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October 23, 2014

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Desai says he didn’t see or approve settlement

In court papers, doctor’s personal lawyer objects to deal struck by trial lawyer

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Dr. Dipak Desai, the majority owner of the Endoscopy Center of Southern Nevada, leaves a hearing at Las Vegas City Hall on March 3, 2008.

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Dr. Dipak Desai has his personal lawyer opposing a settlement the physician’s chief trial lawyer struck last week with a former patient suing over last year’s hepatitis outbreak.

“It’s a scene straight out of the movie ‘Sybil,’ which is the classic exposition of schizophrenia,” said Will Kemp, one of the lead plaintiffs’ lawyers in the massive hepatitis litigation. “He has one attorney file a motion, then he has another one oppose it. I’ve never seen anything like it.”

But Desai’s personal attorney, Dennis Kennedy, contends in court papers he filed Thursday that Desai never saw the settlement and did not agree to the terms of it before the trial lawyer struck the deal with the former patient, Michael Washington.

Desai and his wife, who has been handling his personal and financial affairs since his 2008 stroke, also are upset because his insurance company won’t tell him how much it is set to pay Washington.

The trial lawyer, Brett Schoel, was representing Desai and his insurance company, Nevada Mutual Insurance, which agreed to pay an undisclosed amount to Washington and his wife, Josephine, in return for dropping Desai as a defendant in the case.

Washington alleges he was infected with the potentially deadly hepatitis C virus during a routine colonoscopy at Desai’s Endoscopy Center of Southern Nevada in July 2007.

The settlement, first reported by the Sun last week, was set to be the first with thousands of former patients suing Desai, including about 300 who allege lax medical procedures at Desai’s clinics caused them to be infected with the virus.

Washington’s case also was scheduled to be the first to go to trial Oct. 19, but his lawyer, Ed Bernstein, said Thursday the trial will likely be delayed a couple of months because lawyers have been unable to finish taking depositions from medical experts.

District Judge David Wall, who is presiding over the trial, has been asked to find that the settlement with Washington was made in good faith by both parties. Wall is to conduct a hearing Tuesday, which now will take into consideration objections from Desai’s personal attorney.

If Wall approves the settlement, the case will move forward against several other defendants, including the Endoscopy Center.

Bernstein said Kennedy’s court filing is part of a “contractual dispute” between Desai and his insurance company and has no bearing on whether a good-faith settlement was reached with Washington.

“Insurance companies generally get consent from their insured, but it’s not unusual for them to settle a case without consent,” Bernstein said.

But in his court papers, Kennedy noted that under Desai’s policy, Nevada Mutual Insurance “has no authority to unilaterally enter into a settlement because the settlement must be made with the written consent of Dr. Desai — consent which has not been given.”

Kennedy added, “There is no allegation made here that Mr. Schoel has done anything improper. All that is being said is that Dr. Desai had the right to know what was being done — purportedly on his behalf — and he was never consulted or advised. And as the ultimate indignity and act of disrespect, when he asked to see the terms to which his fiduciaries had obligated him, his request was imperiously dismissed.”

Kennedy described the insurance company’s failures to keep Desai in the loop during the negotiations as “acts of breathtaking arrogance.”

Kemp said he finds it “hilarious” that the insurance company hid the terms of the agreement from Desai.

“What is the big secret?” Kemp said. “Normally, the amount of a settlement is public, unless there is a compelling reason not to make it public. But I don’t see any reason not to make it public in this case.”

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