Baptist Physicians Lexington, Inc. v. New Lexington Clinic, P.S.C.

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Appellants, three physicians, were formerly employed by The New Lexington Clinic (“NLC”) but resigned to practice at a facility opened by Baptist Healthcare System Inc. through its subsidiary (collectively, “Baptist”). NLC subsequently brought actions against Appellants for breach of fiduciary duties owed in their capacity as members of the NLC board of directors. Baptist was joined as a defendant on the ground that it aided and abetted Appellants’ breaches. The trial court dismissed the complaints, concluding that the complaints did not properly invoke Ky. Rev. Stat. 271B.8-300, which the court considered controlling to all actions involving a breach of a corporate director’s duties. The Supreme Court remanded to the trial court, holding (1) section 271B.8-300 does not abrogate common law fiduciary duty claims against Kentucky directors but codifies a standard of conduct and liability for directors derived from business judgment rule principles; (2) section 271B.8-300 did not apply in this case because preparing for and participating in a competing venture does not constitute the type of conduct addressed in the statute; and (3) NLC properly pled common law fiduciary duty claims on the alleged facts. View "Baptist Physicians Lexington, Inc. v. New Lexington Clinic, P.S.C. " on Justia Law