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Saint Alphonsus ordered to pay $52M to former MRI partner

A jury has ordered a Boise hospital to pay $52 million to an MRI company for violating a partnership agreement it had with the company. The award is one of the largest to ever come out of the Idaho district courts.

It’s the second time the lawsuit, brought by MRI Associates against Saint Alphonsus Regional Medical Center, has gone to trial. The first trial ended in a $63 million verdict, but that was later overturned by the Idaho Supreme Court.

Saint Alphonsus spokeswoman Elizabeth Duncan says the hospital is disappointed with the verdict and will appeal.

Wade Woodard, one of the attorneys for MRI, said appeals could continue for three to four years, and that it would be a long time before MRI could see any money. He said that wait could harm the company, which hasn’t done well since the hospital contract ended.

“MRI’s barely hanging on,” Woodard said. “If they don’t get money soon, they’re going out of business.”

MRI Associates, which operates MRI Center of Idaho and MRI Mobile, partnered with Saint Alphonsus in 1985 in an effort to make magnetic resonance imaging and other diagnostic tests more accessible to the hospital. The partnership was slated to last until at least 2015. But in 1998, a group of radiologists from Saint Alphonsus decided to build their own outpatient medical imaging facility, Intermountain Medical Imaging. In 2004, the hospital told MRI Associates it was leaving the partnership in favor of Intermountain.

The hospital then sued MRI Associates for its portion of the ownership in MRI Associates. MRI countersued, contending the hospital breached the terms of the partnership agreement when it became a competitor.

“They were competing with their partner while still a partner,” Woodard said. “That’s been against the law for a long time.”

The case first went to trial in 2007, when a jury awarded MRI Associates more than $63.5 million in damages. A judge later reduced the award to $36 million, and in 2009 the Idaho Supreme Court sent it back for a new trial. The retrial ended Nov. 1, when the jury awarded MRI Associates $52 million.

Woodard’s firm, Banducci Woodard Schwartzman, portrayed the case as akin to David v. Goliath, noting they were able to beat Jones Day, one of the largest law firms in the country. 

Idaho Business Review writer Brad Iverson-Long contributed to this report.

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