A missed deadline in a $3 million medical malpractice suit against a Salem clinic has brought about an abrupt and drastic result: It prompted a default judgment over the summer, and a judge last week ruled that a jury’s seven-figure award for the plaintiff will stand.
The company, Salem Orthopaedics, has argued that its registered agent, attorney Jeff Dorsey, did not inform it of the suit when it was first filed in June. It said it remained unaware of the legal action until early September, by which time a $2.3 million judgment had already been entered against it.
On Oct. 7 in Roanoke Circuit Court, Judge William Alexander — assigned as a substitute judge — denied the clinic’s subsequent request to vacate that judgment and to allow it to file a formal response.
The suit involved a patient, Kimberly Salyers, who was treated at the clinic in 2017. Her legal complaint claimed that surgery to fix a torn ACL caused injury to her peroneal nerve, which “was entrapped with a surgical suture.” In court filings, her lawyers said the injury caused permanent damage and could eventually result in the need for a knee replacement.
On June 5, Salyers’ attorneys, Anthony Segura and Jonathan Rogers, filed suit against Salem Orthopaedics and two members of its medical staff, Mark Hagy and Christopher Deneault.
Salem Orthopaedics began as Virginia Orthopaedics in 1999 and ceased operations last fall after it was acquired by LewisGale Regional Health System. It maintains a registered agent to receive payments and handle other business; Dorsey has acted as that agent since 2015.
Both sides agree that, on June 6, Dorsey was officially served with the lawsuit and, from there, had three weeks to file a response, which came due June 27.
“Mr. Dorsey did not, however, forward the Summons and Complaint to Salem Orthopaedics. Nor did he otherwise apprise Salem Orthopaedics of the pending action against it,” attorneys for the clinic wrote in a motion last month.
“Because it had no actual notice of the lawsuit, Salem Orthopaedics did not retain counsel and did not file responsive pleadings,” the motion said.
Segura and the attorney representing Salem Orthopaedics, Joseph Rainsbury of Richmond, declined to comment about the matter. Dorsey’s lawyer, Phillip Anderson, said he also was not able to discuss the case.
On July 1, the court found the clinic in default for not responding after being served with the suit. Under Virginia Supreme Court rules, it was then no longer entitled to receive notice of ongoing proceedings in the case. The plaintiff withdrew her complaints against the individual doctors and pursued a claim solely against Salem Orthopaedics.
Just over two months later, on Sept. 5 in Roanoke Circuit Court, Salyers’ attorneys presented evidence of damages to a jury, which recommended the patient be awarded $2.5 million, plus interest, dating back two years to when she was treated. That amount exceeded the state cap on medical malpractice awards, and the judge reduced it to $2.3 million.
Because the defendants were in default at the time of the hearing, they were not notified of it and had no representatives present in court.
But Dorsey soon learned of the outcome, court papers said, and on Sept. 17 he made the clinic aware of the judgment.
“This was the first notice that anyone affiliated with Salem Orthopaedics had ever received about the present suit,” a defense motion said.
That motion, submitted seven days after the judgment, asked the court to set aside the award and allow the company to properly respond to the suit.
State Supreme Court rules provide that such requests can be considered by a judge if they are made within 21 days of a judgment, but it requires evaluating the reason for the delayed response and the effect of the delay on the plaintiff.
The clinic’s response came well within that three-week window; it argued that its officers were not at fault, that they didn’t receive actual notice of the claims until after the judgment, and that the delay that had resulted would not adversely affect the plaintiff.
“[Medical] malpractice cases take time to litigate — typically two years or so. A delay of a few months is, in light of this, inconsequential,” the defendant’s motion said.
It also posited that the two doctors had been non-suited to “exploit [a] procedural advantage” that would move the case forward more quickly.
The plaintiff’s response argued that the defendant was responsible for the actions of its registered agent and that the delay had caused expense and inconvenience.
Alexander found in favor of the plaintiff, citing the Supreme Court provisions regarding the rules of default.
“The final judgment shall stand,” his order said.
The attorney for the clinic declined to comment on the case, and it is unclear whether the clinic, in its current inactive state, was required to maintain medical malpractice insurance and, if so, whether its coverage meets or exceeds the amount of damages.