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Hospital claims law firm's negligence destroyed it

Stories focused upon law firms and hospitals frequently spotlight malpractice claims brought by the former against the latter for negligence that contributes to a patient's injury or accident.

That is not always the case, though, as illustrated in a recent media story narrating a tale with precisely the opposite fact pattern.

The material facts of the matter, as alleged by the plaintiffs in a large-scale malpractice matter, are these: The negligent legal representation of a law firm upon which hospital officials justifiably relied essentially brought ruin to the facility, as well as its demise as an independent operator, following an adverse litigation outcome.

To atone for that wrong, the hospital now states, the firm must help the facility recoup its losses. To that end, the hospital filed a legal malpractice lawsuit against the law firm last week for negligence.

The case is a bit convoluted, but not formidably complex. In basic terms, problems arose when the hospital began losing revenue some years back from physicians seeking to perform surgeries offsite. The law firm advised the hospital to enter into contracts with doctors, pursuant to which those physicians would be rewarded by inducing patients to have their surgeries performed at an out-patient center built and operated by the hospital.

Notwithstanding strong indications subsequently that such contracts violated federal law, coupled with the federal government's request to the hospital to "unwind the contracts," the hospital refused to terminate the agreements, opting to rely upon the continued guidance of the law firm that the facility would prevail in any trial.

It didn't. In fact, a jury trial against the hospital resulted in the facility being hammered by a $237.4 million judgment.

The hospital's malpractice lawsuit against the law firm seeks damages in the amount of $117 million for "misleading and reckless" advice.

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