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BENDA v. PER-SE TECHNOLOGIES

June 2, 2005.

CHARLES F. BENDA, JR., Plaintiff,
v.
PER-SE TECHNOLOGIES, INC., Defendant.



The opinion of the court was delivered by: AMY J. ST. EVE, District Judge

MEMORANDUM OPINION AND ORDER

Plaintiff Charles F. Benda, Jr. ("Benda") sues Defendant Per-Se Technologies, Inc. ("Per-Se") for fraudulent inducement and tortious interference with a business expectancy. Per-Se moves for summary judgment on all counts. For the reasons discussed below, the Court grants in part and denies in part Per-Se's motion.

BACKGROUND

  I. Parties And Relevant Non-Parties

  Benda resides in St. Charles, Illinois. (R. 36-1; Pl.'s Resp. to Def.'s Stmt. Mat. Facts ("Def.'s SMF") ¶ 1.) From April 2003 to January 2004, Per-Se employed Benda as its National Vice President of Per-Se's Academic and Multi-Specialty Practice Group ("AMSG"). Per-Se is a Delaware corporation with its principal place of business in Atlanta, Georgia. (Id.) Per-Se provides medical billing and collection services to hospitals, physician groups, and individual physicians. (Id. ¶ 3.)

  Douglas Marcotte ("Marcotte") was the Senior Vice President of Sales and Marketing at Per-Se during all relevant times. Frank Murphy ("Murphy") was the President of Per-Se's Physician Services Division at all relevant times. II. Per-Se's Business

  The Physician Services Division of Per-Se enters into "service agreements" to outsource the billing and collection functions of various health-care organizations, and then Per-Se earns a percentage of the funds collected on behalf of clients. (Id. ¶ 4.) Per-Se divides the Physician Services Division into the following five separate sales groups: (1) Anesthesiology, (2) Radiology, (3) Pathology, (4) Emergency Room, and (5) Academic and Multi-Specialty Practice. (Id. ¶ 5.) Per-Se commonly refers to these groups as "verticals." (Id. ¶ 6.) The Physician Services Division also includes operational groups, such as the Account Management Group. (Id. ¶ 7.) Once a client executes a service agreement, the Account Management Group works directly with the client to implement Per-Se's systems and to ensure proper operation. (Id. ¶ 8.)

  The AMSG targets two distinct markets — (1) physician practices affiliated with academic institutions (commonly called the "academic" market), and (2) multi-specialty physician practices (commonly called the "multi-specialty" market). (Id. ¶ 9.) Traditionally, the AMSG focused exclusively on the academic market as opposed to the multi-specialty market. (Id. ¶ 11.)

  The primary tool used to track sales prospects at Per-Se is the Baseline, Upside, and Commit ("BUC") Report." (Id. ¶¶ 17, 18.) The BUC Report categorizes sales leads based in part on the likelihood of making a sale. (Id. ¶ 19.) Per-Se lists a lead as "Upside" if it has approximately a 50% chance to close. (Id. ¶ 20.) It lists a lead as "Commit" if a service agreement is close to being signed and the sale has a 75% chance of closing. (Id. ¶ 21.) Finally, Per-Se lists a lead as "Baseline" once it closes the lead, and the service agreement is ready for it to implement. (Id. ¶ 22.) The sales directors maintain responsibility for initially listing sales prospects on the BUC Report. (Id. ¶ 23.) III. Benda's Employment With Springfield

  Prior to joining Per-Se, Benda worked for Springfield Service Corporation ("Springfield") as the Senior Vice President for Sales and Marketing. (Id. ¶ 26.) While at Springfield, Benda worked closely with Diane Derus. (Id. ¶ 27.) Benda and Derus have worked together for over fifteen years. (Id.)

  According to Benda, Springfield's primary financial backer was the Bank of Bahrain. (Id. ¶ 29.) Benda assumed that due to "geopolitical" issues affecting the Middle East, the Bank of Bahrain was considering divesting itself of its interest in Springfield. (Id. ¶ 30.) His perceived uncertainty over the future owners of Springfield concerned Benda. (Id. ¶ 31.) Benda personally attended numerous meetings where employees discussed Springfield's financial situation, and he even participated in attempting to secure alternative financing for Springfield. (Id. ¶ 32.) Benda considered leaving Springfield beginning in early 2003. (Id. ¶ 35.)

  IV. Benda's Employment With Per-Se

  Benda met with Marcotte on two occasions and Murphy on one occasion to discuss potentially working for Per-Se. (Id. ¶ 36.) In April 2003, Per-Se hired Benda as the National Vice President of AMSG. (Id. ¶ 37.) Benda was an at will employee throughout his employment with Per-Se. (Id. ¶ 38.) At the time Per-Se hired him, Benda's annual base salary was $155,000 plus advanced commissions in the amount of $15,000 paid over six months. (Id. ¶ 40.) The compensation plan applicable to Benda was entitled the 2003 Sales Compensation Plan-National Vice Presidents ("2003 Compensation Plan"). (Id. ¶ 41.) The amount of Benda's commissions depended on the extent to which the AMSG met its quota. (Id. ¶ 42.) On sales that represented between 0% and 80% of the sales quota, the 2003 Compensation Plan called for Plaintiff to earn ½ of a percent on the sales generated by AMSG. (Id. ¶ 43.) The 2003 Compensation Plan specified that an employee would earn commissions on sales that closed during the "Plan Year," which was the calendar year 2003. (Id. ¶ 44.) The 2003 Compensation Plan also provided that, in order to receive any commissions, Benda must (1) sign an acknowledgement defining the 2003 Compensation Plan; (2) sign Per-Se's standard non-disclosure contract; and (3) complete training on Per-Se's standards of conduct. (Id. ¶ 45.) Benda did not sign an acknowledgement defining the 2003 Commission's Plan. (Id. ¶ 46.)

  As National Vice President for AMSG, Benda served as a sales manager. (Id. ¶ 49.) Benda's responsibilities included ensuring that AMSG was closing sales for services agreements. (Id. ¶ 50.) In 2003, the annual sales quota for AMSG was $11 million, which translated into a quarterly quota of $2.75 million. (Id. ¶ 51.) Benda understood that because he began working on April 1, 2003, Per-Se adjusted his quota to 75% of the 2003 AMSG team total, or $8.25 million. (Id.)

  The AMSG did not meet its sales quota for 2003. (Id. ¶ 68.) The AMSG missed its sales quota for each of the three quarters during which Benda worked. (Id. ¶ 69.) In the fourth quarter of 2003, the AMSG did not close $2 million in sales, but instead closed approximately $700,000. (Id. ¶ 70.)

  V. Per-Se's MedAxxis Software

  MedAxxis is a practice management system sold by Per-Se. (R. 46-1; Def.'s Reply to Pl.'s Stmt. Add. Mat. Facts ("Pl.'s SAMF") ¶¶ 18-19.) Benda contends that both Marcotte and Murphy represented to him that MedAxxis was "state of the art" and "fully functional" and was in use at many large multi-specialty practices throughout the country. (Id. ¶¶ 20, 25.) Benda contends that because of MedAxxis's deficiencies, he proceeded with a back-up solution, the Electronic Healthcare System ("EHS"). (Id. ¶ 35.) EHS develops, installs, and supports practice management systems throughout the country. (Id. ¶ 36.) Benda also asserts that he reorganized Per-Se's sales force in order to address MedAxxis's deficiencies. (Id. ¶ 39.)

  VI. The University of Texas-Houston Deal

  Around the time that Per-Se hired Benda, Per-Se began negotiating a deal with the University of Texas-Houston ("UT-Houston"). (R. 36-1; Def.'s SMF ¶ 82.) The deal began as a potential services agreement for the UT-Houston Anesthesiology Department. (Id. ¶ 83.) At some point in the deal, Per-Se gave responsibility for overseeing the deal to David Mason, the Senior Vice President for Account Management. (Id. ¶ 86.) While the parties dispute Benda's level of involvement in the UT-Houston deal, they agree that Benda only made two trips to Houston in connection with the deal and his last trip was in September 2003 — four months before the deal closed. (Id. ¶ 89.) Toward the end of 2003, UT-Houston announced that it had selected another vendor for billing and collection services. (Id. ¶ 91.) ...


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