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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