Superior Court of New Jersey, Chancery Division, Bergen
DAVID M. NAMEROW, M.D., Plaintiff,
PEDIATRICARE ASSOCIATES, LLC, SCOTT W. ZUCKER, M.D., JERRREY M. BIENSTOCK, M.D., and MELISSA CHISM, M.D., Defendants.
Approved for Publication October 21, 2019
Novack, for plaintiff (Bressler, Amery & Ross, PC,
D. Gorelick, for defendants (Garfunkel Wild, PC, attorneys).
matter comes before the court by way of defendants'
PediatriCare Associates, LLC, Scott W. Zucker, M.D., Jeffrey
M. Bienstock, M.D., and Melissa Chism, M.D.
("defendants") application for partial summary
judgment filed on September 4, 2018, by their attorneys,
Garfunkel Wild, PC. Plaintiff David M. Namerow, M.D.
("plaintiff"), by his attorneys Bressler, Amery
& Ross, filed opposition to defendants' motion for
partial summary judgment, as well as a cross-motion for
partial summary judgment, on September 18, 2018.
parties entered into an original Operating Agreement on
January 1, 2000, to form PediatriCare as a limited liability
company, with the purpose of owning and operating a medical
practice. On March 12, 2001, the parties entered into the
Amended and Restated Operating Agreement (the
"Agreement"), which was the operative document
governing the relationship.
to the Agreement, a member has the right to retire once the
member has reached the age of sixty (60) and has provided
twenty-five (25) years of membership or service to the
practice. Section 9.9 of the Agreement (titled
"Retirement of a Member") provides that the
"retirement purchase price" is calculated in
accordance with Section 10 of the Agreement (titled
"Determination of Value"). The specific language of
Section 10 is determinative, and is cited here in full:
The total value of the company ("company value")
shall be the last dated amount set forth on the Certificate
of Agreed Value, attached hereto as Exhibit G and made part
hereto, executed by the members. The members shall exercise
their best efforts to meet not less than once per year for
the purpose of considering a new value but their failure to
meet or determine a value shall not invalidate the most
recently executed Certificate of Agreed Value setting forth
the company value then in effect. If the parties fail to
agree on a revaluation as described above for more than two
(2) years, the company value shall be equal to the last
agreed upon value, adjusted to reflect the increase or
decrease in the net worth of the company, including
collectible accounts receivable, since the last agreed upon
value. The value of a member's interest
("Value") shall mean the company value multiplied
by the percentage interest held by said member and being
purchased hereunder, less any indebtedness that the selling
or disabled member, the Decedent, or a member departing for
any other reason contemplated hereunder may have to the
company or to the other members, whichever the case may be.
most recent Certificate of Agreed Value attached to the
Agreement stated the "value of the company" at $2.4
million, and was signed by Dr. Namerow, Dr. Zucker, Dr.
Bienstock, and Dr. Chism, dated January 1, 2000.
announced his intention to retire in January 2016, triggering
application of Section 10 of the Agreement. Plaintiff's
retirement marks the first time that a member of the practice
has retired, and thus the first time that PediatriCare has
attempted to apply the Section 10 provision of the Agreement
with a Certificate of Agreed Value greater than two years
March of 2016, the parties, as members of PediatriCare,
engaged Butzel, Karadimas, Carrabba, Testin, LLC
("BKCT") to perform a fair market valuation for the
purpose of assisting the LLC in the matter of business and
succession planning. The 2016 BKCT appraisal employed the
fair market valuation methodology. In October of 2016,
defendants engaged the Coker Group, a healthcare consulting
firm, to provide a fair market valuation of the practice for
the purposes of determining the retirement purchase price in
relation to plaintiff's retirement. Defendants requested
the Coker Group use the fair market valuation methodology.
The parties are in agreement that the two 2016 fair market
valuations were for the purpose of reaching a settlement as
to a voluntarily negotiated buy-out number. The parties are
also in agreement that no voluntary buy-out number was ever
25 of the Agreement provides:
This Agreement may be amended only by the vote of at least
eighty percent (80%) of the percentage interests of the
members of the company; except, however, other than by
application of Sections 5 and 6, the Percentage Interests of
the members may ...