Palter Sims Martinez PLLC

An Ex-Employee has filed a Dubious Claim with Your Professional Board. Now What?

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Every medical professional must meet strict criteria for patient care. If there is an allegation of substandard care – whether it proves to be true or false – a board, composed of unbiased and knowledgeable professionals is charged with investigating the actions of the responsible practitioner.  In the case of dentists and orthodontists in Texas, that board is the State Board of Dental Examiners.

The challenging job of investigating substandard medical care is made more difficult for this board when the claim originates from a disgruntled ex-employee because it may not be valid. When this situation occurs, a dental practice owner must make a business decision about retaining legal representation for these administrative proceedings.

Nathanial Martinez, of the Dallas-based law firm of Palter Stokley Sims PLLC, specializes in representing dentists and orthodontists in cases before the State Board of Dental Examiners. As such, he has valuable insights about navigating this often frustrating process.

An Attempt at Retaliation

“In most cases, false accusations made by an employee to a professional board are an attempt at retaliation by the employee as a result of some adverse action taken by the employer,” Martinez noted.  “In the case of a dental practice, this may occur if the managing dentist puts the employee on probation, penalizes them in some other way, or terminates the employee.

“In some cases this report to the professional board can result from a personal affront – either real or imagined – to the employee by the practice owner. However, in most cases, this situation will occur when the employee has been fired and they are unhappy with this termination.”

What to do Before the Claim is Filed

“An owner of a practice must take every claim seriously and conduct a thorough investigation of the claim, even if the owner believes them to be false,” he said. “It is important for dentists to keep detailed records of every patient they see, in accordance with the generally accepted procedures for patient care in their profession.  For dentists and orthodontists, there are standards for maintaining patient records and they must ensure that they are honoring those standards in everything they do.

“If an employee leaves, the practice owner should send a letter to the employee reminding them of their obligation to keep patient records confidential. It is important for the owner of the practice to keep thorough records on every patient they see and the recommendations which are made. It is also important for all staff to be trained appropriately and aware of the standards of care.

“Basically, before any claim is brought to the professional board, the owner of the practice must be able to show and demonstrate clearly that the claim is false,” Martinez said.

Legal Steps to Take

“In the context of the (Texas) State Board of Dental Examiners, when this board receives a complaint they must take it seriously,” Martinez said. “They are required to investigate every claim made.

“When a dentist or orthodontist receives notification of a claim, it is important for them to retain an attorney who should then reach out to the board and immediately advise the board of this representation. I recommend they retain an attorney who has experience in navigating the various procedures of the professional board, because this will allow the practice owner to stay focused on their business. Retaining an attorney will also ensure a timely response to any inquiries by the board. You would be surprised  at how many deadlines a busy dentist might miss simply because he or she has too much on their plate,” he said.

“It’s important to remember that the actions of board are not inherently adversarial. It may ‘feel’ that way because the dentist may be responding to a false complaint which is being filed by a former employee. Unlike a lawsuit, where all parties examine the complaint and charges, complaints filed with a professional board are not typically examined by the practice owner. The professional board is very cautious about the information it discloses to the parties involved with the claim. The objective of the board is to determine whether the standards of care have been met.

“The board is just doing its job,” Martinez noted. “It is conducting an investigation of an allegation. The practice owner must attempt to avoid being defensive, which will go a long way towards getting his name cleared, especially if it is a false claim. If the documentation has been correctly done, the dentist can quickly prove that the claim is false.”

Procedures of a Professional Board are Different

“The procedures of a medical professional board are very different from that of a lawsuit,” Martinez said. “These are all administrative, are governed by the rules of the state board and have their own policies and procedures on how these claims are investigated. These proceedings are all public, but the information received from the dentist is completely confidential because this is patient information.

“It’s important to retain an attorney for this appearance before the board for several reasons. The practice owner needs an attorney who is experienced in dealing with the board and the investigators for the board. These investigators are going to be the ‘eyes and ears’ of the practice owners as the claim moves through the system. This is somewhat of a long process and keeping up with this can be onerous for the dentist. By hiring an experienced attorney, the dentist can continue to focus on his or her business while this process continues.

Criteria for Choosing an Attorney

“There are attorneys, myself included, who specialize in this type of work,” Martinez noted. “We enjoy dealing with administrative boards and this is the type of attorney a practice owner should retain.

“The criteria for choosing an attorney should include someone who has had experience in managing these types of cases before dental or other professional boards. It’s important to remember, the investigators for the board are typically long-term employees, and an attorney with an existing business relationship and professional rapport with them can speed the process along.

“Another important consideration in choosing an attorney for this specialized proceeding is to find a lawyer who will not be confrontational or adversarial with the board. In this type of situation, where the board is just trying conduct an investigation, having an attorney who is cooperative with the board – someone who is doing everything he can do to help discover the facts – will go a long way towards debunking a false claim.

“I can’t stress this enough: the professional board and its investigators are not the ‘bad guys,’” Martinez concluded. “They are just trying to investigate a claim. While the practice owner may feel that this claim made by a former employee is distracting and frankly untrue, he or she still has an obligation to respond and cooperate with the investigation to the best of their ability.”

This information is not intended as legal advice. If your dental practice has been notified of a claim filed by a former employee before the State Board of Dental Examiners and you are considering retention of legal representation, contact us for more information.

Buying a Dental Practice Can Come with Disgruntled Legacy Employees: Here’s How to Avoid a Lawsuit

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According to the Kaiser Family Foundation, there are 210,030 active dentists in the United States, with 15,050 of these practicing in Texas. While there are some larger dental practices with several dentists, by and large, most of these practices are owned by one or two dentists, making them archetypical small businesses.

While dentists are highly trained in oral health, most are not trained in the day-to-day running of a business and they often learn the grim realities of this challenge when something like human resource issues arise in their practice. In situations where one dentist purchases the practice of another dentist, these HR issues can become contentious and even result in lawsuits. Hopefully, before the situation deteriorates to this level, the owner of the practice has engaged an attorney such as Nathanial L. Martinez of the Dallas-based law firm, Palter Stokley Sims, PLLC who specializes in legal issues associated with dental and orthodontic practices.

Inheriting a Staff

“Within the dental practice, the typical scenario of workplace friction caused by inherited employees occurs when a young dentist decides to buy a retiring dentist’s practice,” Martinez notes. “In most cases, the new dentist will inherit the staff of the retiring dentist and must adapt to that existing staff.

“In most cases, the legacy employees will be ‘team players.’ They will do their best to get along with the new dentist, who is now their new boss.  However, in a few cases, especially if one of the staff members has been with the practice for a number of years and has some managerial responsibility within the office, they might be combative with the new dentist which may create some friction within the office. This is especially true if the new dentist has a different plan from the previous dentists for conducting the business.”

Prevention is the Best Cure

The best approach to handling this or any other HR problem is to prepare for it in advance.

“I think it was Ben Franklin who said, ‘an ounce of prevention is worth a pound of cure.’” Martinez said. “Long before a dentist decides to buy a practice he or she should learn about the staff they are inheriting. They should try to meet with the staff and get to know them.

“They should also set expectations for an open relationship and have a good dialog about the practice with the staff. This will go a long way in avoiding the potential friction with the inherited staff,” he noted.

“If, however, the dentist buys the practice and experiences this friction, there are a number of non-legal approaches that can be taken to resolve this issue if an employee doesn’t want to be a team player.

“First, a dialog should be created with this employee and expectations should be set early in the relationship. I recommend that the new owner of the practice either creates a different HR policy manual or makes some amendments to the existing manual. They should review these policies and procedures with their attorney and attempt to ascertain new policies and procedures which can be put into place to help alleviate the tension and friction that is occurring.

“Having a team meeting is advisable,” Martinez notes. “And having an attorney at this meeting is a good idea. At the meeting, the new owner should introduce his/her new vision for the practice and have each employee sign-on to the new policies and procedures.

“Another approach is to manage expectations among the staff and involve the retiring dentist, if possible.  If there is a problem with an employee, especially one who has been employed by the practice for a long time, having the retiring dentist get involved by talking to the employee will resolve the problem before the situation escalates.

“Like most lawyers, I want my clients to resolve these types of issues before I have to get involved,” he said. “This is because it sets the tone for the office in the future.

“Finally, it is important for the owner of the practice to keep a written record of each employee interaction. If there is any violation of the policies and procedures, it is important to have this documented.”

When All Else Fails

“If, after numerous attempts to correct this issue, the employee friction continues, termination of the employee must be considered,” Martinez said. “How this termination is carried out is really critical for the small dental practice. If the employee has been associated with the practice for an extended period of time, they’ve made friends with their colleagues, and this termination can cause divisions within the remaining staff.

“For all my clients, I recommend they consider a reasonable severance package for the terminated employee,” he noted.  “I realize that this is not a popular suggestion, especially when the practice owner feels the employee is causing the problem.  However, the most important consideration is that the rest of the staff sees the new owner doing the right thing by the terminated employee. The remaining staff needs to see that the owner is being reasonable. Plus, the owner should document this action, showing that he or she is reasonable with this employee in case they are forced to appear before a state employment commission or court in the future.

“A good lawyer can draft termination documents that meet the standards of law and withstand the scrutiny of state employment agencies. Termination, while not ideal, is sometimes the only approach for handling an employee who is keeping the practice from moving forward,” Martinez concluded.

“At the end of the day, the goal of any good lawyer is to help small-business owner clients, including dentists, get back to focusing on their business, and away from focusing on their disgruntled, legacy employee.”

This information is not intended to be legal advice. If you are considering buying an existing dental practice or are experiencing friction in your existing practice from a disgruntled employee, Nathanial Martinez of Palter Stokley Sims law firm is a trusted counsel for handling these issues. Click here to set an appointment to discuss these and other legal issues.

Why Apartment Owners in Dallas are Crying ‘Foul’ on Changes in the Code of Ordinances

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Navigating the labyrinth of the code of ordinances of a large, politically diverse municipality can be challenging. Just ask the owners of apartment complexes in Dallas, Texas. The managers and owners of multi-family real estate in the ninth largest city in the United States face even greater challenges in the form of recent recommendations from the City Council’s Housing Committee.

The Housing Committee conducted hearings among constituents regarding the standards of apartments in the Dallas and later made recommendations to the city’s professional staff on a wide range of issues. In spite of the staff’s opposition, these recommendations were sent to the entire Council for debate.

Some of these recommendations, which were opposed by The Apartment Association of Greater Dallas the trade association for apartment owners in the city, would lead to dramatic increases in the cost of maintenance of apartment complexes.  Ironically, these expenses would most likely be passed on to apartment renters, hurting many of the people they were designed to help.

The Dallas Code of Ordinances

Kimberly

Kimberly Sims is a member in the Dallas-based law firm Palter Stokley Sims PLLC, and she represents landlords and managers in landlord/tenant disputes. Recently, she offered insights on the city’s proposed Code of Ordinances for Minimum Housing Standards and the implications in dealing with this code.

“These are the standards by which multi-family complex owners must comply in the managing and maintenance of their properties,” she said.

What does Sims think about the recent recommendations presented by the Housing committee of the council?

“In the broad scheme of things, everyone wants people who live in apartment complexes to be treated well,” she said. “We also want them to have remedies when the standards are not met and we want all owners to follow these standards.  But I’m not convinced that we need to specifically dictate all of the standards – down to the minutia –  in order to ensure that.”

“There will always be outliers in any industry – on the one side the great apartment owners who treat their tenants in the same way they treat their family members — and then – on the other — those owners who won’t follow any standards even if told by ordinance to do so. The latter causes these specific requirements to be put in place even though they are the ones who need to be regulated but likely also the ones who won’t follow them.

“As with all things in law, there is a pendulum,” she noted. “And the pendulum appears to be swinging towards forcing landlords to adhere to stricter policies. Because of the costs associated with these policies and the impractical nature of some of them, these recommendations should be modified.”

Some Recommendations are Misguided

“Several of the proposed provisions stand out as burdensome and impractical,” Sims said. “For example, the requirement that HVAC units in every apartment cool to a minimum of 80 degrees.  This may seem to be reasonable. However, these apartments are in Texas and we all know that it’s hard to get AC down to 80 when it’s 108 outside.

“Most air-conditioning systems – even in single-family dwellings – cannot cool more than 20 degrees from the outside temperature.  So why do we expect landlords to be able to make that happen?” she asked.

“If this is included in the ordinance, and the cooling requirement is not met, what happens? If an apartment owner has 180 units and the inspector (inspections are provided for in the ordinance) finds the cooling requirement is not being met on a hot summer day, does the owner have to immediately replace all 180 units? This is not practical.

“The standards in these proposals will also lead to excessive costs,” she said.  “This means that owners are either not going to comply because they can’t comply for the entire complex at one time, or they risk fines being assessed against them.

“The real concern, on both sides of these issues is ‘what happens as a result of these restrictive ordinances,” she asked. “Are the increases in costs for meeting these standards passed on to the tenant? The likely result is yes. There is a strong probability that these recommendations, if passed, will result in higher rents for the very people they were passed to help.”

Input of Apartment Owners

There is some availability for apartment owners to provide input as to the proposed ordinances. Sims explains.

“There was a request for the city for input from management companies and owners of apartment complexes and that has been supplied by these groups,” she said. “Hopefully, that will result in modifications to these ordinances that are more reasonable.

“There is also an effort on the part of management companies and owners to clarify the process of inspections. For example, how often will these inspections occur? Will the city inspect owners who have had more violations in the past more frequently?

“An apartment owner is less likely to be inspected if his complex has less tenant complaints,” she noted. “As a practical matter, it is important for the landlord to be one of those who is complying, to the best of its ability. For example, if you can’t replace every air-conditioner and every water heater in your complex, you can set a schedule for replacing the faulty ones.

“Most importantly, as a practical matter, owners must try to stay off the city’s radar,” she said. “An apartment complex that is cited will be re-inspected, perhaps multiple times.”

If you have legal questions about landlord/tenant matters, contact Kimberly Sims. The phone number is 214.888.3110.

Apartment Owners: Are You Unknowingly Discriminating in Your Application Process?

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Apartment Stock

The vacancy rates for apartments have dropped to their lowest point in more than a decade and this increased consumer demand has allowed many property owners and managers to be more selective in the tenants they choose. When these factors are combined with access to more sophisticated electronic criminal background checks, prospective tenants with any kind of criminal record – whether it is a serious felony or minor traffic ticket – run the risk of having their application turned down.

According to an April 5, 2016 article in the Wall Street Journal, the owners and managers of these apartments are adamant that they are within their rights to refuse to rent to individuals who might endanger other tenants. In spite of this, these commercial property owners are receiving increased scrutiny from the Department of Housing and Urban Development (HUD), the federal agency charged with ensuring that the access to housing remains fair and this situation motivated HUD officials to issue guidelines in April. However, even with these guidelines, the situation is far from clear.

Kimberly Sims, a partner in the Dallas-based law firm Palter Stokley Sims PLLC,  represents landlords and managers in landlord/tenant disputes and recently offered some insights for apartment owners and managers who want to avoid violations of the Fair Housing Act.

Disparate Impact

Real estate executives who are adept at juggling a wide range of business demands, including finance, operations, marketing and others, are sometimes flummoxed by legal terms.  This issue has a beauty. It is “disparate impact.” Kimberly Sims explains.

“The issue with disparate impact turns on the fact that no one knows exactly what it is and no one knows when they’re doing it.. Unlike when someone alleges discrimination on the basis of race, gender, national origin or religion – which most understand to be violations of the law – this term means that an apartment owner is discriminating against a prospective tenant without knowing it.”

“In the case of an owner saying that ‘anyone with a criminal history’ will be excluded from renting my property, he is excluding all people with this history. The result of this is that the owner may be unintentionally excluding a certain group of people which have  more criminal history based on their socioeconomic status.

“Without knowing they are discriminating, the owners who use these criteria are, in effect, discriminating based on the impact of applying the criteria. The challenge of this legal issue lies in the fact that no one would know they were discriminating without the  data about the propensity of any group toward criminal history,. . . that is until someone sues them.”

What are the Rights of the Landlord?

“Most landlords require an application from a prospective tenant which grants them the right to screen the tenant,” Sims said.  “Current residents want landlords and apartment managers to screen tenants because they want a process to weed-out tenants who do have might have violent histories.

“While the landlord clearly has that right to screen applicants, the question becomes ‘how far does this right extend?’ For example, are we excluding someone with a minor traffic ticket? Frankly, I don’t know any  landlord who has ever excluded someone because they have a traffic ticket on their record but this is the example that many have used.

“However, if a landlord’s policy is to exclude anybody with ANY crime, while they certainly have the right to do this, we get into the legal landmine field of ‘what is the effect of this policy’ on discrimination against protected groups.  A prospective tenant might legitimately ask what the legitimate business concern is served by this broad policy.

“In creating their screening policy, I would ask the landlord what their business objective is.  Is it philosophical? Is it to protect other tenants? What exactly is the business objective?”

Issues Associated with Excluding EVERY Tenant with a Criminal History

Kimberly was asked if there are any legal issues involved in excluding all prospective tenants with any type of criminal history.  She explained.

“Let’s say a prospective tenant had a conviction for violating drug laws related to marijuana in the 1970’s. This is minor violation that occurred more than 40 years ago. Can this person be excluded by the apartment management?

“Potentially, yes,” she said. “But then what happens?”

“I have seen situations where the excluded person filed suit claiming that others who had had this similar violation were not excluded. Since everyone must be treated equally, the landlord must make sure that they catch everyone who might have had this minor violation on their record. This is, of course, a challenge.

“It also comes back to the question of ‘what is the legitimate business reason for excluding this individual? What does something that happened 40 years ago really matter now? Are we really protecting the other tenants?”

The Ramifications of NOT Excluding Prospective Tenants with Criminal Backgrounds

This issue must surely have landlords scratching their heads. In an effort to loosen their screening policy, what liabilities are presented?

“The violence and theft issues should be the primary concerns of landlords who are screening tenants,” Kimberly said. “If a landlord can determine that a prospective tenant has a history of violent criminal activity, they are certainly within their rights to keep this individual away from their other tenants.

“Of course, that is the other extreme from the minor violation which happened 40 years ago. Landlords don’t want this type of tenant exposed to other families and they face potential liability if they know this background and fail to exclude the applicant.

“As a practical matter, we need to find a middle-ground,” Kimberly said. “Landlords need a specific policy that does not exclude tenants who have minor infractions in their background and distinguishes those minor and remote issues from more serious, violent crime.

“Another strategy is to establish a policy that checks for criminal history for a specific amount of time. A good range is to go back seven to ten years. If there is nothing on the prospective tenant’s background for the past ten years, the landlord can legitimately surmise that whatever happened in the distant past, excluding violent crimes, is not affecting this person now.

“Noticing the frequency of violations that the prospective tenant has is also a good factor to check,” she said. “If they are having many minor legal issues, on a regular basis, they might be someone who could be undependable and potentially disruptive to the other tenants.

“Establishing a policy, which include these criteria, is the most important take-away of this discussion. When a policy is written and followed in every case, the landlord is more likely to avoid claims, including discrimination, but also further their legitimate business goals

In the course of managing your real estate business, you might have legal questions come up. If so, contact Kimberly Sims at Palter Stokley Sims.

The Three Most Important Words for Oil and Gas Deal Makers: We Just Closed.

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The headline on the front page of the May 11, 2016, Wall Street Journal suggests a cautionary tale for deal makers in all areas of the oil and gas industry: Oil Bust Squeezes Deal-Maker. It’s a story of “buyer’s remorse” on a $33 billion dollar purchase.

According the article, Energy Transfer Equity, LP, a Dallas company led by well-known oil man Kelcy Warren, is “scrambling to restructure or escape”

Trans_Canada_Keystone_Oil_Pipeline

Trans Canada Keystone Oil Pipeline. Author: shannonpatrick17 (http://creativecommons.org/licenses/by-sa/3.0)], via Wikimedia Commons

an agreement to acquire Williams Cos., a pipeline company based in Tulsa. This deal was announced seven months ago and the well-chronicled volatility in the price of oil and gas apparently made the deal economically challenging, which led to finger-pointing on both sides and a lawsuit filed in Delaware.

There are billions of dollars at stake in this “deal-gone-south”, which can provide lessons for independent and private equity backed operators doing deals in these chaotic times for the oil business.

Time Kills Deals

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Dallas-based attorney, Craig Stokley, a founding member of the firm Palter Stokley Sims PLLC, who specializes in oil and gas litigation and transactional issues, thinks these types of situations can be avoided for smaller independent and private equity operators in the oil field.  How? A close connection between those performing due diligence and those striking the deal on behalf of the two parties. Not only is it important that the parties strike a deal they are pleased with, it is equally important that both sides understand the deal  the same way– on paper and in their minds.

“Time kills deals,” Stokley added. “If an operator is acquiring an asset, whether it involves billions or thousands of dollars, an increasing length of time between striking the deal and closing exponentially increases the chances of the deal ‘blowing up’.

“In these volatile times, it is critical to make sure the detailed due diligence is effectively and timely summed up for the deal makers so that the deal they strike can match reality on the ground.”

Stokley noted that in any acquisition of oil and gas assets, there are:

  • Leases
  • Joint Operating Agreements
  • Historical joint interest billing statements
  • Byproduct (i.e. produced water) from production and the costs associated with transportation and disposal of this byproduct
  • Equipment, personal property, fixtures, and improvements such as pumping units, pipelines, gathering systems, salt water disposal wells, water wells, tanks, compression equipment, etc.
  • Pooling Agreements, hauling agreements, and other master service agreements that may or may not be assignable
  • Oil and gas marketing commitments
  • Title Opinions

“With all of these variables, it is very important that legal counsel and deal makers understand what is important when structuring their deal,” he added.

Avoiding the Courthouse is Good Business

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By Leaflet (Own work) [CC BY-SA 3.0 (http://creativecommons.org/licenses/by-sa/3.0)], via Wikimedia Commons

All of the attorneys at Palter Stokley Sims, and Craig Stokley in particular, are readily prepared to litigate issues when deals and business relationships go bad. That is their “bread and butter.”  In order to help clients avoid such disputes, Palter Stokley Sims places a premium on due diligence and getting to know the client’s goals. This allows the firm to help its oil and gas clients to invest in opportunities which yield a better return on investment. This puts Stokley’s clients in a better position than their competitors by saving valuable time and resources when compared to the typical independent or private-equity private- equity backed operator whose structure does not justify a full-time in-house counsel.

“Non-refundable deposit payments, with a liquidated damages provision, will enable all parties to avoid a court proceeding seeking specific performance,” Stokley said. “Such lawsuits, similar to the one between Energy Transfer and William’s can paralyze an operator and cause them to miss out on future opportunities, while trying to sort out the specific performance issues in protracted litigation. While some parties may insist upon specific performance, if the deposit payment is high enough, they will almost always agree to a liquidated damages provision.”

Stokley cautions that the excitement of “getting a deal done” can often obscure reality.

“In the end, you want a knowledgeable person negotiating the deal who understands the due diligence of the asset so the negotiations reflect reality,” noted Craig Stokley.  “This can be accomplished with a ‘get to know the clients’ business’ approach by counsel who works closely with the deal makers at the table when the deal is struck. Knowing my clients’ business is what I strive to achieve.”

While the size of the mega-deals such as the Energy Transfer purchase of Williams pipeline are rare, they provide cautionary lessons for smaller outfits in the energy business.   If you are in the energy business and either desire knowledgeable, timely counsel for your deal making, or find yourself in need or a trusted, experienced litigator, the attorneys at Palter Stokley Sims are available to consult with you. Just click here for more information.