Newport plastic surgeon is sued for half of health-care analysis business

A prominent Newport Beach plastic surgeon is facing a lawsuit by a former business partner who alleges the doctor cheated him out of his share of a multimillion-dollar tech start-up.

Dr. Jay Calvert is the co-founder of MD Insider, a company that says it cuts health-care costs for its clients by analyzing doctors’ performances and determining who provides the best care at the best prices.

A lawsuit filed in March 2014 says Calvert paid $3,000 to buy out his partner, Adam Michael-Perzow, when MD Insider was in a fledgling phase. The suit alleges that Calvert said he planned to shut down the company and offered to buy back a 50% stake when he was actually building up MD Insider behind his partner’s back.

Perzow, who filed the lawsuit in Orange County Superior Court with Calvert and MD Insider named as defendants, claims he is entitled to half the company in its current form.

Lawyers for both sides did not specify the company’s worth, though Calvert’s lawyer, Arthur Barens, estimated Perzow stands to gain a $10 million to $12 million stake if he wins the case.

Barens said Calvert and MD Insider have refused to settle and plan to take the case to a trial scheduled for next month.

“He never contributed one thing to the company,” Barens said of Perzow. “He left the company in early 2011 and the company had zero value at that time.”

According to the suit, Perzow was a patient of Calvert’s and bought into the idea of MD Insider in 2010 when the doctor asked him for help getting the idea “off the ground.”

At the time, the company was described as a web service that matched health-care providers with consumers, according to court documents.

“This was sort of akin to an online dating service between doctors and patients,” the lawsuit states.

Perzow claims a business plan he created helped legitimize the company.

According to the lawsuit, he sold his 50% stake when Calvert suddenly said he wanted to drop the idea and shutter MD Insider. In reality, the suit alleges, Calvert was still working to launch the business while quietly pushing Perzow out.

“As the documents [for Perzow to give up his share] are out there for him to sign, Calvert is meeting with venture capitalists,” said Perzow’s lawyer, Richard Kellner, who compared his client’s lawsuit to one that Cameron and Tyler Winklevoss filed against Facebook founder Mark Zuckerberg alleging that he stole their idea for the social networking site.

Barens argued that MD Insider became successful years after Perzow left.

The company took off after Calvert handed over the reins in 2013 to an experienced entrepreneur named David Norris, Barens said.

Norris, the company’s chief executive, transformed MD Insider from a doctor-patient matching website to the business-to-business analytics service it is now, according to Barens.

Under Norris, the company raised $1.5 million in November, on top of $2 million in previous investments, the company said.

“Perzow waits until 2014, when he sees some newspaper articles about Norris and about the company, and he files suit,” Barens said.

In January, Judge James Di Cesare denied a motion for summary judgment against MD Insider and Calvert, but Kellner said he took Di Cesare’s comments in the ruling as a signal that Perzow will prevail at trial.

“The evidence is undisputed that defendant told plaintiff [that] MD Insider was winding down to entice plaintiff’s quiet departure when, in truth, defendant intended to carry on the business with someone else,” Di Cesare wrote.

But the judge also said it would be unfair to MD Insider’s new partners if he handed over 50% of the company to Perzow. Expert economists likely will have to determine how much Perzow may be entitled to, according to the ruling.

Barens said the company is ready to call economists to testify that Perzow deserves nothing.