Law360 (March 8, 2021, 4:09 PM EST) -- Adventist Health System has settled its suit accusing a California-based asset management company of conspiring with its outside counsel to defraud the hospital system of $2 million through a failed $57.5 million deal for personal protective equipment during the COVID-19 pandemic.
U.S. District Judge Paul G. Byron on Monday granted the parties' joint motion to stay the case until Oct. 12, when Tomax Capital Management Inc. and principal Yehoram Tom Efrati's final payment to AdventHealth is due under an agreement the sides finalized during a mediation session last week, according to filings in federal court in Orlando, Florida.
Details about the payments were not immediately available Monday.
"Tomax Capital and Mr. Efrati are pleased that the commercial dispute with Adventist Health System could be amicably resolved without further litigation," defense counsel Laurence J. Pino of Pino Nicholson PLLC told Law360.
AdventHealth's settlement with Tomax and Efrati came on the heels of a separate deal with defendant and California attorney Michael H. Weiss and his firm, and both agreements were reached shortly after Judge Byron denied the defendants' respective motions to dismiss.
Judge Byron also handed down a ruling Friday — the same day the parties notified the court of their resolution — denying Tomax's bid for summary judgment based on its argument that AdventHealth could not produce sufficient evidence to prove its case at trial.
The judge called Tomax's motion, which it filed nearly five months before the discovery deadline, "glaringly premature."
"Clearly, plaintiff has not 'had an adequate opportunity for discovery,'" he said, quoting Eleventh Circuit case law.
The health care system, which has hospitals in nine states, claimed in its May 28 complaint that when Tomax failed to deliver on an April 8 contract to provide 10 million 3M N95 ventilator masks to protect its workers from the coronavirus, it asked for the money in escrow to be returned. According to the suit, Weiss sent just $55.5 million and told AdventHealth the remaining $2 million was in Tomax's possession, but Tomax never returned the rest despite assurance from Efrati that it would.
In his Feb. 23 order denying the defendants' motions to dismiss, Judge Byron allowed Florida-based AdventHealth's claims for breach of contract, conversion, breach of fiduciary duty, civil theft and civil conspiracy to move forward and also ruled that his court had the authority to exercise personal jurisdiction over Weiss and Efrati under the state's long-arm statute.
The parties asked in their joint motion for the court to either stay the case or dismiss it with leave for AdventHealth to reopen it by Oct. 29 in the event that Tomax fails to complete its obligations. If Tomax does not perform, AdventHealth is entitled to a consent judgment against the defendants, according to the motion.
"Thus an abatement until October 12, 2021 will result in a quick resolution of this litigation regardless of whether defendants perform," the motion said.
The parties also noted that there were several filing deadlines and a Sept. 6 trial date scheduled in the case before Oct. 12.
Counsel for AdventHealth did not immediately respond to a request for comment Monday.
AdventHealth is represented by Mayanne Downs, Jason A. Zimmerman and Joshua Bachman of GrayRobinson PA.
Tomax and Efrati are represented by Laurence J. Pino and Sean M. Southard of Pino Nicholson PLLC.
The case is Adventist Health System Sunbelt Healthcare Corp. v. Michael H. Weiss PC et al., case number 6:20-cv-00877, in the U.S. District Court for the Middle District of Florida.
--Editing by Ellen Johnson.
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