Center Healthcare Ed. & Res. v. Internat. Cong. Joint Reconst.Annotate this Case
In 2009, the president of the International Congress for Joint Reconstruction, Inc. (ICJR) retained Mark Sacaris, part owner of the Center for Healthcare Education and Research, Inc. (CHE), to assist ICJR in producing medical education conferences on the subject of joint-reconstruction surgery. Their agreement was unwritten, and there was no discussion of the rates ICJR would be charged. Sacaris was given full control over ICJR’s money accounts as part of the arrangement. Sacaris used ICJR’s money accounts to pay CHE’s invoices without notifying ICJR’s board members of the amounts ICJR was being charged. Over time, and also without informing the board of ICJR, he increased the scope of CHE’s services, thereby creating additional sources of profit for CHE, and indirectly for himself, but he did not disclose his interest in these arrangements to ICJR. Eventually the ICJR board was informed by Sacaris that ICJR had amassed a $2 million to CHE. ICJR terminated its relationship with Sacaris and CHE. CHE filed suit to recover amounts it claimed it was owed by ICJR under the agreement. ICJR cross-sued Sacaris and CHE, asserting Sacaris secretly profited from his relationship with ICJR. After a bench trial, the court found ICJR liable to CHE for breach of contract. Although the court also found that CHE and Sacaris breached their fiduciary duties to ICJR in earning all four categories of the profits ICJR sought to disgorge, the court awarded ICJR recovery only as to categories two and four. On appeal, ICJR contended the trial court erred in determining that ICJR could not recover disgorgement of CHE and Sacaris’s profits from their undisclosed charges for management services without proof their breach of fiduciary duties caused ICJR to suffer monetary damages. The Court of Appeal agreed ICJR was not required to show it suffered monetary harm to establish a right to disgorgement of CHE and Sacaris' profits from undisclosed charges for event management services. The Court of Appeal reversed that portion of the judgment affected by the error and remanded for the trial court to determine the appropriate amount of the award of disgorgement. However, the Court rejected ICJR’s claim that the court erred in determining that running symposia for pharmaceutical companies was not a corporate opportunity of ICJR.