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JONESBOROUGH, Tenn. (WJHL) — State of Franklin Healthcare Associates (SOFHA) is suing Knoxville-based Summit Medical Group (SMG) for up to $120 million, claiming SMG conspired with some SOFHA doctors in an effort to “destroy the value of Plaintiffs’ business as a going concern.”
The suit, filed Wednesday in Washington County Circuit Court, claims SMG breached non-disclosure agreements (NDAs) it had with SOFHA by communicating with doctors at SOFHA practices in Sullivan County and Southwest Virginia.
SOFHA, which opted to become employee-owned in early 2024, previously said a “small group of physicians” has made “false claims” about the group’s financial situation.
After what the suit calls improper communications between SMG and some of those doctors, the doctors told SOFHA on April 30 that they wouldn’t renew contracts that expire Sept. 30. The suit alleges the doctors then met secretly with SMG in early July before formally requesting to SOFHA’s leadership that it consider the sale of some of its assets to SMG.
“In the email, the physicians stated that if SOFHA would not agree to sell the practice to SMG, SOFHA would be left with assets of little value, vacant locations, no compensation, and no revenue from these clinics,” the suit states.
That email, the suit says, was followed by a July 21 letter of intent from SMG “for acquisition of certain assets in Sullivan County, Tennessee and Southwest Virginia.”
This wasn’t the first transactional discussion between SOFHA and SMG, though — nor are the Sullivan County physicians the only ones who have left or said they’ll leave SOFHA this year.
“Since April 30, 2025, other physicians employed by Plaintiffs have given notice that they do not intend to renew their employment agreements,” the suit says.
It also reveals that on May 21, Summit issued a letter of intent to SOFHA to buy the entire group — “acquisition of substantially all of the assets of Plaintiffs.”
The lawsuit seeks relief on seven counts:
- Breach of contract
- Breach of fiduciary duty
- Tortious interference with business relationships
- Tortious interference with contract rights
- Violation of Tennessee Code Annotated 47-50-109, which prohibits any party from inducing or procuring someone else to breach a contract
- Violation of the Uniform Trade Secrets Act
- Civil conspiracy
It seeks injunctions against SMG that would bar it from contacting anyone at SOFHA other than its designated representatives. It asks for compensatory damages of up to $120 million “or such amount to be proven at trial.”
It asks for punitive damages of either twice as much as compensatory damages or $500,000 under counts 1 through 4 and count 7, and additional damages related to counts 5 and 6.
SMG’s website says it has 526 providers at 90 locations in 23 counties and serves 435,000 patients. Its closest locations to the Tri-Cities are in Greeneville.
SOFHA’s website shows it has 30 practices in seven counties and 244 providers.
News Channel 11 has reached out to both companies seeking comment. This is a developing story.
