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Law360 (April 16, 2021, 5:44 PM EDT ) Adventist Health System asked a Florida federal court Friday to award it more than $1.5 million after a California-based asset management company defaulted on their settlement to resolve the hospital system's fraud suit over a failed $57.5 million deal for personal protective equipment needed for the COVID-19 pandemic.
In its motion — which it said counsel for defendants Tomax Capital Management Inc. and its principal Yehoram Tom Efrati did not oppose — Florida-based AdventHealth said that under the terms of the parties' March 3 settlement agreement, it is entitled to entry of a consent final judgment because of the defendants' failure to make the first payment of $300,000, which was due April 12.
The motion asks for a judgment of $1.5 million, plus $10,573 in interest that accrued between March 3 and April 16, as well as recovery of attorney fees and costs incurred enforcing the agreement.
"The amount of the consent judgment reflects the amounts owed to AdventHealth to make it whole for the loss it suffered at the hands of Tomax and Efrati," the motion said. "Under these circumstances, Florida's public policy favors enforcement of settlement agreements."
On March 8, U.S. District Judge Paul G. Byron granted the parties' joint motion to stay the case until Oct. 12, when Tomax and Efrati's final payment to AdventHealth was due under the agreement the sides finalized during a mediation session the week before, according to filings in the federal court in Orlando, Florida.
"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 at the time.
AdventHealth's settlement with Tomax and Efrati came on the heels of a separate deal it reached with the other defendants in the case, California attorney Michael H. Weiss and his firm, and both agreements were reached shortly after Judge Byron denied the defendants' respective motions to dismiss.
The health care system, which has hospitals in nine states, claimed in its May 2020 complaint that when Tomax failed to deliver on an April 8 contract to provide 10 million 3M N95 ventilator masks to protect hospital system workers from COVID-19, it asked for the money in escrow to be returned. According to the suit, Weiss sent $55.5 million and told AdventHealth the remaining $2 million was in Tomax's possession, but Tomax never returned that money 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.
Representatives for the two sides did not immediately respond to requests for comment Friday.
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 Rich Mills.
For a reprint of this article, please contact reprints@law360.com.
