Carroll v. HealthSouth
Arthroscopic & Laser Surgery Center
of San Diego, L.P., et al.

Case No. GIC806908

Superior Court of California, San Diego County

Frequently Asked Questions

I. BASIC INFORMATION

1. What is this notice and why should I read it?

This Notice advises you of a proposed class action settlement. The court in charge of this case is the San Diego County Superior Court and the case is known as Carroll v. HealthSouth Arthroscopic & Laser Surgery Center of San Diego, L.P., et al., San Diego Superior Court, Case No. GIC806908. Judge Ronald L. Styn of the California Superior Court for the County of San Diego (“Court”) has granted preliminary approval of a proposed class action settlement of all claims in this case. If you are included in the following definition, you are considered a “Class Member” and all Class Members together are considered “the Class”:

All persons who were patients and treated at Arthroscopic & Laser Surgery Center of San Diego, L.P. (and all affiliated entities operating under fictitious business names related thereto); SHC San Diego, Inc.; or HealthSouth Corporation at the HealthSouth Sports Medicine and Rehabilitation Center formerly located at or about 5471 Kearny Villa Road, Suite 202, San Diego, California; and/or who received any surgery or treatment from Defendant Gary Losse, M.D. at Arthroscopic & Laser Surgery Center of San Diego, L.P. or the Kearny Villa location, from January 1, 1996 through December 15, 2000.

This Notice explains the lawsuit, the settlement, your legal rights, what benefits are available to you, who is eligible for them, and how to get them. It is important that you read this Notice carefully as your rights may be affected by this settlement.

2. What is this class action lawsuit about?

On or about March 10, 2003, Plaintiffs Tim Carroll, Anna Good, and Paula Hamma (“Plaintiffs”) filed this class action against HealthSouth Corporation (and the affiliated entities identified above) (“Settling Defendants”) alleging, inter alia, and amongst other claims and allegations, that Settling Defendants purportedly violated California law by allegedly concealing from the public that Gary Losse, M.D. was incompetent to render medical services, including performing surgery, because of his alleged long-term undisclosed addiction to narcotics.

In July of 2015, following years of litigation, Plaintiffs and Settling Defendants (identified above) (collectively, “the Parties”) participated in two (2) full days of mediation before qualified and skilled mediators in an attempt to resolve this dispute. There, the Parties successfully resolved this dispute through good faith, arm’s-length negotiations.

Settling Defendants deny that they violated the law in any way as alleged in the lawsuit. Nothing in this Notice, or the settlement itself, or any actions to carry out the terms of the settlement shall mean or be interpreted to mean that Settling Defendants admit any fault, guilt, negligence, wrongdoing or liability whatsoever.

3. Why is there a settlement?

Plaintiffs and Settling Defendants have been actively investigating and litigating the claims asserted in this class action lawsuit. With the assistance of highly experienced, skilled, and impartial mediators, a comprehensive investigation of the claims, and good faith settlement negotiations, the Parties and their respective counsel agreed to this settlement.

Plaintiffs and their counsel recognize the expense and length of continued proceedings necessary to continue the litigation against Settling Defendants through class certification, trial and any possible appeals. Plaintiffs and their counsel also have taken into account the uncertainty and risk of the outcome of further litigation, and the difficulties and delays inherent in such litigation. In addition, Plaintiffs and their counsel are aware of the burdens of proof necessary to establish liability for the claims asserted in the lawsuit, Settling Defendants’ defenses thereto, and the difficulties in establishing damages. Plaintiffs and their counsel also have taken into account the extensive settlement negotiations that have been conducted. Based on the foregoing, Plaintiffs, in their roles as the Class Representatives, and their counsel, Morris, Sullivan & Lemkul LLP and the Law Office of Marc O. Stern, APC (“Class Counsel”), in their capacity as attorneys for the Class, believe the settlement confers substantial benefits to all Class Members and is a fair, adequate and reasonable settlement, and is in the best interest of the Class Members.

Through the litigation and the negotiations that resulted in this settlement, Settling Defendants have not admitted any liability or wrongdoing. At all times, Settling Defendants have further asserted that the care and treatment rendered was appropriate and reasonable, have denied any alleged impairment of Gary Losse, M.D., and have denied knowledge of any purported impairment. Settling Defendants have additionally expressly denied, and continue to deny, each of the claims and contentions alleged by Plaintiffs in the lawsuit. Settling Defendants repeatedly have asserted and continue to assert defenses thereto, and have expressly denied and continue to deny any wrongdoing or legal liability arising out of any of the facts or conduct alleged in the lawsuit. However, Settling Defendants have concluded that any further defense of this litigation would be protracted and expensive. Substantial amounts of time, energy and resources of Settling Defendants have been and, unless this settlement is made, will continue to be devoted to the defense of the claims asserted by Plaintiffs on behalf of the Class Members. Therefore, Settling Defendants have agreed to put to rest and settle the asserted claims in the manner and upon the terms set forth in this Notice, without any admission of wrongdoing or liability.

The settlement was preliminarily approved by the Court on May 6, 2016. A summary of the terms of the preliminarily approved settlement is set forth below. The specific and complete terms of the proposed settlement are described in the Joint Stipulation of Class Action Settlement Agreement (“Agreement”), a copy of which is available for your review as set forth at the end of this Notice.

II. WHO IS IN THE SETTLEMENT

To determine whether you are entitled to receive money from this settlement, you must first determine whether you are a Class Member as set forth below:

4. How do I know if I am part of the settlement?

Any individual who fits within this description is a Class Member for settlement purposes only:

All persons who were patients and treated at Arthroscopic & Laser Surgery Center of San Diego, L.P. (and all affiliated entities operating under fictitious business names related thereto); SHC San Diego, Inc.; or HealthSouth Corporation at the HealthSouth Sports Medicine and Rehabilitation Center formerly located at or about 5471 Kearny Villa Road, Suite 202, San Diego, California; and/or who received any surgery or treatment from Defendant Gary Losse, M.D. at Arthroscopic & Laser Surgery Center of San Diego, L.P. or the Kearny Villa location, from January 1, 1996 through December 15, 2000.

5. Are there exceptions to being included?

There are no categorical exceptions to the class definition above. Class Members who wish to exclude themselves from the settlement may do so as described in Section V. below.

6. I’m still not sure if I am included.

If you are still not sure whether you are included, you can ask for free help. You can call the Claims Administrator, Classaura Class Action Administration, at (888) 272-1245 or email the Claims Administrator at healthsouth@classaura.com.

III. THE SETTLEMENT BENEFITS — WHAT YOU GET

7. What does the settlement provide?

Settling Defendants have agreed to pay $5,000,000.00 (“the Class Settlement Amount”) to resolve the claims in the lawsuit. All Class Members, excluding only those who properly request exclusion, will be included in the settlement (“Settlement Class Members”). Of the Settlement Class Members, only those who file valid and timely Claim Forms will receive a settlement payment (“Participating Class Members”). The total sum of $5,000,000.00 will be payable to the “Participating Class Members”, the Class Representatives, Class Counsel, and the Claims Administrator.

If approved by the Court, the $5,000,000.00, minus the deductions identified below, will be distributed to all Participating Class Members. The deductions include:

  1. Class Representative Enhancement Awards to be paid to Plaintiffs in an amount not to exceed $25,000.00, each;
  2. Class Administration Costs, estimated at $35,000.00; and
  3. Attorneys’ Fees and Costs in an amount not to exceed $2,000,000.00;

The foregoing amounts are tentative estimates because they are subject to approval by the Court at the Final Approval Hearing, which is set for November 10, 2016. The remaining amount after these deductions are made from the $5,000,000.00 Class Settlement Amount is called the “Net Settlement Amount”, which will be apportioned and made payable as described below and in the Agreement among all Participating Class Members. The payment and distribution of any unclaimed settlement payments shall be made in accordance with the Agreement, subject to approval by the Court.

8. How much will my payment be?

All Participating Class Members (as defined above) are entitled to receive settlement payments. The amount of any individual settlement payment will be based on whether Class Members treated with Defendant Gary Losse, M.D. at Arthroscopic & Laser Surgery Center of San Diego, L.P. (“ALSC”); whether Class Members treated with some other physician than Defendant Gary Losse, M.D. at ALSC; and/or whether Class Members received rehabilitation treatment at the HealthSouth Sports Medicine and Rehabilitation Center formerly located at or about 5471 Kearny Villa Road, Suite 202, San Diego, California, as follows:

  • 94% of the Net Settlement Amount to be apportioned equally among Participating Class Members who received treatment by Gary Losse, M.D. at ALSC;
  • 3% of the Net Settlement Amount to be apportioned equally among Participating Class Members who received treatment by some other physician than Gary Losse, M.D. at ALSC; and
  • 3% of the Net Settlement Amount to be apportioned equally among Participating Class Members who received rehabilitation treatment at HealthSouth Sports Medicine and Rehabilitation Center formerly located at or about 5471 Kearny Villa Road, Suite 202, San Diego, California.

IV. HOW YOU GET A PAYMENT

9. How can I get a payment?

All Participating Class Members who submit valid and timely Claim Forms (as defined above) are entitled to receive settlement payments. If you return the Claim Form, but it is defective, you will be mailed a cure letter by the Claims Administrator within ten (10) business days of receipt of your defective submission. You must follow the instructions provided therein in order to ensure your claim is valid and timely.

10. When can I expect to receive my payment?

The Court will hold a hearing on November 10, 2016 to decide whether to finally approve the settlement. If the Court finally approves the settlement, and there are no objections or appeals, settlement payments will be mailed to all Participating Class Members within a few months. If there are objections or appeals, resolving them can take time, perhaps more than a year.

Please be patient.

11. What am I giving up in exchange for a settlement payment or if I do nothing?

SUMMARY OF RIGHTS YOU ARE RELEASING

Unless you opt out of the Class by submitting a timely and valid Request for Exclusion as set forth in this Notice and the Agreement, you will be considered a Settlement Class Member. Settlement Class Members cannot sue, continue to sue, or be part of any other lawsuit against Settling Defendants or any other Released Party (as defined below) for the claims alleged in THIS action as more fully described below. All Court orders will apply to and legally bind you.

RELEASED PARTIES

The Released Parties are HealthSouth Corporation; Arthroscopic & Laser Surgery Center of San Diego, L.P. (d/b/a HealthSouth Arthroscopic & Laser Surgery Center of San Diego, d/b/a HealthSouth/Oasis Surgery Center, and also d/b/a Oasis Surgery Center); SHC San Diego, Inc.; and HealthSouth Corporation (d/b/a HealthSouth Sports Medicine and Rehabilitation Center [erroneously named as HealthSouth Rehabilitation]), as well as their former or present parent entities, subsidiaries, predecessors, successors, assigns, and affiliates, and their respective officers, directors, managers, shareholders, members, partners (save for Plaintiffs’ separate claims against the non-settling defendants in the related action GIC806902, Gary Losse, M.D., David Chao, M.D., Paul Murphy, M.D., and Byron King, M.D.), attorneys, representatives, employees, administrators, fiduciaries, insurance carriers, trustees, and agents.

RELEASED CLAIMS

The Released Claims are as follows:

1. Plaintiffs’/Settlement Class Members’ Release.

Upon the Effective Date [the latter of: (a) the date the Court grants Final Approval of the settlement (estimated at this time to be November 10, 2016, or (b) if any timely appeals are filed, the date of any final appellate ruling approving this settlement], and as a condition of receiving any Individual Settlement Payment and/or Class Representative Enhancement Payments, or failing to submit a valid Request for Exclusion, Plaintiffs and all Settlement Class Members, including their heirs, successors, and anyone else purporting to claim through them, agree to the additional following General Release: In consideration of Settling Defendants’ promises and agreements as set forth herein, Plaintiffs, Settlement Class Members, and their heirs, successors, and anyone else purporting to claim through them, hereby fully and finally release HealthSouth Corporation; Arthroscopic & Laser Surgery Center of San Diego, L.P. (d/b/a HealthSouth Arthroscopic & Laser Surgery Center of San Diego, d/b/a HealthSouth/Oasis Surgery Center, and also d/b/a Oasis Surgery Center); SHC San Diego, Inc.; and HealthSouth Corporation (d/b/a HealthSouth Sports Medicine and Rehabilitation Center [erroneously named as HealthSouth Rehabilitation]), as well as their former or present parent entities, subsidiaries, predecessors, successors, assigns, and affiliates, and their respective officers, directors, managers, shareholders, members, partners (save for Plaintiffs’ separate claims against the non-settling defendants in the related action GIC806902, Gary Losse, M.D., David Chao, M.D., Paul Murphy, M.D., and Byron King, M.D.), attorneys, representatives, employees, administrators, fiduciaries, insurance carriers, trustees, and agents (collectively, the “Released Parties”), of and from any and all claims of Plaintiffs, Settlement Class Members, and their heirs, successors, and anyone else purporting to claim through them, including, but not limited to, those which were or could have been asserted in the Class Action, and also generally release and discharge the Released Parties from any and all claims, demands, obligations, causes of action, rights, or liabilities of whatsoever kind or character which have been or could have been asserted against the Released Parties arising out of or relating to interaction(s) of Plaintiffs and/or any Class Members with Released Parties, Gary Losse, M.D., Byron King, M.D., David Chao, M.D., Paul Murphy, M.D., Oasis Sports Medical Group, Inc., and/or Oasis MSO, Inc., including, but not limited to those for negligence, breach of fiduciary duty, fraud, deceit, breach of contract, concealment, unfair business practices, unlawful business practices, fraudulent business practices, battery, assault, failure to provide informed consent, lack of informed consent, failure to provide adequate peer review or quality assurance, violations of the California Business and Professions Code, violations of the California Consumers Legal Remedies Act, any other claims and/or causes of action, claims for damages or any other type of relief (including attorneys’ fees and costs), as well as any and all claims which could have been brought based upon the factual allegations in the Class Action under any federal, state, or local law or ordinance, public policy, tort, common law, law sounding in equity, or otherwise. This release specifically includes any and all claims, demands, obligations and/or causes of action whether or not known or suspected to exist, and whether or not specifically or particularly described herein.

2. Plaintiffs’/Settlement Class Members’ Civil Code Section 1542 Waiver.

It is Plaintiffs’ and the Settlement Class Members’ intent that this settlement shall be effective as a bar to all demands, liens, assignments, contracts, covenants, actions, suits, causes of action, obligations, costs, expenses, attorneys’ fees, damages, losses, claims, controversies, judgments, orders, and liabilities of whatever character, nature and kind, known or unknown, suspected or unsuspected, whether or not concealed or hidden, against the Released Parties and all parent entities, successor entities, officers, managers, attorneys, directors, shareholders, partners, employees, agents, members, affiliates, representatives, subsidiary entities or agents. In furtherance of this intent, Plaintiffs and the Settlement Class Members expressly, knowingly and voluntarily waive any and all rights and benefits conferred upon them by the provisions of Section 1542 of the California Civil Code, which provides:

A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS WHICH THE CREDITOR DOES NOT KNOW OR SUSPECT TO EXIST IN HIS OR HER FAVOR AT THE TIME OF EXECUTING THE RELEASE, WHICH IF KNOWN BY HIM OR HER MUST HAVE MATERIALLY AFFECTED HIS OR HER SETTLEMENT WITH THE DEBTOR.

3. No Release as to Case No. GIC806902.

The releases described above do not apply to Plaintiffs’ pending separate claims against Gary Losse, M.D.; David Chao, M.D.; Paul Murphy, M.D.; Byron King, M.D.; Oasis Sports Medical Group, Inc.; and Oasis MSO, Inc., or to any claims Plaintiffs or the Settlement Class Members may have against same, in consolidated Case No. 806902. Plaintiffs and the Settlement Class Members hereby expressly reserve any and all rights to pursue any action or claims against those persons and entities, but intend this settlement to be a full release of any and all claims as to the Settling Defendants.

V. OPTING OUT OF THE SETTLEMENT

If you do not wish to receive payment from the settlement, and wish to reserve your right to sue or continue to sue Settling Defendants for the Released Claims described above, you must take affirmative steps to exclude yourself from the Class. Excluding yourself from the Class is referred to as “opting out” of the Class and those who opt out of the Class are referred to as “Opt-Outs”.

12. What do I need to do if I do not want to be part of the settlement?

If you do not want to be part of the settlement, you must take affirmative steps to opt out of the Class by submitting a written letter to the Claims Administrator indicating clearly that you are requesting to be excluded from the Class. The written request must be signed by you, include your name, address, telephone number, and the last four digits of your social security number, and be returned by mail to the Claims Administrator at the specified address below. Your letter must be postmarked on or before October 25, 2016.

Classaura Class Action Administration
Carroll v. Losse, et al., Case No. GIC806908
1718 Peachtree St NW, Suite 1080
Atlanta, Georgia 30309

Any individual, who submits a completed and timely Request for Exclusion shall not be considered a Settlement Class Member, shall be barred from participating in any portion of the settlement, may not object to the settlement, and shall receive no payment from the settlement. Any such individual will not release any claims he/she may have against Settling Defendants.

13. If I do not opt out, can I sue for the same claims later?

No. Unless and until you opt out of the Class, you waive any right to sue Settling Defendants or any other Released Party for the Settlement Class Members’ Released Claims described above. If you have a pending lawsuit against any Settling Defendant or Released Party, you shall consult with your attorney(s) in that case immediately, if applicable. You must opt out of the settlement to file or continue your lawsuit. Remember, the deadline to opt out of the Class is October 25, 2016.

14. If I opt out of the Class, can I get money from this settlement?

No. If you opt out of the settlement, you will not receive any money from the settlement.

VI. OBJECTING TO THE SETTLEMENT

You have the option to tell the Court that you do not agree with the settlement or any portion of it. This process is called “objecting to the settlement”.

15. How do I object to the settlement?

If you are a Settlement Class Member [i.e., a Class Member who does not opt out of the settlement], you can object to the settlement or any portion of it by filing a valid Notice of Objection with the Court and serving copies of same on the Parties’ counsel, at the addresses identified below, and the Claims Administrator, at the address identified above. Any such written Notice of Objection must be signed by you, include your name, address, and telephone number, the case name and number as identified in this Notice, a concise and clear statement explaining all grounds for your objection, accompanied by any legal support for same, if applicable, and copies of any papers, briefs, or other documents upon which your objection is based, if applicable. The postmark date of the filing and service will be deemed the exclusive means for determining that the Notice of Objection is timely.

The addresses of Class Counsel and Counsel for Settling Defendants are:

Class Counsel
Chase M. Stern
Morris, Sullivan & Lemkul LLP
9915 Mira Mesa Blvd., Suite 300
San Diego, CA 92101

Marc O. Stern
Law Office of Marc O. Stern, APC
8070 La Jolla Shores Dr., #519
La Jolla, CA 92037

Settling Defendants’ Counsel
William A. Miller
Higgs, Fletcher & Mack LLP
401 West A Street, Suite 2600
San Diego, CA 92101

Your Notice of Objection must be filed with the Court and postmarked to all Parties’ counsel and the Claims Administrator by October 25, 2016. Settlement Class Members who fail to file and serve timely written objections in the manner specified above shall be deemed to have waived any objections and shall be foreclosed from making any objection (whether by appeal or otherwise) to the settlement.

16. What is the difference between objecting and opting out?

Objecting is simply telling the Court that you do not like the settlement or some portion of it. Opting out is telling the Court that you do not want to be included in the settlement. If you opt out, you have no basis to object because the case no longer affects you. You can object ONLY if you do not opt out.

VII. IF YOU DO NOTHING

17. What happens if I do nothing at all?

If you are a Class Member and do nothing at all, you will NOT receive a settlement payment and will be bound by the settlement terms and the release as described above.

VIII. THE COURT’S FINAL APPROVAL HEARING

The Court will hold a hearing to decide whether to finally approve the settlement. If you follow the instructions below, you may request to speak at the hearing, but you are NOT required to appear at all.

18. When and where will the Court decide whether to finally approve the settlement?

The Court will hold a Final Approval Hearing on November 10, 2016 at 8:30 a.m., at the San Diego Superior Court in Department 62, located at 330 West Broadway, San Diego, CA 92101. At this hearing, the Court will determine whether to grant final approval of the settlement. If there are objections, the Court will consider them. The Court will listen to only those Class Members who have made timely written requests to speak at the hearing. This hearing may be rescheduled by the Court without further notice to you.

19. Do I need to attend the Final Approval Hearing?

No. Class Counsel will answer any questions the Court may have. You may attend at your own expense or have an attorney attend on your behalf at your own expense.

20. May I speak at the Final Approval Hearing?

You may notify the Court of your intent to speak at the Final Approval Hearing. To do so, you must file with the Court and mail to Class Counsel and Settling Defendants’ Counsel at the addresses listed above a document captioned “Notice of Intention to Appear in Carroll v. Losse, et al., Case No. GIC806908”, which shall include any objections pursuant to the procedure set forth above in Section VI. This document must be postmarked no later than October 25, 2016. You cannot speak at the hearing if you opt out of the settlement, as set forth above.

IX. THE ATTORNEYS REPRESENTING YOU

21. Do I have an attorney in this case?

The Court has authorized the law firms of Morris, Sullivan & Lemkul LLP and the Law Office of Marc O. Stern, APC to represent you and the other Settlement Class Members for settlement purposes only. These attorneys are collectively referred to herein as “Class Counsel”. You will not be charged separately for the services of Class Counsel. If you wish to be represented by separate counsel, you may retain your own counsel at your own expense. Class Counsel’s contact information is set forth above.

22. How will Class Counsel be paid?

At the Final Approval Hearing, Class Counsel will request that the Court approve payment of an amount not to exceed $2,000,000.00, representing Class Counsel’s award of Attorneys’ Fees and Costs. The Court, in its sole and absolute discretion, may award less than this amount. Settling Defendants, and each of them, have agreed not to oppose an award of Attorneys’ Fees and Costs of up to $2,000,000.00.

X. GETTING MORE INFORMATION

23. Are there more details about the settlement?

This Notice only summarizes the proposed settlement and does not represent the entirety of the terms contained within the Agreement. You can obtain a copy of the Agreement, the Final Judgment or other settlement documents by writing to the Claims Administrator at the address listed above, or by reviewing the court-filed documents in the Court’s file at http://www.sdccourt.ca.gov/ and entering Case No. GIC806908.

24. How do I obtain more information?

You visit the claims website at www.HealthSouthClassAction.com or contact the Claims Administrator at the address and telephone number listed above.

THIS NOTICE IS APPROVED BY THE SAN DIEGO COUNTY SUPERIOR COURT
PLEASE DO NOT CONTACT THE COURT ABOUT THIS NOTICE.