Local Biz Sues G.E.

by Clare Rolens

A Santa Barbara-based medical company that provides body scans to thousands of South Coast patients is suing General Electric (GE) for $12 million in lost profits for leasing them allegedly faulty scanners. In 2000, local businessmen Dan Parker and James Gerlach started Vitascan, a preventative scanning company that traveled throughout California and served more than 4,000 patients before going out of business in September 2003. According to the plaintiffs’ attorney Thomas Foley, Vitascan failed because the two scanners they leased from GE did not operate consistently when they were moved. Radiology technician Edgar Reyes — who operated the scanners — testified in Santa Barbara Superior Court that the machines often broke down at crucial moments, leading to delays that frustrated patients, who paid as much as $2,000 for the scans. Parker called it a “tragedy” that a fine business concept failed because of unreliable equipment.

The defense countered the business’s failure was not due to ornery scanners, but to poor management. GE charged the suit is simply an attempt by Vitascan to “hit the jackpot” and get out of paying the $4 million it owes GE. On Tuesday, GE attorney Dennis Ellis questioned Dr. Lawrence Harter — the former medical director of Vitascan — who testified that the scanners worked well and the owners of Vitascan focused on profits rather than quality healthcare. He also outlined what he considered poor business decisions by Vitascan management. The case will go to the jury by the end of July.

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