona State Board of Dental Examiners (the “Arizona Dental 2 Board”), the dentist-anesthesiologist was intubating another child-patient within as little 3 as two minutes after Zion’s extubation. 4 7. Also, based on records from the Arizona Dental Board, when Zion (then 5 unconscious and unable to breath on his own) was left alone in the recovery room, he was 6 given supplemental oxygen from an oxygen tank, but “the oxygen tank was empty or not 7 operating properly.” 8 8. Two-year-old Zion was left alone in the recovery room for 5-10 minutes, or 9 possibly longer. When Veronica, Zion’s mother, was later taken back to the recovery room 10 by a member of the Kool Smiles staff, Veronica observed that Zion had an oxygen mask 11 on his face and his toe was connected to a monitor. The monitor in question was a pulse 12 oximeter device, which is used to monitor the patient’s pulse and oxygen saturations. 13 Veronica heard the sound of the monitor’s alarm as she and the staff member entered the 14 room, which was then immediately silenced by the staff member. Shortly thereafter, the 15 alarm went off an additional three to four times – each time silenced by the Kool Smiles 16 staff member – until the staff member finally removed the monitor from Zion and stated 17 that the device does not work on children. 18 9. It was then that Veronica first noticed Zion’s chest was not moving. Despite 19 Veronica’s lack of medical training, she grabbed her son’s wrist to check his pulse and 20 found none. At that point, the Kool Smiles staff member finally realized something was 21 amiss and the Kool Smiles staff member left to get assistance. Kool Smiles dentists then 22 entered the room, and Veronica was removed and stood directly outside the room where 23 she waited and prayed. In the 911 call that Kool Smiles later made to Emergency Medical 24 Services (“EMS”), the caller from Kool Smiles admitted that Zion was unresponsive and 25 not breathing, and that this condition occurred after “[w]e did treatment under general 26 anesthesia.” Zion was later diagnosed with severe hypoxic ischemic encephalopathy (brain 27 damage caused by a lack of oxygen). Two-year-old Zion never regained consciousness 28
4
Case 20-33918 Document 150-1 Filed in TXSB on 08/25/20 Page 5 of 79
1 and died at Phoenix Children’s Hospital four days later. 2 10. According to the statements of a third-party witness (Ilene Evangelista), who 3 was interviewed by television reporters shortly after the death of Zion, Ms. Evangelista 4 was at Kool Smiles waiting for her child to be treated when the EMS personnel removed 5 Zion from the facility. Ms. Evaneglista stated it was “business as usual” for Kool Smiles, 6 and they just kept processing other child-patients. 7 11. It is also noteworthy that the same Kool Smiles clinic (the Yuma clinic) was 8 implicated in the post-treatment infection death of another child-patient, a four-year-old 9 girl, in February of 2016. A wrongful death lawsuit is presently pending against Kool 10 Smiles related to that death. 11 12. Kool Smiles negligently caused Zion’s death in a variety of ways, including 12 but not limited to: failure to properly monitor Zion; failure to ensure that his airway 13 remained open; failure to obtain any pre-, intra-, and/or post-op ECGs to monitor his 14 condition; and failure to use the proper, available equipment to ensure that Zion was able 15 to breathe. Further, when Zion’s condition worsened, Kool Smiles failed to follow “PALS” 16 protocol (Pediatric Advanced Life Support). The multiple failures of Kool Smiles dentists 17 and staff, as detailed more fully herein, caused the untimely and tragic death of two-year- 18 old Zion. 19 13. When the Arizona Dental Board examined the events that led to Zion’s death, 20 its members concluded that the conduct of the dentists handling Zion’s case – their use of 21 anesthesia, the lack of contemporaneous X-rays to indicate that the invasive procedures 22 performed on Zion were even necessary, conduct of the staff, and the equipment used by 23 Kool Smiles in Zion’s recovery and subsequent resuscitation, and the Kool Smiles 24 environment – fell below the standard of care. 25 14. At the most basic level, this case presents as the tragic death of a young child 26 resulting from gross medical negligence. But sadly, this tragedy is not an isolated incident. 27 What lies beneath this tragedy is something much more egregious; namely, a non-medical 28
5
Case 20-33918 Document 150-1 Filed in TXSB on 08/25/20 Page 6 of 79
1 corporate ownership group that implemented and continues to execute a business plan 2 aimed at maximizing profits for its owners, employees, agents, and contractors at the 3 expense of the health, safety, and welfare of the financially vulnerable children they are 4 treating. 5 15. Kool Smiles is a national dental chain focusing on the dental treatment of 6 children in lower-income families, with the costs of such treatment to be paid by a variety 7 of government-funded state children’s health insurance programs (“SCHIP Programs”). 8 The Kool Smiles business model targets children in lower-income families throughout the 9 country, because those children are dependent on government-funded SCHIP Programs for 10 their dental care. Kool Smiles then overtreats, underperforms, and overbills such 11 government-funded SCHIP Programs for the dental services it renders. See generally 12 https://www.cbs.com/shows/whistleblower/video/EOPlIRuX7NC1nEiKKM8F3OZFrnWH 13 RWH_/whistleblower-blow-the-whistle-change-the-world/. 14 16. A key part of the Kool Smiles business model is to maximize the productivity 15 of each clinic by scheduling the child-patients back-to-back, resulting in an insufficient 16 amount of time between each child-patient for cleaning of the stations, monitoring of 17 children who are recovering from various forms of anesthesia, and even to allow time for 18 staff members to use the bathroom facilities. 19 17. Kool Smiles has a documented history of recommending unnecessary crowns 20 and root canal treatments in small children, instead of less expensive, safer, and more 21 appropriate methods to treat cavities in baby teeth. Upon information and belief, Kool 22 Smiles has ignored such less expensive and less dangerous treatment options for its own 23 financial gain. 24 18. At almost the same time when the Kool Smiles clinic in Yuma was engaging 25 in the dental treatments that led to Zion’s death, Kool Smiles and its affiliates were settling 26 a False Claims Act lawsuit pending against them by the federal government (the “False 27 Claims Act Lawsuit”), under which Kool Smiles paid $23,900,000. 28
6
Case 20-33918 Document 150-1 Filed in TXSB on 08/25/20 Page 7 of 79
1 19. A key allegation in the False Claims Act Lawsuit was that Kool Smiles 2 routinely performed (and then billed for) unnecessary and potentially dangerous dental 3 procedures on small children, such as pulpotomies (baby root canals) and crowns. 4 20. The January 10, 2018 press release issued by the U.S. Department of Justice 5 regarding the settlement of the False Claims Act Lawsuit noted that the Department of 6 Justice had alleged that Kool Smiles “knowingly submitted false claims to state Medicaid 7 programs for medically unnecessary pulpotomies (baby root canals), tooth extractions, 8 and stainless-steel crowns…” The press release further quoted the Acting Assistant 9 Attorney General of the Department of Justice’s Civil Division as stating that the 10 Department will take action when healthcare providers “put vulnerable patients at risk 11 by performing medically unnecessary procedures to achieve financial goals.” 12 Similarly, the press release quotes one United States Attorney as saying, “The allegations 13 in these cases are particularly egregious because they involved medically unnecessary 14 dental services performed on children, . . . Exploiting needy children for financial gain 15 is inexcusable.” See Justice Department press release, Exhibit A hereto (emphasis added). 16 21. In Zion’s case, and in general, there were far less expensive and safer 17 methods to treat cavities in baby teeth. In this regard, Zion’s case provides a perfect case 18 study for this type of misconduct and its consequences. The standard of care at the time of 19 Zion’s death was to treat baby tooth issues like Zion’s with ADA-recommended silver 20 diamine fluoride, a non-invasive approach that costs approximately $25 per tooth. Silver 21 diamine fluoride prevents the need for drilling, filling, and over-billing, and eliminates the 22 need for anesthesia. However, silver diamine fluoride was never discussed or offered to the 23 Gastelums. Instead, the much more invasive and costly procedures of baby root canals and 24 crowns were recommended and performed (which required the use of general anesthesia), 25 thereby increasing the amount of money that Kool Smiles could bill to the government and 26 increasing Kool Smiles’ profits. Regrettably, Zion’s death resulted from the type of 27 misconduct in which Kool Smiles has engaged, and for which it has been cited, for almost 28
7
Case 20-33918 Document 150-1 Filed in TXSB on 08/25/20 Page 8 of 79
1 a decade. 2 22. On January 10, 2018, when the U.S. Justice Department issued its press 3 release regarding the $23,900,000 settlement of the False Claims Act Lawsuit against Kool 4 Smiles, that press release stated:
5 Between January 2009 and December 2011 [the time period of the subject 2012 False Claims Act lawsuit] . . . Kool Smiles located throughout 17 states 6 knowingly submitted false claims to state Medicaid programs for medically unnecessary pulpotomies (baby root canals), tooth extractions, stainless 7 steel crowns, in addition to seeking payment for pulpotomies that were never performed. 8 9 See Exhibit A hereto, copy of the Justice Department press release (italics added). 23. Kool Smiles placed its artificially inflated profits (from billing government- 10 11 funded SCHIP Programs for excessive and unnecessary procedures) ahead of compliance 12 with the standards of care required to protect the safety of child-patients in the dental chair. 13 Despite the fact that Kool Smiles was recently forced to pay $23,900,000, Kool Smiles and 14 its corporate overseers continue to choose financial gain over the safety of child-patients. 15 Zion’s tragic and untimely death as a direct result of this same misconduct demonstrates 16 that Kool Smiles continues to engage in the same wrongful and fraudulent conduct despite 17 its settlement of the False Claims Act Lawsuit. 18 24. The records of the Arizona Dental Board contain numerous references to the 19 systemic problems at Kool Smiles based on its business model. As one example, the June 20 1, 2018 minutes of the Arizona Dental Board refer to the role that the Kool Smiles 21 “environment” played in Zion’s death, including the allegation that it was “a high pressure, 22 high volume work environment.” 23 25. For the Arizona clinics of Kool Smiles, including the Yuma clinic where 24 Zion was treated, the government-funded SCHIP Program targeted by Kool Smiles through 25 its business model was the Arizona Health Care Cost Containment System (“AHCCCS”) 26 and its “KidsCare” program. However, Zion and his family were entirely foreseeable 27 targets and victims of the fraudulent business model described in this Complaint. 28
8
Case 20-33918 Document 150-1 Filed in TXSB on 08/25/20 Page 9 of 79
1 26. Joseph, on behalf of Veronica (the “Gastelums”), brings this action not only 2 to hold Kool Smiles and its affiliates accountable for the wrongful actions that caused 3 Zion’s death, but also to prevent this type of senseless tragedy from ever happening to 4 another family because of Kool Smiles’ abhorrent and chronic misconduct. No more 5 children should die in order to prevent such reckless and greedy corruption. 6 PLAINTIFFS AND THEIR STANDING 7 27. All of the foregoing allegations are hereby incorporated by reference. 8 28. Plaintiff Joseph Gastelum is a resident of Yuma County, Arizona. 9 29. Statutory Beneficiary Veronica Renee Gastelum is a resident of Yuma 10 County, Arizona. 11 30. Plaintiff Joseph Gastelum and Statutory Beneficiary Veronica Gastelum are 12 the biological parents of Zion Gastelum, who died on December 20, 2017. 13 31. Plaintiff Joseph Gastelum has standing to file this lawsuit pursuant to the 14 Arizona wrongful death statute, A.R.S. §§ 12-611 et seq. 15 THE DEFENDANTS 16 32. All of the foregoing allegations are hereby incorporated by reference. 17 33. Defendant Kool Smiles, P.C. (“Kool Smiles”) is believed to be owned by 18 and/or an affiliate of one or more of the Benevis Defendants (see below for a definition of 19 20 the Benevis Defendants). 21 34. Defendant Kool Smiles Holding Corp. (“Kool Smiles Holding”) is a 22 Delaware corporation and is, upon information and belief, owned by and/or an affiliate of 23 one or more of the Benevis Defendants. 24 35. Defendant Kool Smiles Holding is headquartered in Atlanta, GA, and is, 25 upon information and belief, a holding corporation that owns, controls, and/or operates 26 various Kool Smiles clinics in conjunction with Kool Smiles. 27 36. Defendant KS AZ-2, P.C. (“KS AZ”) is an Arizona professional corporation, 28 whose domestic address is 2990 South 6th Avenue, Tucson, Arizona, 85364, with a
9
Case 20-33918 Document 150-1 Filed in TXSB on 08/25/20 Page 10 of 79
1 secondary address at 1090 Northchase Parkway SE, Marietta, Georgia, 30067 (the same 2 address as Benevis). Collectively, Kool Smiles, Kool Smiles Holding, and KS AZ will be 3 referred to as the “Kool Smiles Defendants.” 4 37. The National Provider Identifier (1588751184) lists KS AZ-2, P.C. as the 5 legal name for doing business as Kool Smiles and lists the address as 2383 West 24th Street, 6 Yuma, AZ, 85364. This is the physical address of the Kool Smiles – Yuma Clinic. 7 38. Defendant FFL Partners, LLC (“FFL”) (formerly known as Friedman 8 Fleischer & Lowe GP, LLC) is a limited partnership organized under Delaware law, whose 9 principal place of business is One Maritime Plaza, 22nd Floor, San Francisco, CA, 94111. 10 According to historical data on the internet, Defendant FFL is a private equity firm that 11 concentrates on investing in healthcare services (among other industries) and, since its 12 1997 founding, has raised $4.6 Billion of investor capital. 13 39. Defendant Friedman Fleischer & Lowe Capital Partners II, L.P. (“FFL 14 Capital Partners”) is a limited partnership organized under Delaware law, whose 15 principal place of business is One Maritime Plaza, 22nd Floor, San Francisco, CA, 94111. 16 Upon information and belief, Defendant FFL is the general partner of Defendant FFL 17 Capital Partners. Defendants FFL and FFL Capital Partners will be referred to as the “FFL 18 Defendants.” 19 20 40. Defendant Benevis, LLC (“Benevis LLC”) is a Delaware limited liability 21 company with a principal address of 1090 Northchase Parkway SE, Suite 150, Marietta, 22 Georgia, 30067. It is believed that Defendant Benevis LLC is an affiliate of, and/or is 23 wholly or partially owned, managed and/or controlled by, Defendants FFL and/or FFL 24 Capital Partners. 25 41. Defendant Benevis Holding Corp. (“Benevis Holding”) is a Delaware 26 corporation, whose principal address is 1090 Northchase Parkway SE, Suite 150, Marietta, 27 Georgia, 30067. It is believed that Defendant Benevis Holding is an affiliate of, and/or is 28 wholly or partially owned, managed and/or controlled by, Defendants FFL and/or FFL
10
Case 20-33918 Document 150-1 Filed in TXSB on 08/25/20 Page 11 of 79
1 Capital Partners. 2 42. Defendants Benevis LLC and Benevis Holding will be collectively referred 3 to as the “Benevis Defendants.” 4 43. Defendant FFL’s website provides the following description of its affiliation 5 with Benevis: “Benevis provides various non-clinical services to group dental practices, 6 including providing dental facilities, support staff, and other business services.” 7 44. The FFL website also references FFL’s affiliation with Kool Smiles, stating: 8 “Kool Smiles is a nationally-branded provider of dental care focused primarily on children 9 enrolled in Medicaid and State Children's Health Insurance Programs. The limited access 10 to care for children on Medicaid/SCHIP plans provides an attractive growth 11 opportunity for Kool Smiles as it continues to expand offices with a mission to provide 12 quality care to this underserved population . . . . Families seeking affordable options for 13 routine dental care provide an attractive market space for growth.” [Emphasis added.] 14 45. Defendants Dale G. Mayfield, DMD (“Mayfield”) and Jane Doe Mayfield 15 are believed to be residents of the State of Georgia. At all times relevant to this Complaint, 16 Defendant Mayfield was acting on behalf of his marital community. 17 46. Defendant Mayfield is believed to be the Chief Dental Officer of Kool Smiles 18 and to have an ownership and/or management position in the Kool Smiles Defendants and 19 20 the Benevis Defendants. Defendant Mayfield is also the President of Defendant KS AZ. 21 Defendant Mayfield is an Arizona-licensed dentist. 22 47. Defendants Tu Tran, DDS (“Tran”) and Jane Doe Tran are believed to be 23 residents of the State of Georgia. At all times relevant to this Complaint, Defendant Tran 24 was acting on behalf of his marital community. 25 48. Defendant Tran is believed to have an ownership and/or management 26 position in the Kool Smiles Defendants and the Benevis Defendants. Defendant Tran is an 27 Arizona-licensed dentist. 28 49. Defendants Paul Walker, DDS (“Walker”) and Jane Doe Walker are
11
Case 20-33918 Document 150-1 Filed in TXSB on 08/25/20 Page 12 of 79
1 believed to be residents of the State of Georgia. At all times relevant to this Complaint, 2 Defendant Walker was acting on behalf of his marital community. 3 50. Defendant Walker is believed to have an ownership and/or management 4 position in the Kool Smiles Defendants and the Benevis Defendants. 5 51. Defendants David Vieth, DDS (“Vieth”) and Jane Doe Vieth are believed to 6 be residents of the State of Georgia. At all times relevant to this Complaint, Defendant 7 Vieth was acting on behalf of his marital community. 8 52. Defendant Vieth is believed to have an ownership and/or management 9 position in the Kool Smiles Defendants and the Benevis Defendants. 10 53. Defendants Stephen Montoya, DDS (“Montoya”) and Jane Doe Montoya 11 are believed to be residents of Maricopa County, Arizona. At all times relevant to this 12 Complaint, Defendant Montoya was acting on behalf of his marital community. 13 54. Defendant Montoya performed the December 16, 2017 dental procedures on 14 Zion that led to his death. 15 55. Defendants Aaron Roberts, DMD (“Roberts”) and Jane Doe Roberts are 16 believed to be residents of Maricopa County, Arizona. At all times relevant to this 17 Complaint, Defendant Roberts was acting on behalf of his marital community. 18 56. Defendant Roberts was in charge of the general anesthesia administered to 19 20 Zion during the December 16, 2017 dental procedures, which led to Zion’s death. 21 57. Defendant Desert State Dental Anesthesia, LLC (“Desert State”) is an 22 Arizona Limited Liability Company, whose address is 625 W. Southern Avenue, Mesa, 23 Arizona, 85210. Defendant Roberts is an employee and/or agent of Defendant Desert 24 State. 25 58. Defendants Marco Cervantes, DDS (“Cervantes”) and Jane Doe Cervantes 26 are believed to be residents of Maricopa County, Arizona. At all times relevant to this 27 Complaint, Defendant Cervantes was acting on behalf of his marital community. 28 59. Defendant Cervantes treated Zion in October of 2017 at the Kool Smiles
12
Case 20-33918 Document 150-1 Filed in TXSB on 08/25/20 Page 13 of 79
1 clinic in Yuma, and he, without contemporaneous X-rays, formulated the invasive and 2 dangerous treatment plan that was later implemented on Zion in December 2017. 3 60. Defendants Lucia Rojas (“Rojas”) and John Doe Rojas are believed to be 4 residents of Yuma County, Arizona. At all times relevant to this Complaint, Defendant 5 Rojas was acting on behalf of her marital community. 6 61. Defendant Rojas functioned as the office manager of the Kool Smiles clinic 7 in Yuma and she oversaw the inadequate informed consent process obtained from Veronica 8 for the invasive and dangerous treatment rendered to Zion in December of 2017. 9 62. Defendants Marc Auerbach, DDS (“Auerbach”) and Jane Doe Auerbach are 10 believed to be residents of Pima County, Arizona. At all times relevant to this Complaint, 11 Defendant Auerbach was acting on behalf of his marital community. 12 63. In a December 5, 2017 Procedure Authorization Request form submitted to 13 AHCCCS, Defendant Auerbach used his name and professional credentials to secure 14 authorization for the dangerous and invasive treatment to be rendered to Zion on December 15 16, 2017. As noted above, this was submitted without contemporaneous X-rays. 16 64. Defendants Cheryl Webb (“Webb”) and John Doe Webb are believed to be 17 residents of Yuma County, Arizona. At all times relevant to this Complaint, Defendant 18 Webb was acting on behalf of her marital community. 19 20 65. Defendant Webb is believed to be the Kool Smiles staff member who left 21 Zion alone in the “recovery” room, and who took Zion’s mother, Veronica, back to the 22 “recovery” room where Zion had been left alone while still under the effects of general 23 anesthesia after the December 16, 2017 dental procedures. Defendant Webb is believed to 24 be the staff member who set the alarms on the pulse oximeter, repeatedly continued to 25 silence the pulse oximeter alarm, and she is the Kool Smiles Defendant’ staff member who 26 eventually removed the monitor device from Zion’s toe. 27 66. The FFL Does 1-50 are partners, employees, or agents of the FFL Defendants 28 whose tortious acts caused or contributed to the underlying claims in this matter but whose
13
Case 20-33918 Document 150-1 Filed in TXSB on 08/25/20 Page 14 of 79
1 identities are not yet known to the Plaintiff. Plaintiff will move to amend the Complaint to 2 add these individuals as named defendants when their identities become known [or are 3 determined]. 4 67. The FFL Doe Companies 1-50 are yet to be identified entities associated with 5 the FFL Defendants whose tortious acts caused or contributed to the underlying claims in 6 this matter but whose identities are not yet known to the Plaintiff. Plaintiff will move to 7 amend the Complaint to add these entities as named defendants when their identities 8 become known [or are determined]. These entities may be either directly or vicariously 9 liable for the underlying claims. 10 68. The Benevis Does 1-50 are partners, employees, or agents of the Benevis 11 Defendants whose tortious acts caused or contributed to the underlying claims in this matter 12 but whose identities are not yet known to the Plaintiff. Plaintiff will move to amend the 13 Complaint to add these individuals as named defendants when their identities become 14 known [or are determined]. 15 69. The Benevis Doe Companies 1-50 are yet to be identified entities associated 16 with the Benevis Defendants whose tortious acts caused or contributed to the underlying 17 claims in this matter but whose identities are not yet known to the Plaintiff. Plaintiff will 18 move to amend the Complaint to add these entities as named defendants when their 19 20 identities become known [or are determined]. These entities may be either directly or 21 vicariously liable for the underlying claims. 22 70. The Kool Smiles Doe Companies 1-50 are yet to be identified entities 23 associated with the Kool Smiles Defendants whose tortious acts caused or contributed to 24 the underlying claims in this matter but whose identities are not yet known to the Plaintiff. 25 Plaintiff will move to amend the Complaint to add these entities as named defendants when 26 their identities become known [or are determined]. These entities may be either directly 27 or vicariously liable for the underlying claims. 28 71. The Kool Smiles Does 1-50 are partners, employees, or agents of the Kool
14
Case 20-33918 Document 150-1 Filed in TXSB on 08/25/20 Page 15 of 79
1 Smiles Defendants whose tortious acts caused or contributed to the underlying claims in 2 this matter but whose identities are not yet known to the Plaintiff. Plaintiff will move to 3 amend the Complaint to add these individuals as named defendants when their identities 4 become known [or are determined]. 5 72. The ABC Companies 1-50 are yet to be identified entities associated with the 6 named defendants whose tortious acts caused or contributed to the underlying claims in 7 this matter but whose identities are not yet known to the Plaintiff. Plaintiff will move to 8 amend the Complaint to add these entities as named defendants when their identities 9 become known [or are determined]. These entities may be either directly or vicariously 10 liable for the underlying claims. 11 SUBJECT MATTER JURISDICTION AND VENUE 12 73. All of the foregoing allegations are hereby incorporated by reference. 13 74. This Court has subject matter jurisdiction over this action and the amount of 14 damages sought by the Plaintiff exceeds the minimum jurisdictional amount established 15 for filing in this Court. 16 75. Pursuant to A.R.S. § 12-401(7), “[w]hen there are several defendants 17 residing in different counties, action may be brought in the county in which any of the 18 defendants reside.” 19 20 76. Upon information and belief, Defendant Roberts resides in Maricopa County, 21 specifically, at 121 West Orchid Lane, Phoenix, Arizona, 85021. 22 77. Upon information and belief, Defendant Montoya resides in Maricopa 23 County, specifically at 2216 East Plum Court, Gilbert, Arizona, 85298. 24 78. Based on the foregoing, venue is proper in this Court. 25 PERSONAL JURISDICTION 26 79. All of the foregoing allegations are hereby incorporated by reference. 27 80. With respect to (a) Defendants Kool Smiles PC, Kool Smiles Holding, 28 Mayfield, Tran, Walker, and Vieth (the “Out-of-State Kool Smiles Defendants”), (b) the
15
Case 20-33918 Document 150-1 Filed in TXSB on 08/25/20 Page 16 of 79
1 Benevis Defendants, and (c) Defendants FFL and FFL Capital Partners (collectively, the 2 “Out-of-State Defendants”), the following allegations are made with respect to this 3 Court’s assertion of personal jurisdiction over those Defendants: 4 (a) As supported by the detailed factual allegations herein, the Out-of- 5 State Defendants purposefully availed themselves of the opportunity to expand the 6 Kool Smiles dental chain into the State of Arizona; 7 (b) Based on the factual allegations herein, it was all too foreseeable that 8 a tragic injury and death such as occurred to Zion Gastelum could indeed happen in 9 Arizona, given the business model of the Kool Smiles dental clinics; 10 (c) The events giving rise to this case, namely, the inappropriate 11 treatment provided to Zion Gastelum, and his resulting death, were “related” to and 12 arose out of the fraudulent business model alleged herein, and the expansion of that 13 fraudulent business model in to the State of Arizona; and 14 (d) Based on the facts of this matter, and the detailed allegations herein, 15 it is both fair and reasonable for the Out-of-State Defendants to be asked to defend 16 their actions, and their business model, in the courts of the State of Arizona, given 17 that the tragic death of Zion Gastelum occurred in Arizona, and arose out of the 18 business model of the various Defendants, and the use of that business model in the 19 State of Arizona after the Kool Smiles chain was expanded into this State. 20 FACTUAL ALLEGATIONS 21 Factual Allegations Regarding the Management Defendants 22 81. All of the foregoing allegations are hereby incorporated by reference. 23 82. On information and belief, the FFL Defendants invested in the Benevis 24 Defendants (then known as NCDR) in 2004, to facilitate the expansion of the Kool Smiles 25 clinics to numerous states around the country. 26 83. Defendant Tran is believed to be a founding dentist and has an ownership 27 position in the Kool Smiles Defendants and the Benevis Defendants. 28
16
Case 20-33918 Document 150-1 Filed in TXSB on 08/25/20 Page 17 of 79
1 84. Defendant Vieth is believed to be a founding dentist and has an ownership 2 position in the Kool Smiles Defendants and the Benevis Defendants. 3 85. Defendant Walker is believed to be a founding dentist and has an ownership 4 position in the Kool Smiles Defendants and the Benevis Defendants. 5 86. Defendant Mayfield is believed to have an ownership position in the Kool 6 Smiles Defendants and the Benevis Defendants. 7 87. Defendants Mayfield, Tran, and Vieth function and act as the "Presidents" of 8 approximately 130 dental practices controlled by the Benevis Defendants, the FFL 9 Defendants, and Kool Smiles Defendants. 10 88. Defendant Tran is believed to be the President of 54 Kool Smiles clinics in 11 the following cities and states: Atlanta, GA; Brockton, MA; Brownsville, TX; Bryan, TX; 12 Cambridge, MA; Chelsea, MA; Christianburg, VA; Colonial Heights, VA; Columbus, GA; 13 Dalton, GA; Danville, VA; Decatur, GA; Del Rio, TX; Eagle Pass, TX; Evansville, IN; 14 Fall River, MA; Falls Church, VA; Forest Park, GA; Fort Wayne, IN; Fredericksburg, VA; 15 Hampton, VA; Hampton, VA; Highland Bra, IN; Holyoke, MA; Holyoke, MA; Houston, 16 TX; Killeen, TX; Laredo, TX; Laredo, TX; Leon Valley, TX; Lilburn, GA; Louisville, KY; 17 Louisville, KY; Macon, GA; McAllen, TX; Mission, TX; New Bedford, MA; Norfolk, 18 VA; Norfolk, VA; Portsmouth, VA; Richmond, VA; Roxbury, MA; San Antonio, TX; 19 20 Smyrna, GA; Stone Mountain, GA; Terra Haute, IN; Texarkana, TX; Valdosta, GA; 21 Virginia Beach, VA; Waco, TX; Weslaco, TX; Winchester, VA; and Woodbridge, VA. 22 89. Defendant Mayfield is believed to be President of 43 clinics in the following 23 cities and states: Abilene, TX; Amarillo, TX; Biloxi, MS; Corpus Christie, TX; Edinburg, 24 TX; El Paso, TX; Everett, W A; Hattiesburg, MS; Houston, TX; Jackson, MS; Killeen, 25 TX; Las Cruces, NM; Longview, TX; Lubbock, TX; Lufkin, TX; Midland, TX; Midwest 26 City, OK; Odessa, TX; Phoenix, AZ; San Angelo, TX; Sherman, TX; Spokane, WA; 27 Temple, TX; Texas City, TX; Tucson, AZ; Tupelo, MS; Tyler, TX; Vancouver, WA; 28 Waco, TX; Wichita Falls, TX; and Yuma, AZ.
17
Case 20-33918 Document 150-1 Filed in TXSB on 08/25/20 Page 18 of 79
1 90. Defendant Vieth is believed to be the President of 30 clinics in the following 2 cities and states: Anderson, SC; Baltimore, MD; Baton Rouge, LA; Brooklyn, MD; 3 Charleston, SC; Columbia, SC; District Heights, MD; East Chicago, IN; Elkhart, IN; Gary, 4 IN; Greensville, SC; Hagerstown, MD; Hartford, CT; Lafayette IN; Lafayette, LA; 5 Metairie, LA; Monroe, LA; New Britain, CT; New Haven, CT; New Orleans, LA; 6 Orangeburg, SC; Rock Hill, SC; Salisbury, MD; Shreveport, LA; and Takoma Park, MD. 7 91. Upon information and belief, Defendant Mayfield is vicariously liable for all 8 of the dentists and health care professionals that work at the various dental clinics he 9 oversees, including the Yuma clinic, and/or he is directly negligent with respect to the 10 hiring at and supervision of those clinics, including the Yuma clinic. 11 92. The address for Defendants Mayfield, Vieth, Tran, and Walker are at the 12 same location and on the same floor as the Benevis Defendants in Marietta, Georgia. 13 93. Upon information and belief, the "Presidents” of the various Kool Smiles 14 clinics, namely, Defendants Mayfield, Vieth, and Tran, are such in name only, and they 15 were placed in these positions by the FFL Defendants, and by the Benevis Defendants, to 16 circumvent state dental practice ownership statutes. 17 94. Upon information and belief, the local Arizona entity, Defendant KS AZ, 18 was set up to circumvent statutory regulations on the number of clinics that one dentist is 19 20 permitted to oversee, and a similar system of local entities was used for all or many of the 21 other Kool Smiles clinics. 22 95. Upon information and belief, all of the Kool Smiles clinics are owned by, or 23 subsidiaries or affiliates of, Defendant Kool Smiles, PC and/or Kool Smiles Holding. Also, 24 upon information and belief, the individual Kool Smiles clinics and related subsidiary 25 entities are threads in a large corporate web spun by the Kool Smiles Defendants, and they 26 are in turn but controlled by the FFL Defendants, and the Benevis Defendants (collectively, 27 the FFL Defendants, the Benevis Defendants, and Defendants Mayfield, Tran, Walker, and 28 Vieth will be referred to as the “FFL Management Team”).
18
Case 20-33918 Document 150-1 Filed in TXSB on 08/25/20 Page 19 of 79
1 96. The various Kool Smiles clinics all use standard forms from the Benevis 2 Defendants, utilizing the Benevis name, and they use standard procedures imposed on 3 those clinics by the Benevis Defendants, with respect to, among other things, scheduling, 4 productivity, and profitability. 5 97. Upon information and belief, the Benevis Defendants are vicariously liable 6 for all of the dentists that work at the various dental clinics that do business under the name 7 Kool Smiles, including the Yuma clinic, and/or they are directly negligent with respect to 8 the hiring at and supervision of those clinics, including the Yuma clinic. 9 Factual Allegations Regarding The Medical Malpractice Defendants 10 98. All of the foregoing allegations are hereby incorporated by reference. 11 99. In 2017, Defendant Montoya was board certified in pediatric dentistry, and 12 he was subject to the Arizona Medical Malpractice Act, A.R.S. §§ 12-561 et seq. 13 100. In 2017, Defendant Montoya held a section 1303 anesthesia license, as 14 identified in A.A.C. R4-11-1303 et seq. 15 101. In 2017, Defendant Montoya held a current PALS (Pediatric Advanced Life 16 Support) certificate. 17 18 102. At all times relevant to this Complaint, Defendant Montoya was an agent 19 and/or employee of the Kool Smiles Defendants. Alternatively, and at a minimum, the Kool 20 Smiles Defendants held Defendant Montoya out as their agent and representative, and 21 Defendant Montoya was reasonably perceived as such by customers of Kool Smiles, 22 including the Gastelums. Further, given the nature of the potentially dangerous medical 23 services being rendered (invasive and potentially dangerous dental procedures, 24 accompanied by general anesthesia, on a two-year-old child in a dental clinic), the duties 25 owed by the Kool Smiles Defendants to Zion and his family must be treated as non- 26 delegable. 27 103. At all times relevant to this Complaint, Defendant Montoya was acting on 28 behalf of the Kool Smiles Defendants.
19
Case 20-33918 Document 150-1 Filed in TXSB on 08/25/20 Page 20 of 79
1 104. Defendant Roberts received his license to practice dentistry in June of 2016. 2 105. In 2017, Defendant Roberts was board certified by the American Dental 3 Board of Anesthesiology and he was subject to the Arizona Medical Malpractice Act, 4 A.R.S. §§ 12-561 et seq. 5 106. In 2017, Defendant Roberts held a section 1301 anesthesia license, as 6 identified in A.A.C. R4-11-1301 et seq. 7 107. In 2017, Defendant Roberts held a mobile section 1301 anesthesia license, 8 as identified in A.A.C. R4-11-1301 et seq. 9 108. In 2017, Defendant Roberts held a current PALS (Pediatric Advanced Life 10 Support) certificate. 11 109. In 2017, Defendant Roberts was a member, owner, employee, or agent of 12 Defendant Desert State. 13 110. At all times relevant to this Complaint, Defendant Roberts was acting on 14 behalf of Defendant Desert State. 15 111. With respect to the capability of the Kool Smiles Yuma clinic to render 16 general anesthesia services to child-patients, and to handle any emergencies that might 17 arise, neither Defendant Roberts nor Defendant Desert State scheduled an on-site 18 evaluation with the Arizona Dental Board at the Kool Smiles Yuma clinic. 19 20 112. Defendant Roberts and/or Defendant Desert State did, however, provide the 21 Arizona Dental Board with an affidavit verifying the fitness of the Kool Smiles 22 Defendants’ Yuma facility for general anesthesia, including that “the equipment and 23 supplies for the provision of anesthesia or deep sedation are in place and in appropriate 24 condition and [the clinic] maintains a staff of supervised personnel capable of handling 25 procedures, complications and emergency incidents,” as outlined in A.A.C. R4-11- 26 1301(D)(5)(a and b). 27 113. Zion’s patient file (produced by the Kool Smiles Defendants) includes an 28 anesthesia form with discharge instructions that expressly reference the role of Defendant
20
Case 20-33918 Document 150-1 Filed in TXSB on 08/25/20 Page 21 of 79
1 Desert State in the treatment rendered to Zion by Defendant Roberts. That form lists ten 2 different doctors who are affiliated with Defendant Desert State – Defendant Roberts being 3 one of the ten – and a checked box next to his name. Also, that form (with a Desert State 4 form number listed on the lower right, “DSDA Disc 7_2013”) is initialed by Defendant 5 Roberts and includes the telephone number for Defendant Desert State that patients are to 6 call if there are any questions for the anesthesiologist. 7 114. That same Desert State form, found in Zion’s patient file, was signed by 8 Veronica, and states, “The doctor will remain with your child throughout the dental 9 appointment to monitor and take care of your child.” [Emphasis added.] 10 115. Similarly, another anesthesia form found in Zion’s patient file titled 11 Anesthesia Agreement and Consent, signed by Veronica, explicitly promised, “Advanced 12 anesthesia equipment required by the state of Arizona will be present and patient’s 13 vital signs will be monitored throughout.” [Emphasis added.] Upon information and 14 belief, the form containing this written promise was a Benevis / Kool Smiles form. 15 116. Upon information and belief, Defendant Desert State is vicariously liable for 16 the work done by Defendant Roberts, including for his treatment of Zion, and/or it was 17 directly negligent with respect to the hiring and/or supervision of Defendant Roberts. 18 117. In 2017, in addition to his role on behalf of Defendant Desert State, 19 20 Defendant Roberts was acting as an agent and/or employee of the Kool Smiles Defendants. 21 Alternatively, and at a minimum, the Kool Smiles Defendants held Defendant Roberts out 22 as their agent and representative, and Defendant Roberts was reasonably perceived as such 23 by customers of Kool Smiles, including the Gastelums. Further, given the nature of the 24 potentially dangerous medical services being rendered (invasive and potentially dangerous 25 dental procedures, accompanied by general anesthesia, on a two-year-old child in a dental 26 clinic), the duties owed by the Kool Smiles Defendants to Zion and his family must be 27 treated as non-delegable. 28 118. In 2017, Defendant Cervantes was licensed by the State of Arizona to
21
Case 20-33918 Document 150-1 Filed in TXSB on 08/25/20 Page 22 of 79
1 practice dentistry and he was subject to the Arizona Medical Malpractice Act, A.R.S. §§ 2 12-561 et seq. 3 119. In 2017, Defendant Cervantes was not board certified in pediatric dentistry. 4 120. In 2017, Defendant Cervantes was authorized to bill the Arizona AHCCCS 5 program and its KidsCare program for dental services he rendered. 6 121. In 2017, Defendant Cervantes was an agent and/or employee of the Kool 7 Smiles Defendants. Alternatively, and at a minimum, the Kool Smiles Defendants held 8 Defendant Cervantes out as their agent and representative, and Defendant Cervantes was 9 reasonably perceived as such by customers of Kool Smiles, including the Gastelums. 10 Further, given the nature of the potentially dangerous medical services being rendered 11 (invasive and potentially dangerous dental procedures, accompanied by general anesthesia, 12 on a two-year-old child in a dental clinic), the duties owed by the Kool Smiles Defendants 13 to Zion and his family must be treated as non-delegable. 14 122. In 2017, Defendant Auerbach was board certified in pediatric dentistry, and 15 subject to the Arizona Medical Malpractice Act, A.R.S. §§ 12-561 et seq. 16 123. In 2017, Defendant Auerbach was an agent, owner, and/or employee of the 17 Kool Smiles Defendants, and possibly the Benevis Defendants. Alternatively, and at a 18 minimum, the Kool Smiles Defendants held Defendant Auerbach out as their agent and 19 20 representative. Further, given the nature of the potentially dangerous medical services 21 being rendered (invasive and potentially dangerous dental procedures, accompanied by 22 general anesthesia, on a two-year-old child in a dental clinic), the duties owed by the Kool 23 Smiles Defendants to Zion and his family must be treated as non-delegable. 24 124. Defendant Auerbach lists his contact information for the National Provider 25 Identifier database as the same address for the Benevis Defendants, and Defendant 26 Auerbach lists his contact phone number as a Kool Smiles Defendants’ clinic in Las 27 Cruces, New Mexico, where Defendant Mayfield is the President. 28 125. In 2017, Defendant Rojas was not an Arizona licensed healthcare provider.
22
Case 20-33918 Document 150-1 Filed in TXSB on 08/25/20 Page 23 of 79
1 126. Upon information and belief, Defendant Rojas was not qualified to oversee 2 the “informed” consent process used with Zion’s mother, Veronica. 3 127. In 2017, Defendant Rojas was an agent and/or employee of the Kool Smiles 4 Defendants. Alternatively, and at a minimum, the Kool Smiles Defendants held Defendant 5 Rojas out as their agent and representative, and Defendant Rojas was reasonably perceived 6 as such by customers of Kool Smiles, including the Gastelums. Further, given the nature 7 of the potentially dangerous medical services being rendered (invasive and potentially 8 dangerous dental procedures, accompanied by general anesthesia, on a two-year-old child 9 in a dental clinic), the duties owed by the Kool Smiles Defendants to Zion and his family 10 must be treated as non-delegable. 11 128. In 2017, Defendant Webb was not an Arizona licensed healthcare provider. 12 129. On information and belief, Defendant Webb was present during the 13 procedures performed on Zion by Defendants Montoya and Roberts. 14 130. In 2017, Defendant Webb was an agent and/or employee of the Kool Smiles 15 Defendants. Alternatively, and at a minimum, the Kool Smiles Defendants held Defendant 16 Webb out as their agent and representative, and Defendant Webb was reasonably perceived 17 as such by customers of Kool Smiles, including the Gastelums. Further, given the nature 18 of the potentially dangerous medical services being rendered (invasive and potentially 19 20 dangerous dental procedures, accompanied by general anesthesia, on a two-year-old child 21 in a dental clinic), the duties owed by the Kool Smiles Defendants to Zion and his family 22 must be treated as non-delegable. 23 Factual Allegations Regarding the Medical Malpractice Claim 24 131. All of the foregoing allegations are hereby incorporated by reference. 25 132. Zion Gastelum was born on April 28, 2015. His biological parents are 26 Plaintiff Joseph Gastelum and Statutory Beneficiary Veronica Gastelum (formerly 27 Veronica De Los Reyes). 28
23
Case 20-33918 Document 150-1 Filed in TXSB on 08/25/20 Page 24 of 79
1 133. At the time of Zion’s birth and at all times relevant to this Complaint, Joseph 2 and Veronica were not married. 3 134. Joseph and Veronica were married in 2018, after the death of their son Zion. 4 135. On February 6, 2017, Zion (then just one year old) presented to the Kool 5 Smiles’ Yuma clinic for an initial dental evaluation, accompanied by his mother, Veronica. 6 136. Jose Soto, DDS, performed an oral evaluation of Zion on February 6, 2017, 7 at the Kool Smiles. The only tooth Dr. Soto identified for any follow up was tooth J, simply 8 to observe that tooth. Dr. Soto documented fair oral hygiene, moderate caries risk, and hard 9 and soft tissues within normal limits. 10 137. The only X-rays allegedly taken of Zion were purportedly taken on the date 11 of this first visit (February 6, 2017), and, consistent with Dr. Soto’s written records, did 12 not reflect that any dangerous or invasive treatment procedures were necessary for Zion, 13 then just one year old. 14 138. After the death of Zion, the Kool Smiles Defendants produced what was 15 represented to be all medical records, images, and studies of Zion to Plaintiff’s counsel. 16 The only X-rays provided were from February 6, 2017, taken over eight months before the 17 recommendation for the invasive treatment of Zion, and those X-rays did not support any 18 such invasive treatment. 19 20 139. Upon information and belief, the Kool Smiles Defendants do not have 21 contemporaneous X-rays or radiographic studies of Zion, in any format, from the Fall of 22 2017, to justify or support the invasive and dangerous treatment rendered to Zion in 23 December of 2017. 24 140. On February 6, 2017, Zion’s mother, Veronica, signed off on a treatment 25 plan for Zion which stated, “Six Months Recall. No treatment necessary.” [Emphasis 26 added.] 27 141. On October 20, 2017, Zion presented to the Kool Smiles Defendants’ Yuma 28 clinic. Zion was then 2 years and 6 months old.
24
Case 20-33918 Document 150-1 Filed in TXSB on 08/25/20 Page 25 of 79
1 142. On October 20, 2017, Defendant Cervantes documented a dental assessment 2 of Zion. 3 143. On October 20, 2017, Defendant Cervantes documented allegedly poor oral 4 hygiene, high caries risk, but hard and soft tissues were noted to be within normal limits, 5 and the gingival health was noted as only mildly inflamed. 6 144. On October 20, 2017, Defendant Cervantes documented that X-rays of Zion 7 would be taken later, when Zion was under general anesthesia, in December of 2017. Upon 8 information and belief, X-rays of Zion were not taken in December of 2017. 9 145. During the October 20, 2017 office visit, Zion’s mother, Veronica, did not 10 sign a treatment plan for future care for Zion. 11 146. Defendant Cervantes developed a treatment plan on October 20, 2017, for 12 teeth L, E, F; including a pulpectomy of tooth L, all without having radiographic evidence 13 of necessity for the pulpectomy. 14 147. Veronica was, however, presented with an Anesthesia Agreement and 15 Consent form on October 20, 2017, by Defendant Rojas, an unlicensed individual and the 16 Office Manager for the Kool Smiles’ Yuma clinic. Defendant Rojas was not, however, 17 qualified to provide the necessary advice to render this consent process legitimate. This 18 document was not witnessed, nor is there any indication of true informed consent on the 19 20 part of Veronica. This is, however, one of the documents with an explicit promise of 21 continuous monitoring of Zion when he was to be subjected to general anesthesia 22 (“Advanced anesthesia equipment required by the state of Arizona will be present 23 and patient’s vital signs will be monitored throughout.”) (emphasis added). 24 148. Also on October 20, 2017, Veronica signed a Criteria for Dental Treatment 25 under General Anesthesia/IV Sedation on October 20, 2017. This document was denoted 26 as a Benevis form, “Benevis – Standard Form; Legal/RM (3/20/15).” Again, this was 27 overseen by Defendant Rojas, who was not qualified to provide the necessary advice to 28 render this consent process legitimate. This document was not witnessed, nor did any
25
Case 20-33918 Document 150-1 Filed in TXSB on 08/25/20 Page 26 of 79
1 dentist sign off on the document on October 20, 2017. Rather, it appears to have been 2 belatedly signed by Defendant Montoya on December 16, 2017, when the invasive dental 3 treatments were rendered to Zion, resulting in his death. 4 149. At no time did Veronica receive medical advice from any licensed medical 5 professional in conjunction with any of the above-referenced documents presented to her 6 with respect to the general anesthesia and dental treatment to be rendered to Zion. 7 150. On December 5, 2017, the Kool Smiles Defendants requested prior 8 authorization from AHCCCS / KidsCare for three sterling silver crowns and three 9 pulpotomies/ pulpectomies (teeth E, F, and L), which form identified Defendant Auerbach 10 as the “provider.” This authorization form did not reference teeth B, I, D, C, H, or G. 11 151. On information and belief, Defendant Auerbach never saw or treated Zion. 12 152. On December 8, 2017, Veronica signed a Disclosure for General 13 Anesthesia/IV Sedation Services and Consent to Treat, another Benevis Standard Form, 14 and a Pre-Op Instructions for Dental Treatment under General Anesthesia, again a Benevis 15 Standard Form. This Disclosure was witnessed by Defendant Rojas, the Office Manager of 16 the Kool Smiles’ Yuma clinic. 17 153. With respect to these December 8, 2017 forms, as with the other documents 18 referenced above, this was overseen by Defendant Rojas, who was not qualified to provide 19 20 the necessary advice to make any such consent process meaningful. Also, these documents, 21 for the first time, referenced the anesthesiologist/doctor’s alleged status as an independent 22 contractor; but the documents did not explain the potential legal significance of that status, 23 nor did Defendant Rojas explain this in any way to Veronica (notably, Veronica does not 24 have legal training and did not understand any such legal significance). 25 154. The Kool Smiles Defendants, along with Defendants Cervantes, Montoya, 26 Auerbach, Roberts, and Rojas, did not present or explain any alternative treatment 27 procedures to Veronica (including the possible use of silver diamine fluoride, which would 28 have been both far safer and far less expensive). They also failed to fully inform Veronica
26
Case 20-33918 Document 150-1 Filed in TXSB on 08/25/20 Page 27 of 79
1 of the actual risks of the planned procedures, and they failed to obtain a meaningful 2 informed consent from Veronica. 3 155. On December 16, 2017, Zion presented to the Kool Smiles’ Yuma clinic for 4 the invasive treatment recommended by Defendant Cervantes and the Kool Smiles 5 Defendants. Zion was 2 years and 8 months old. 6 156. On December 16, 2017, Zion was accompanied by his mother, Veronica, and 7 his grandmother, Norma Lopez. They arrived at the Kool Smiles’ Yuma clinic at the 8 scheduled time of 6:45 A.M. for a scheduled 7:00 A.M. procedure. 9 157. On December 16, 2017, Veronica signed a new consent form presented by 10 Kool Smiles through Defendant Rojas, for: (1) stainless steel crowns and pulpotomies for 11 teeth B, I, and L; and (2) white crowns for teeth D, E, and F. No alternative therapies or 12 treatments were suggested. 13 158. At approximately 8:00 A.M., Zion was taken to the procedure/operating 14 room, accompanied by his mother, Veronica. Defendant Montoya passed by Veronica and 15 Zion on the way into the operating room – Defendant Montoya greeted them, briefly. 16 159. Upon information and belief, this brief meeting in the hallway was the first 17 time Defendant Montoya had ever seen Zion. 18 160. Veronica remained with Zion until general anesthesia was initiated by 19 20 Defendant Roberts. Veronica asked Defendant Roberts how long it would take for Zion to 21 fall asleep. Defendant Roberts stated he would turn up the gas if Zion struggled so it would 22 be quicker. Zion fought the mask, and Defendant Roberts increased the anesthesia. 23 161. Defendant Roberts documented that he started anesthesia at 8:15 A.M. on 24 December 16, 2017. 25 162. Defendant Roberts documented that Defendant Montoya started the invasive 26 dental procedures at 8:23 A.M. 27 163. Upon information and belief, 5 intra-oral photos were taken of Zion. 28
27
Case 20-33918 Document 150-1 Filed in TXSB on 08/25/20 Page 28 of 79
1 164. Based on information and belief, Defendant Montoya did not order any X- 2 rays, and no X-rays of Zion were taken on December 16, 2017. 3 165. Defendant Montoya implemented Defendant Cervantes October 20, 2017 4 treatment for Zion. In addition, Defendant Montoya implemented a new treatment plan 5 for teeth B, D, I without radiographic evidence of necessity and without informed consent. 6 166. According to the anesthesia record, Defendant Roberts administered the 7 narcotics alfentanil (50 mcg) and Dilaudid (0.2 mg) to Zion at the beginning of the 8 procedures. 9 167. Defendant Roberts administered IV Propofol (50 mg), IV alfentanil (50 10 mcg), IV Dexamethasone (2 mg), and IV Dilaudid (0.2 mg), in addition to the inhaled 11 anesthesia of Servoflurane and isoflurane. 12 168. Defendant Montoya performed pulpotomies on teeth D, E, and F, and on the 13 first molars (teeth B, I, and L). Defendant Montoya placed stainless steel crowns on teeth 14 B, I, and L, and white crowns on teeth D, E, and F. Defendant Montoya performed an 15 enameloplasty procedure on the facial surfaces of teeth C, H, and G. 16 169. Defendant Montoya stopped surgery at 9:08 A.M., approximately 45 minutes 17 after the procedures started and almost one hour after the initiation of anesthesia. 18 170. On information and belief, Defendant Montoya left Zion’s procedure room 19 20 and immediately initiated procedures on another child-patient. 21 171. On information and belief, Defendant Montoya had multiple child-patients 22 under various stages of general anesthesia upon whom he was performing procedures. 23 172. Defendant Roberts discontinued general anesthesia and removed Zion’s IV 24 access. 25 173. According to Zion’s patient file from the Kool Smiles Defendants, which 26 may or may not be fully accurate according to the Arizona Dental Board, at approximately 27 9:15 A.M., Defendant Roberts carried Zion into a recovery room directly next door to the 28
28
Case 20-33918 Document 150-1 Filed in TXSB on 08/25/20 Page 29 of 79
1 procedure room and oxygen, via a nasal hood, was placed on Zion at 5 liters per minute. 2 Defendant Roberts then left the recovery room. 3 174. Based on information and belief, Zion was left alone in the recovery room 4 for five to ten minutes or more. Further, based on information obtained from the Arizona 5 Dental Board (which information was not found anywhere in Zion’s patient file produced 6 by Kool Smiles), the oxygen tank Zion was hooked up to during recovery was empty and/or 7 did not work, and was not available to resuscitate Zion. 8 175. Thus, based on information and belief, Defendant Webb came to the 9 reception area at approximately 9:15 A.M., where she engaged in conversation with the 10 front desk personnel and then proceeded to the restroom in the waiting area. 11 176. Based on information and belief, between 9:15 and 9:20 A.M., Defendant 12 Roberts cleaned the procedure room where Zion had been, Kool Smiles personnel brought 13 the next child-patient back to the procedure room, Defendant Roberts communicated with 14 the family of that patient, and Defendant Roberts then intubated that child-patient. 15 177. At approximately 9:20 A.M., or possibly later (as noted above, the record 16 keeping has been questioned by the Arizona Dental Board), Defendant Webb, after leaving 17 the rest room, called out for Veronica to accompany Defendant Webb to the recovery room. 18 178. Veronica asked her mother-in-law, Norma, to get the car and wait for her to 19 20 bring Zion out to the car. 21 179. Defendant Webb then escorted Veronica back to the recovery room. 22 180. Based on the medical records, and on information and belief, no one was 23 present with Zion in the recovery room from at least 9:15 A.M. (and possibly earlier) until 24 Veronica was taken back there by Defendant Webb at approximately 9:20 A.M., or 25 possibly later. 26 181. When Veronica and Defendant Webb arrived at the “recovery” room, 27 Veronica observed that Zion was alone in the room. 28
29
Case 20-33918 Document 150-1 Filed in TXSB on 08/25/20 Page 30 of 79
1 182. As Veronica and Defendant Webb entered the recovery room, Zion’s pulse 2 oximeter was sounding an alarm. 3 183. Defendant Webb silenced the alarm after Defendant Webb and Veronica 4 entered the room. 5 184. However, the pulse oximeter alarm kept sounding, and Defendant Webb kept 6 silencing the alarm, at least another 3-4 times, and on the last occasion, Defendant Webb 7 took the pulse oximeter off Zion’s toe, stating that the pulse oximeter did not work properly 8 on children. 9 185. Defendant Webb did not record Zion’s vital signs during his recovery period. 10 186. On information and belief, Defendant Webb did not assess the oxygen tank 11 in the recovery area at any time prior to Zion’s cardiorespiratory event. 12 187. Defendant Webb later admitted to one of the investigating police officers 13 that, in her view, at least, the pulse oximeter did not “provide an accurate reading as it 14 would on an adult” and that “she had to keep muting her [Zion’s] oximeter because 15 the integrated alarm kept going off.” [Emphasis added.] 16 188. Defendant Webb also admitted to the same police officer that Zion’s pulse 17 oximetry alarm was set to sound at 88% for low oxygenation saturation and 68 beats per 18 minute as the low alarm for Zion’s pulse. 19 20 189. After Defendant Webb removed the pulse oximeter from Zion’s toe, 21 Veronica noticed that Zion’s chest was not moving – i.e. Zion was not breathing. 22 190. Veronica frantically attempted to feel for a pulse on Zion’s wrist, without 23 success. 24 191. Defendant Webb then adjusted Zion’s jaw. Zion did not start breathing. 25 192. Defendant Webb left the recovery room to get assistance. 26 193. On information and belief, Defendant Montoya entered the recovery room 27 and told Veronica not to worry, Zion just “needs a little more oxygen.” At Defendant 28 Montoya’s direction, Veronica was removed from the recovery room by Defendant Webb.
30
Case 20-33918 Document 150-1 Filed in TXSB on 08/25/20 Page 31 of 79
1 194. On information and belief, Defendant Montoya did not evaluate the oxygen 2 tank or oxygen delivery system which was provided to Zion in the recovery room. 3 195. On information and belief, Defendant Montoya did not evaluate the pulse 4 oximetry for functionality. 5 196. Defendant Roberts failed to ensure Zion’s oxygenation, ventilation, and 6 circulation were stabilized prior to commencing a subsequent anesthesia case. 7 197. Defendant Webb failed to continuously monitor Zion while Zion was in the 8 recovery room, and based on the medical records, no one else from the Kool Smiles 9 Defendants undertook that critical task. 10 198. Sometime after Defendant Montoya entered the recovery room, Defendant 11 Roberts arrived in the recovery room to assess Zion’s condition. Defendant Roberts 12 assessed Zion’s breathing. Defendant Montoya reported Zion’s heart rate was about 48 13 beats per minute which, supposedly for “a young child was not too slow.” 14 199. A heart rate of 48 beats per minute is a significant finding in a 2-year-old 15 child recovering from general anesthesia and must be addressed by medical personnel. 16 200. Defendant Montoya failed to assess and intervene in Zion’s significant 17 bradycardia. 18 201. On information and belief, Zion’s pulse was 58 beats per minute and his 19 20 oxygen saturations were 79% and falling. 21 202. Defendant Roberts performed airway maneuvers on Zion, but Zion could not 22 breathe spontaneously. 23 203. Defendant Roberts initiated rescue breaths via bag, valve, and mask (positive 24 pressure breathing). Zion’s oxygen saturation did not improve. 25 204. Zion was carried back to the operating room by Defendant Roberts and 26 placed on the foot of the dental chair while a second child-patient remained intubated at 27 the top of the dental chair. 28
31
Case 20-33918 Document 150-1 Filed in TXSB on 08/25/20 Page 32 of 79
1 205. On information and belief, the oxygen was removed from the other child- 2 patient and administered to Zion with the use of the bag, valve, mask apparatus. 3 206. Defendant Montoya extubated the other child-patient and carried that child- 4 patient to the recovery room where Zion had been previously. 5 207. On information and belief, the Kool Smiles’ personnel and/or Defendant 6 Roberts and/or Defendant Montoya transferred monitors back on to Zion in the operating 7 room. 8 208. Defendant Roberts then determined Zion’s pulse was faint to nonexistent and 9 cardiac compressions were initiated by Defendant Roberts, while Defendant Montoya 10 maintained Zion’s airway with a bag and mask. 11 209. At 09:24:25 A.M., EMS was contacted by someone at Kool Smiles’ Yuma 12 clinic, believed to be Defendant Rojas. 13 210. An AED device (automated external defibrillator) was applied to Zion – but 14 “no shockable rhythm was detected.” CPR (cardio-pulmonary resuscitation) was 15 commenced by Defendant Roberts. 16 211. The PALS (Pediatric Advanced Life Support) algorithm states that for a non- 17 shockable rhythm, the order of interventions should be: 18 • IV/IO access 19 20 • Epinephrine every 3-5 minutes 21 • Consider advanced airway - intubation 22 212. On information and belief, a Kool Smiles Defendants staff person named 23 “Ariana” took over chest compressions while Defendant Roberts prepared to re-intubate 24 Zion via nasal endotracheal tube (ETT). Zion was re-intubated by Defendant Roberts. 25 213. Defendant Roberts resumed CPR. Defendant Montoya resumed airway 26 maintenance with ventilations via the newly inserted nasal ETT. 27 214. Veronica was still in the hallway, having been told nothing about her son’s 28 status, when she observed an EMS ambulance crew arriving to Zion’s procedure room.
32
Case 20-33918 Document 150-1 Filed in TXSB on 08/25/20 Page 33 of 79
1 215. Veronica used Rojas’ phone to call Joseph, telling him, “Meet me at the 2 hospital – Zion is not breathing.” 3 216. At 09:27:19 A.M., the first Yuma EMS unit arrived at the Kool Smiles’ 4 Yuma clinic. Defendant Montoya was then administering ventilations. CPR was taken over 5 by EMS personnel. An intraosseous (IO) line was established by EMS and epinephrine was 6 administered via the IO line. This was the first time that epinephrine was administered to 7 Zion, which was a violation of PALS protocol by Defendants Roberts and Montoya, and 8 by the Kool Smiles Defendants. 9 217. Zion was transported by EMS personnel to Yuma Regional Medical Center 10 and he was then flown to Phoenix Children’s Hospital, where Zion died four days later. 11 Factual Allegations Regarding the Arizona Dental Board Investigation 12 218. All of the foregoing allegations are hereby incorporated by reference. 13 219. The public proceedings of the Arizona Dental Board on June 1 and August 14 3, 2018, are highly critical of the actions of Defendant Roberts. Among other points, the 15 President of the Arizona Dental Board, Dr. Gregory Waite, DDS, repeatedly criticized 16 17 Defendant Roberts for not making sure that Zion’s airway (his ability to breathe) was 18 protected. 19 220. Based on a transcript of the Dental Board proceedings, prepared from the 20 publicly available tape recording of the August 3 proceeding, in response to the argument 21 by Defendant Roberts’ attorney that Defendant Roberts was young and inexperienced, Dr. 22 Waite noted, “So it doesn’t matter whether it was 18 months or 20 years out of practice. 23 Airway is the number one issue with children.” 24 221. Regarding the fact that Defendant Roberts was intubating the next patient in 25 as little as two minutes after leaving Zion in the recovery room, at the Dental Board 26 meeting, Dr. Waite stated, “He should have stayed with his patient [Zion] the entire time 27 [for recovery]. And that child [Zion] would be with us today. He’s not here – for 28
33
Case 20-33918 Document 150-1 Filed in TXSB on 08/25/20 Page 34 of 79
1 whatever reason, Dr. Roberts went from one case to another without properly 2 recovering his patient.” Dr. Waite also commented, “you cannot do that, you cannot 3 recover a patient properly that’s deeply sedated, and go through that with your next patient 4 in two minutes, or even five minutes. . . . But it is very basic that this child would not have 5 gone through this emergency had it not been for proper [sic, should say improper] 6 maintenance of the airway.” To the same effect was Dr. Waite’s following comment, 7 “There is no way possible, regardless of whether it was two minutes, five minutes, or 8 possibly 10 minutes, that you can extubate a patient that is heavily sedated, have them fully 9 recover from deep sedation to the point that they can be left in the hands of an 10 unexperienced assistant, and start another case. And – and review the medical history 11 of that case, and – and according to his records it was extubation – two minutes from 12 extubation to – to starting the next case. The whole outcome of this was based on one 13 thing, loss of airway.” [All emphasis added.] See also Dr. Waite’s following comment, 14 right after that, “This child lost airway. He was deeply sedated and was in a situation that 15 was not properly monitored.” 16 222. During the Dental Board meeting, Dr. Waite was clear regarding the training 17 for sedation, stating, “this was very, very basic. The number one thing you learn… very 18 first thing especially on young children is airway, airway, airway.” 19 20 223. In response to Defendant Roberts’ defense that he was compelled by the Kool 21 Smiles Defendants’ scheduling and productivity environment to move from one patient to 22 another so quickly, Dr. Waite noted that Defendant Roberts’ history was that he had 23 performed general anesthesia on 296 patients who were two years old or younger, and 249 24 of those very young children were child-patients of Kool Smiles. Thus, as Dr. Waite noted, 25 while “the scheduling of – of these patients, in my opinion, was absolutely ridiculous 26 the way these patients were scheduled for what was being asked of Dr. Roberts as a 27 dentist anesthesiologist,” nonetheless, the day of Zion’s anesthesia “was not his first day 28 at this practice. He had seen approximately 249 children. He had an opportunity way
34
Case 20-33918 Document 150-1 Filed in TXSB on 08/25/20 Page 35 of 79
1 before this day to stand up and say something, and say I will not practice under these 2 conditions. Because I’m sure it wasn’t the very first day that these conditions were 3 that way, that these patients were scheduled that way. This is the way that practice 4 ran.” [All emphasis added.] 5 224. The next speaker on the August 3 transcript, believed to be Heather Hardy, 6 RDH, started by saying, “And I agree, Dr. Waite, with everything that you said”, but she 7 then went on to note a greater degree of sympathy with the demands imposed on Defendant 8 Roberts by the Kool Smiles Defendants’ productivity, efficiency, and profitability 9 requirements, stating, “And is it right that he said, hey, this isn’t enough time, but 10 everybody else is doing it. Frankly I am thankful that there wasn’t any other casualties 11 before, that happened, before this case. . .. And that yes, he [Roberts] forgot what he 12 had learned in his training kind of based on the peer pressure of that was what was 13 happening already in this office.” [All emphasis added.] 14 225. Dr. Waite then spoke again, stating, “this never would have come about 15 had he [Roberts] spent the time with the patient in recovery. 100 percent. . .. And this 16 wasn’t his first day. He had multiple, multiple opportunities. He, based on the other 17 offices he worked at, he knew that these children – this was not being safely done on 18 these children. He knew that from day one that he was in that office [the Kool Smiles 19 20 clinic]. He had an opportunity to say, I will not practice under these circumstances. 21 But every day under those circumstances, every child was put at risk. You cannot get 22 more egregious than a death. How are you going to go to that family and say, I’m sorry, 23 I learned from the death of your child that I will no longer practice that way. Regardless of 24 whether punitive or not, that child is not coming back, 100 percent, rests on the 25 responsibility of Dr. Roberts.” [All emphasis added.] 26 226. At the June 1, 2018 Dental Board meeting, Defendant Roberts’ attorney 27 presented a report authored by an expert in the field of dental anesthesia which identified 28 five critical deviations Defendant Roberts made during the care of Zion.
35
Case 20-33918 Document 150-1 Filed in TXSB on 08/25/20 Page 36 of 79
1 227. Defendant Roberts, through his attorney at the June 1, 2018 Dental Board 2 meeting, expressed that Defendant Roberts had no explanation as to why the oxygen 3 tank which was used for Zion was not working or was empty, noting that the oxygen 4 tank was supplied by the Kool Smiles Defendants. 5 228. The proceedings from the Arizona Dental Board Meeting of June 1, 2018 6 also address Defendant Montoya’s failure to meet the standard of care by failing to 7 obtain current X-rays prior to initiating invasive treatment. Dr. Bienstock stated, “pulpal 8 therapy was performed on six teeth, none of which had current X-rays. This does not meet 9 the standard of care.” Dr. Taylor further clarified, “just so you understand …. No X-rays 10 were taken. None at all. … stainless steel crowns were put on, fillings were done (sic)… 11 the standard of care was way below (sic) [should read above] that for that young boy.” 12 229. Based on the Arizona Dental Board Consent Agreement with Defendant 13 Roberts, dated September 4, 2018, Defendant Roberts had three (3) children under general 14 anesthesia on December 16, 2017 at the same time at the Kool Smiles’ Yuma clinic: two- 15 year-old Zion; two-year-old “OG”; and five-year-old “AL.” 16 230. An Arizona Dental Board Consultant found the following violations of the 17 standard of care by Defendant Roberts in his care of Zion: 18 a. Failure to insure immediate availability of an oxygen supply – “the oxygen 19 20 tank connected was empty or not operating properly;” 21 b. Failure to insure the patient had recovered sufficiently from the effects of 22 anesthesia prior to being placed in recovery; 23 c. Failure to record vital signs during recovery; 24 d. Failure to insure the adequacy of support staff who will be monitoring a 25 patient during recovery. Defendant Roberts relied on the representations of 26 Kool Smiles that Kool Smiles staff were adequately trained; 27 28
36
Case 20-33918 Document 150-1 Filed in TXSB on 08/25/20 Page 37 of 79
1 e. Failure to insure the patient in recovery has progressed sufficiently to a point 2 where direct intervention would no longer be necessary prior to redirecting 3 attention to the next scheduled patient. 4 231. The Arizona Dental Board Consultant also found violations of the standard 5 of care by Defendant Roberts in regard to the care and treatment provided to “OG” and 6 “AL” on December 16, 2017. 7 232. The Arizona Dental Board found Defendant Roberts violated A.R.S. § 32- 8 1201.01(14) and A.A.C. R4-11-1301(E). 9 233. The absence of adequately trained staff, the presence of malfunctioning 10 equipment, the use of unnecessary procedures, and the hurried and chaotic scheduling of 11 child-patients for procedures under general anesthesia were a result of the Kool Smiles 12 Defendants’ Business Model as outlined below. 13
14 Factual Allegations Regarding the Kool Smiles Business Model 15 234. All of the foregoing allegations are hereby incorporated by reference. 16 235. Defendant FFL is a sponsor / manager of private equity funds structured as 17 limited partnerships. Defendant FFL has more than $2 Billion under management. 18 According to basic historical data on the internet, Defendant FFL concentrates on investing 19 in healthcare services, among other industries, and since its 1997 founding, it has raised 20 approximately $4.6 Billion of investor capital and commitments. Defendant FFL maintains 21 its principal place of business at One Maritime Plaza, 22nd Floor, San Francisco, CA, 22 94111. 23 236. Upon information and belief, Defendant FFL Capital Partners is a private 24 equity fund formed by Defendant FFL in 2004 to invest in various business sectors, 25 including the health care sector. Defendant FFL is the general partner of Defendant FFL 26 Capital Partners. 27 237. Also upon information and belief, the Benevis Defendants, one of which was 28
37
Case 20-33918 Document 150-1 Filed in TXSB on 08/25/20 Page 38 of 79
1 formerly known as NCDR, were formed by Defendant FFL to evade state laws prohibiting 2 anyone but dentists from owning dental practices and/or making professional dental 3 decisions. On information and belief, the Benevis Defendants operate, manage, and/or 4 control the Kool Smiles Defendants – and all of the related Kool Smiles Defendants’ 5 clinics. 6 238. Defendants FFL and/or FFL Capital Partners are believed to own the Benevis 7 Defendants (and their predecessor, NCDR), and the FFL Defendants have collected 8 revenues and profits generated by the Kool Smiles Defendants through the various Kool 9 Smiles dental clinics throughout the country. 10 239. The funds raised from the sale of the limited partnership interests in 11 Defendant FFL Capital Partners were used, in part, for the expansion of the Kool Smiles 12 chain of pediatric dental clinics, and for the acquisition of all or most of the assets of 13 portfolio companies (such as Kool Smiles) chosen by the general partner, Defendant FFL, 14 which was also expected to manage the portfolio companies. 15 240. When Defendant FFL Capital Partners was formed, there were no Kool 16 Smiles Defendants facilities in the State of Arizona. On information and belief, all of the 17 Kool Smiles clinics located in Arizona were funded, in whole or in part, by Defendant FFL 18 using funds raised through Defendant FFL Capital Partners. 19 20 241. On information and belief, in 2017, the Benevis Defendants were owned by 21 Defendant FFL Capital Partners, which is managed and/or controlled by Defendant FFL. 22 242. On information and belief, Defendant Benevis LLC owns the Kool Smiles 23 trademark, which it registered in 2004 (when the Benevis predecessor entity, NCDR, was 24 formed). 25 243. Defendant FFL receives both a management fee and a share of all profits 26 earned by its portfolio companies, including the Kool Smiles Defendants. 27 244. The Benevis Defendants, and their predecessor, NCDR, were created so that 28 FFL and FFL Capital Partners could exercise control over the Kool Smiles clinics, as most
38
Case 20-33918 Document 150-1 Filed in TXSB on 08/25/20 Page 39 of 79
1 states preclude persons who are not dentists from owning dental practices, and all states 2 prohibit any interference with the independent professional judgments of dentists. 3 245. On information and belief, investment personnel of Defendant FFL exercise 4 management and/or control over the Benevis Defendants and the Kool Smiles Defendants. 5 246. The Benevis Defendants have the right to hire and fire the Kool Smiles clinic 6 personnel, and the Benevis Defendants exercise control over the day-to-day operations of 7 the Kool Smiles clinics. 8 247. The FFL Defendants manage and/or control the Benevis Defendants and, 9 through the Benevis Defendants, the FFL Defendants effectively manage and/or control 10 the various Kool Smiles clinics. 11 248. The FFL Defendants exercise management and control over all key decisions 12 about the investments of the funds raised by Defendant FFL Capital Partners, which funds 13 were used to finance the opening of new Kool Smiles clinics, which increased in number 14 from approximately 6 in 2005 to more than 130 by 2012. 15 16 Factual Allegations Regarding the False Claims Act Lawsuit 17 249. All of the foregoing allegations are hereby incorporated by reference. 18 250. In part, the following allegations in this Complaint are based on allegations 19 in the False Claims Act Lawsuit, which resulted in a $23,900,000 payment by the Benevis 20 Defendants and various FFL affiliates to the federal government and numerous state 21 governments. 22 251. The False Claims Act Lawsuit was filed against various affiliated Kool 23 Smiles entities, including NCDR (the predecessor to Defendant Benevis LLC) and 24 Defendants FFL, FFL Capital Partners, Kool Smiles, Vieth, Mayfield, KS AZ-1 P.C., and 25 KS AZ-4, P.C. 26 252. After the False Claims Act Lawsuit was filed, NCDR was renamed and in all 27 practical terms became Defendant Benevis LLC. However, the FFL Defendants still own 28
39
Case 20-33918 Document 150-1 Filed in TXSB on 08/25/20 Page 40 of 79
1 and control the Benevis Defendants, and the Benevis Defendants exert control over the 2 various Kool Smiles clinics. 3 253. The False Claims Act Lawsuit was filed in 2012, and the settlement of that 4 lawsuit was announced in January of 2018, just a few weeks after the December 16, 2017 5 treatment rendered to Zion at the Kool Smiles Yuma clinic, which resulted in his death. 6 254. On January 10, 2018, the United States Department of Justice announced, 7 “Dental Management Company Benevis and Its Affiliated Kool Smiles Dental Clinics to 8 Pay $23.9 Million to Settle False Claims Act Allegations Relating to Medically 9 Unnecessary Pediatric Dental Services.” See Exhibit A hereto (emphasis added). 10 255. As part of the settlement of the False Claims Act Lawsuit, the United States 11 Justice Department stated, “Under the agreement, Benevis and the Kool Smiles clinics will 12 pay the United States and participating states a total of $23.9 million, plus interest, to 13 resolve allegations that they knowingly submitted false claims for payment to state 14 Medicaid programs for medically unnecessary dental services performed on children 15 insured by Medicaid.” See Exhibit A hereto (emphasis added). 16 256. The United States Justice Department also stated, “[B]etween January 2009 17 and December 2011, Benevis and Kool Smiles clinics located throughout 17 states 18 knowingly submitted false claims to state Medicaid programs for medically unnecessary 19 20 pulpotomies (baby root canals), tooth extractions, stainless steel crowns, in addition to 21 seeking payment for pulpotomies/pulpectomies that were never performed.” See Exhibit 22 A hereto (emphasis added). 23 257. The United States Justice Department further stated, “Kool Smiles clinics 24 routinely pressured and incentivized dentists to meet production goals through a 25 system that disciplined ‘unproductive’ dentists and awarded ‘productive’ dentists with 26 substantial cash bonuses based on the revenue generated by the procedures they 27 performed.” See Exhibit A hereto (emphasis added). 28
40
Case 20-33918 Document 150-1 Filed in TXSB on 08/25/20 Page 41 of 79
1 258. One United States Attorney stated, “The allegations in these cases are 2 particularly egregious because they involved medically unnecessary dental services 3 performed on children,” . . . Exploiting needy children for financial gain is inexcusable.” 4 See Exhibit A hereto (emphasis added). 5 259. Special Agent in Charge Phillip M. Coyne, with the Office of the Inspector 6 General of the U.S. Department of Health and Human Services, stated, “It is intolerable 7 when health care companies seek to boost profits by defrauding Medicaid and exploiting 8 children. . . . Systematically performing and billing for medically unnecessary dental 9 procedures undermines the well-being of these young patients . . . .” See Exhibit A 10 hereto (emphasis added). 11 260. Another United States Attorney noted, “Especially when that fraud [fraud in 12 the healthcare system] involves performing unnecessary procedures on kids – here, 13 unnecessary baby root canals and tooth extractions, among other procedures – we will 14 not hesitate to use every tool at our disposal to punish those who break the law.” See 15 Exhibit A hereto (emphasis added). 16 17 Factual Allegations Regarding Prioritization of Profits over Patient Safety 18 261. All of the foregoing allegations are hereby incorporated by reference. 19 262. On information and belief, from the time the False Claims Act Lawsuit was 20 filed (in 2012) until the notice of the settlement in January of 2018, the Kool Smiles 21 Defendants billed and collected some $2.5 billion from the federal government and/or 22 various SCHIP programs. Thus, the $23,900,000 settlement sum represented less than 1% 23 of the amounts billed during the prosecution of the False Claims Act Lawsuit. 24 263. On information and belief, the same practices that resulted in the False 25 Claims Act Lawsuit have continued at the Kool Smiles clinics, and those practices directly 26 resulted in the tragic death of Zion. 27 264. Defendant FFL’s interest in the profits of its portfolio companies provides a 28
41
Case 20-33918 Document 150-1 Filed in TXSB on 08/25/20 Page 42 of 79
1 significant incentive for Defendant FFL to maximize those profits. In addition, as an 2 inherent part of its business model, Defendant FFL needs to be successful in sponsoring 3 additional private equity funds, and its success in attracting investors to subsequent funds 4 will necessarily depend on the returns earned by investors in the existing funds managed 5 by Defendant FFL. 6 265. For this reason, the profitability of Defendant FFL’s portfolio companies, 7 including the Benevis Defendants and the Kool Smiles Defendants, needs to match or 8 exceed that of competing managed investments, in order for Defendant FFL to attract 9 investors, both initially and on an ongoing basis. 10 266. With respect to the Kool Smiles Defendants, the basic business model of the 11 FFL Management Team (as defined above) is to focus on child-patients insured through 12 government-funded SCHIP Programs (the “Kool Smiles Business Model”). In Arizona, 13 these are the AHCCCS program and its KidsCare program. 14 267. With respect to the Kool Smiles Business Model, the government 15 reimbursements for SCHIP child-patients are far lower than commercial dental rates (even 16 those states with the most generous payments are approximately one-third lower than 17 commercial rates, and in most states, an SCHIP program only pays about 30-40% of the 18 commercially available rate). For this reason, very few dental practitioners are willing to 19 20 accept lower income pediatric patients through SCHIP Programs. 21 268. Thus, to provide their investors with above-market returns, the FFL 22 Defendants had to develop a business model capable of driving profits. Because of the 23 price pressure, the only way for the Kool Smiles Business Model to succeed in producing 24 steady profits is for the child-patients to be subjected to excessive and unnecessary 25 procedures, with the profit goal being placed ahead of compliance with the standards of 26 care that are required to protect the safety of child-patients in the dental chair. 27 269. On information and belief, the FFL Management Team, acting through the 28 Kool Smiles Business Model, developed a business plan aimed at taking advantage of
42
Case 20-33918 Document 150-1 Filed in TXSB on 08/25/20 Page 43 of 79
1 SCHIP child-patients by upselling dental services, performing unnecessary dental services, 2 setting quotas for the Kool Smiles Defendants’ dentists, providing deficient care, and 3 incentivizing the Kool Smiles Defendants’ employees to elevate financial goals over 4 patient care and patient safety. 5 270. Defendant FFL’s website admits at least some aspects of the Kool Smiles 6 Business Model. That website states: “Kool Smiles is a nationally-branded provider of 7 dental care focused primarily on children enrolled in Medicaid and State Children’s Health 8 Insurance Programs. The limited access to care for children on Medicaid/SCHIP plans 9 provides an attractive growth opportunity for Kool Smiles as it continues to expand 10 offices . . . . Families seeking affordable options for routine dental care provide an 11 attractive market space for growth.” [Emphasis added.] 12 271. As noted above, the reason this patient population is underserved is due to 13 the below-market reimbursement rates for child-patients served by SCHIP Programs. 14 272. The procedures performed on Zion reflect these pricing pressures. Assuming 15 for the sake of argument, that there was even a true need for significant dental treatment of 16 Zion, then just two years old, the use of silver diamine fluoride to “paint” the affected baby 17 teeth could have been accomplished for, upon information and belief, approximately $100, 18 with no need for general anesthesia, and no need for invasive and painful dental procedures. 19 20 273. In contrast, after Zion’s death, the Kool Smiles Defendants still billed 21 AHCCCS for the December 16, 2017 services (the Kool Smiles Defendants sent this bill 22 out despite those services having led to Zion’s death). In this regard, the Kool Smiles 23 Defendants sent a bill to AHCCCS for $2,604 for the December 16, 2017 dental services 24 that led to Zion’s death. 25 274. On information and belief, under the Kool Smiles Business Model, the FFL 26 Management Team bridged the gap between SCHIP reimbursement payments and 27 commercial rates by billing for unnecessary services, overscheduling patients, requiring 28 dentists and hygienists to perform more procedures in shorter amounts of time, and
43
Case 20-33918 Document 150-1 Filed in TXSB on 08/25/20 Page 44 of 79
1 performing high profit / high return procedures such as pulpotomies/pulpectomies and 2 crowns versus simpler, lower return, and safer services, such as dental fillings or silver 3 diamine fluoride treatments. 4 275. On information and belief, as part of the Kool Smiles Business Model, the 5 various Kool Smiles clinics all had to meet quotas, which quotas were centrally monitored. 6 276. Under the Kool Smiles Business Model, dental providers – both dentists and 7 hygienists - were relegated to subordinate positions, where they were forced to follow the 8 Benevis / Kool Smiles quota-driven protocols, by performing dental procedures on 9 children as dictated by the Kool Smiles Business Model. 10 277. The Kool Smiles Defendants regularly reported information on quota-based 11 reports, and the financial performance of the clinics, to the FFL Defendants and the Benevis 12 Defendants. 13 278. On information and belief, the Kool Smiles Defendants have regional Dental 14 Directors who instruct clinic employees in methods to increase SCHIP reimbursement 15 revenues, and/or how to maximize SCHIP revenues, even when this is done at the expense 16 of dental quality and safety. 17 279. On information and belief, the Kool Smiles Defendants significantly 18 overschedule child-patients to meet monthly procedure and revenue quotas, so as to ensure 19 20 profit maximization. Setting such timing and production quotas results in substandard (and 21 potentially dangerous) patient care, performance of procedures that are unnecessary, billing 22 for services that are not actually performed, and requiring non-professional employees to 23 provide services that dentists should perform. 24 280. On information and belief, as part of the Kool Smiles Business Model, the 25 Kool Smiles Defendants subject children to invasive and medically unnecessary 26 procedures, often performed by unqualified/underqualified employees who do not have 27 enough time to perform the procedures in question. 28 281. A critical aspect of the Kool Smiles Business Model was to use crowns and
44
Case 20-33918 Document 150-1 Filed in TXSB on 08/25/20 Page 45 of 79
1 pulpotomies excessively and unnecessarily, as such procedures provide significantly 2 higher revenues than simply filling a cavity. The Kool Smiles Defendants incentivized the 3 Kool Smiles dentists to achieve these objectives. 4 282. A pulpotomy/pulpectomy is a procedure that is medically necessary when a 5 cavity removal results in pulp exposure in a primary tooth with normal pulp. See generally 6 the American Association of Pediatric Dentistry (“AAPD”) Guideline on Pulp Therapy for 7 Primary and Immature Permanent Teeth (Revised 2014). 8 283. On information and belief, in accordance with the Kool Smiles Defendants’ 9 directives, and pursuant to the Kool Smiles Business Model, in order to satisfy their 10 procedure and revenue quotas, the Kool Smiles dentists commonly performed 11 pulpotomies/pulpectomies on primary teeth (baby teeth) where the cavity could be 12 removed without exposing pulp. Such primary (baby) teeth would end up falling out as the 13 child grew up and would then be replaced by permanent teeth. 14 284. In public statements, the Kool Smiles Defendants quoted a dental 15 professional who said crowns might be desirable even if they were not currently necessary 16 for the patient because, in the case of Medicaid / SCHIP patients, the dentist could not be 17 sure that the pediatric patient would return to the dentist in a timely fashion. 18 285. In order to obtain consent for unnecessary medical procedures, such as 19 20 pulpotomies/pulpectomies and crowns, the Kool Smiles Defendants failed to properly 21 inform parents about the risks, benefits, and alternatives available, including but not 22 limited to the alternative of silver diamine fluoride. 23 286. With respect to the lack of informed consent, the Kool Smiles Defendants 24 failed to fully and adequately disclose all of the qualifications, training, and skill sets of 25 the treating professionals, including dentists focused on providing general anesthesia, and 26 they failed to fully and adequately disclose the limitations and dangers of conducting 27 general anesthesia in a local dental clinic, versus a regular hospital setting. 28 287. On information and belief, the Kool Smiles Defendants allowed the consent
45
Case 20-33918 Document 150-1 Filed in TXSB on 08/25/20 Page 46 of 79
1 process to be overseen by dental clinic office managers, even though such office managers 2 were not qualified by training or experience to oversee such an informed consent process. 3 288. With respect to the Kool Smiles Business Model, and its focus on profits, 4 and the related overscheduling of child-patients, a consequence of such overscheduling is 5 that dentists and dental anesthesia providers must immediately move on to the next patient, 6 leaving the post-anesthesia care of young children, who have not yet woken up, to be 7 monitored by unskilled or less skilled personnel. 8 289. On information and belief, the Kool Smiles Business Model resulted in 9 Defendant FFL Capital Partners receiving a $700 million offer to purchase the Benevis’ 10 Defendants’ predecessor. 11 The Current Operating Structure of Kool Smiles 12 290. All of the foregoing allegations are hereby incorporated by reference. 13 291. On information and belief, at the present time, all or nearly all of the Kool 14 Smiles clinics are organized the same way they were during the pendency of the False 15 Claims Act Lawsuit. Typically, each clinic is staffed with three dentists and three 16 hygienists. Two dental assistants are assigned to each dentist for operative procedures. One 17 dental assistant is assigned to each hygienist for hygiene procedures. The clinics usually 18 have a dental assistant who serves as the clinical team lead (the “CTL”). 19 20 292. The Kool Smiles Yuma clinic, the location providing the care and treatment 21 that resulted in Zion’s death, is believed to have 10 bays – 2 rows of 5 chairs - without any 22 dividers for hygiene or privacy. It is further believed that there are at least two operating 23 suites with at least two recovery rooms for post-anesthesia care. Finally, there is a separate 24 room where X-rays are taken. 25 293. On information and belief, during the prosecution of the False Claims Act 26 Lawsuit and through the conclusion of that lawsuit in January of 2018, the Kool Smiles 27 clinics continued to act in substantially the same manner as described above, by pressuring 28 dentists, employees, and agents to substantially overbook appointments, perform
46
Case 20-33918 Document 150-1 Filed in TXSB on 08/25/20 Page 47 of 79
1 unnecessary dental procedures, and exploit low income children and their families for 2 financial gain. 3 294. Based on information and belief, at the Kool Smiles Yuma clinic, the staff 4 had overscheduled the appointments on December 16, 2017, resulting in a failure to 5 properly monitor Zion’s post-operative stage, and requiring staff to quickly move on to the 6 next child-patient. 7 295. Based on information and belief, the Kool Smiles Defendants engaged in 8 over scheduling as a regular practice in order to meet the requirements set forth by the Kool 9 Smiles Business Model. 10 296. Based on the Arizona Dental Board Consent Agreement for Case Numbers 11 201700266-AO; 201800046; and 201800047, regarding Defendant Roberts care on 12 December 16, 2017, due to such overscheduling, Defendant Roberts was not available to 13 monitor Zion after his anesthesia, nor did Defendant Roberts properly supervise the care 14 and treatment of Zion during the recovery period, and Defendant Roberts was not available 15 to stabilize Zion’s airway. At the time when Zion was having difficulty breathing, 16 Defendant Roberts was with another child-patient, had already intubated that patient, and 17 had placed that patient under general anesthesia. 18 297. Based on the Arizona Dental Board Non-Disciplinary Consent Agreement 19 20 Number 201800008 regarding patient “ZG”(Zion), the Kool Smiles Defendants and 21 Defendant Montoya did not take contemporaneous X-rays in the Fall of 2017, so as to 22 justify the invasive and dangerous dental treatment provided to Zion in December of 2017. 23 298. On information and belief, between 2012 and 2018, Defendant FFL Capital 24 Partners continued to increase revenues and profits from the Benevis Defendants and the 25 Kool Smiles Defendants despite the lack of any commensurate increase in SCHIP 26 payments on a per procedure basis. Also, in this time frame, the Kool Smiles Defendants 27 continued to perform medically unnecessary pulpotomies/pulpectomies and crowns, and 28
47
Case 20-33918 Document 150-1 Filed in TXSB on 08/25/20 Page 48 of 79
1 they incentivized Kool Smiles Defendants’ employees or agents to place revenues and 2 profits above patient care. 3 299. In 2017, the SCHIP charge for a resin-based composite crown was $283.00 4 while the crowns themselves cost $8.00. The charge for resin-based composite 4+ surfaces 5 was $375.00 with a reimbursement of $82.00. In addition, the charge for a pulpotomy was 6 $210 per tooth, allowing the Kool Smiles Defendants to bill approximately $500 per tooth 7 versus $100 or less for simply filling a cavity. Additional revenue was available if the steel 8 crown was covered with enamel to provide a non-metal color. On information and belief, 9 by 2016, a pulpotomy/pulpectomy with an enamel color allowed the Kool Smiles 10 Defendants to collect approximately $900.00 per tooth. 11 300. In order to obtain consent for unnecessary medical procedures such as 12 pulpotomies/pulpectomies and crowns, the Kool Smiles Defendants knowingly and 13 intentionally failed to obtain informed consent from low income parents, by 14 misrepresenting the need for the procedures, failing to inform parents about alternative 15 procedures such as fillings and sealants, and silver diamine fluoride, misrepresenting the 16 skills and training of its dentists, employees and agents, the available equipment and 17 capability of its facilities to fully and properly monitor and handle post-anesthesia care of 18 its patients. 19 20 301. On information and belief, at all times relevant to this Complaint, the Kool 21 Smiles Defendants were aware of non-invasive procedures, such as silver diamine fluoride, 22 which would have been appropriate for Zion and other similarly-situated child patients at 23 a significantly lower cost than performing pulpotomies/pulpectomies with crowns. But the 24 Kool Smiles Defendants did not offer these alternative treatment options to patients or 25 inform parents of these alternative and safer procedures – denying the parents the 26 opportunity to provide a true informed consent. 27 302. On information and belief, at all times relevant to this Complaint, the Kool 28 Smiles Defendants continued to have unlicensed and unqualified personnel (such as office
48
Case 20-33918 Document 150-1 Filed in TXSB on 08/25/20 Page 49 of 79
1 managers) oversee the “informed” consent process, even though such personnel were not 2 truly qualified to handle such a process. These office managers were not qualified to obtain 3 a true informed consent, they failed to offer alternative options, and they misrepresented 4 (or failed to disclose) the actual risks. 5 303. On information and belief, at all times relevant to this Complaint, the Kool 6 Smiles Defendants continued to treat child-patients with unnecessary pulpotomies/ 7 pulpectomies and crowns, a pervasive business practice that was performed at a level far 8 above any legitimate patient need. 9 304. On information and belief, at all times relevant to this Complaint, the Kool 10 Smiles Defendants continued to overschedule appointments, requiring treaters to provide 11 deficient or hurried care, so as to achieve revenue goals. This included scheduling back- 12 to-back operative procedures for dentists, relegating the post-operative and post-anesthesia 13 care of children to improperly trained personnel, and in some cases leaving children alone 14 during the post-operative and post-anesthesia recovery period. 15 ALLEGATIONS WITH RESPECT TO VICARIOUS LIABILITY 16 305. All of the foregoing allegations are hereby incorporated by reference. 17 306. With respect to the actions and omissions of Defendant Webb, as described 18 above, including but not limited to her actions in leaving Zion alone while he was in the 19 20 post-anesthesia “recovery” room, Defendant Webb was an agent and/or employee of the 21 Kool Smiles Defendants. Alternatively, and at a minimum, the Kool Smiles Defendants 22 held Defendant Webb out as their agent and representative, and Defendant Webb was 23 reasonably perceived as such by customers of the Kool Smiles Defendants, including the 24 Gastelums. Further, given the nature of the potentially dangerous medical services being 25 rendered here (invasive and potentially dangerous dental procedures, accompanied by 26 general anesthesia, on a two-year-old child in a dental clinic), the duties owed by the Kool 27 Smiles Defendants to Zion and his family must be treated as non-delegable. 28 307. With respect to the actions of the Kool Smiles Defendants’ staff and
49
Case 20-33918 Document 150-1 Filed in TXSB on 08/25/20 Page 50 of 79
1 employees, they had a non-delegable duty to assess all equipment, including but not limited 2 to the pulse oximeter and oxygen supply prior to accepting patients for recovery after 3 general anesthesia. Further, given the nature of the potentially dangerous medical services 4 being rendered here (invasive and potentially dangerous dental procedures, accompanied 5 by general anesthesia, on a two-year-old child in a dental clinic), the duties owed by the 6 Kool Smiles Defendants to Zion and his family must be treated as non-delegable. 7 308. With respect to the actions and omissions of Defendant Roberts, as described 8 above, including but not limited to his handling of the general anesthesia on Zion, and 9 Zion’s recovery phase, Defendant Roberts was an agent and/or employee of both 10 Defendant Desert State and of the Kool Smiles Defendants. Alternatively, and at a 11 minimum, both Defendant Desert State and the Kool Smiles Defendants held Defendant 12 Roberts out as their agent and representative, and Defendant Roberts was reasonably 13 perceived as such by customers of the Kool Smiles Defendants, including the Gastelums. 14 Further, given the nature of the potentially dangerous medical services being rendered here 15 (invasive and potentially dangerous dental procedures, accompanied by general anesthesia, 16 on a two-year-old child in a dental clinic), the duties owed by both Defendant Desert State 17 and the Kool Smiles Defendants to Zion and his family must be treated as non-delegable. 18 309. With respect to the actions and omissions of Defendant Montoya, as 19 20 described above, including but not limited to his actions in rendering invasive and 21 potentially dangerous dental treatments to Zion on December 16, 2017, without 22 contemporaneous X-rays, and without providing Zion’s parents with safer, less expensive, 23 and less invasive options (such as silver diamine fluoride), Defendant Montoya was an 24 agent and/or employee of the Kool Smiles Defendants. Alternatively, and at a minimum, 25 the Kool Smiles Defendants held Defendant Montoya out as their agent and representative, 26 and Defendant Montoya was reasonably perceived as such by customers of the Kool 27 Smiles, Defendants including the Gastelums. Further, given the nature of the potentially 28 dangerous medical services being rendered here (invasive and potentially dangerous dental
50
Case 20-33918 Document 150-1 Filed in TXSB on 08/25/20 Page 51 of 79
1 procedures, accompanied by general anesthesia, on a two-year-old child in a dental clinic), 2 the duties owed by the Kool Smiles Defendants to Zion and his family must be treated as 3 non-delegable. 4 310. With respect to the actions and omissions of Defendant Cervantes, as 5 described above, including but not limited to his actions in recommending the invasive and 6 potentially dangerous dental treatments performed on Zion on December 16, 2017, without 7 contemporaneous X-rays, and without providing Zion’s parents with safer, less expensive, 8 and less invasive options (such as silver diamine fluoride), Defendant Cervantes was an 9 agent and/or employee of the Kool Smiles Defendants. Alternatively, and at a minimum, 10 the Kool Smiles Defendants held Defendant Cervantes out as their agent and 11 representative, and Defendant Cervantes was reasonably perceived as such by customers 12 of Kool Smiles, including the Gastelums. Further, given the nature of the potentially 13 dangerous medical services being rendered here (invasive and potentially dangerous dental 14 procedures, accompanied by general anesthesia, on a two-year-old child in a dental clinic), 15 the duties owed by the Kool Smiles Defendants to Zion and his family must be treated as 16 non-delegable. 17 311. With respect to the actions and omissions of Defendant Rojas, as described 18 above, including but not limited to her role in overseeing the defective “informed consent” 19 20 process, the failure during that process to provide Zion’s parents with safer, less expensive, 21 and less invasive options (such as silver diamine fluoride), and the repeated overscheduling 22 of patients, Defendant Rojas was an agent and/or employee of the Kool Smiles Defendants. 23 Alternatively, and at a minimum, the Kool Smiles Defendants held Defendant Rojas out as 24 their agent and representative, and Defendant Rojas was reasonably perceived as such by 25 customers of the Kool Smiles Defendants, including the Gastelums. Further, given the 26 nature of the potentially dangerous medical services being rendered here (invasive and 27 potentially dangerous dental procedures, accompanied by general anesthesia, on a two- 28 year-old child in a dental clinic), the duties owed by the Kool Smiles Defendants to Zion
51
Case 20-33918 Document 150-1 Filed in TXSB on 08/25/20 Page 52 of 79
1 and his family must be treated as non-delegable. 2 312. With respect to the actions and omissions of Defendant Auerbach, as 3 described above, including but not limited to the December 5, 2017 Procedure 4 Authorization Request form submitted to AHCCCS and KidsCare, where Defendant 5 Auerbach used his name, professional capacity, and professional credentials to secure 6 authorization for the dangerous and invasive treatment to be rendered to Zion on December 7 16, 2017, all without any contemporaneous X-rays, and without any attempt to provide 8 Zion’s parents with safer, less expensive, and less invasive options (such as silver diamine 9 fluoride), Defendant Auerbach was an agent and/or employee of the Kool Smiles 10 Defendants. Alternatively, and at a minimum, the Kool Smiles Defendants held Defendant 11 Auerbach out as their agent and representative, and Defendant Auerbach was reasonably 12 perceived as such by customers of Kool Smiles, including the Gastelums. Further, given 13 the nature of the potentially dangerous medical services being rendered here (invasive and 14 potentially dangerous dental procedures, accompanied by general anesthesia, on a two- 15 year-old child in a dental clinic), the duties owed by the Kool Smiles Defendants to Zion 16 and his family must be treated as non-delegable. 17 313. While the exact relationship between the Kool Smiles Defendants 18 (Defendant Kool Smiles PC, Defendant Kool Smiles Holding, and Defendant KS AZ) is 19 20 unknown at this time, at a minimum, they all have vicarious liability for each other, because 21 they have all held themselves out to members of the public as one entity known as Kool 22 Smiles. Further, given the nature of the potentially dangerous medical services being 23 rendered here (invasive and potentially dangerous dental procedures, accompanied by 24 general anesthesia, on a two-year-old child in a dental clinic), the duties owed by the Kool 25 Smiles Defendants to Zion and his family must be treated as non-delegable. 26 314. Upon information and belief, the FFL Defendants are vicariously liable for 27 all other named Defendants, based on the level of control exercised (directly or indirectly) 28 by the FFL Defendants over the other Defendants.
52
Case 20-33918 Document 150-1 Filed in TXSB on 08/25/20 Page 53 of 79
1 315. Upon information and belief, the Benevis Defendants are vicariously liable 2 for the Kool Smiles Defendants, and for Defendants Mayfield, Cervantes, Auerbach, 3 Montoya, Roberts, Rojas, and Webb, based on the level of control exercised (directly or 4 indirectly) by Benevis Defendants over those Defendants. 5 316. Upon information and belief, the Kool Smiles Defendants are each 6 vicariously liable for Defendants Mayfield, Cervantes, Auerbach, Montoya, Roberts, 7 Rojas, and Webb, based on the level of control exercised (directly or indirectly) by the 8 Kool Smiles Defendants over those Defendants. 9 ALLEGATIONS REGARDING JOINT AND SEVERAL LIABILITY 10 317. All of the foregoing allegations are hereby incorporated by reference. 11 318. While Arizona has adopted principles of comparative fault, joint and several 12 liability is still appropriate under Arizona law where one party is acting as an agent or 13 servant of another party (see generally the allegations set forth immediately above) or 14 where parties are “acting in concert” with each other. See A.R.S. § 12-2506. 15 319. For purposes of “acting in concert” liability, parties are properly found to be 16 acting in concert if they are pursuing a common plan or design to commit a tortious act and 17 they have actively taken part in such a common plan or design. A.R.S. § 12-2506((F)(1). 18 320. The agreement pursuant to which parties can be found to be acting in concert 19 20 does not need to be expressed in words, and such an agreement may be implied and 21 understood to exist from the conduct itself. See Restatement (Second) of Torts, § 876. 22 321. On information and belief, the FFL Defendants, the Benevis Defendants, and 23 Defendants Mayfield, Tran, Walker and Vieth along with the Kool Smiles Defendants, 24 presumably in combination with other persons or entities who will be identified through 25 the discovery process, are expected to fit within the concept of acting in concert, as defined 26 above. In addition, all of those same parties are, on information and belief, acting as agents 27 for each other and are therefore vicariously liable for each other. 28 / / /
53
Case 20-33918 Document 150-1 Filed in TXSB on 08/25/20 Page 54 of 79
1 COUNT ONE 2 (Medical Malpractice) (Direct Negligence Claims against the Kool Smiles Defendants, 3 and Defendants Cervantes, Montoya, Roberts, and Webb) (With Vicarious Liability Claims against the Kool Smiles Defendants, 4 the Benevis Defendants, Defendants Mayfield, Tran, Walker, and Vieth, the FFL Defendants, and Defendant Desert State) 5 6 322. All of the foregoing allegations are hereby incorporated by reference. 7 323. At all relevant times, the dentists, assistants, hygienists, administrators, and 8 medical directors employed by or affiliated with the Kool Smiles Yuma clinic had a duty 9 to provide medical care and treatment to patients, including Zion, pursuant to A.R.S. 12- 10 561 et seq., and to exercise that degree of care, skill, and learning expected of a reasonable, 11 prudent health care provider in the profession or class to which he or she belongs, acting 12 in the same or similar circumstances. 13 324. The Kool Smiles Defendants had a non-delegable duty to insure their Yuma 14 clinic had the proper equipment, licensed personnel, trained personnel, and policies and 15 procedures to provide pre-operative evaluation, operative care, and post-operative care and 16 treatment for all patients who presented to the Kool Smiles Yuma clinic, including Zion. 17 325. The Kool Smiles Defendants also had a non-delegable duty to insure their 18 Yuma clinic had all equipment and trained personnel necessary to facilitate the 19 administration of general anesthesia, recovery from general anesthesia, and the ability to 20 intervene for complications from general anesthesia, for all patients, including Zion. 21 22 326. In 2017, Defendant Cervantes was an employee, owner or agent of the Kool 23 Smiles Defendants, working in the Kool Smiles Yuma clinic, and Defendant Cervantes had 24 a duty to provide dental care and treatment to his patient, Zion, in accordance with the 25 prevailing standard of care for dental providers in the same or a similar community. 26 327. In 2017, Defendant Montoya was an employee, owner or agent of the Kool 27 Smiles Defendants, working in the Kool Smiles Yuma clinic, and Defendant Montoya had 28
54
Case 20-33918 Document 150-1 Filed in TXSB on 08/25/20 Page 55 of 79
1 a duty to provide dental care and treatment to his patient, Zion, in accordance with the 2 prevailing standard of care for dental providers in the same or a similar community. 3 328. In 2017, Defendant Roberts was an agent of the Kool Smiles Defendants and 4 of Defendant Desert State, working in the Kool Smiles Yuma clinic, and Defendant Roberts 5 had a duty to provide dental anesthesia care and treatment to his patient, Zion, in 6 accordance with the prevailing standard of care with dental anesthesia providers in the 7 same or a similar community. Alternatively, with regard to any contention that Defendant 8 Roberts was an independent contractor of the Kool Smiles Defendants, and that those 9 Defendants are not responsible for his negligence or misconduct, the Kool Smiles 10 Defendants held Defendant Roberts out as their agent and representative, and Defendant 11 Roberts was reasonably perceived as such by customers of the Kool Smiles Defendants, 12 including the Gastelums. Further, Defendant Roberts was assured that the Kool Smiles 13 Yuma clinic were all adequately licensed and trained, and that the personnel staff properly 14 monitor and maintain the equipment sets, including the supply of oxygen. Further, given 15 the nature of the potentially dangerous medical services being rendered (invasive and 16 potentially dangerous dental procedures, accompanied by general anesthesia, on a two- 17 year-old child in a dental clinic), the duties owed by the Kool Smiles Defendants to Zion 18 and his family must be treated as non-delegable. 19 20 329. In 2017, Defendant Webb was an employee and/or agent of the Kool Smiles 21 Defendants working in the Kool Smiles Yuma clinic, and Defendant Webb had a duty to 22 provide dental and/or medical care and treatment to her patient, Zion, in accordance with 23 the prevailing standard of care for dental / medical providers in the same or a similar 24 community. 25 330. Defendant Montoya had a non-delegable duty to insure the Kool Smiles 26 Defendants’ Yuma facility had all equipment and trained personnel necessary to facilitate 27 the administration of general anesthesia, recovery from general anesthesia, and the ability 28 to intervene for complications from general anesthesia, for all patients, including Zion.
55
Case 20-33918 Document 150-1 Filed in TXSB on 08/25/20 Page 56 of 79
1 331. The employees, staff, hygienists, agents, and other related medical personnel 2 of the Kool Smiles Defendants, working at the Kool Smiles Yuma clinic, including but not 3 limited to Defendants Cervantes, Montoya, Roberts, and Webb, had a duty to exercise the 4 level of care, skill, and treatment that is recognized by similar prudent healthcare providers 5 in the same or similar situations. 6 332. The employees, staff, hygienists, agents, and other related medical personnel 7 of the Kool Smiles Defendants, working at the Kool Smiles Yuma clinic, including but 8 not limited to Defendants Cervantes, Montoya, Roberts, and Webb, failed to treat, observe 9 and otherwise provide medical care to Zion in accordance with the prevailing professional 10 standards of care for similar health care providers within the same or a similar medical 11 community. 12 333. The employees, staff, hygienists, agents and other related medical personnel 13 of the Kool Smiles Defendants, working at the Kool Smiles Defendants’ Yuma clinic, 14 including but not limited to Defendants Cervantes, Montoya, Roberts, and Webb, 15 undertook the duty to treat Zion in accordance with the prevailing professional dental 16 standards of care. Notwithstanding the duties undertaken, they breached their duties by 17 negligently doing or failing to do one or more acts, any and/or all of which are a departure 18 from the prevailing professional standards of care for similar health care providers in the 19 20 same or a similar medical community. 21 334. The employees, staff, hygienists, agents and other related medical personnel 22 of the Kool Smiles Defendants, working at the Kool Smiles Yuma clinic, including but not 23 limited to Defendants Cervantes, Montoya, Roberts, and Webb, breached their applicable 24 standard of care and the individual and collective breaches of the standard of care are the 25 direct and proximate cause of the death of Zion, on December 20, 2017. 26 335. The Kool Smiles Defendants’ staff, hygienists, agents and other related 27 medical personnel had a duty to assess and maintain all equipment and supplies, including 28 but not limited to the pulse oximeter and oxygen supply.
56
Case 20-33918 Document 150-1 Filed in TXSB on 08/25/20 Page 57 of 79
1 336. Defendant Cervantes breached his applicable standard of care when 2 Defendant Cervantes formulated and recommended the highly invasive treatment plan for 3 Zion, to be accompanied by general anesthesia, and Defendant Cervantes did so despite his 4 failure to obtain contemporaneous X-rays to support or justify such an invasive treatment 5 plan, as well as a failure to consider less invasive and safer treatment alternatives, including 6 silver diamine fluoride. 7 337. Defendant Montoya breached his applicable standard of care when 8 Defendant Montoya implemented the highly invasive treatment plan for Zion, to be 9 accompanied by general anesthesia, despite the failure to obtain contemporaneous X-rays 10 to support or justify such an invasive treatment plan, and the related failure to consider less 11 invasive and safer treatment alternatives, including silver diamine fluoride. 12 338. Defendant Montoya also breached the standard of care by scheduling and 13 permitting multiple children under his care and guidance to be exposed to general 14 anesthesia and/or recovery simultaneously. 15 339. Defendant Montoya breached the standard of care by not assessing all 16 equipment, including the pulse oximetry and oxygen supply, prior to initiating treatment 17 of child-patients at the Kool Smiles Yuma clinic on December 16, 2017. 18 340. Defendant Roberts breached his applicable standard of care in his 19 20 management of Zion’s post-operative and post-anesthesia care, including by leaving Zion 21 alone in the “recovery” room, all as set forth in detail above. 22 341. Defendants Montoya, Roberts, and Webb, and possibly other Kool Smiles 23 Defendants’ staff, failed to follow the applicable standard of care during the post-operative 24 period for Zion, including monitoring Zion’s post-anesthesia recovery and initiation of 25 PALS protocol. 26 342. The Kool Smiles Defendants failed to develop and implement proper policies 27 and procedures for their recovery room and their post-anesthesia care. 28
57
Case 20-33918 Document 150-1 Filed in TXSB on 08/25/20 Page 58 of 79
1 343. An SpO2 of 93% or less in a child recovering from general anesthesia must 2 be evaluated by a qualified health care professional. 3 344. The Kool Smiles Defendants failed in their duty to provide functioning 4 equipment and necessary supplies for the safe recovery of their patients recovering from 5 general anesthesia. 6 345. Defendants Montoya, Roberts, and Webb, and possibly other Kool Smiles 7 Defendants’ staff, hygienists, agents and other related medical personnel, failed to 8 accurately and timely evaluate Zion’s SpO2 during his recovery from general anesthesia. 9 346. A pulse of 80 beats per minute or less in a two-year-old child recovering from 10 general anesthesia must be evaluated by a qualified health care professional. 11 347. Defendants Montoya, Roberts, and Webb, and possibly other Kool Smiles 12 staff, hygienists, agents and other related medical personnel, failed to accurately and timely 13 evaluate Zion’s pulse rate. 14 348. The Kool Smiles Defendants are liable for the negligent acts committed by 15 their agents, employees, staff, hygienists, and other related medical/dental personnel of the 16 Kool Smiles Defendants working at the Yuma clinic, including but not limited to 17 Defendants Cervantes, Montoya, Roberts, and Webb, who breached the prevailing 18 professional standard of care in failing to timely and properly diagnose, plan, manage, treat, 19 20 and evaluate Zion on a pre-operative, operative, and post-operative basis, causing and/or 21 contributing to Zion’s death. 22 349. The Benevis Defendants are liable for the negligent acts committed by the 23 employees, staff, hygienists, and other medical personnel of the Kool Smiles Defendants 24 working at the Yuma clinic, including but not limited to Defendants Cervantes, Montoya, 25 Roberts, and Webb, who breached the prevailing professional standard of care in failing to 26 timely and properly diagnose, plan, manage, treat, and evaluate Zion on a pre-operative, 27 operative, and post-operative basis, causing and/or contributing to Zion’s death. 28
58
Case 20-33918 Document 150-1 Filed in TXSB on 08/25/20 Page 59 of 79
1 350. Defendants FFL and/or FFL Capital Partners are liable for the negligent acts 2 committed by the employees, staff, hygienists, agents and other related medical personnel 3 of the Kool Smiles Defendants working at the Yuma clinic, including but not limited to 4 Defendants Cervantes, Montoya, Roberts, and Webb, who breached the prevailing 5 professional standard of care in failing to timely and properly diagnose, plan, manage, treat, 6 and evaluate Zion on a pre-operative, operative, and post-operative basis, causing and/or 7 contributing to Zion’s death. 8 351. Defendants Mayfield, Tran, Walker, and Vieth are liable for the negligent 9 acts committed by the employees, staff, hygienists, agents and other related medical 10 personnel of the Kool Smiles Defendants working at the Yuma clinic, including but not 11 limited to Defendants Cervantes, Montoya, Roberts, and Webb, who breached the 12 prevailing professional standard of care in failing to timely and properly diagnose, plan, 13 manage, treat, and evaluate Zion on a pre-operative, operative, and post-operative basis, 14 causing and/or contributing to Zion’s death. 15 352. Defendant Desert State is liable for the negligent acts committed by its agents 16 working at the Kool Smiles Yuma clinic, specifically, Defendant Roberts, who breached 17 the prevailing professional standard of care in failing to timely and properly diagnose, plan, 18 manage, treat, and evaluate Zion on a pre-operative, operative, and post-operative basis, 19 20 with specific respect to the general anesthesia of Zion, causing and/or contributing to 21 Zion’s death. 22 353. Apart from the derivative liability of the Kool Smiles Defendants, those 23 Defendants were directly negligent in caring for Zion, as alleged above, thereby causing 24 and/or contributing to Zion’s death. 25 354. Defendant Cervantes’ negligent acts in caring for Zion, as alleged above, 26 caused and/or contributed to Zion’s death. 27 355. Defendant Montoya’s negligent acts in caring for Zion, as alleged above, 28 caused and/or contributed to Zion’s death.
59
Case 20-33918 Document 150-1 Filed in TXSB on 08/25/20 Page 60 of 79
1 356. Defendant Roberts’ negligent acts in caring for Zion, as alleged above, 2 caused and/or contributed to Zion’s death. 3 357. Defendant Webb’s negligent acts in caring for Zion, as alleged above, caused 4 and/or contributed to Zion’s death. 5 WHEREFORE, on Count One, Plaintiff requests judgment for direct negligence 6 against the Kool Smiles Defendants, and Defendants Cervantes, Montoya, Roberts, and 7 Webb, and each of them, and for derivative liability against the Kool Smiles Defendants, 8 the FFL Defendants, the Benevis Defendants, Defendants Mayfield, Tran, Walker, and 9 Vieth, and Defendant Desert State, and each of them, as follows: 10 A. For general compensatory damages in an amount to be proven at trial; 11 B. For special damages according to proof; 12 C. For punitive damages in an amount that will punish Defendants and/or deter 13 Defendants and others from similar misconduct in the future; 14 D. For attorneys’ fees; 15 E. For costs of suit; and 16 F. For such other and further relief as the Court deems just and proper. 17
18 COUNT TWO 19 (Negligent Hiring / Negligent Supervision) (The Kool Smiles Defendants, the Benevis Defendants, 20 Defendants Mayfield, Vieth, Tran, and Walker, and Defendant Desert State) 21 358. All of the foregoing allegations are hereby incorporated by reference. 22 359. The Kool Smiles Defendants had a duty to hire, retain and supervise qualified 23 employees in their dental business. 24 360. The Kool Smiles Defendants opted to provide dentistry with general 25 anesthesia to its child-patients. 26 361. Performing dental surgery with general anesthesia on pediatric patients has 27 inherent risks for which individuals must be specifically trained, with specific emphasis on 28 the risks associated with pediatric patients.
60
Case 20-33918 Document 150-1 Filed in TXSB on 08/25/20 Page 61 of 79
1 362. With respect to the use of general anesthesia in pediatric patients, all support 2 personnel must be trained in how to properly respond to emergencies arising out of the use 3 of general anesthesia, including, specifically, medical complications in pediatric patients 4 (foreseen and unforeseen) who are receiving general anesthesia. 5 363. Complications with the administration of general anesthesia, both generally 6 and with pediatric patients, include but are not limited to: loss of respiratory drive, cardiac 7 dysrhythmia, and loss of patent airway. 8 364. All support personnel must be trained on the proper monitoring of post- 9 anesthesia pediatric patients, including but not limited to the operation of all equipment 10 used for monitoring a patient in recovery, troubleshooting such equipment, and continuous 11 monitoring and assessment of the patient, until the child-patient has successfully recovered 12 maintenance of airway, breathing and circulation independently. 13 365. The Kool Smiles Defendants failed in their duty to provide qualified 14 employees, staff, and agents for the administration of general anesthesia, both in general 15 and with respect to the care provided to Zion. 16 366. The Kool Smiles Defendants failed in their duty to provide qualified 17 employees, staff, and agents for the recovery of patients from general anesthesia, both in 18 general and with respect to the care provided to Zion. 19 20 367. The Kool Smiles Defendants failed in their duty to properly train and 21 supervise personnel regarding post-anesthesia care and the requirements of continuous 22 monitoring for such patients, both in general and with respect to the care provided to Zion. 23 368. The above-referenced failures on the part of the Kool Smiles Defendants 24 caused and/or contributed to Zion’s death. 25 369. The Benevis Defendants failed in their duty to provide qualified agents, 26 employees, and support staff for the administration of general anesthesia, and in its 27 supervision of such personnel, both in general and with respect to the care provided to 28 Zion.
61
Case 20-33918 Document 150-1 Filed in TXSB on 08/25/20 Page 62 of 79
1 370. The Benevis Defendants failed in their duty to provide qualified agents, 2 employees, and support staff for the recovery of patients from general anesthesia, and in 3 its supervision of such personnel, both in general and with respect to the care provided to 4 Zion. 5 371. The above-referenced failures on the part of the Benevis Defendants caused 6 and/or contributed to Zion’s death. 7 372. Defendants Mayfield, Tran, Walker, and Vieth failed in their duty to provide 8 qualified agents, employees, agents and support staff for the administration of general 9 anesthesia, and in his supervision of such personnel, both in general and with respect to the 10 care provided to Zion. 11 373. Defendants Mayfield, Tran, Walker, and Vieth failed in their duty to provide 12 qualified agents, employees, and support staff for the recovery of patients from general 13 anesthesia, and in their supervision of such personnel, both in general and with respect to 14 the care provided to Zion. 15 374. The above-referenced failures on the part of Defendants Mayfield, Tran, 16 Walker, and Vieth caused and/or contributed to Zion’s death. 17 375. Defendant Desert State failed in its duty to provide qualified agents, 18 employees, and support staff for the administration of general anesthesia, and in its 19 20 supervision of such personnel, both in general and with respect to the care provided to 21 Zion. 22 376. The above-referenced failures on the part of Defendant Desert State caused 23 and/or contributed to Zion’s death. 24 WHEREFORE, on Count Two, Plaintiff requests judgment against the Kool Smiles 25 Defendants, the Benevis Defendants, Defendants Mayfield, Tran, Walker, and Vieth, and 26 Defendant Desert State, and each of them, as follows: 27 A. For general compensatory damages in an amount to be proven at trial; 28 B. For special damages according to proof;
62
Case 20-33918 Document 150-1 Filed in TXSB on 08/25/20 Page 63 of 79
1 C. For punitive damages in an amount that will punish Defendants and/or deter 2 Defendants and others from similar misconduct in the future; 3 D. For attorneys’ fees; 4 E. For costs of suit; and 5 F. For such other and further relief as the Court deems just and proper. 6 COUNT THREE 7 (Negligence per se) (Direct Negligence Claims against the Kool Smiles Defendants, 8 and Defendants Montoya, Roberts, Cervantes, and Auerbach) (Vicarious Liability Claim against Defendant Desert State) 9 377. All of the foregoing allegations are hereby incorporated by reference. 10 378. The Arizona regulations which oversee the practice of dentistry are located 11 in the Arizona Administrative Code, Title 4, Chapter 11. The Arizona Revised Statutes 12 which oversee the practice of dental health are found at ARS §§ 32-1201 et seq. 13 379. The Kool Smiles Defendants violated A.A.C. R4-11-1301(B)(2)(a and b) by 14 not having the appropriate equipment and/or adequately trained staff available to Zion 15 during his dental procedures and recovery from general anesthesia on December 16, 2017, 16 and, in this regard, those Defendants were negligent per se. This violation caused and/or 17 contributed to Zion’s death. 18 380. The Kool Smiles Defendants violated A.A.C. R4-11-1301(E)(1 and 8) by 19 20 failing to have pre-, intra-, and post-operative ECG strips for Zion on December 16, 2017 21 and by failing to have the time of discharge/status accurately documented and, in this 22 regard, they were negligent per se. This violation caused and/or contributed to Zion’s 23 death. 24 381. Defendant Roberts violated A.A.C. R4-11-1301(E)(1 and 8) by failing to 25 have pre-, intra-, and post-operative ECG strips for Zion and the time of discharge/status 26 accurately documented and, in this regard, he was negligent per se. This violation caused 27 and/or contributed to Zion’s death. 28
63
Case 20-33918 Document 150-1 Filed in TXSB on 08/25/20 Page 64 of 79
1 382. Defendant Roberts violated A.A.C. R4-11-1301(E)(1-3) by failing to have 2 proper intra- and postoperative documentation, including pulse oximetry, blood pressure, 3 and vital signs, for Zion and, in this regard, he was negligent per se. This violation caused 4 and/or contributed to Zion’s death. 5 383. Defendant Roberts violated A.A.C. R4-11-1301(H) by failing to 6 continuously supervise Zion from the initiation of anesthesia until his circulation, 7 oxygenation and ventilation were stable and, in this regard, he was negligent per se. This 8 violation caused and/or contributed to Zion’s death. 9 384. Defendant Roberts violated A.A.C. R4-11-1301 (H) by failing to complete 10 Zion’s recovery by determining that he met the criteria for discharge prior to commencing 11 a subsequent anesthesia case and, in this regard, he was negligent per se. This violation 12 caused and/or contributed to the death of Zion. 13 385. Defendant Roberts violated A.A.C. R4-11-1301(I) by failing to employ an 14 appropriately licensed person (allopathic or osteopathic physician or CRNA) to 15 continuously monitor Zion until oxygenation, ventilation, and circulation were stable and, 16 in this regard, he was negligent per se. This violation caused and/or contributed to Zion’s 17 death. 18 386. Defendant Roberts violated A.A.C. R4-11-1305 by failing to timely report 19 20 Zion’s death and, in this regard, he was negligent per se. 21 387. Defendant Montoya violated A.A.C. R4-11-1307 (B)(2) by failing to request 22 an on-site evaluation of the Kool Smiles Yuma clinic with respect to general anesthesia 23 services and, in this regard, he was negligent per se. This violation caused and/or 24 contributed to Zion’s death. 25 388. Defendant Montoya violated A.A.C. R4-11-1304(G) by failing to employ an 26 appropriately licensed person (allopathic or osteopathic physician or CRNA) to 27 continuously monitor Zion until oxygenation, ventilation, and circulation were stable and, 28
64
Case 20-33918 Document 150-1 Filed in TXSB on 08/25/20 Page 65 of 79
1 in this regard, he was negligent per se. This violation caused and/or contributed to Zion’s 2 death. 3 389. Defendant Montoya violated A.A.C. R4-11-1305 by failing to report Zion’s 4 death and, in this regard, he was negligent per se. 5 390. Defendant Roberts violated ARS §32-1201.01(12) and was unprofessional 6 in his conduct, by knowingly representing himself as an anesthesiologist specializing in 7 pediatrics to Veronica, and, in this regard, he was negligent per se. This violation caused 8 and/or contributed to Zion’s death. 9 391. Defendant Montoya violated ARS §32-1201.01 by performing permanent 10 dental interventions on Zion without radiographic or clinical evidence of necessity, and 11 was negligent per se. This violation caused or contributed to the death of Zion. 12 392. Defendant Auerbach violated ARS §32-1201.01(15) by permitting his name 13 to be attached to a fraudulent prior authorization request, submitted by Defendant Kool 14 Smiles, to a governmental entity requesting authorization for services which were not 15 radiographically indicated, and was negligent per se. This violation caused or contributed 16 to the death of Zion. 17 393. Defendant Cervantes violated ARS §32-1201.01(12 and 15) by authoring a 18 fraudulent treatment plan which was the genesis for the fraudulent prior authorization 19 20 request for dental services to be performed on Zion and was negligent per se. This violation 21 caused or contributed to the death of Zion. 22 394. Defendant Roberts violated ARS §32-1201.01(14) for failing to monitor 23 Zion during the intraoperative and recovery period and allowing Zion’s respiratory status 24 to be compromised, leading to a cardiac dysrhythmia, severe anoxic brain injury and death, 25 and was negligent per se. This violation caused or contributed to the death of Zion. 26 395. Defendant Montoya violated ARS §32-1201.01(14) for failing to monitor 27 Zion during the recovery period and allowing Zion’s respiratory status to be compromised, 28
65
Case 20-33918 Document 150-1 Filed in TXSB on 08/25/20 Page 66 of 79
1 leading to a cardiac dysrhythmia, severe anoxic brain injury and death, and was negligent 2 per se. This violation caused or contributed to the death of Zion. 3 396. Defendants Cervantes, Montoya, and Roberts violated ARS §32-1264 (A) (1, 4 3, and 5) by not maintaining a medical record of Zion that included a history and clinical 5 examinations, diagnosis and treatment planning, and radiographs and were negligent per 6 se. This violation caused or contributed to the death of Zion. 7 397. Defendant Kool Smiles was not a registered business entity within the 8 description of ARS § 32-1213 (A). 9 398. All of these aforementioned acts caused and/or contributed to Zion’s death, 10 in leading to the unnecessary and inappropriate procedures performed on Zion and the 11 resulting failure to properly perform the medical services pre-operatively, operatively and 12 post-operatively. 13 WHEREFORE, on Count Three, Plaintiff requests judgment against the Kool 14 Smiles Defendants, and Defendants Montoya, Roberts, and Auerbach, and each of them, 15 and for derivative liability against Defendant Desert State, as follows: 16 A. For general compensatory damages in an amount to be proven at trial in 17 excess of the minimum jurisdictional limits of this Court; 18 B. For special damages according to proof; 19 20 C. For punitive damages in an amount that will punish Defendants and/or deter 21 Defendants and others from similar misconduct in the future; 22 D. For attorneys’ fees; 23 E. For costs of suit; and 24 F. For such other and further relief as the Court deems just and proper.
25 COUNT FOUR (Consumer Fraud – A.R.S. § 44-1521) 26 (The Kool Smiles Defendants) (With Vicarious Liability Claims Against the 27 FFL Defendants and the Benevis Defendants)
28
66
Case 20-33918 Document 150-1 Filed in TXSB on 08/25/20 Page 67 of 79
1 399. All of the foregoing allegations are hereby incorporated by reference. 2 400. The Kool Smiles Defendants’ acts are consistent with the Kool Smile’s 3 Business Model, which contains essential elements such as incentivizing the excessive use 4 of unnecessary pulpotomies/pulpectomies and crowns which yield higher revenue; 5 instituting a bonus system that rewards dentists for operative revenue and for hygiene 6 revenue; subjecting employees to discipline or termination for earning revenue of less than 7 a set dollar value per patient, without regard to the condition or needs of the patient; as well 8 as other goals related to the desired economic return; and requiring the Kool Smiles 9 Defendant employees or agents (namely Defendant Mayfield) to regularly report 10 information on quota-based reports (which could only be achieved by performing 11 unnecessary procedures) to Defendant FFL. 12 401. In accordance with the Kool Smiles Business Model of maximizing 13 profitability through the use of excessive and unnecessary procedures on children to 14 ultimately defraud Medicaid/AHCCCS, Defendant Kool Smiles engaged in the act, use or 15 employment of deception, deceptive acts or practices, fraud, false pretenses, false 16 promises, misrepresentations, or the concealment, suppression or omission of material 17 facts with the intent that the Gastelums rely upon such concealment, suppression or 18 omission. 19 20 402. The Kool Smiles Defendants made deceptive and misleading claims to the 21 Gastelums in connection with the sale of its services by misrepresenting the need for the 22 procedures performed on Zion. More specifically, the Kool Smiles Defendants made 23 deceptive and misleading claims to Gastelums regarding the need for the procedures, which 24 would increase bonuses consistent with the Kool Smiles Business Model, on their son Zion 25 by performing pulpotomies/pulpectomies and placing dental crowns under general 26 anesthesia, rather than using or suggesting alternative methods such as fillings, fluoride or 27 sealants. 28
67
Case 20-33918 Document 150-1 Filed in TXSB on 08/25/20 Page 68 of 79
1 403. Defendant Kool Smiles made deceptive and misleading claims to Gastelums 2 in connection with the sale of its services by misrepresenting the need for the procedure to 3 perform pulpotomies/pulpectomies and place dental crowns in Zion’s mouth, because the 4 Kool Smiles Defendants knew or should have known that such procedures, rather than 5 alternative procedures such as fillings, were excessive and not medically necessary. 6 404. The Kool Smiles Defendants’ continued deceptive and misleading use of 7 pulpotomies/pulpectomies and crowns has been so pervasive that multiple children in 8 families received crowns versus fillings leading low-income families to believe these 9 procedures were necessary and appropriate, and in fact the industry standard. In this case, 10 in order to abide by and satisfy the Kool Smiles Business Model of, among other things, 11 increasing revenue by means of excessive use of unnecessary pulpotomies/pulpectomies 12 and crowns, obtaining bonuses from operative services rather than hygiene, and earning a 13 minimum sum certain per patient, the Kool Smiles Defendants made deceptive and 14 misleading claims to Gastelums in connection with the sale of its services by 15 misrepresenting the effectiveness of the procedure on Zion, a two-year-old child, to 16 perform pulpotomies/pulpectomies and place crowns on multiple teeth when the Kool 17 Smiles Defendants knew or should have known, based on Zion’s age, Zion’s primary teeth 18 would be falling out within a short period and such an operation would be excessive and 19 20 unnecessary given the existence of alternative methods. 21 405. The Kool Smiles Defendants made deceptive and misleading claims to the 22 Gastelums in connection with the sale of its services by misrepresenting the need for the 23 procedure to perform pulpotomies/pulpectomies and place crowns on multiple teeth of their 24 two-year-old child, Zion, failed to inform the Gastelums about alternative procedures such 25 as fillings so as to minimize the chance that the Gastelums would seek a second opinion or 26 not agree to the more lucrative procedures. 27 406. The Kool Smiles Defendants made deceptive and misleading claims to 28 Gastelums in connection with the sale of its services by misrepresenting the skills and
68
Case 20-33918 Document 150-1 Filed in TXSB on 08/25/20 Page 69 of 79
1 training of the employees and by misrepresenting the adequacy of the facility’s equipment 2 used during and after the pulpotomies/pulpectomies and crown placements, to monitor the 3 anesthesia and post-anesthesia care. 4 407. The Kool Smiles Defendants continued deceptive and misleading use of 5 pulpotomies/pulpectomies and application of crowns had been so pervasive that multiple 6 children in numerous families received unnecessary crowns with pulpectomies versus 7 fillings leading low-income families to believe these procedures were appropriate. 8 408. The Gastelums were victims of these deceptive practices, and relied upon the 9 Kool Smiles’ Defendants misleading claims to them regarding their two-year-old son’s 10 procedures of pulpotomies/pulpectomies and crown placement by trusting the Kool Smiles 11 Defendants with their son, Zion, and allowing him to be placed under general anesthesia 12 for an unnecessary and risky surgery. 13 409. As a result of the Kool Smiles Defendants’ deceptive and misleading claims 14 in connection with the sale of its services that the Gastelums relied upon, Plaintiff and his 15 wife were consequently and proximately injured when their two-year-old son, Zion, died 16 as a result of the profit driven, medically unnecessary procedures, of putting Zion under 17 general anesthesia for pulpotomies/pulpectomies and crowns, rather than using an 18 alternative method. 19 20 410. The Kool Smiles Defendants’ conduct was malicious and attended by willful, 21 wanton and reckless indifference, warranting an award of punitive damages. 22 411. The FFL Defendants, Benevis Defendants, and Defendants Mayfield, Tran, 23 Walker and Vieth, are vicariously liable for the actions of the Kool Smiles Defendants. 24 WHEREFORE, on Count Four, Plaintiff requests judgment against the Defendant 25 Kool Smiles, and against the FFL Defendants, the Benevis Defendants, and Defendants 26 Mayfield, Tran, Walker and Vieth, and each of them, as follows: 27 A. For general compensatory damages in an amount to be proven at trial in 28 excess of the minimum jurisdictional limits of this Court;
69
Case 20-33918 Document 150-1 Filed in TXSB on 08/25/20 Page 70 of 79
1 B. For special damages according to proof; 2 C. For punitive damages in an amount that will punish Defendants and/or deter 3 Defendants and others from similar misconduct in the future; 4 D. For attorneys’ fees; 5 E. For costs of suit; and 6 F. For such other and further relief as the Court deems just and proper. 7 COUNT FIVE 8 (Aiding and Abetting) 9 (The FFL Defendants, the Benevis Defendants, and Defendants Mayfield, Tran, Vieth, 10 Walker, Cervantes, Montoya, Auerbach, Roberts, Rojas and Desert State) 11 412. All of the foregoing allegations are hereby incorporated by reference. 12 413. The Kool Smiles Defendants fraudulently obtained consent from Veronica 13 by misrepresenting the appropriateness and medical necessity of the 14 pulpotomy/pulpectomy and placing crowns on six teeth of their two-year-old, Zion. But 15 for the actions of the Kool Smiles Defendants, Zion would not have undergone these 16 procedures. 17 414. With respect to Kool Smiles Defendants’ fraudulent conduct, namely against 18 the Plaintiffs as parents of two-year-old Zion, of performing unnecessary and excessive 19 medical procedures on children, namely on Zion, knowingly misrepresenting the necessity 20 of such procedures so as to obtain consent from parents to perform said procedures, and 21 ultimately performing excessive and unnecessary procedures to maximize profits by 22 defrauding Medicaid, at various times and in various ways, the Defendants, and each of 23 them, excluding the Kool Smiles Defendants, substantially assisted the Kool Smiles 24 Defendants in this fraudulent activity. 25 26 415. Each of the Defendants, excluding the Kool Smiles Defendants, knew the 27 Kool Smiles Defendants’ conduct constituted fraud against consumers, and namely against 28 the Gastelums, and yet they continued to substantially assist in the control, enforcement,
70
Case 20-33918 Document 150-1 Filed in TXSB on 08/25/20 Page 71 of 79
1 and encouragement of the Kool Smiles Business Model to enable the Kool Smiles 2 Defendants to commit the fraud. 3 416. Each of the Defendants, excluding the Kool Smiles Defendants, knew or 4 should have known that they were substantially assisting the Kool Smiles Defendants in its 5 fraudulent conduct where each defendant abided by the Kool Smiles Business Model. 6 417. Defendant FFL defined the Kool Smiles Business Model for the Benevis 7 Defendants and Kool Smiles Defendants, based upon a scheme to defraud Medicaid and 8 child-patients families, and communicated this business model to the Benevis Defendants, 9 Kool Smiles Defendants, and namely Defendant Mayfield. 10 418. The Kool Smiles Business Model controls the quantity and quality of patient 11 care. 12 419. A critical aspect of the Kool Smiles Business Model was to use crowns 13 excessively, exclusively, and unnecessarily as they took less time to apply and provided 14 significantly higher revenues than drilling and filling a cavity. 15 420. A critical aspect of the Kool Smiles Business Model was to perform 16 pulpotomy/pulpectomy procedures unnecessarily, often without radiographic justification 17 in order to increase revenues. 18 421. The Kool Smiles Business Model incentivized the medical providers – 19 20 dentists and hygienists – and office staff, to follow unattainable quota-driven protocols 21 which led to medically unnecessary, excessive and substandard treatment. 22 422. A major part of Kool Smiles Business Model is for the dentists to spend their 23 time maximizing operative procedure volume and revenue. The Kool Smiles Business 24 Model incentivized the medically unnecessary and excessive procedures by only awarding 25 bonuses for operative revenue and not hygiene revenue. Defendants Mayfield, Cervantes, 26 Soto, Auerbach and Rojas knew the Kool Smiles Business Model required they perform 27 unnecessary and inappropriate crown and pulpectomy/pulpotomy procedures to maximize 28 revenue.
71
Case 20-33918 Document 150-1 Filed in TXSB on 08/25/20 Page 72 of 79
1 423. Defendants Mayfield, Tran, Vieth, Walker, Cervantes, Auerbach, Roberts, 2 Rojas, and Desert State all personally profited from the performance of unnecessary and 3 inappropriate crowns and pulpectomy/pulpotomy procedures on children as young as two- 4 years-old. 5 424. Defendants Mayfield, Tran, Vieth, Walker, Cervantes, Auerbach, Roberts, 6 Rojas, and Desert State all placed personal financial benefits linked directly to performing 7 unnecessary procedures, such as Zion’s treatment, above patient safety in an effort to aid 8 and abet the Kool Smiles Defendants’ tortious acts. 9 425. Based upon information and belief, in 2017, Defendants Mayfield, 10 Cervantes, Soto, Auerbach, and Rojas job performance was evaluated based upon monthly 11 (or daily) quotas and was incentivized to maximize revenue. 12 426. As a result of the bonus system for operative procedures, medical providers 13 were spending their time on medically unnecessary and excessive procedures. The 14 consequence of this policy was that dentists did not have time to perform all of their 15 hygiene responsibilities, such as a pre-consultation to determine the patient’s medical 16 history and to determine whether X-rays were necessary. Therefore, hygienists were 17 required to take on significantly more responsibility including the responsibility to make 18 treatment decisions that by Arizona law should have been made by the dentist. Hygienists 19 20 were required to complete their work in less than 15 minutes per patient, per Kool Smiles’ 21 policy. The direct result of the bonus system was substandard care. 22 427. The Kool Smiles Business Model to be incorporated by all Kool Smiles 23 Defendants’ facilities, intended to defraud Medicaid through reimbursements of medically 24 unnecessary and excessive procedures to maximize returns for its investors. Medicaid pays 25 approximately 30-40% of the commercially available rate. As such, to provide the 26 investors with above market returns, the Kool Smiles Business Model developed by the 27 FFL Defendants would not succeed if the Kool Smiles Defendants’ practices complied with 28 the standard practices of Non-Medicare dependent dental practices.
72
Case 20-33918 Document 150-1 Filed in TXSB on 08/25/20 Page 73 of 79
1 428. Because maximizing returns for investors was the principal goal of the Kool 2 Smiles Business Model, developed by the FFL Defendants, each Kool Smiles Defendants’ 3 clinic had per patient, per provider and per facility/day revenue targets (report cards), which 4 were designed to achieve the desired return. Employees were punished, rewarded, and even 5 fired in accordance with the extent to which they achieved procedure goals which 6 correlated to that desired financial return. In order to meet that desired return, they were 7 compelled to resort to all manner of unnecessary and incomplete procedures and other 8 improprieties which resulted in the filing of false Medicaid claims as described herein. 9 429. Defendants’ substantial assistance in the Kool Smiles Defendants’ fraudulent 10 conduct against the Gastelums in this case enabled the Kool Smiles Defendants to perform 11 the medically unnecessary and excessive procedure of performing a 12 pulpotomies/pulpectomies and placing crowns on six of the teeth of young two-year-old, 13 Zion which ultimately caused his death. 14 430. The Kool Smiles Defendant billed Medicaid approximately $2,800 for 15 Zion’s care and treatment, after said treatment resulted in his death. 16 WHEREFORE, on Count Five, Plaintiff requests judgment against Defendants FFL, 17 Capital Partners, Benevis, Mayfield, Tran, Vieth, Walker, Cervantes, Auerbach, Roberts, 18 Rojas, and Desert State and each of them, as follows: 19 20 A. For general compensatory damages in an amount to be proven at trial in 21 excess of the minimum jurisdictional limits of this Court; 22 B. For special damages according to proof; 23 C. For punitive damages in an amount that will punish Defendants and/or deter 24 Defendants and others from similar misconduct in the future; 25 D. For attorneys’ fees; 26 E. For costs of suit; and 27 F. For such other and further relief as the Court deems just and proper. 28
73
Case 20-33918 Document 150-1 Filed in TXSB on 08/25/20 Page 74 of 79
1
2 COUNT SIX (Civil Conspiracy) 3 (The FFL Defendants, the Kool Smiles Defendants, the Benevis Defendants, and Defendants Mayfield, Tran, Vieth, Walker, Cervantes, Montoya, Roberts, Rojas, 4 Auerbach and Desert State) 5 431. All of the foregoing allegations are hereby incorporated by reference. 6 432. The FFL Defendants, the Benevis Defendants, and the Kool Smiles 7 Defendants, were not deterred by the $23,900,000 fine that was paid as a result of a 8 settlement in a case brought by the government under the False Claims Act for submitting 9 false claims to Medicaid for reimbursements of procedures on young children. 10 433. Consequently, Defendants’ continued practice is evidence that the FFL 11 Defendants, Benevis Defendants, and Kool Smiles Defendants, and namely Defendants 12 Mayfield, Rojas, Montoya, Cervantes, Tran, Vieth, Roberts, Walker, Auerbach and Desert 13 State either expressly or impliedly by the tortious conduct itself, entered into an agreement, 14 purpose, and design to continue fraudulently billing Medicaid for medically unnecessary 15 and excessive procedures, such as unnecessary pulpotomies/pulpectomies and crown 16 placements, to maximize returns for investors at the expense of vulnerable young children 17 and their parents, including, in this case, Zion and his parents. 18 434. With this fraudulent intent in mind, Defendants FFL, and Benevis, and the 19 20 Kool Smiles Defendants, and namely Defendants Mayfield, Rojas, and Cervantes took 21 action to accomplish and did accomplish the defrauding of Medicaid by, first, fraudulently 22 obtaining consent from vulnerable parents of children, namely the Gastelums in this case, 23 by stating that these medically unnecessary procedures were the appropriate method 24 without informing the parents of any other alternative methods or procedures, such as 25 fillings, so as to avoid the possibility of the parents saying no or seeking a second opinion. 26 435. The FFL Defendants, Benevis Defendants, and Kool Smiles Defendants, and 27 namely Defendants Mayfield, Rojas, Cervantes and Auerbach then used this fraudulently 28 obtained consent to perform and did perform medically unnecessary and excessive
74
Case 20-33918 Document 150-1 Filed in TXSB on 08/25/20 Page 75 of 79
1 procedures on young children, namely two-year-old Zion in this case who was put under 2 general anesthesia to receive pulpotomy/pulpectomy and crowns on six teeth even when 3 his teeth would shortly be falling out naturally, in order to maximize the return for investors 4 because Medicaid pays approximately 30-40% of the commercially available rate for the 5 reimbursement of procedures such as pulpotomies/pulpectomies and crowns. 6 436. The FFL Defendants, Benevis Defendants, and Kool Smiles Defendants, and 7 namely Defendants Mayfield, Tran, Vieth, Walker, Rojas, Roberts, Cervantes, Auerbach 8 and Desert State were all aware of lower cost and safer American Dental Association 9 approved procedures which were available yet continued to use high cost invasive 10 procedures to maximize profits to the participants in the conspiracy. 11 437. As a direct and proximate result of the acts committed pursuant to and in 12 furtherance of the conspiracy, such as the continued performance of medically unnecessary 13 and excessive procedures on children, namely Zion in this case, Gastelums were injured as 14 their two-year-old son died after receiving said procedures. 15 438. The conspiracy and conduct of the FFL Defendants, Benevis Defendants, and 16 Kool Smiles Defendants, and namely Defendants Mayfield, Tran, Vieth, Walker, Rojas, 17 Cervantes, Montoya, Roberts, Auerbach and Desert State were done in reckless disregard 18 for the health, safety and welfare of vulnerable young children and their families with the 19 20 intent to maximize profits and returns at all cost, so that the Gastelums are entitled to 21 recover punitive damages. 22 WHEREFORE, on Count Six, Plaintiff requests judgment against Defendants FFL, 23 Benevis, Kool Smiles, Mayfield, Tran, Vieth, Walker, Rojas, Cervantes, Roberts, 24 Auerbach and Desert State and each of them, as follows: 25 A. For general compensatory damages in an amount to be proven at trial in 26 excess of the minimum jurisdictional limits of this Court; 27 B. For special damages according to proof; 28 C. For punitive damages in an amount that will punish Defendants and/or deter
75
Case 20-33918 Document 150-1 Filed in TXSB on 08/25/20 Page 76 of 79
1 Defendants and others from similar misconduct in the future; 2 D. For attorneys’ fees; 3 E. For costs of suit; and 4 F. For such other and further relief as the Court deems just and proper. 5 REQUEST FOR PUNITIVE DAMAGES 6 439. All of the foregoing allegations are hereby incorporated by reference. 7 440. Punitive damages are sought with respect to all claims in this case. 8 441. Punitive damages are sought against the FFL Defendants, the Kool Smiles 9 Defendants, and Benevis Defendants (the “Punitive Damage Defendants”). As discovery 10 in this case proceeds, it may be found appropriate to request punitive damages against other 11 named or to-be-named Defendants, and, if so, an amendment will be sought at that time. 12 442. The Punitive Damage Defendants acted knowingly, and with egregious and 13 14 wanton disregard for the safety of children, by constructing a business model (the Kool 15 Smiles Business Model) aimed at performing excessive and potentially dangerous (but high 16 revenue) procedures on young children without regard for patient safety. These include, 17 without limitation, excessive and unnecessary pulpotomies/pulpectomies and crowns. 18 443. At a minimum, the Punitive Damage Defendants acted with a conscious 19 disregard of a substantial risk of serious injury to others. 20 444. The FFL Defendants, Benevis Defendants, and Kool Smiles Defendants are 21 continuing the same behaviors for which they paid $23,900,000 in fines to the government, 22 because the fine was inconsequential as compared to the profits obtained by continuing the 23 practice. 24 The Gastelums are entitled to an award of punitive damages in an amount sufficient 25 to prevent the continued fraudulent practices of the FFL Defendants, the Kool Smiles 26 Defendants, and Defendant Benevis. 27 28
76
Case 20-33918 Document 150-1 Filed in TXSB on 08/25/20 Page 77 of 79
1 WHEREFORE, the Gastelums request judgment against the Punitive Damage 2 Defendants, and each of them, as follows: 3 A. For punitive damages in a sum that will punish those Defendants and/or deter 4 those Defendants, and others, from similar misconduct in the future; and 5 B. For such other and further relief as the Court deems just and proper. 6 RESPECTFULLY SUBMITTED this 27th day of July, 2020. 7 POLI, MOON & ZANE, PLLC 8 9 By /s/ Michael N. Poli Michael N. Poli 10 Lawrence R. Moon 11 2999 North 44th Street, Suite 325 Phoenix, Arizona 85018 12
13 BURG SIMPSON ELDREDGE 14 HERSH & JARDINE 15 By /s/ Michael Burg 16 Michael Burg 17 David TeSelle 40 Inverness Drive East 18 Englewood, Colorado 80122 19 Attorneys for Plaintiffs 20 21
22 ORIGINAL of the foregoing was e-filed via TurboCourt and a Copy delivered via 23 TurboCourt this 27th day of July, 2020, 24 as follows:
25 The Honorable Sherry Stephens 26 Maricopa County Superior Court
27 28 / / /
77
Case 20-33918 Document 150-1 Filed in TXSB on 08/25/20 Page 78 of 79
1 Donn C. Alexander, Esq. Christopher Stuart, Esq. 2 JONES, SKELTON & HOCHULI, P.L.C. 3 40 N. Central Avenue, Suite 2700 Phoenix, AZ 85004 4 Attorneys for Defendants Kool Smiles, P.C., 5 Kool Smiles Holding Corp., KS AZ-2, P.C., Benevis, LLC, Benevis Holding Corp., 6 Dale Mayfield, DMD and Jane Doe Mayfield, 7 Tu Tran, DDS and Jane Doe Tran, Paul Walker, DDS and Jane Doe Walker, 8 David Vieth, DDS and Jane Doe Vieth, 9 Marcos A. Cervantes, DDS and Jane Doe Cervantes, Lucia Rojas and John Doe Rojas, 10 Mark Auerbach, DDS and Jane Doe Auerbach, 11 and Cheryl Lynn Webb and John Doe Webb
12 Frederick M. Cummings, Esq. 13 DICKINSON WRIGHT, PLLC 1850 N. Central Avenue, Suite 1400 14 Phoenix, AZ 85004 Attorneys for Defendants Aaron Roberts, DMD 15 and Jane Doe Roberts 16 John M. Green, Esq. 17 GREEN LAW OFFICES, LLC 18 200 West Jackson Blvd., Suite 2060 Chicago, IL 60606 19 Attorneys for Defendants Stephen Montoya, 20 DDS and Jane Doe Montoya
21 Wendy N. Weigand, Esq. 22 GUST ROSENFELD, P.L.C. One East Washington Street, Suite 1600 23 Phoenix, Arizona 85004 24 Attorneys for Defendants Stephen Montoya, DDS and Jane Doe Montoya 25 26
27 / / /
28
78
Case 20-33918 Document 150-1 Filed in TXSB on 08/25/20 Page 79 of 79
1 Robert Bernheim, Esq. FARHANG & MEDCOFF 2 4801 East Broadway Boulevard, Suite 311 3 Tucson, AZ 85711 Attorneys for Defendant Desert State Dental 4 Anesthesia, LLC 5 Geoff Sturr, Esq. 6 Osborn Maledon, Esq. 7 OSBORN MALEDON, P.A. 2929 North Central Ave., 21st Floor 8 Phoenix, AZ 85012 9 Attorneys for Defendants FFL Partners, LLC, Friedman Fleischer & Lowe Capital Partners II, 10 L.P. 11 /s/ Linda Gundelach 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28
79
Case 20-33918 Document 150-2 Filed in TXSB on 08/25/20 Page 1 of 70 Case 20-33918 Document 150-2 Filed in TXSB on 08/25/20 Page 2 of 70 Case 20-33918 Document 150-2 Filed in TXSB on 08/25/20 Page 3 of 70 Case 20-33918 Document 150-2 Filed in TXSB on 08/25/20 Page 4 of 70 Case 20-33918 Document 150-2 Filed in TXSB on 08/25/20 Page 5 of 70 Case 20-33918 Document 150-2 Filed in TXSB on 08/25/20 Page 6 of 70 Case 20-33918 Document 150-2 Filed in TXSB on 08/25/20 Page 7 of 70 Case 20-33918 Document 150-2 Filed in TXSB on 08/25/20 Page 8 of 70 Case 20-33918 Document 150-2 Filed in TXSB on 08/25/20 Page 9 of 70 Case 20-33918 Document 150-2 Filed in TXSB on 08/25/20 Page 10 of 70 Case 20-33918 Document 150-2 Filed in TXSB on 08/25/20 Page 11 of 70 Case 20-33918 Document 150-2 Filed in TXSB on 08/25/20 Page 12 of 70 Case 20-33918 Document 150-2 Filed in TXSB on 08/25/20 Page 13 of 70 Case 20-33918 Document 150-2 Filed in TXSB on 08/25/20 Page 14 of 70 Case 20-33918 Document 150-2 Filed in TXSB on 08/25/20 Page 15 of 70 Case 20-33918 Document 150-2 Filed in TXSB on 08/25/20 Page 16 of 70 Case 20-33918 Document 150-2 Filed in TXSB on 08/25/20 Page 17 of 70 Case 20-33918 Document 150-2 Filed in TXSB on 08/25/20 Page 18 of 70 Case 20-33918 Document 150-2 Filed in TXSB on 08/25/20 Page 19 of 70 Case 20-33918 Document 150-2 Filed in TXSB on 08/25/20 Page 20 of 70 Case 20-33918 Document 150-2 Filed in TXSB on 08/25/20 Page 21 of 70 Case 20-33918 Document 150-2 Filed in TXSB on 08/25/20 Page 22 of 70 Case 20-33918 Document 150-2 Filed in TXSB on 08/25/20 Page 23 of 70 Case 20-33918 Document 150-2 Filed in TXSB on 08/25/20 Page 24 of 70 Case 20-33918 Document 150-2 Filed in TXSB on 08/25/20 Page 25 of 70 Case 20-33918 Document 150-2 Filed in TXSB on 08/25/20 Page 26 of 70 Case 20-33918 Document 150-2 Filed in TXSB on 08/25/20 Page 27 of 70 Case 20-33918 Document 150-2 Filed in TXSB on 08/25/20 Page 28 of 70 Case 20-33918 Document 150-2 Filed in TXSB on 08/25/20 Page 29 of 70 Case 20-33918 Document 150-2 Filed in TXSB on 08/25/20 Page 30 of 70 Case 20-33918 Document 150-2 Filed in TXSB on 08/25/20 Page 31 of 70 Case 20-33918 Document 150-2 Filed in TXSB on 08/25/20 Page 32 of 70 Case 20-33918 Document 150-2 Filed in TXSB on 08/25/20 Page 33 of 70 Case 20-33918 Document 150-2 Filed in TXSB on 08/25/20 Page 34 of 70 Case 20-33918 Document 150-2 Filed in TXSB on 08/25/20 Page 35 of 70 Case 20-33918 Document 150-2 Filed in TXSB on 08/25/20 Page 36 of 70 Case 20-33918 Document 150-2 Filed in TXSB on 08/25/20 Page 37 of 70 Case 20-33918 Document 150-2 Filed in TXSB on 08/25/20 Page 38 of 70 Case 20-33918 Document 150-2 Filed in TXSB on 08/25/20 Page 39 of 70 Case 20-33918 Document 150-2 Filed in TXSB on 08/25/20 Page 40 of 70 Case 20-33918 Document 150-2 Filed in TXSB on 08/25/20 Page 41 of 70 Case 20-33918 Document 150-2 Filed in TXSB on 08/25/20 Page 42 of 70 Case 20-33918 Document 150-2 Filed in TXSB on 08/25/20 Page 43 of 70 Case 20-33918 Document 150-2 Filed in TXSB on 08/25/20 Page 44 of 70 Case 20-33918 Document 150-2 Filed in TXSB on 08/25/20 Page 45 of 70 Case 20-33918 Document 150-2 Filed in TXSB on 08/25/20 Page 46 of 70 Case 20-33918 Document 150-2 Filed in TXSB on 08/25/20 Page 47 of 70 Case 20-33918 Document 150-2 Filed in TXSB on 08/25/20 Page 48 of 70 Case 20-33918 Document 150-2 Filed in TXSB on 08/25/20 Page 49 of 70 Case 20-33918 Document 150-2 Filed in TXSB on 08/25/20 Page 50 of 70 Case 20-33918 Document 150-2 Filed in TXSB on 08/25/20 Page 51 of 70 Case 20-33918 Document 150-2 Filed in TXSB on 08/25/20 Page 52 of 70 Case 20-33918 Document 150-2 Filed in TXSB on 08/25/20 Page 53 of 70 Case 20-33918 Document 150-2 Filed in TXSB on 08/25/20 Page 54 of 70 Case 20-33918 Document 150-2 Filed in TXSB on 08/25/20 Page 55 of 70 Case 20-33918 Document 150-2 Filed in TXSB on 08/25/20 Page 56 of 70 Case 20-33918 Document 150-2 Filed in TXSB on 08/25/20 Page 57 of 70 Case 20-33918 Document 150-2 Filed in TXSB on 08/25/20 Page 58 of 70 Case 20-33918 Document 150-2 Filed in TXSB on 08/25/20 Page 59 of 70 Case 20-33918 Document 150-2 Filed in TXSB on 08/25/20 Page 60 of 70 Case 20-33918 Document 150-2 Filed in TXSB on 08/25/20 Page 61 of 70 Case 20-33918 Document 150-2 Filed in TXSB on 08/25/20 Page 62 of 70 Case 20-33918 Document 150-2 Filed in TXSB on 08/25/20 Page 63 of 70 Case 20-33918 Document 150-2 Filed in TXSB on 08/25/20 Page 64 of 70 Case 20-33918 Document 150-2 Filed in TXSB on 08/25/20 Page 65 of 70 Case 20-33918 Document 150-2 Filed in TXSB on 08/25/20 Page 66 of 70 Case 20-33918 Document 150-2 Filed in TXSB on 08/25/20 Page 67 of 70 Case 20-33918 Document 150-2 Filed in TXSB on 08/25/20 Page 68 of 70 Case 20-33918 Document 150-2 Filed in TXSB on 08/25/20 Page 69 of 70 Case 20-33918 Document 150-2 Filed in TXSB on 08/25/20 Page 70 of 70 Case 20-33918 Document 150-3 Filed in TXSB on 08/25/20 Page 1 of 13
1 BURG SIMPSON 2 ELDREDGE HERSH & JARDINE, P.C. Michael Burg, #031437 3 [email protected] David TeSelle, # 032057 4 [email protected] 5 40 Inverness Drive East Englewood, Colorado 80122 6
7 Ronda Kelso, #023301 [email protected] 8 2390 E Camelback Road, Ste. 403 9 Phoenix, Arizona, 85016 [email protected] 10 11 POLI, MOON & ZANE, PLLC Michael N. Poli, #006431 12 [email protected] 13 Lawrence R. Moon, #017000 [email protected] 14 2999 North 44th Street, Suite 325 15 Phoenix, Arizona 85018
16 Attorneys for Plaintiff
17 ARIZONA SUPERIOR COURT
18 MARICOPA COUNTY
19 20 JOSEPH MARTIN GASTELUM, father of 21 Zion Gastelum, individually and for and on Case No. CV2018-011975 behalf of STATUTORY BENEFICIARY Case No. CV2019-015618 22 (Consolidated) VERONICA RENEE GASTELUM, mother of Zion Gastelum, and on behalf of 23 their deceased son, ZION GASTELUM, JOINT REPORT 24 Plaintiff, 25 vs. 26 (Assigned to the Honorable Sherry KOOL SMILES, P.C. a foreign Stephens) 27 corporation; KOOL SMILES HOLDING
CORPORATION, a foreign corporation; 28 KS AZ-2, P.C. a domestic professional
T2435279.DOCX;1 Case 20-33918 Document 150-3 Filed in TXSB on 08/25/20 Page 2 of 13
1 corporation; FFL PARTNERS, LLC, a foreign corporation; FRIEDMAN 2 FLEISCHER & LOWE CAPITAL PARTNERS II, L.P.; BENEVIS, LLC, a 3 foreign entity; BENEVIS HOLDING 4 CORP., a foreign entity; DALE MAYFIELD, DMD and JANE DOE 5 MAYFIELD, husband and wife; TU TRAN, DDS and JANE DOE TRAN, 6 husband and wife; PAUL WALKER, DDS and JANE DOE WALKER, husband and 7 wife; DAVID VIETH, DDS and JANE DOE VIETH, husband and wife; 8 STEPHEN MONTOYA, DDS and JANE 9 DOE MONTOYA, husband and wife; AARON ROBERTS, DMD and JANE 10 DOE ROBERTS, husband and wife; DESERT STATE DENTAL 11 ANESTHESIA, LLC, a domestic
12 company; MARCOS A. CERVANTES, DDS and JANE DOE CERVANTES,
13 husband and wife; LUCIA ROJAS and JOHN DOE ROJAS, wife and husband;
14 MARC AUERBACH, DDS and JANE DOE AUERBACH, husband and wife; 15 CHERYL LYNN WEBB and JOHN DOE WEBB, wife and husband; FFL DOES 1 - 16 50; FFL DOE COMPANIES 1-50; 17 BENEVIS DOES 1-50; BENEVIS DOE COMPANIES 1-50; KOOL SMILES DOE 18 COMPANIES 1-50; KOOL SMILES DOES 1-50; ABC COMPANIES 1-50, 19 Defendants. 20 ______21
22 JOSEPH MARTIN GASTELUM, father of Zion Gastelum, individually and for and 23 on behalf of STATUTORY BENEFICIARY VERONICA RENEE 24 GASTELUM, mother of Zion Gastelum, and on behalf of their deceased son, Zion 25 Gastelum,
26 Plaintiff,
27 vs.
28
2
Case 20-33918 Document 150-3 Filed in TXSB on 08/25/20 Page 3 of 13
1 FRIEDMAN FLEISCHER & LOWE CAPITAL PARTNERS , L.P., a foreign 2 entity; BENEVIS CORP., a foreign entity (fka NCDR ACQUISITION 3 CORPORATION and fka BENEVIS ACQUISITION CORPORATION); FFL 4 DOES 1-50; FFL DOE COMPANIES 1- 50; ABC COMPANIES 1-50. 5 Defendants. 6 7 The parties signing below certify that they have conferred about the matters set forth 8 in Rule 16(b)(2) and (c)(3). The parties are submitting a Proposed Scheduling Order with 9 this Joint Report. Each date in the Joint Report and in the Proposed Scheduling Order 10 includes a calendar month, day, and year. 11 1. Brief description of the case:
12 These consolidated cases arise out of the death of Zion Gastelum after dental 13 procedures were performed under general anesthesia in December 2017. Plaintiff alleges 14 medical malpractice, negligent hiring and supervision, negligence per se, consumer fraud, 15 aiding and abetting, and civil conspiracy. Defendants deny the allegations. The defendants 16 include seven individuals and entities who are alleged to have been directly involved in the 17 dental procedures at issue. The remaining defendants are allegedly liable under theories of 18 vicarious liability, aiding and abetting, and civil conspiracy. 19 20 2. Current case status: 21 The parties have conferred and agree this is a Tier 3 case per Ariz. R. Civ. P., Rule 22 26.2(b). 23 Every defendant has been served. 24 All defendants in CV2018-011975, except those defendants whose motions to 25 dismiss were granted, and both of the defendants in CV2019-015618 have filed answers. 26 a. Discovery Taken to Date 27 The Court previously authorized, at Plaintiff’s request, written and oral discovery 28
3
Case 20-33918 Document 150-3 Filed in TXSB on 08/25/20 Page 4 of 13
1 on facts relevant to motions to dismiss for lack of personal jurisdiction that certain 2 Defendants had filed. With respect to that discovery, according to Defendants, Plaintiff 3 has deposed thirteen witnesses and served written discovery on all Defendants other than 4 Dr. Roberts. 5 Plaintiff has also taken discovery in connection with Dr. Auerbach’s motion for 6 summary judgment. With respect to that discovery, according to Defendants, Plaintiff 7 deposed five witnesses and served written discovery on Dr. Auerbach and a third-party 8 subpoena on United Health Care. 9 b. Presently Anticipated Discovery1 10 1. Plaintiff 11 Plaintiff presently anticipates serving the following written discovery. 12 Plaintiff will propound Rule 34 requests for production of documents, Rule 36 13 requests for admission, and Rule 33 uniform and non-uniform interrogatories. Plaintiff 14 may also issue document subpoenas to non-parties. Plaintiff reserves the right to utilize 15 other written discovery procedures. 16 Plaintiff presently anticipates that the following depositions may be taken. 17 1. Defendant Stephen Montoya, DDS 18 19 2. Defendant Aaron Roberts, DMD 20 3. Defendant Marcos Cervantes, DDS 21 4. Defendant Lucia Rojas 22 23 5. Defendant Cheryl Webb
24 6. Defendant Desert State Anesthesia 30(b)(6) 25
26 27 1 The parties include this information to facilitate case management and planning and do not intend for the information disclosed below to be binding or limiting on any 28 party.
4
Case 20-33918 Document 150-3 Filed in TXSB on 08/25/20 Page 5 of 13
1 7. Defendant Benevis Holding Corp 30(b)(6) 2 8. Defendant Benevis Corp 30(b)(6) 3 9. Defendant Benevis LLC 30(b)(6) 4 5 10. Defendant KSAZ-2 30(b)(6)
6 11. Defendant FFL Partners 30(b)(6) 7 12. Defendant Friedman Fleischer & Lowe Capital Partners I, L.P. 8 9 30(b)(6)
10 13. Defendant Friedman Fleischer & Lowe Capital Partners II, L.P. 11 30(b)(6) 12 13 14. Individuals who authored documents 14 15. C-level and directors from the corporate Defendants 15 16. Fact witnesses re alleged medical negligence (person who were 16 present who interacted with Zion Gastelum or his family; Yuma Fire 17 18 Department; investigators; Yuma Police Department; Yuma
19 Regional Medical Center; Phoenix Children’s Hospital; Air Evac 20 personnel) 21 22 17. Standard of care experts identified by Defendants with respect to
23 alleged medical malpractice. 24 18. Causation experts identified by Defendants with respect to alleged 25 26 medical malpractice 27 19. Any experts identified by Defendants with respect to other matters 28
5
Case 20-33918 Document 150-3 Filed in TXSB on 08/25/20 Page 6 of 13
1 2 20. Plaintiffs and Relators in the False Claims Act cases filed against 3 Benevis, LLC and affiliated entities, including, without limitation, Michael Greenwald, 4 DDS and Robin Fitzgerald. 5 21. Representatives of the entity(ies) that purchased the Kool Smiles 6 dental chain in 2018. 7 22. Dale Mayfield 8 23. David Vieth 9 24. Mel Deane 10 25. Dave Crusell 11 26. Jeff Lane 12 27. Any other lay or expert witness disclosed by any other party. 13 Defendants note that they have not yet each consented, pursuant to Rule 30(a), to 14 the depositions of any non-party witnesses. Defendants object, pursuant to Rule 30(a), to 15 re-deposing any witness on matters addressed in a previous deposition. 16 2. Defendants 17 Defendants presently anticipate serving the following written discovery. 18 19 1. Written discovery to be served on Plaintiff as authorized by Rules 33 20 through 36, subject to the limits set forth in Rule 26.2(f). 21 2. Third-party document subpoenas as may be warranted. 22 Defendants presently anticipate that the following depositions may be taken. 23 1. Plaintiff Joseph Gastelum 24 2. Veronica Gastelum 25 3. Jason Brady, DMD 26 4. Reuben Turner, DDS 27 5. Drew Paulson, M.D. 28 6. David Tellez, M.D.
6
Case 20-33918 Document 150-3 Filed in TXSB on 08/25/20 Page 7 of 13
1 7. Brian Appavu, M.D. 2 8. Robert Graham, M.D. 3 9. Standard of care expert identified by Plaintiff with respect to alleged 4 medical malpractice 5 10. Causation expert identified by Plaintiff with respect to alleged 6 medical malpractice 7 11. Any expert identified by Plaintiff with respect to other matters 8 12. Any and all lay or expert witnesses disclosed by any party 9 13. Individual witnesses or corporate 30(b)(6) representatives to support 10 any non-party at fault designations that one or more Defendants 11 should make 12 Defendants note that they have not yet each consented, pursuant to Rule 30(a), to the 13 depositions of any non-party witnesses. 14 3. Amendments: 15 At this time, no party anticipates filing an amendment to a pleading that will add a 16 new party to these consolidated cases. However, any anticipated amendments to pleadings 17 adding a new party will be filed on or before August 28, 2020. 18 19 4. Special Case Management/Electronically Stored Information: 20 Electronically stored information (“ESI”) is expected to be an issue in this case 21 because certain corporate defendants possess potentially relevant ESI. Counsel for 22 Plaintiff and counsel for those Defendants have conferred, utilizing the Commercial 23 Court’s ESI checklist, and anticipate reaching a written agreement regarding the disclosure 24 and discovery of ESI and a date by which parties will disclose ESI pursuant to Rule 26.1.
25 5. Settlement: 26 The parties agree to engage in settlement discussions with a private mediator. 27 The parties will complete private mediation by February 28, 2021. 28
7
Case 20-33918 Document 150-3 Filed in TXSB on 08/25/20 Page 8 of 13
1 6. Readiness: 2 This case will be ready for trial by November 8, 2021. 3 7. Jury: 4 The parties request a trial by jury. 5 6 8. Length of trial: 7 This case is in the preliminary stage, however, at this time Plaintiff estimates the 8 length of trial will be 30-35 judicial days, while Defendants estimate the length of trial will 9 be 10-15 judicial days.
10 9. Summary jury: 11 The parties do not agree to a summary jury trial. 12 10. Preference: 13 This case is not entitled to a preference for trial. 14 15 11. Special requirements: 16 At a pretrial conference or at trial, it is anticipated neither party will require 17 disability accommodations or an interpreter. 18 12. Scheduling conference: 19 The parties do not request a Rule 16(d) scheduling conference. 20 13. Other matters: 21 The parties suggest that the Court schedule a status conference in November or 22 December 2020 to review the progress of the case and discuss with the parties how the 23 Covid-19 pandemic is affecting civil jury trial settings. 24 25 Plaintiff intends to file a motion for permission to exceed the discovery limits set 26 forth in Rule 26.2(f)(3). 27 The parties attach a good faith consultation certificate under Rule 7.1(h) to this Joint 28
8
Case 20-33918 Document 150-3 Filed in TXSB on 08/25/20 Page 9 of 13
1 Report. 2 3 GOOD FAITH CONSULTATION CERTIFICATE 4 Pursuant to Ariz.R.Civ.P., Rule 71(h), the parties hereby certify that they conferred 5 via email and by telephone on May 26, 2020 and June 8, 2020 in good faith in connection 6 with the preparation of the Joint Report and Proposed Scheduling Order. 7 RESPECTFULLY SUBMITTED this day of July, 2020. 8 POLI, MOON & ZANE, PLLC 9
10 /s/ Lawrence Moon Michael N. Poli, #006431 11 Lawrence R. Moon, #017000 12 2999 North 44th Street, Suite 325 Phoenix, Arizona 85018 13
14 BURG SIMPSON ELDREDGE HERSH & JARDINE, P.C. 15
16 /s/ David TeSelle Michael Burg 17 David TeSelle 18 Ronda Kelso 40 Inverness Drive East 19 Englewood, Colorado 80122 20 Attorneys for Plaintiff
21 JONES, SKELTON & HOCHULI, P.L.C. 22 /s/ Chris Stuart 23 Donn C. Alexander, Esq. 24 Chris Stuart, Esq. 40 N. Central Avenue, Suite 2700 25 Phoenix, AZ 85004 Attorneys for Defendants Kool Smiles, P.C., 26 Kool Smiles Holding Corp., KS AZ-2, P.C., 27 Benevis, LLC, Benevis Holding Corp., Benevis Corp., Dale Mayfield, DMD and Jane Doe 28
9
Case 20-33918 Document 150-3 Filed in TXSB on 08/25/20 Page 10 of 13
1 Mayfield, Tu Tran, DDS and Jane Doe Tran, Paul Walker, DDS and Jane Doe Walker, 2 David Vieth, DDS and Jane Doe Vieth, Marcos 3 A. Cervantes, DDS and Jane Doe Cervantes, Lucia Rojas and John Doe Rojas, Mark 4 Auerbach, DDS and Jane Doe Auerbach, and 5 Cheryl Lynn Webb and John Doe Webb
6 7 GUST ROSENFELD, P.L.C.
8 /s/ William Sowders 9 William Sowders, Esq. One East Washington Street, Suite 1600 10 Phoenix, Arizona 85004 11 Attorneys for Defendants Stephen Montoya, DDS and Jane Doe Montoya 12 13 DICKINSON WRIGHT, PLLC
14 /s/ Frederick M. Cummings Frederick M. Cummings, Esq. 15 1850 N. Central Avenue, Suite 1400 16 Phoenix, AZ 85004 Attorneys for Defendants Aaron Roberts, 17 DMD and Jane Doe Roberts 18
19 FARHANG & MEDCOFF 20 /s/ Robert Bernheim 21 Robert Bernheim, Esq. 22 4801 East Broadway Boulevard, Suite 311 Tucson, AZ 85711 23 Attorneys for Defendant Desert State Dental 24 Anesthesia, LLC
25 GREEN LAW OFFICES, LLC 26 /s/ John M. Green 27 John M. Green, Esq. 28 200 West Jackson Blvd., Suite 2060
10
Case 20-33918 Document 150-3 Filed in TXSB on 08/25/20 Page 11 of 13
1 Chicago, IL 60606 Attorneys for Defendants Stephen Montoya, 2 DDS and Jane Doe Montoya 3 WILLKIE FARR & GALLAGHER LLP 4
5 /s/ Benjamin P. McCallen Benjamin P. McCallen (Pro Hac Vice) 6 787 Seventh Ave. 7 New York, NY 10019-6099 Attorneys for Defendants FFL Partners, LLC, 8 Friedman Fleischer & Lowe Capital Partners , 9 L.P., and Friedman Fleischer & Lowe Capital Partners II, L.P. 10 11 OSBORN MALEDON, P.A.
12 /s/ Geoffrey M.T. Sturr 13 Colin F. Campbell, Esq. Geoffrey M. T. Sturr, Esq. 14 William D. Furnish, Esq. 2929 North Central Ave., 21st Floor 15 Phoenix, AZ 85012 16 Attorneys for Defendants FFL Partners, LLC, Friedman Fleischer & Lowe Capital Partners , 17 L.P., and Friedman Fleischer & Lowe Capital 18 Partners II, L.P.
19 20 ORIGINAL of the foregoing was e-filed via TurboCourt and a Copy delivered via 21 TurboCourt this 31st day of July 2020, as follows: 22 The Honorable Sherry Stephens 23 Maricopa County Superior Court
24
25 Donn C. Alexander, Esq. William Sowders, Esq. Chris Stuart, Esq. GUST ROSENFELD, P.L.C. 26 JONES, SKELTON & HOCHULI, One East Washington Street, Suite 1600 27 P.L.C. Phoenix, Arizona 85004 40 N. Central Avenue, Suite 2700 28
11
Case 20-33918 Document 150-3 Filed in TXSB on 08/25/20 Page 12 of 13
1 Phoenix, AZ 85004 Attorneys for Defendants Stephen 2 Attorneys for Defendants Kool Smiles, Montoya, DDS and Jane Doe Montoya P.C., Kool Smiles Holding Corp., KS AZ- 3 2, P.C., Benevis, LLC, Benevis Holding Corp., Dale Mayfield, DMD and Jane 4 Doe Mayfield, Tu Tran, DDS and Jane 5 Doe Tran, Paul Walker, DDS and Jane Doe Walker, David Vieth, DDS and Jane 6 Doe Vieth, Marcos A. Cervantes, DDS 7 and Jane Doe Cervantes, Lucia Rojas and John Doe Rojas, Mark Auerbach, 8 DDS and Jane Doe Auerbach, and Cheryl 9 Lynn Webb and John Doe Webb
10
11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28
12
Case 20-33918 Document 150-3 Filed in TXSB on 08/25/20 Page 13 of 13
1 Frederick M. Cummings, Esq. Robert Bernheim, Esq. 2 DICKINSON WRIGHT, PLLC FARHANG & MEDCOFF 1850 N. Central Avenue, Suite 1400 4801 East Broadway Boulevard, Suite 3 Phoenix, AZ 85004 311 Attorneys for Defendants Aaron Roberts, Tucson, AZ 85711 4 DMD and Jane Doe Roberts Attorneys for Defendant Desert State 5 Dental Anesthesia, LLC John M. Green, Esq. Benjamin P. McCallen 6 GREEN LAW OFFICES, LLC WILLKIE FARR & GALLAGHER 7 200 West Jackson Blvd., Suite 2060 LLP Chicago, IL 60606 787 Seventh Ave. 8 Attorneys for Defendants Stephen New York, NY 10019-6099 9 Montoya, DDS and Jane Doe Montoya Attorneys for Defendants FFL Partners, LLC, Friedman Fleisher & Lowe Capital 10 Partners, and Friedman Fleischer & 11 Lowe Capital Partners II, L.P Geoffrey M. T. Sturr, Esq. 12 OSBORN MALEDON, P.A. st 13 2929 North Central Ave., 21 Floor 14 Phoenix, AZ 85012 15 Attorneys for Defendants FFL Partners, LLC, Friedman 16 Fleischer & Lowe Capital 17 Partners, and Friedman Fleischer & Lowe Capital 18 Partners II, L.P.
19
20 /s/ Linda Gundelach 21 22 23 24 25 26 27 28
13
Case 20-33918 Document 150-4 Filed in TXSB on 08/25/20 Page 1 of 3
Clerk of the Superior Court *** Electronically Filed *** 08/05/2020 8:00 AM SUPERIOR COURT OF ARIZONA MARICOPA COUNTY
CV 2018-011975 08/04/2020
CLERK OF THE COURT HON. SHERRY K. STEPHENS T. DeRaddo Deputy
JOSEPH MARTIN GASTELUM, et al. MICHAEL N POLI v.
KOOL SMILES P C, et al. DONN C ALEXANDER
ROBERT A BERNHEIM FREDERICK M CUMMINGS EILEEN DENNIS GILBRIDE WILLIAM S SOWDERS GEOFFREY M STURR JUDGE STEPHENS
BANKRUPTCY FILED / CASE ON DISMISSAL CALENDAR
The Court has received Defendants Benevis, LLC, Benevis Holding Corp. and Benevis Corp.’s Notice of Filing Bankruptcy and Imposition of Automatic Stay, on August 2, 2020, and August 3, 2020. Voluntary Petitions were filed under Chapter 11 of the United States Bankruptcy Code, in the United States Bankruptcy Court for the Southern District of Texas, cases numbers: 20-3318; 20-33920; and 20-33922.
IT IS ORDERED entering a Stay Order in this case and placing this case/claim(s) on the Dismissal Calendar for dismissal on February 1, 2020 as to Defendant(s) Benevis, LLC,Benevis Holding Corp. and Benevis Corp.’s (debtor(s)), only.
This case/claim(s) will be dismissed on February 1, 2020 unless prior to the scheduled dismissal date Plaintiffs demonstrate they have moved to lift the stay but the request has not been ruled upon or has been denied; or they have sought to reduce the claim(s) against the debtor to judgment in the Bankruptcy Court in an adversary proceeding and the adversary proceeding has not yet been resolved despite diligence in seeking such a resolution; or they have obtained Docket Code 314 Form V000A Page 1
Case 20-33918 Document 150-4 Filed in TXSB on 08/25/20 Page 2 of 3
SUPERIOR COURT OF ARIZONA MARICOPA COUNTY
CV 2018-011975 08/04/2020
severance of the claim(s) against the debtor from the claim(s) against the other parties to the action, if any; or they have demonstrated a reasonable basis for continuance of the case on the Dismissal Calendar.
Any party may ask the Court to schedule an informal status conference before the dismissal date to inform the Court what action, if any, is undertaken in the Bankruptcy Court that would permit this case to proceed.
IT IS FURTHER ORDERED that as to the remaining Defendants, the provisions of Rule 38.1, A.R.C.P., shall continue to apply.
Docket Code 314 Form V000A Page 2
Case 20-33918 Document 150-4 Filed in TXSB on 08/25/20 Page 3 of 3
Clerk of the Superior Court *** Electronically Filed *** 08/06/2020 8:00 AM SUPERIOR COURT OF ARIZONA MARICOPA COUNTY
CV 2018-011975 08/05/2020
CLERK OF THE COURT HON. SHERRY K. STEPHENS T. DeRaddo Deputy
JOSEPH MARTIN GASTELUM, et al. MICHAEL N POLI v.
KOOL SMILES P C, et al. DONN C ALEXANDER
ROBERT A BERNHEIM FREDERICK M CUMMINGS EILEEN DENNIS GILBRIDE WILLIAM S SOWDERS GEOFFREY M STURR JUDGE STEPHENS
MINUTE ENTRY
A clerical error having been made,
It has been brought to the Court’s attention that the minute entry entitled Bankruptcy Filed / Case on Dismissal Calendar, dated 8/4/2020, contained an error in the date that the claims will be dismissed as to certain defendants. To clarify, the second paragraph on page one should have stated:
IT IS ORDERED entering a Stay Order in this case and placing this case/claim(s) on the Dismissal Calendar for dismissal on February 1, 2021 as to Defendant(s) Benevis, LLC; Benevis Holding Corp.; and Benevis Corp. (debtors) ONLY.
The balance of the minute entry remains unchanged.
The minute entry dated 8/4/2020 is available for viewing at: http://www.courtminutes.maricopa.gov.
Docket Code 021 Form V000A Page 1
Civil Court Case Information - Case History Page 1 of 10 Case 20-33918 Document 150-5 Filed in TXSB on 08/25/20 Page 1 of 10
0 k Docket
Civil Court Case Information - Case History
Case Information Case Number: CV2018-011975 Judge: Stephens, Sherry File Date: 9/7/2018 Location: Downtown Case Type: Civil
Party Information Party Name Relationship Sex Attorney Joseph Martin Gastelum Plaintiff Male Michael Poli Veronica Renee Gastelum Plaintiff Female Michael Poli Kool Smiles P C Defendant Donn Alexander Kool Smiles Holding Corporation Defendant Donn Alexander K S Az-2 P C Defendant Donn Alexander F F L Partners L L C Defendant GEOFFREY STURR Friedman Fleischers & Lowe Capital Partners I I, L P Defendant GEOFFREY STURR Benevis L L C Defendant Donn Alexander Benevis Holding Corp Defendant Donn Alexander Dale Mayfield Defendant Male Donn Alexander Tu Tran Defendant Male Donn Alexander Paul Walker Defendant Male Eileen Gilbride David Vieth Defendant Male Donn Alexander Stephen Montoya Defendant Male William Sowders Aaron Roberts Defendant Male Frederick Cummings Desert State Dental Anesthesia L L C Defendant Robert Bernheim Marcos A Cervantes Defendant Male Donn Alexander Lucia Rojas Defendant Female Donn Alexander Mark Auerbach Defendant Male Donn Alexander Cheryl Lynn Webb Defendant Female Donn Alexander Marc Auerbach Defendant Male Donn Alexander Michelle Roberts Defendant Female Frederick Cummings
Case Documents Filing Date Description Docket Date Filing Party 8/17/2020 ANS - Answer 8/18/2020 NOTE: Answer of FFL Partners, LLC and Friedman Fleischer & Lowe Capital Partners II, L.P. to Plaintiff's First Amended Complaint IN CV2018- 011975 8/17/2020 ANS - Answer 8/18/2020 NOTE: DEFENDANTS KS AZ-2, P.C., DALE MAYFIELD, DMD, MARC AUERBACH, DDS, MARCO CERVANTES, DDS, LUCIA ROJAS, CHERYL WEBB AND DAVID VIETH, DDS’ ANSWER TO PLAINTIFF’S FIRST AMENDED COMPLAINT 8/17/2020 ANS - Answer 8/18/2020 NOTE: DEFENDANT STEPHEN MONTOYA, DDS’S ANSWER TO PLAINTIFF’S FIRST AMENDED COMPLAINT 8/14/2020 ANS - Answer 8/18/2020 NOTE: Answer on Behalf of Aaron Roberts, DMD and Michelle Roberts to Plaintiffs' First Amended Complaint 8/6/2020 021 - ME: Nunc Pro Tunc Order 8/6/2020 8/6/2020 SCO – Scheduling Order 8/6/2020 NOTE: Order 8/5/2020 314 - ME: Bankruptcy 8/5/2020 8/3/2020 NOB - Notice Of Filing Bankruptcy 8/3/2020 NOTE: DEFENDANTS BENEVIS, LLC, BENEVIS HOLDING CORP. AND BENEVIS CORP.'S NOTICE OF FILING BANKRUPTCY AND IMPOSITION OF AUTOMATIC STAY 7/31/2020 JSR – Joint Scheduling Report 7/31/2020 NOTE: Joint Report
http://www.superiorcourt.maricopa.gov/docket/CivilCourtCases/caseInfo.asp?caseNumber... 8/19/2020 Civil Court Case Information - Case History Page 2 of 10 Case 20-33918 Document 150-5 Filed in TXSB on 08/25/20 Page 2 of 10
7/27/2020 AMC - Amended Complaint 7/27/2020 NOTE: First Amended Complaint 7/24/2020 019 - ME: Ruling 7/24/2020 7/21/2020 REL - Reply 7/23/2020 NOTE: Plaintiff's Reply in Support of His Motion for Leave to Amend Complaint 7/15/2020 926 - ME: Under Advisement Ruling 7/15/2020 7/9/2020 REL - Reply 7/10/2020 NOTE: Defendant Auerbach's Reply in Support of His Supplemental Memorandum and Opposition to Plaintiff's Motion to Amend 7/7/2020 NOT - Notice 7/8/2020 NOTE: Plaintiff's Notice of Citation of Supplemental Authority Regarding Defendant Auerbach's Renewed Motion for Summary Judgment 6/26/2020 ANS - Answer 6/26/2020 NOTE: DEFENDANT BENEVIS CORP. ANSWER TO PLAINTIFF COMPLAINT 6/26/2020 CCA - Cert Compulsory Arbitration 6/26/2020 NOTE: DEFENDANT BENEVIS CORP. CERTIFICATE RE COMPULSORY ARBITRATION 6/26/2020 NJT - Not Demand For Jury Trials 6/26/2020 NOTE: DEFENDANT BENEVIS CORP.'S JURY DEMAND 6/25/2020 MTA - Motion To Amend 6/26/2020 NOTE: Plaintiff's Motion for Leave to Amend Complaint 6/25/2020 RES - Response 6/26/2020 NOTE: PLAINTIFF’S RESPONSE TO DEFENDANT AUERBACH’S SUPPLEMENTAL MEMORANDUM IN SUPPORT OF HIS MOTION FOR SUMMARY JUDGMENT 6/18/2020 003 - ME: Hearing Reset 6/18/2020 6/17/2020 NOT - Notice 6/18/2020 NOTE: DEFENDANT BENEVIS CORP. NOTICE OF WITHDRAWAL OF ITS MOTION TO DISMISS FOR LACK OF PERSONAL JURISDICTION 6/17/2020 NOT - Notice 6/19/2020 NOTE: DEFENDANT BENEVIS CORPS / OF WITHDRAWAL OF ITS MOTION TO DISMISS FOR LACK OF PERRSONAL JURISDICTION 5/29/2020 MEM - Memorandum 5/29/2020 NOTE: Defendant Auerbach's Supplemental Memorandum in Support of his Motion for Summary Judgment 5/22/2020 020 - ME: Matter Under Advisement 5/22/2020 5/19/2020 NJT - Not Demand For Jury Trials 5/19/2020 NOTE: DEFENDANT STEPHEN MONTOYA, DDS’S DEMAND FOR JURY TRIAL 5/19/2020 ANS - Answer 5/19/2020 NOTE: DEFENDANT STEPHEN MONTOYA, DDS’S ANSWER TO COMPLAINT 5/19/2020 CCA - Cert Compulsory Arbitration 5/20/2020 NOTE: DEFENDANT STEPHEN MONTOYA, DDS’S CERTIFICATE REGARDING COMPULSORY ARBITRATION 5/18/2020 ALT - Appeals Letter Of Transmittal 5/19/2020 5/18/2020 CAO - Court Of Appeals Order 5/19/2020 5/15/2020 LOW - List Of Witnesses/Exhibit/Evidence 5/18/2020 NOTE: notice of additional exhibits 5/12/2020 ANS - Answer 5/13/2020 NOTE: Defendant Desert State Dental Anesthesia's Answer to Plaintiff's Compliant 5/7/2020 ANS - Answer 5/7/2020 NOTE: DEFENDANTS KS AZ-2, P.C., BENEVIS, LLC, BENEVIS HOLDING CORP., DALE MAYFIELD, DMD, MARC AUERBACH, DDS, MARCOS CERVANTES, DDS, LUCIA ROJAS, CHERYL WEBB AND DAVID VIETH, DDS’ ANSWER TO PLAINTIFF’S COMPLAINT 5/7/2020 NJT - Not Demand For Jury Trials 5/7/2020 NOTE: DEFENDANTS KS AZ-2, P.C., BENEVIS, LLC, BENEVIS HOLDING CORP., DALE MAYFIELD, DMD, MARC AUERBACH, DDS, MARCOS CERVANTES, DDS, LUCIA ROJAS, CHERYL WEBB AND DAVID VIETH, DDS’ JURY DEMAND 5/6/2020 ANS - Answer 5/7/2020 NOTE: ANSWER OF FFL PARTNERS, LLC AND FRIEDMAN FLEISCHER & LOWE CAPITAL PARTNERS II, L.P. IN CV2018-011975 5/6/2020 ANS - Answer 5/7/2020 NOTE: ANSWER OF FRIEDMAN, FLEISCHER & LOWE CAPITAL PARTNERS, L.P. IN CV2019-015618 5/1/2020 094 - ME: Oral Argument Set 5/1/2020 4/30/2020 ANS - Answer 5/1/2020 NOTE: Answer on Behalf of Aaron Roberts, DMD and Michelle Roberts 4/23/2020 ORD - Order 4/23/2020 NOTE: GRANTING DEFENDANT MARC AUERBACH DDSS MOTION TO EXCEED PAGE LIMIT 4/20/2020 MOT - Motion 4/21/2020 NOTE: Defendant Marc Auerbach, DDS Motion to Exceed Page Limit 4/20/2020 REL - Reply 4/21/2020 NOTE: DEFENDANT MARC AUERBACH, DDS REPLY IN SUPPORT OF HIS RENEWED MOTION FOR SUMMARY JUDGMENT 4/15/2020 RES - Response 4/17/2020
http://www.superiorcourt.maricopa.gov/docket/CivilCourtCases/caseInfo.asp?caseNumber... 8/19/2020 Civil Court Case Information - Case History Page 3 of 10 Case 20-33918 Document 150-5 Filed in TXSB on 08/25/20 Page 3 of 10
NOTE: PLAINTIFF’S RESPONSE TO DEFENDANT BENEVIS CORP’S MOTION TO DISMISS FOR LACK OF PERSONAL JURISDICTION AND AFFIDAVIT OF RONDA M. KELSO, ESQ. 3/31/2020 021 - ME: Nunc Pro Tunc Order 3/31/2020 3/31/2020 SOF - Statement Of Facts 4/2/2020 NOTE: PLAINTIFF’S STATEMENT OF FACTS IN SUPPORT OF RESPONSE TO DEFENDANT AUERBACH’S MOTION FOR SUMMARY JUDGMENT 3/31/2020 RES - Response 4/6/2020 NOTE: PLAINTIFF’S RESPONSE TO DEFENDANT MARC AUERBACH, DDS’S RENEWED MOTION FOR SUMMARY JUDGMENT 3/30/2020 053 - ME: Case Consolidation 3/30/2020 3/30/2020 ORD - Order 3/30/2020 NOTE: RE JOINT MOTION TO EXTEND THE DEADLINE FOR DEFENDANTS OTHER THAN TU TRAN KOOL SMILES PC AND KOOL SMILES HOLDING CORP TO FILE THEIR ANSWERS 3/30/2020 ORD - Order 3/30/2020 NOTE: RE JOINT MOTION TO CONSOLIDATE 3/25/2020 MOT - Motion 3/26/2020 NOTE: JOINT MOTION TO EXTEND THE DEADLINE FOR DEFENDANTS OTHER THAN TU TRAN, KOOL SMILES, P.C. AND KOOL SMILES HOLDING CORP TO FILE THEIR ANSWERS. 3/25/2020 MCD - Motion To Consolidate 3/26/2020 NOTE: Joint Motion to Consolidate 3/13/2020 MOT - Motion 3/17/2020 NOTE: UNOPPOSED MOTION TO SET BRIEFING SCHEDULE REGARDING DEFENDANT MARC AUERBACH, DD’S RENEWED MOTION FOR SUMMARY JUDGMENT 3/11/2020 926 - ME: Under Advisement Ruling 3/11/2020 3/10/2020 NOT - Notice 3/12/2020 NOTE: Notice of Supplemental Authority on Personal Jurisdiction 3/2/2020 020 - ME: Matter Under Advisement 3/2/2020 2/27/2020 NOT - Notice 2/28/2020 NOTE: MOVANTS' NOTICE OF SUPPLEMENTAL AUTHORITY IN SUPPORT OF THEIR SUPPLEMENTAL BRIEF IN SUPPORT OF THEIR MOTION TO DISMISS ON PERSONAL JURISDICTION 2/26/2020 NOT - Notice 2/28/2020 NOTE: Notice of Errata Re: Exhibits to Movants Supplement to Their Brief in Support of Their Motion to Dismiss on Personal Jurisdiction 2/21/2020 ORD - Order 2/21/2020 NOTE: GRANTING PLAINTIFFS MOTION TO EXCEED PAGE LIMITATION 2/20/2020 019 - ME: Ruling 2/20/2020 2/20/2020 016 - ME: Ext/Time/Filing Granted 2/20/2020 2/19/2020 SDD - Notice: Sealed Document 2/26/2020 NOTE: PLAINTIFF'S SUPPLEMENTAL BRIEF IN SUPPORT OF HIS OPPOSITION TO THE MOTIONS TO DISMISS FOR LACK OF PERSONAL JURISDICTION 2/19/2020 NOT - Notice 2/21/2020 NOTE: Plaintiff's Notice of Errata 2/19/2020 ORD - Order 2/20/2020 NOTE: RE: PARTIES STIPULATION TO EXTEND THE DEADLINE FOR FILING SUPPLEMENTAL BRIEFS 2/19/2020 ORD - Order 2/20/2020 NOTE: RE: PLAINTIFFS SUPPLEMENT TO HIS MOTION FOR LEAVE TO FILE HIS SUPPLMENTAL BRIEF UNDER SEAL 2/18/2020 REQ - Request 2/20/2020 NOTE: PLAINTIFF’S REQUEST FOR A COURT REPORTER 2/18/2020 MOT - Motion 2/20/2020 NOTE: Plaintiff's Motion to Exceed Page Limit 2/18/2020 MOT - Motion 2/20/2020 NOTE: PLAINTIFF'S SUPPLEMENT TO HIS MOTION FOR LEAVE TO FILE HIS SUPPLEMENTAL BRIEF UNDER SEAL 2/18/2020 STA - Statement 2/20/2020 NOTE: Movants' Supplemental Brief in Support of Their Motion to Dismiss on Personal Jurisdiction 2/18/2020 MDJ - Motion to Dismiss for Lack of Jurisdiction 2/20/2020 NOTE: THE FFL DEFENDANTS’ SUPPLEMENTAL BRIEF IN SUPPORT OF THEIR MOTION TO DISMISS FOR LACK OF PERSONAL JURISDICTION 2/18/2020 019 - ME: Ruling 2/18/2020 2/14/2020 STP - Stipulation 2/19/2020 NOTE: STIPULATION TO EXTEND DEADLINE FOR FILING SUPPLEMENTAL BRIEFS REGARDING PERSONAL JURISDICTION TO PERMIT PARTIES TO ADDRESS CONFIDENTIALITY DESIGNATIONS 2/13/2020 MOT - Motion 2/18/2020 NOTE: PLAINTIFF'S MOTION OF FILING SUPPLEMENTAL BRIEFING ON MOTION TO DISMISS FOR LACK OF PERSONAL JURISDICTION UNDER SEAL 2/12/2020 016 - ME: Ext/Time/Filing Granted 2/12/2020
http://www.superiorcourt.maricopa.gov/docket/CivilCourtCases/caseInfo.asp?caseNumber... 8/19/2020 Civil Court Case Information - Case History Page 4 of 10 Case 20-33918 Document 150-5 Filed in TXSB on 08/25/20 Page 4 of 10
2/11/2020 ORD - Order 2/12/2020 NOTE: RE: STIPULATION TO EXTEND DEADLINE FOR FILING SUPPLEMENTAL BRIEFS REGARDING PERSONAL JURISDICTION 2/10/2020 STP - Stipulation 2/11/2020 NOTE: STIPULATION TO EXTEND DEADLINE FOR FILING SUPPLEMENTAL BRIEFS REGARDING PERSONAL JURISDICTION 2/7/2020 STP - Stipulation 2/11/2020 NOTE: STIPULATION TO EXTEND DEADLINE FOR FILING SUPPLEMENTAL BRIEFS REGARDING PERSONAL JURISDICTION 2/5/2020 NSC - Notice of Substitution of Counsel 2/7/2020 NOTE: Notice of Substitution of Counsel 2/5/2020 016 - ME: Ext/Time/Filing Granted 2/5/2020 2/4/2020 ORD - Order 2/5/2020 NOTE: REGARDING STIPULATION TO EXTEND DEADLINE FOR FILING SUPPLEMENTAL BRIEFS REGARDING PERSONAL JURISDICTION 1/28/2020 STP - Stipulation 1/30/2020 NOTE: STIPULATION TO EXTEND DEADLINE FOR FILING SUPPLEMENTAL BRIEFS REGARDING PERSONAL JURISDICTION 1/22/2020 SPM - SPECIAL MASTER ORDER 1/24/2020 NOTE: SPECIAL DISCOVERY MASTER’S ADVISORY RULING RE: DEPOSITION OF DR. MONTOYA RE: PRENDING RULE 56 MOTION FOR SUMMARY JUDGMENT 1/22/2020 NOT - Notice 1/24/2020 NOTE: SPECIAL DISCOVERY MASTER’S ADVISORY RULING RE: PRODUCTION OF DOCUMENTS OF MEL DEANE 1/15/2020 029 - ME: Status Conference 1/15/2020 1/6/2020 ORD - Order 1/6/2020 NOTE: EXTENDING TIME FOR PLAINTIFF TO RESPOND TO DR. AUERBACH’S RENEWED MOTION FOR SUMMARY JUDGMENT PENDING COURT RULING ON PLAINTIFF’S RULE 56(d) MOTION 1/6/2020 028 - ME: Status Conference Set 1/6/2020 1/3/2020 NOT - Notice 1/6/2020 NOTE: BENEVIS, LLC’S NOTICE REGARDING THE PRODUCTION OF DOCUMENTS PURSUANT TO THE SPECIAL DISCOVERY MASTER’S REPORT AND ADVISORY RULING RE: ORAL ARGUMENT ON MOVING DEFENDANTS’ AND BENEVIS, LLC’S OBJECTION TO PRODUCING AUDIT CHART REVIEWS OF TU TRAN, DDS 12/20/2019 STP - Stipulation 12/23/2019 NOTE: STIPULATION TO EXTEND TIME FOR PLAINTIFF TO RESPOND TO DR. AUERBACH’S RENEWED MOTION FOR SUMMARY JUDGMENT PENDING COURT RULING ON PLAINTIFF’S RULE 56(d) MOTION 12/19/2019 MOT - Motion 12/20/2019 NOTE: PLAINTIFF’S REQUEST FOR RULE 56(D) RELIEF AND FOR EXPEDITED HEARING 12/17/2019 REP - Report 12/18/2019 NOTE: SPECIAL DISCOVERY MASTER’S REPORT AND ADVISORY RULING RE: ORAL ARGUMENT ON MOVING DEFENDANTS’ AND BENEVIS, LLC’S OBJECTION TO PRODUCING AUDIT CHART REVIEWS OF TU TRAN, DDS 12/13/2019 RES - Response 12/17/2019 NOTE: Plaintiffs' Response to Moving Defendants' and Benevis, LLC's Objection to Producing Audit Chart Reviews Created by Tu Tran, DDS 12/6/2019 OBJ - Objection/Opposition. 12/10/2019 NOTE: MOVING DEFENDANTS’ AND BENEVIS, LLC’S OBJECTION TO PRODUCING AUDIT CHART REVIEWS CREATED BY TU TRAN, DDS 11/22/2019 NOT - Notice 11/26/2019 NOTE: BENEVIS, LLC NOT RE THE PROD OF DOCS PURSUANT TO SPEC DISC MASTERS REPT OF CONF RE DEFENDANTÃ?Â? OBJECTION TO PORTION OF SPEC DISC MASTERÃ?Â?S 10-28-19 REPORT 11/21/2019 MSJ - Motion For Summary Judgment 11/22/2019 NOTE: Defendant Marc Auerbach, DDS's Renewed Motion for Summary Judgment 11/21/2019 SOF - Statement Of Facts 11/22/2019 NOTE: Statement of Facts in Support of Marc Auerbach, DDS's Motion for Summary Judgment 11/18/2019 REP - Report 11/20/2019 NOTE: SPECIAL DISCOVERY MASTER’S REPORT OF CONFERENCE RE: DEFENDANTS OBJECTION TO A PORTION OD SPECIAL DISCOVERY MASTER’S OCTOBER 28, 2019 REPORT 11/7/2019 OBJ - Objection/Opposition. 11/8/2019 NOTE: DEFENDANTS’ OBJECTION TO A PORTION OF SPECIAL DISCOVERY MASTER’S OCTOBER 28, 2019 REPORT 10/29/2019 094 - ME: Oral Argument Set 10/29/2019 10/28/2019 REP - Report 10/29/2019 NOTE: REPORT OF SPECIAL DISCOVERY MASTER ON JOINT DISCOVERY STATEMENT DATED OCTOBER 22, 2019 10/23/2019 OBJ - Objection/Opposition. 10/24/2019 NOTE: FFL Defendants' Opposition to Plaintiffs' Motion to Extend Discovery Deadlines re Personal Jurisdiction Discovery and Pending Motions 10/23/2019 OBJ - Objection/Opposition. 10/24/2019 NOTE: DEFENDANTS KOOL SMILES, P.C., KOOL SMILES HOLDING CORP., KS AZ-2, P.C., BENEVIS, LLC, BENEVIS HOLDING CORP., MAYFIELD, TRAN, WALKER, VIETH, CERVANTES, ROJAS, AUERBACH AND WEBB’S OPPOSITION TO PLAINTIFF’S MOTION TO EXTEND DISCOVERY DEADLINES, SIMULTANEOUS REPORT AND ORAL ARGUMENT REGARDING PERSONAL JURISDICTION 10/22/2019 028 - ME: Status Conference Set 10/22/2019
http://www.superiorcourt.maricopa.gov/docket/CivilCourtCases/caseInfo.asp?caseNumber... 8/19/2020 Civil Court Case Information - Case History Page 5 of 10 Case 20-33918 Document 150-5 Filed in TXSB on 08/25/20 Page 5 of 10
10/22/2019 NOT - Notice 10/23/2019 NOTE: Notice of Oral Argument 10/22/2019 NOT - Notice 10/23/2019 NOTE: Notice of Errata 10/22/2019 REP - Report 10/23/2019 NOTE: JONT DISCOVERY STATEMENT PURSUANT TO RULE 26(d), ARIZ. R. CIV. P. 10/21/2019 REP - Report 10/21/2019 NOTE: PLAINTIFF’S PORTION OF THE JONT DISCOVERY STATEMENT PURSUANT TO RULE 26(d), ARIZ. R. CIV. P. 10/18/2019 MOT - Motion 10/21/2019 NOTE: PLANTIFF’S MOTION TO EXTEND DISCOVERY DEADLINES, SIMULTANEOUS REPORT AND ORAL ARGUMENT REGARDING PERSONAL JURISDICTION 10/17/2019 OBJ - Objection/Opposition. 10/21/2019 NOTE: FFL Defendants' Objection to Report of Special Discovery Master, Hon. Barry Schneider (Ret.) 10/11/2019 REP - Report 10/14/2019 NOTE: Report re Joint Discovery Stmt 10/4/2019 NOT - Notice 10/7/2019 NOTE: Notice of Oral Argument 10/3/2019 STA - Statement 10/7/2019 NOTE: Joint Discovery Statement 9/13/2019 RES - Response 9/18/2019 NOTE: Plaintiff's Response to Second Renewed and Revised Motion for Protective Order; Motion To Modify Subpoena Duces Tecum; Or In The Alternative, Motion for Rule 26(b)(2)(C)(iii) Relief, Filed by Defendants KS AZ-2, P.C., and Marc Auerbach 9/6/2019 NOT - Notice 9/11/2019 NOTE: Notice of Oral Argument AND BRIEFING SCHEDULE 8/30/2019 MOT - Motion 9/3/2019 NOTE: Defendants KS AZ-2, P.C. and Marc Auerbach, DDS's Renewed and Revised Motion for Protective Order; Motion to Modify Subpoena Duces Tecum; or, in the Alternative, Motion for Relief Based on A.R.C.P. Rule 26(b)(2)(C)(iii) 8/8/2019 094 - ME: Oral Argument Set 8/8/2019 8/2/2019 029 - ME: Status Conference 8/2/2019 7/31/2019 019 - ME: Ruling 7/31/2019 7/29/2019 MOT - Motion 7/31/2019 NOTE: DEFENDANT KS AZ-2, P.C. AND MARC AUERBACH, DDS’ MOTION FOR PROTECTIVE ORDER; MOTION TO MODIFY SUBPOENA DUCES TECUM; OR IN THE ALTERNATIVE MOTION FOR RELIEF BASED ON A.R.C.P., RULE 26(b)(2)(C)(iii) 7/11/2019 NSC - Notice of Substitution of Counsel 7/15/2019 NOTE: Notice of Substitution of Counsel Within Firm 7/3/2019 NAR - Notice Of Appearance 7/8/2019 NOTE: PLAINTIFFS’ NOTICE OF APPEARANCE 7/3/2019 NOT - Notice 7/9/2019 NOTE: ADVISORY RULING ON PLAINTIFF’S MOTIONS TO TAKE DEPOSITIONS AND TO COMPEL WRITTEN DISCOVERY RE: JURISDICTION 6/28/2019 ORD - Order 6/28/2019 NOTE: REGARDING STIPULATION TO EXTEND THE PERSONAL JURISDICTION DISCOVERY DEADLINE 6/25/2019 NSC - Notice of Substitution of Counsel 6/26/2019 NOTE: Notice of Substitution of Counsel Within Firm 6/25/2019 STP - Stipulation 6/26/2019 NOTE: STIPULATION TO EXTEND TIME TO CONDUCT DISCOVERY RE: PERSONAL JURISDICTION 6/25/2019 REL - Reply 6/26/2019 NOTE: PLAINTIFF’S Reply in Support of Plaintiff's Motions to Compel Written Discovery Responses from Defendants Kool Smiles Holding Corporation, Kool Smiles, P.C., Kool Smiles AZ-2, P.C. Benevis, LLC, Benevis Holding Corp, and Tu Trans, D.D.S. Re Personal Jurisdiction 6/25/2019 REL - Reply 6/27/2019 NOTE: Plaintiff's Reply in Support of Plaintiff's Motions to Compel Depositions of Defendants Benevis, LLC, Kool Smiles, PC Re Personal Jurisdiction 6/17/2019 RES - Response 6/19/2019 NOTE: DEFENDANTS BENEVIS, LLC AND KOOL SMILES AZ-2, P.C.’S COMBINED RESPONSE TO PLAINTIFF’S MOTIONS TO COMPEL DEPOSITIONS OF DEFENDANTS BENEVIS, LLC AND KOOL SMILES AZ-2, P.C. RE: PERSONAL JURISDICTION 6/17/2019 RES - Response 6/19/2019 NOTE: DEFENDANTS’ RESPONSE TO PLAINTIFFS’ MOTIONS TO COMPEL WRITTEN DISCOVERY RESPONSES REGARDING PERSONAL JURISDICTION FROM DEFENDANTS BENEVIS, LLC, KOOL SMILES HOLDING CORP., BENEVIS HOLDING CORP., KOOL SMILES, P.C., KS AZ-2, P.C., AND TU TRAN, D.D.S 6/7/2019 MTC - Motion To Compel 6/11/2019 NOTE: PLAINTIFF’S MOTION TO COMPEL WRITTEN DISCOVERY RESPONSES OF DEFENDANT BENEVIS, LLC RE: PERSONAL JURISDICTION 6/7/2019 MTC - Motion To Compel 6/11/2019
http://www.superiorcourt.maricopa.gov/docket/CivilCourtCases/caseInfo.asp?caseNumber... 8/19/2020 Civil Court Case Information - Case History Page 6 of 10 Case 20-33918 Document 150-5 Filed in TXSB on 08/25/20 Page 6 of 10
NOTE: PLAINTIFF’S MOTION TO COMPEL WRITTEN DISCOVERY RESPONSES OF DEFENDANT KS AZ-2, P.C. RE: PERSONAL JURISDICTION 6/7/2019 MTC - Motion To Compel 6/11/2019 NOTE: PLAINTIFF’S MOTION TO COMPEL WRITTEN DISCOVERY RESPONSES OF DEFENDANT BENEVIS HOLDING CORPORATION RE: PERSONAL JURISDICTION 6/7/2019 MTC - Motion To Compel 6/11/2019 NOTE: PLAINTIFF’S MOTION TO COMPEL WRITTEN DISCOVERY RESPONSES OF DEFENDANT TU TRAN, DDS RE: PERSONAL JURISDICTION 6/7/2019 MTC - Motion To Compel 6/11/2019 NOTE: PLAINTIFF’S MOTION TO COMPEL WRITTEN DISCOVERY RESPONSES OF DEFENDANT KOOL SMILES HOLDING CORPORATION RE: PERSONAL JURISDICTION 6/7/2019 MTC - Motion To Compel 6/11/2019 NOTE: motion to compel 6/7/2019 MTC - Motion To Compel 6/11/2019 NOTE: PLAINTIFF’S MOTION TO COMPEL DEPOSITION OF DEFENDANT KS AZ-2, P.C. RE: PERSONAL JURISDICTION 6/7/2019 MTC - Motion To Compel 6/11/2019 NOTE: PLAINTIFF’S MOTION TO COMPEL DEPOSITION OF DEFENDANT BENEVIS, LLC RE: PERSONAL JURISDICTION 5/31/2019 REP - Report 6/4/2019 NOTE: SPECIAL DISCOVERY MASTER’S REPORT OF RULE 53(c) FIRST MEETING 5/29/2019 005 - ME: Hearing 5/29/2019 5/21/2019 NOT - Notice 5/23/2019 NOTE: Notice of 1st Meeting 5/21/2019 AFF - Affidavit 5/23/2019 NOTE: Notice of Acceptance and Affidavit of Barry C Schnieder 5/20/2019 ORD - Order 5/20/2019 NOTE: APPOINTING SPECIAL DISCOVERY MASTER 5/15/2019 STP - Stipulation 5/16/2019 NOTE: Stipulation for the Appointment of a Special Discovery Master 5/13/2019 NAR - Notice Of Appearance 5/13/2019 NOTE: Notice of Appearance of Additional Counsel 5/1/2019 094 - ME: Oral Argument Set 5/1/2019 4/25/2019 REL - Reply 4/26/2019 NOTE: Defendant Dr. Auerbach's Reply in Support of His Motion for Summary Judgment 4/15/2019 RES - Response 4/16/2019 NOTE: PLAINTIFF’S RESPONSE TO DEFENDANT AUERBACH’S MOTION FOR SUMMARY JUDGMENT, OR IN THE ALTERNATIVE, REQUEST FOR RULE 56(d) RELIEF — and — REQUEST FOR EXPEDITED HEARING 4/15/2019 SOF - Statement Of Facts 4/16/2019 NOTE: PLAINTIFF’S STATEMENT OF FACTS IN SUPPORT OF RESPONSE TO DEFENDANT AUERBACH’S MOTION FOR SUMMARY JUDGMENT 4/4/2019 ORD - Order 4/4/2019 NOTE: REGARDING STIPULATION TO EXTEND THE APRIL 1, 2019 DEADLINE TO SCHEDULE PERSONAL JURISDICTION DEPOSITIONS 4/1/2019 STP - Stipulation 4/2/2019 NOTE: STIPULATION TO EXTEND THE APRIL 1, 2019 DEADLINE TO SCHEDULE DEPOSITIONS REGARDING PERSONAL JURISDICTION 3/26/2019 ORD - Order 3/26/2019 NOTE: Stipulation to Extend Deadlines to Respond and Reply to Defendant Auerbach’s Motion for Summary Judgment 3/22/2019 STP - Stipulation 3/25/2019 NOTE: Stipulation to Extend Deadlines to Respond and Reply to Defendant Auerbach's Motion for Summary Judgment 3/11/2019 MCD - Motion To Consolidate 3/12/2019 NOTE: Defendant Desert State Dental Anesthesia, LLC's Partial Joinder to FFL Defendants' Motion to Dismiss 3/11/2019 REL - Reply 3/12/2019 NOTE: DEFENDANT DESERT STATE DENTAL ANESTHESIA, LLC’S JOINDER TO REPLY TO MOTION TO DISMISS/MOTION TO ENFORCE ARBITRATION AGREEMENT 3/11/2019 PHO - Pro Hac Vice Order 3/11/2019 NOTE: Order 3/7/2019 028 - ME: Status Conference Set 3/7/2019 3/6/2019 PHA - Pro Hac Vice Application 3/7/2019 NOTE: MOTION TO ASSOCIATE COUNSEL PRO HAC VICE 3/4/2019 028 - ME: Status Conference Set 3/4/2019 3/1/2019 MSJ - Motion For Summary Judgment 3/4/2019 NOTE: Defendant Auerbach's Motion for Summary Judgment 3/1/2019 SOF - Statement Of Facts 3/1/2019
http://www.superiorcourt.maricopa.gov/docket/CivilCourtCases/caseInfo.asp?caseNumber... 8/19/2020 Civil Court Case Information - Case History Page 7 of 10 Case 20-33918 Document 150-5 Filed in TXSB on 08/25/20 Page 7 of 10
NOTE: Statement of Facts in Support of Defendant Auerbach's Motion for Summary Judgment 2/25/2019 ORD - Order 2/25/2019 NOTE: GRANTING PLAINTIFF LIMITED DISCOVERY RIGHTS 2/21/2019 REL - Reply 2/22/2019 NOTE: Reply to Motion to Dismiss/Motion to Enforce Arbitration Agreement 2/21/2019 REL - Reply 2/22/2019 NOTE: Reply in Support of Motion to Dismiss for Lack of Personal Jurisdiction by Defendants Benevis Holding Corp., Kool Smiles, PC, Kool Smiles Holding Corp., and Tran 2/21/2019 REL - Reply 2/22/2019 NOTE: Reply in Support of FFL Defendants' Alternative Grounds for Dismissal of the Complaint 2/21/2019 REL - Reply 2/22/2019 NOTE: Reply in Support of FFL Defendants' Motion to Dismiss for Lack of Personal Jurisdiction 2/21/2019 REL - Reply 2/22/2019 NOTE: Defendants' Roberts Joinder in Reply to Motion to Dismiss/Motion to Enforce Arbitration Agreement dated February 21, 2019 2/21/2019 NOT - Notice 2/22/2019 NOTE: Joinder of Stephen and Jane Doe Montoya in Reply to Motion to Dismiss/Motion to Enforce Arbitration Agreement 2/13/2019 ORD - Order 2/13/2019 NOTE: PROPOSED ORDER GRANTING PRO HAC VICE APPLICATION OF BENJAMIN P. McCALLEN 2/11/2019 PHA - Pro Hac Vice Application 2/12/2019 NOTE: Motion to Associate Counsel Pro Hac Vice 2/1/2019 STP - Stipulation 2/1/2019 NOTE: STIPULATED NOTICE OF OUTSTANDING MOTIONS AND THEIR STATUS PER ORDER OF CIVIL PRESIDING JUDGE 1/24/2019 022 - ME: Order Signed 1/24/2019 1/23/2019 ORD - Order 1/24/2019 NOTE: MOTION TO EXCEED PAGE LIMITATIONS 1/22/2019 OBJ - Objection/Opposition. 1/23/2019 NOTE: Plaintiff's Oppositoin to Defendants' Motions to Dimiss/Motion to Enforce Arbitration Agreement — and, in the alternative — MOTION FOR LIMITED DISCOVERY RE UNCONSCIONABILITY OF ALLEGED ARBITRATION AGREEMENT 1/22/2019 066 - ME: Case Reassigned 1/22/2019 1/21/2019 OBJ - Objection/Opposition. 1/23/2019 NOTE: PLAINTIFF’S OPPOSITION TO MOTIONS TO DISMISS FOR LACK OF PERSONAL JURISDICTION; MOTION FOR LIMITED DISCOVERY; DECLARATION OF DAVID TESELLE 1/21/2019 MOT - Motion 1/23/2019 NOTE: Plaintiff's Motion to Exceed Page Limit 1/18/2019 SUM - Summons 1/24/2019 1/17/2019 019 - ME: Ruling 1/17/2019 1/15/2019 066 - ME: Case Reassigned 1/15/2019 1/14/2019 RES - Response 1/15/2019 NOTE: DEFENDANT DESERT STATE DENTAL ANESTHESIA, LLC’S Response to Plaintiff's Motion Requesting an Order Granting Plaintiff Limited Discovery Regarding the Matter of Personal Jurisdiction Raised by Defendants' Motions to Dismiss 1/14/2019 023 - ME: Order Entered By Court 1/14/2019 1/14/2019 021 - ME: Nunc Pro Tunc Order 1/14/2019 1/14/2019 PHO - Pro Hac Vice Order 1/14/2019 NOTE: Order 1/14/2019 ORD - Order 1/14/2019 NOTE: TO EXTEND PLAINTIFF’S TIME TO RESPOND TO DEFENDANTS’ MOTIONS TO DISMISS FOR LACK OF PERSONAL JURISDICTION AND DEFENDANTS’ MOTIONS TO DISMISS / ENFORCE ARBITRATION AND DEFENDANTS’ TIME TO REPLY 1/10/2019 029 - ME: Status Conference 1/10/2019 1/10/2019 STP - Stipulation 1/11/2019 NOTE: STIPULATION TO EXTEND PLAINTIFF’S TIME TO RESPOND TO DEFENDANTS’ MOTIONS TO DISMISS FOR LACK OF PERSONAL JURISDICTION AND DEFENDANTS’ MOTIONS TO DISMISS / ENFORCE ARBITRATION AND DEFENDANTS’ TIME TO REPLY 1/9/2019 MOT - Motion 1/10/2019 NOTE: Motion to Associate Counsel Pro Hac Vice 1/9/2019 REL - Reply 1/10/2019 NOTE: Reply in Support of Motion to Transfer to Commercial Court 1/8/2019 OBJ - Objection/Opposition. 1/9/2019 NOTE: PLAINTIFF’S OPPOSITION TO THE FFL DEFENDANTS’ MOTION TO DISMISS FOR FAILURE TO STATE A CLAIM 1/8/2019 OBJ - Objection/Opposition. 1/9/2019 NOTE: FFL Defendants' Opposition to Plaintiff's Motion to (1) Extend the Stipulated Briefing Schedule for Pending Motions to Dismiss and (2) Permit Limited Jurisdictional Discovery 1/8/2019 NOT - Notice 1/9/2019 NOTE: Notice of Errata 1/7/2019 RES - Response 1/8/2019
http://www.superiorcourt.maricopa.gov/docket/CivilCourtCases/caseInfo.asp?caseNumber... 8/19/2020 Civil Court Case Information - Case History Page 8 of 10 Case 20-33918 Document 150-5 Filed in TXSB on 08/25/20 Page 8 of 10
NOTE: Response by Defendants Kool Smiles PC, Kool Smiles Holding Corp, Benevis Holding Corp and Tran to Plaintiff’s Motion for Expedited Briefing and Argument on Plaintiff’s Motion for Jurisdictional Discovery 1/7/2019 RES - Response 1/8/2019 NOTE: Response by Defendants Benevis Holding Corp., Kool Smiles, PC, Kool Smiles Holding Corp. and Tran to Plaintiffs' Request for Discovery on Personal Jurisdiction 1/4/2019 028 - ME: Status Conference Set 1/4/2019 12/31/2018 OBJ - Objection/Opposition. 1/2/2019 NOTE: Plaintiff's Opposition to FFL Defendants' Motion to Transfer to Commercial Court 12/27/2018 MOT - Motion 12/28/2018 NOTE: PLAINTIFF’S MOTION FOR EXPEDITED BRIEFING SCHEDULE AND EXPEDITED ORAL ARGUMENT RE: THEIR MOTION REQUESTING AN ORDER GRANTING PLAINTIFF LIMITED DISCOVERY REGARDING THE MATTER OF PERSONAL JURISDICTION RAISED BY DEFENDANTS’ MOTIONS TO DISMISS 12/21/2018 MOT - Motion 12/24/2018 NOTE: MOTION REQUESTING AN ORDER GRANTING PLAINTIFF LIMITED DISCOVERY REGARDING THE MATTER OF PERSONAL JURISDICTION RAISED BY DEFENDANTS’ MOTIONS TO DISMISS 12/14/2018 MOT - Motion 12/14/2018 NOTE: Motion to Transfer to Commercial Court 12/14/2018 NOT - Notice 12/17/2018 NOTE: RULE 7.1(g) NOTICE OF FIRST EXTENSION OF TIME FOR FILING RESPONSE TO FFL DEFENDANTS’ (1) MOTION TO DISMISS FOR LACK OF PERSONAL JURISDICTION; (2) ALTERNATIVE MOTION TO COMPEL ARBITRATION; AND (3) ALTERNATIVE MOTION TO DISMISS FOR FAILURE TO STATE A CLAIM 12/7/2018 MDJ - Motion to Dismiss for Lack of Jurisdiction 12/10/2018 NOTE: FFL DEFENDANTS’ (1) MOTION TO DISMISS FOR LACK OF PERSONAL JURISDICTION; (2) ALTERNATIVE MOTION TO COMPEL ARBITRATION; AND (3) ALTERNATIVE MOTION TO DISMISS FOR FAILURE TO STATE A CLAIM 12/4/2018 ORD - Order 12/4/2018 NOTE: EXTENDING TIME TO BRIEFING SCHEDULE FOR DEFENDANTS MOTIONS TO DISMISS FOR LACK OF PERSONAL JURISDICTION AND MOTIONS TO DISMISS / ENFORCE ARBITRATION 11/29/2018 STP - Stipulation 11/30/2018 NOTE: Stipulation Regarding Briefing Schedule for DEFENDANTS’ MOTIONS TO DISMISS FOR LACK OF PERSONAL JURISDICTION AND MOTIONS TO DISMISS / ENFORCE ARBITRATION 11/19/2018 ORD - Order 11/19/2018 NOTE: RE: UNOPPOSED MOTION FOR TEN-DAY ENLARGEMENT OF TIME FOR PLAINTIFFS TO RESPOND TO DEFENDANTS’ MOTION TO DISMISS/MOTION TO ENFORCE ARBITRATION AGREEMENT 11/16/2018 CAN - Credit Memo Appearance Fee Paid 11/16/2018 NOTE: Credit Memo/Appearance Fee Paid 11/15/2018 MTD - Motion To Dismiss 11/19/2018 NOTE: Joinder of Stephen and Jane Doe Montoya in Motion to Dismiss/Motion to Enforce Arbitration Agreement 11/14/2018 AFS - Affidavit Of Service 11/20/2018 NOTE: KOOL SMILES HOLDING DBA BENEVIS LLC 11/14/2018 SUM - Summons 11/16/2018 11/14/2018 MOT - Motion 11/16/2018 NOTE: UNOPPOSED MOTION FOR TEN-DAY ENLARGEMENT OF TIME FOR PLAINTIFFS TO RESPOND TO DEFENDANTS’ MOTION TO DISMISS/MOTION TO ENFORCE ARBITRATION AGREEMENT 11/14/2018 MTD - Motion To Dismiss 11/16/2018 NOTE: Defendant Desert State Dental Anesthesia, LLC's Joinder to Motion to Dismiss/Motion to Enforce Arbitration Agreement 11/9/2018 CAN - Credit Memo Appearance Fee Paid 11/14/2018 NOTE: Credit Memo/Appearance Fee Paid 11/7/2018 CAN - Credit Memo Appearance Fee Paid 11/7/2018 NOTE: Credit Memo/Appearance Fee Paid 11/6/2018 NAR - Notice Of Appearance 11/8/2018 NOTE: Notice of AppeArance 11/6/2018 MTD - Motion To Dismiss 11/8/2018 NOTE: Defendants Roberts' Joinder in Motion to Dismiss/Motion to Enforce Arbitration Agreement filed on November 1, 2018 11/5/2018 NAR - Notice Of Appearance 11/7/2018 NOTE: Notice of Appearance 11/5/2018 CAN - Credit Memo Appearance Fee Paid 11/7/2018 NOTE: Credit Memo/Appearance Fee Paid 11/1/2018 MDJ - Motion to Dismiss for Lack of Jurisdiction 11/5/2018 NOTE: Motion to Dismiss Defendants Benevis Holding Corp; Kool Smiles, PC; Kool Smiles Holding Corp; and Tran for Lack of Personal Jurisdiction 11/1/2018 MTD - Motion To Dismiss 11/5/2018 NOTE: Motion to Dismiss/Motion to Enforce Arbitration Agreement 10/31/2018 AFS - Affidavit Of Service 11/5/2018
http://www.superiorcourt.maricopa.gov/docket/CivilCourtCases/caseInfo.asp?caseNumber... 8/19/2020 Civil Court Case Information - Case History Page 9 of 10 Case 20-33918 Document 150-5 Filed in TXSB on 08/25/20 Page 9 of 10
NOTE: DALE MAYFIELD DMD AND JANE DOE MAYFIELD 10/31/2018 SUM - Summons 11/2/2018 10/31/2018 AAS - Affidavit Of Attempted Service 11/7/2018 10/31/2018 AAS - Affidavit Of Attempted Service 11/7/2018 10/23/2018 AFS - Affidavit Of Service 10/25/2018 NOTE: BENEVIS LLC 10/23/2018 AFS - Affidavit Of Service 10/25/2018 NOTE: DAVID VIETH DDS AND JANE DOE VIETH 10/23/2018 AFS - Affidavit Of Service 10/25/2018 NOTE: LUCIA ROJAS 10/23/2018 AFS - Affidavit Of Service 10/25/2018 NOTE: FRIEDMAN FLEISCHER & LOWE CAPITAL PARTNERS II PL 10/23/2018 SUM - Summons 10/25/2018 10/19/2018 AFS - Affidavit Of Service 10/23/2018 NOTE: CHERYL LYNN WEBB AND JOHN DOE WEBB 10/19/2018 AFS - Affidavit Of Service 10/23/2018 NOTE: STEPHEN J MONTOYA 10/19/2018 SUM - Summons 10/23/2018 10/15/2018 AFS - Affidavit Of Service 10/18/2018 NOTE: MARC AUERBACH DDS AND JANE DOE AUERBACH 10/15/2018 AFS - Affidavit Of Service 10/18/2018 NOTE: KOOL SMILES PC 10/15/2018 SUM - Summons 10/18/2018 10/11/2018 SUM - Summons 10/15/2018 10/11/2018 SUM - Summons 10/15/2018 10/11/2018 SUM - Summons 10/15/2018 10/11/2018 SUM - Summons 10/15/2018 10/11/2018 SUM - Summons 10/15/2018 10/11/2018 AFS - Affidavit Of Service 10/17/2018 NOTE: FRIEDMAN FLEISCHER & LOWE 10/11/2018 AFS - Affidavit Of Service 10/17/2018 NOTE: BENEVIS HOLDING CORP 10/11/2018 AFS - Affidavit Of Service 10/17/2018 NOTE: FRIEND FLEISCHER & LOWE CAPITAL PARTNERS LL LP 10/11/2018 AFS - Affidavit Of Service 10/17/2018 NOTE: TU TAN DDS AND JANE DOE TRAN 10/11/2018 AFS - Affidavit Of Service 10/17/2018 NOTE: BENEVIS HOLDING CORP 10/5/2018 AFS - Affidavit Of Service 10/10/2018 NOTE: KS AZ-2 PC 10/2/2018 AFS - Affidavit Of Service 10/4/2018 NOTE: AARON ROBERTS DMD AND JANE DOE ROBERTS 10/2/2018 SUM - Summons 10/4/2018 9/28/2018 AFS - Affidavit Of Service 10/3/2018 NOTE: DESERT STATE DENTAL ANESTHESIA C/O PLAXA EXECUTIVE SUITE LLC 9/7/2018 COM - Complaint 9/10/2018 9/7/2018 CSH - Coversheet 9/10/2018 9/7/2018 CCN - Cert Arbitration - Not Subject 9/10/2018 9/7/2018 NJT - Not Demand For Jury Trials 9/10/2018 9/7/2018 CER - Certificate 9/10/2018 NOTE: OF EXPERT OPINION PURSUANT TO ARS 12-2603 9/7/2018 NOT - Notice 9/10/2018 NOTE: PLAINTIFFS OF INTENT TO USE AUDIO VIDEO/TECHNOLOGY
Case Calendar Date Time Event 1/9/2019 9:15 Status Conference 3/6/2019 9:15 Status Conference 5/21/2019 9:00 Oral Argument 8/1/2019 11:15 Status Conference 8/7/2019 8:30 Status Conference 10/24/2019 10:30 Pre-Trial Conference
http://www.superiorcourt.maricopa.gov/docket/CivilCourtCases/caseInfo.asp?caseNumber... 8/19/2020 Civil Court Case Information - Case History Page 10 of 10 Case 20-33918 Document 150-5 Filed in TXSB on 08/25/20 Page 10 of 10
12/6/2019 8:30 Oral Argument 1/10/2020 9:00 Status Conference 1/13/2020 11:00 Status Conference 2/28/2020 8:00 Oral Argument 5/20/2020 11:00 Oral Argument 6/18/2020 9:30 Oral Argument 11/5/2020 8:45 Status Conference 3/16/2021 8:30 Pre-Trial Conference
Judgments There are no judgments on file
http://www.superiorcourt.maricopa.gov/docket/CivilCourtCases/caseInfo.asp?caseNumber... 8/19/2020 Case 20-33918 Document 150-6 Filed in TXSB on 08/25/20 Page 1 of 9
Clerk of the Superior Court *** Electronically Filed *** 07/15/2020 8:00 AM SUPERIOR COURT OF ARIZONA MARICOPA COUNTY
CV 2018-011975 07/14/2020
CLERK OF THE COURT HON. SHERRY K. STEPHENS T. DeRaddo Deputy
JOSEPH MARTIN GASTELUM, et al. MICHAEL N POLI v.
KOOL SMILES P C, et al. DONN C ALEXANDER
ROBERT A BERNHEIM FREDERICK M CUMMINGS EILEEN DENNIS GILBRIDE WILLIAM S SOWDERS GEOFFREY M STURR JUDGE STEPHENS
UNDER ADVISEMENT RULING
The Court has considered Defendant Marc Auerbach, DDS’s Renewed Motion for Summary Judgment filed November 21, 2019, the Statement of Facts in Support of Marc Auerbach, DDS’s Renewed Motion for Summary Judgment filed November 21, 2019, Plaintiff’s Response to Defendant Marc Auerbach, DDS’s Renewed Motion for Summary Judgment filed March 31, 2020, Plaintiff’s Statement of Facts in Support of Response to defendant Marc Auerbach, DDS’s Renewed Motion for Summary Judgment filed March 31, 2020, Defendant Marc Auerbach, DDS’s Reply in Support of His Renewed Motion for Summary Judgment filed April 20, 2020, and the oral argument conducted on May 20, 2020. At oral argument, the parties requested to further brief certain issues because there was confusion on whether the summary judgment motion pertained to both claims against Defendant Auerbach (negligence per se and aiding and abetting). The Court has considered Defendant Auerbach’s Supplemental Memorandum in Support of his Motion for Summary Judgment filed May 29, 2020, Plaintiff’s Response to Defendant Auerbach’s Supplemental Memorandum in Support of His Motion for Docket Code 926 Form V000A Page 1
Case 20-33918 Document 150-6 Filed in TXSB on 08/25/20 Page 2 of 9
SUPERIOR COURT OF ARIZONA MARICOPA COUNTY
CV 2018-011975 07/14/2020
Summary Judgment filed June 25, 2020, Plaintiff’s Notice of Citation of Supplemental Authority Regarding Defendant Auerbach’s Renewed Motion for Summary Judgment filed July 7, 2020, and Defendant Auerbach’s Reply in Support of his Supplemental Memorandum and Opposition to Plaintiffs’ Motion to Amend filed July 9, 2020. This is a wrongful death suit brought by the father of a two-year-old child, Zion Gastellum, who died during a dental procedure performed under anesthesia at the Kool Smiles Dental Clinic in Yuma, Arizona. The father, Joseph Gastelum, is the statutory plaintiff, asserting wrongful death claims on his own behalf and for the statutory beneficiaries. See A.R.S. § 12-611. Plaintiff alleges in the complaint that the defendants devised and executed a business plan to create a chain of 130 pediatric dental clinics that targeted children receiving government health benefits. Part of the business plan was to reward unnecessary procedures, force dangerous over- scheduling, employ untrained staff to perform medical functions, set production quotas for invasive procedures such as root canals and crowns, terminate and discipline personnel for generating less than a set dollar amount per patient, and encourage the negligent maintenance of essential medical equipment. Operating under this business model, the Yuma Kool Smiles clinic performed six simultaneous root canals on Zion, along with three procedures to reshape the enamel surface of a tooth for improved appearance of Zion’s baby teeth (tooth recontouring). Zion was intubated and placed under general anesthesia. After the procedure, Zion was taken to a recovery room, left with untrained staff, and hooked up to an empty oxygen tank. Zion was without oxygen for up to ten minutes. Zion died a few days later on December 20, 2017. Kool Smiles billed Medicaid $2,800 for Zion’s care and treatment. Defendant Auerbach never saw or treated Zion. On December 5, 2017, Defendant Auerbach’s name was used on a procedure authorization request form submitted to AHCCCS to secure authorization for Zion’s treatment. Defendant Auerbach previously filed a motion for summary judgment. The Court granted Plaintiff’s Rule 56(d) request and deferred ruling on that motion until Plaintiff had an opportunity to take Defendant Auerbach’s deposition and conduct other discovery. There are 17 defendants in this case. The complaint alleges claims for dental malpractice, negligent hiring and supervision, negligence per se, consumer fraud, aiding and abetting fraud, and civil conspiracy. The fraud, aiding and abetting, and conspiracy claims allege the defendants’ business model provided incentives for dentists to perform medically unnecessary procedures for profit. Those claims also assert that these defendants intended to defraud Medicaid through reimbursements for medically unnecessary and excessive procedures to maximize returns for its investors. Because Medicaid pays only 30 to 40% of the commercially available rate, to provide investors with above market returns, these defendants developed practices that rewarded or punished employees to the extent they achieved procedure goals Docket Code 926 Form V000A Page 2
Case 20-33918 Document 150-6 Filed in TXSB on 08/25/20 Page 3 of 9
SUPERIOR COURT OF ARIZONA MARICOPA COUNTY
CV 2018-011975 07/14/2020
correlated to a desired financial return. This practice compelled employees to resort to unnecessary and incomplete procedures and other improprieties that resulted in filing false Medicaid claims. In this motion for summary judgment, Defendant Auerbach seeks summary judgment on the ground he has no liability merely because someone placed his name on an authorization form without his knowledge. Defendant Auerbach had nothing to do with Zion’s treatment or care and has never been to the Yuma Kool Smiles office or had any ownership interest in the Yuma Kool Smiles office. Dr. Auerbach never heard of Zion until he heard about his death on the news. He practices pediatric dentistry in Tucson. Dr. Auerbach contends that without his knowledge, someone used his name on a form to obtain preauthorization for Zion’s care. In 2017, United Healthcare had experienced technical difficulties with its electronic portal for submitting authorizations. For unknown reasons, Dr. Montoya (Zion’s dentist) was omitted from the portal. United Healthcare allowed Yuma to submit Dr. Montoya’s authorizations under the name of a different pediatric dentist although the treatment was correctly billed under Dr. Montoya’s name. Defendant Auerbach argues there is no affirmative conduct by Defendant Auerbach that proximately resulted in injury to Plaintiff. In response, Plaintiff argues there is ample evidence contradicting Defendant Auerbach’s position that he was not involved in any way in Zion’s treatment, Zion’s death, or the Yuma Cool Smiles facility. As such, there are disputes of material fact making summary judgment inappropriate. Specifically, Plaintiff contends: (1) Defendant Auerbach is listed as the medical provider seeking pre-authorization approval to treat Zion; (2) Defendant Auerbach is listed on 40 other authorizations out of the Yuma office that were submitted over a four-month period, all of which followed the same “modus operandi” of prescribed deep sedation, crowns, and pulpotomies, and an excessive amount of treatment for young children; (3) Defendant Auerbach’s professional license is on display at the Yuma Kool Smiles office (he paid a licensing fee and approved that license); (4) Defendant Auerbach is on the Board of Dental Examiners list of practicing dentists for the Yuma Kool Smiles office. Plaintiff disputes that the use of Defendant Auerbach’s name on the authorization was a glitch or that United Healthcare directed or agreed that Kool Smiles should use Dr. Auerbach instead of Dr. Montoya’s name for Zion’s treatment. The issue described by Defendant Auerbach regarding the glitch showed it occurred six months earlier than stated, in June 2017, and was resolved within 24 hours. United Healthcare confirmed that the standard operating procedure is for the treating dentist attending the patient should submit the authorization and Yuma Kool Smiles office should have notified them that the wrong provider was listed for the services to be provided to Zion. The large number of authorizations for procedures similar to the one Zion had from both the Yuma and Tucson offices suggest Defendant Auerbach was involved in a pattern of fraudulently prescribing
Docket Code 926 Form V000A Page 3
Case 20-33918 Document 150-6 Filed in TXSB on 08/25/20 Page 4 of 9
SUPERIOR COURT OF ARIZONA MARICOPA COUNTY
CV 2018-011975 07/14/2020
procedures that Plaintiff contends were unnecessary and inappropriate. In summary, there is a question of fact as to whether Defendant Auerbach was involved in Zion’s treatment. Defendant Auerbach replies that the sole question for this court is whether Defendant Auerbach had any participation, knowledge, or involvement in preparing or submitting the authorization for Zion. The evidence “overwhelmingly” demonstrates his name was placed on the insurance authorization without his knowledge, authorization, consent, or participation. Authorization forms are handled by staff members familiar with insurance requirements. Zion’s treating dentist, Dr. Montoya, testified in a deposition that he was notified of an issue with the authorization form by a staff member who later told him the problem had been corrected. Plaintiff cannot show how the use of Defendant Auerbach’s name on the authorization form is relevant to the claims at issue or caused or contributed to Zion’s death. At oral argument on May 20, 2020, Defendant Auerbach argued the only evidence linking him to the negligence claim is the authorization form for Zion’s procedure. Defendant Auerbach contends he had no knowledge and did not give permission to any clerk to use his name on that or any other authorization form submitted by the Yuma Kool Smiles office. Defendant Auerbach argues he had nothing to do with the procedure for Zion. After conducting discovery for 14 months, Plaintiff has no evidence to suggest he had any involvement or knowledge. The fact his name appeared on the form was the result of a billing clerk’s decision and an amended authorization removing his name is now in the United Healthcare computer. In summary, Defendant Auerbach argues there is no competent evidence establishing a genuine issue of material fact regarding the claim for negligence as to him. Dr. Auerbach did not brief the issue of summary judgment on the aiding and abetting claim. The Court permitted the parties to supplement the briefing on that claim. At oral argument on May 20, 2020, Plaintiff argued that Defendant Auerbach is named in two claims: Count 3, negligence per se; and Count 5, aiding and abetting consumer fraud. Plaintiff argued that the elements of aiding and abetting under the Restatement Torts (Second) and Wells Fargo Bank v. Arizona Laborers, 201 Ariz. 474 (2002) include: a primary tort (here consumer fraud); knowledge, to be proven inferentially, meaning general awareness; and substantial assistance (conduct making it easier for the violation to occur). The discovery conducted to date shows Defendant Auerbach was paid a percentage of what he brought in to Kool Smiles for invasive procedures but not routine procedures. His name appears on dozens of preauthorization forms for both the Yuma and Tucson Kool Smiles offices for months. Contrary to the declaration of Mr. Hammer, United Healthcare has no record of any computer problems that required the use of Dr. Auerbach’s name on the Yuma preauthorization forms. The Arizona Dental Board provided Defendant Auerbach with a license for the Yuma location. Defendant
Docket Code 926 Form V000A Page 4
Case 20-33918 Document 150-6 Filed in TXSB on 08/25/20 Page 5 of 9
SUPERIOR COURT OF ARIZONA MARICOPA COUNTY
CV 2018-011975 07/14/2020
Auerbach was involved in the fraudulent business model used by Kool Smiles in violation of the consumer fraud act. In the supplemental briefing, Defendant Auerbach clarified that his motion for summary judgment relates to both the negligence per se claim (based on A.R.S. § 32-1201.01(15) which defines unprofessional conduct to include obtaining a fee by filing a fraudulent claim with a third party for services rendered or to be rendered to a patient) and the aiding and abetting consumer fraud claim. Dr. Auerbach asserts there is no evidence Defendant Auerbach knew he was aiding and abetting a tort or that he substantially aided in the commission of any tort. Dr. Auerbach had no personal involvement in preparing authorization forms or treating Zion. Dr. Auerbach argues there is no evidence he recommended excessive or unnecessary treatment for anyone or was involved in any policy, procedure or management decision for the Yuma Kool Smiles office. In Plaintiff’s response to Defendant Auerbach’s supplemental briefing Plaintiff argues there is substantial circumstantial evidence that Dr. Auerbach knew the Kool Smiles business model was based on medically unnecessary procedures that involved unwarranted risks to the patients and that the authority for those procedures was obtained by providing false, incomplete and/or misleading information to the parents and/or guardians of the patients. Defendant Auerbach aided and abetted the alleged fraud by performing the invasive, costly, and medically unnecessary dental procedures. As to Zion, Defendant Auerbach allowed his name to be used by the Yuma Kool Smiles clinic to obtain insurance pre-authorization for Zion’s procedure from AHCCCS/Medicaid. Despite Defendant Auerbach’s denial that he had knowledge of these matters, the circumstantial evidence would permit reasonable inferences from which a jury could question Defendant Auerbach’s veracity. In Plaintiff’s Notice of Citation of Supplemental Authority filed July 7, 2020, Plaintiff cites to the Restatement (Second) of Torts § 87(b) and Wells Fargo v. Arizona Laborers, Teamsters & Cement Masons Local No. 395 Pension Trust Fund, 201 Ariz. 474 (2002) as support for their position that an aider and abettor is liable for all foreseeable acts. In Defendant Auerbach’s reply in support of his supplemental memorandum, Defendant Auerbach argues no reasonable jury could find Dr. Auerbach aided and abetted any tort or fraud because he did not known he was aiding and abetting a fraud and he did not substantially aid in the commission of a tort. Summary judgment is appropriate only if no genuine issue of material fact exists and the moving party is entitled to judgment as a matter of law. Rule 56, Ariz.R.Civ.P., MacKinney v. City of Tucson, 231 Ariz. 584 (App. 2013), Nat’l Bank of Ariz. v. Thruston, 218 Ariz. 112 (App. 2008), Colonial Tri-City Ltd. P’ship v. Ben Franklin Stores, Inc., 179 Ariz. 428, 432 (App. 1993) and Johnson v. Earnhardt’s Gilbert Dodge, Inc., 212 Ariz. 381, 385, 132 P.3d 825, 829 (2006).
Docket Code 926 Form V000A Page 5
Case 20-33918 Document 150-6 Filed in TXSB on 08/25/20 Page 6 of 9
SUPERIOR COURT OF ARIZONA MARICOPA COUNTY
CV 2018-011975 07/14/2020
Thus, a motion for summary judgment should only be granted if the acts produced in support of the claim or defense have so little probative value, given the quantum of evidence required, that reasonable people could not agree with the conclusion advanced by the proponent of the claim or defense. Orme Sch. v. Reeves, 166 Ariz. 301, 309, 802 P.2d 1000, 1008 (1990). The facts must be viewed in a light most favorable to the party against whom it was direct and summary judgment is inappropriate if there is any doubt as to whether an issue of material fact exists. Lennar Corp. v. Transamerica Ins. Co., 227 Ariz. 238, 242 (App. 2011), Andrews v. Blake, 205 Ariz. 236 (2003), and Joseph v. Markovitz, 27 Ariz.App. 122, 125, 551 P.2d 571, 574 (1976). A statement of facts is the only means by which a party opposing summary judgment may create a record showing the existence of those facts which establish a genuine issue of material fact or otherwise preclude summary judgment in favor of the moving party. See Rule 56, Ariz.R.Civ.P. Where the evidence or inferences would permit a jury to resolve a material issue in favor of either party, summary judgment is improper. Comerica Bank v. Mahmoodi, 224 Ariz. 289, 292 (App. 2010). When a plaintiff moves for summary judgment, it may challenge the legal sufficiency of an affirmative defense on which the defendant bears the burden of proof at trial, by explaining to the court the defendant does not have any evidence to support the defense. National Bank of Ariz. v. Thruston, 218 Ariz. 112, 119 (App. 2008). The opponent of a motion for summary judgment does not raise a genuine issue of fact by merely stating in the record that such an issue exists. They must show that competent evidence is available which will justify a trial on the issue. Flowers v. K-Mart Corp. 126 Ariz. 495, 499 (App. 1980). An unsupported contention that a dispute exists is insufficient to defeat a motion for summary judgment. Sewell v. Brookbank, 119 Ariz. 422, 426 (App. 1978). A nonmoving party may not rest on allegation in its pleadings. See Rule 56, Ariz.R.Civ.P. and MacConnell v. Mitten, 131 Ariz. 22, 25 (1982). Vague or generalized unsupported statements are not sufficient to withstand a motion for summary judgment. Burrington v. Gila County, 159 Ariz. 320 (App. 1988). When deciding a motion for summary judgment, credibility determinations, the weighing of the evidence, and the drawing of legitimate inferences from the facts are jury functions, not those of a judge. Allstate Indem. Co. v. Ridgely, 214 Ariz. 440, 444, ¶ 19, 153 P.3d 1069, 1073 (App. 2007) (quoting Thomspon v. Better-Bilt Aluminum Prds. Co., 171 Ariz. 550, 558, 832 P.2d 203, 211 (1992)). Summary judgment is inappropriate where the facts, even if undisputed, would allow reasonable minds to differ. Nelson v. Phoenix Resort Corp., 181 Ariz. 188, 191, 888 P.2d 1375, 1378 (App. 1994). The general rule is that the question of causation is one of fact for a jury except in those instances where no reasonable persons could disagree. Molever v. Roush, 152 Ariz. 367, 374, 732 P.2d 1105, 1112 (App. 1986). Docket Code 926 Form V000A Page 6
Case 20-33918 Document 150-6 Filed in TXSB on 08/25/20 Page 7 of 9
SUPERIOR COURT OF ARIZONA MARICOPA COUNTY
CV 2018-011975 07/14/2020
To establish liability for a negligence claim, Plaintiff must prove the existence of: (1) a duty requiring the defendant to conform to a certain standard of care; (2) a breach by defendant of that standard; (3) a causal connection between the defendant’s breach and the resulting injury; and (4) actual damages. Quiroz v. Alcoa, Inc., 790 Ariz.Adv. Rep. 8, May 11, 2018 (Arizona Supreme Court) and Gipson v. Kasey, 214 Ariz. 141, 150 P.3d 228, 230 (Ariz. 2007). A person who violates a statute enacted for the protection and safety of the public is guilty of negligence per se. Good v. City of Glendale, 150 Ariz. 218, 221, 722 P.2d 386, 389 (App. 1986). However, the principle of negligence per se applies only “when a person violates a specific legal requirement. . . . The statute must proscribe certain or specific acts. . . . Therefore, if a statute defines only a general standard of care . . . negligence per se is inappropriate.” Reyes v. Frank’s Service & Trucking, LLC, 235 Ariz. 605, 612-13, 334 P.3d 1264, 1271-72 (App. 2014). Recently, the Arizona Court of Appeals stated: A plaintiff suing for negligence must prove, inter alia, a "causal connection" between the defendant's breach and the plaintiff's resulting injuries. Quiroz v. ALCOA Inc., 243 Ariz. 560, 564 ¶7 (2018). In this context, "cause" has two components: actual cause or "causation-in-fact," and proximate or legal cause. Ontiveros v. Borak, 136 Ariz. 500, 505- 06 (1983); Patterson, 214 Ariz. at 438-39 ¶¶13-14; Barrett v. Harris, 207 Ariz. 374, 378 ¶11 (App. 2004). Actual cause exists if the defendant's act "helped cause the final result" and the result "would not have happened without the defendant's act." Ontiveros, 136 Ariz. at 505. A defendant is liable even if his conduct contributed "only a little" to the plaintiff's injuries. Id. (citation omitted). An act that is the actual cause of injuries will also be the proximate cause unless an intervening event supersedes the defendant's liability for the injuries. Id. at 505-06; Patterson, 214 Ariz. at 438-39 ¶14. An event that contributes to the injuries is intervening if it has an independent origin for which the defendant is not responsible. Patterson, 214 Ariz. at 438-39 ¶14. Such an event is superseding if it "was unforeseeable by a reasonable person in the position of the original actor" and "looking backward, after the event, the intervening act appears extraordinary." Ontiveros, 136Ariz. at 506. When the injuries are "produced by an intervening and superseding cause, even though the original negligence may have been a substantial factor in bringing about the injury," the defendant is not liable "because the necessary proximate causation is lacking." Patterson, 213 Ariz. at 439 ¶14 (quoting Herzberg v. White, 49 Ariz. 313, 321 (1937)). ¶18 The existence of proximate cause "requires consideration of all the facts," and "is usually a question for the jury, unless reasonable people could not differ."McMurtry v. Weatherford Hotel, Inc., 231 Ariz. 244, 256 ¶38 (App. 2013). This includes the question whether an intervening and superseding cause Docket Code 926 Form V000A Page 7
Case 20-33918 Document 150-6 Filed in TXSB on 08/25/20 Page 8 of 9
SUPERIOR COURT OF ARIZONA MARICOPA COUNTY
CV 2018-011975 07/14/2020
exists. See Robertson v. Sixpence Inns of Amer. Inc., 163 Ariz. 539, 547 (1990) (holding that the trial court erred in granting summary judgment on issue of intervening and superseding cause). Dupray v. Jai Dining Services, 432 P.3d 937 (App. 2018).
Arizona recognizes a claim for aiding and abetting as embodied in the Restatement of Torts (Second) (Restatement of Torts) § 876(b) (1979). Wells Fargo Bank v. Ariz. Laborers, Teamsters & Cement Masons Local No. 395 Pension Trust Fund, 201 Ariz. 474, 485, ¶ 31, 38 P.3d 12, 23 (2002). A claim for aiding and abetting a tort requires proof that (1) the primary tortfeasor has committed a tort causing injury to the plaintiff; (2) the defendant knew the primary tortfeasor breached a duty; (3) the defendant substantially assisted or encouraged the primary tortfeasor in the breach; and (4) a causal relationship exists between the assistance or encouragement and the breach. Id. at ¶ 34; Restatement of Torts § 876. Security Title Agency, Inc. v. Pope, 219 Ariz. 480 (App. 2008).
Viewing the evidence in a light most favorable to Plaintiff, the Court finds there are genuine issues of material fact and summary judgment for Defendant Auerbach is not appropriate at this time. As noted by counsel for Plaintiff at the oral argument, most of the discovery conducted in this case to date related to personal jurisdiction issues. Defendant Auerbach’s deposition was taken and he did provide some testimony regarding his role at Kool Smiles and how he was compensated. He testified he is paid a percentage of what is collected on the actual work he performed and acknowledged that much of his time involved performing procedures for patients under anesthesia. Dr. Auerbach testified he is aware that AHCCS pays more for root canals and crowns than for fillings. He acknowledged that the preauthorization for Zion should not have been obtained in his name but he did not conduct any investigation to learn about how that occurred. While the Court agrees with Defendant Auerbach that the current evidence implicating him in these claims is slight, there is circumstantial evidence (even though the specific evidence and/or its meaning is disputed) supporting the claims against Defendant Auerbach. The Court must view this evidence in a light most favorable to Plaintiff in a summary judgment motion if there is any doubt as to whether an issue of material facts exists. Lennar Corp. v. Transamerica Ins. Co., 227 Ariz. 238, 242 (App. 2011), Andrews v. Blake, 205 Ariz. 236 (2003), and Joseph v. Markovitz, 27 Ariz.App. 122, 125, 551 P.2d 571, 574 (1976). That is the circumstance here. It is the function of the trier of fact to make credibility determinations, weigh evidence, and draw legitimate inferences from the evidence after hearing all facts and circumstances. The Court is aware Plaintiff has filed a Motion for Leave to Amend Complaint on June 25, 2020 seeking to add an additional claim against Defendant Auerbach for civil
Docket Code 926 Form V000A Page 8
Case 20-33918 Document 150-6 Filed in TXSB on 08/25/20 Page 9 of 9
SUPERIOR COURT OF ARIZONA MARICOPA COUNTY
CV 2018-011975 07/14/2020
conspiracy. The Court has not yet ruled on that motion and this ruling does not decide any issue related to the proposed claim for conspiracy. For the reasons stated, IT IS ORDERED denying Defendant Marc Auerbach, DDS’s Renewed Motion for Summary Judgment filed November 21, 2019.
Docket Code 926 Form V000A Page 9
Case 20-33918 Document 150-7 Filed in TXSB on 08/25/20 Page 1 of 2
IN THE UNITED STATES BANKRUPTCY COURT FOR THE SOUTHERN DISTRICT OF TEXAS HOUSTON DIVISION
In re: § Chapter 11 § BENEVIS CORP., et al.,5 § Case No. 20-33918 (MI) § Debtors. § (Jointly Administered)
ORDER GRANTING MOTION FOR RELIEF FROM THE AUTOMATIC STAY TO PROCEED WITH PENDING LITIGATION
Before the Court is Joseph and Veronica Gastelum’s Motion for Relief from the Automatic
Stay to Proceed with Pending Litigation. Having considered the Motion, objections filed thereto
(if any), and the argument of counsel, the Court finds that the Motion should be granted. It is therefore ORDERED that:
1. The automatic stay under 11 U.S.C. § 362 is lifted so that the litigation styled
Joseph Martin Gastelum, father of Zion Gastelum, individually and for and on
behalf of Statutory Beneficiary Veronica Renee Gastelum, mother of Zion Gastelum
and on behalf of their deceased son, Zion Gastelum v. Kool Smiles, P.C., et al., Case
No. CV2018-011975 pending in the Maricopa County, Arizona Superior Court with
consolidated Case No. CV2019-015618 styled Joseph Martin Gastelum, father of
Zion Gastelum, individually and for and on behalf of Statutory Beneficiary Veronica
Renee Gastelum, mother of Zion Gastelum and on behalf of their deceased son,
Zion Gastelum v. Friedman Fleischer & Lowe Capital Partners, L.P., et al., may
proceed against Debtors Benevis, LLC, Benevis Holding Corp., and Benevis Corp.
to final judgment, including any appeals.
5 The Debtors in these chapter 11 cases, along with the last four digits of each Debtor’s federal tax identification number, are as follows: Benevis Corp. (0242); LT Smile Corporation (2818); Benevis Holding Corp. (0222); Benevis Affiliates, LLC (7420); Benevis, LLC (5524); Benevis Informatics, LLC (7833) (collectively, the “Debtors”). The address of the Debtors’ headquarters is 1090 Northchase Parkway S.E., Suite 150, Marietta, GA 30067.
10702172 Case 20-33918 Document 150-7 Filed in TXSB on 08/25/20 Page 2 of 2
It is SO ORDERED.
Signed this _____ day of ______, 2020.
______HONORABLE MARVIN ISGUR UNITED STATES BANKRUPTCY JUDGE
10702172