(Court Reports - Photo Illustration/MetroCreative)

CLARKSBURG — A federal judge denied the bulk of WVU Medicine’s motion to dismiss a lawsuit filed by the Memorial Health System over allegations of improperly compensating providers, but stayed the case until the West Virginia Supreme Court of Appeals weighs in on one of the issues.

Marietta Area Healthcare Inc., Marietta Memorial Hospital and Marietta Healthcare Physicians Inc. filed suit earlier this year against Camden-Clark Memorial Hospital Corp., Camden-Clark Health Services Inc., West Virginia University Hospitals Inc. and West Virginia United Health System Inc., claiming those entities supported efforts by two executives and a local physician to smear Memorial with unfounded allegations of over-paying doctors in exchange for referring patients to Memorial. The resulting multi-year federal investigation cost Memorial millions of dollars and had a negative impact on its ability to recruit physicians, the suit alleges.

Memorial settled a lawsuit with former Camden Clark CEO Mike King, former hospital legal counsel Todd Kruger and Dr. Michael Roberts with Parkersburg Surgical Associates, but said discovery in that case indicated participation and approval by at least some members of Camden Clark and WVU Medicine’s leadership.

The defendants filed a motion to dismiss, claiming the issues had already been litigated in the settled case and the statute of limitations had passed. Memorial should have included the corporate entities in its previous suit, WVU Medicine’s attorneys argued.

In an order filed Monday, U.S. District Judge for the Northern District of West Virginia Judge John Preston Bailey rejected some of those arguments and said some should be decided at trial.

Bailey’s ruling also said the plaintiffs properly stated their claims for relief on allegations of malicious prosecution, tortious interference with business relationships and expectancies, abuse of process, fraudulent legal process, civil conspiracy, aiding and abetting tortious conduct and vicarious liability and rejected the motion to dismiss those counts. But it defers a ruling on dismissal of the claim of negligent supervision, citing a lack of case law defining it.

The case law that does exist precludes a claim of negligent supervision unless an employee committed a negligent act, the order says.

“Thus, if the employee engages in an intentional or reckless tort, then the employer is immune,” it says. “This court simply cannot agree.”

The order then certifies to the Supreme Court questions asking whether a claim for negligent supervision against an employer is viable under state law, what the elements to such a claim are and whether intentional or reckless torts committed by an employee can form the basis of such a claim.

As a result of the stay, a scheduling conference scheduled for later this week was canceled.

Evan Bevins can be reached at ebevins@newsandsentinel.com.