NOVAMED MANAGEMENT SERVICES LLC v. PEAVY (2026)

After James Peavy developed blindness in one eye following cataract surgery, he filed suit against defendants NovaMed Management Services, LLC and NovaMed, LLC (collectively, “NovaMed”),¹ among other parties, alleging professional and ordinary negligence. Peavy moved for partial summary judgment on the sole issue of whether, as he claims, NovaMed is the alter ego of co-defendant Southeast Eye Surgery Center, P.C. d/b/a Omni Eye Services of Atlanta (“Omni”), which the trial court granted. NovaMed now appeals the trial court's ruling. For the reasons set forth below, we reverse that ruling and remand this case to the trial court.

We review de novo a grant or denial of summary judgment, viewing the evidence and all reasonable conclusions and inferences drawn from it in the light most favorable to the nonmovant. Summary judgment is proper when there is no genuine issue of material fact and the movant is entitled to judgment as a matter of law. The burden on the moving party may be discharged by pointing out by reference to the affidavits, depositions and other documents in the record that there is an absence of evidence to support the nonmoving party's case.

Knaack v. Henley Park Homeowners Ass'n, 365 Ga. App. 375, 378, 877 S.E.2d 821 (2022) (citation modified).

According to Peavy's complaint, in July 2021, he underwent cataract surgery on his left eye at Omni. During post-operative appointments with co-defendant optometrist Dr. Phi Bang, Peavy reported seeing floaters, opaque masses, and flashing charcoal colored spots. Dr. Bang alerted co-defendant ophthalmologist Dr. Lawrence Woodard via text message of a “huge floater” in Peavy's eye; Dr. Woodard texted Dr. Bang to tell Peavy that the floater “will improve gradually.” According to Peavy, he was suffering from an undetected and untreated detached retina in his left eye, which led to his eventual blindness in that eye.

Peavy filed suit, alleging professional and ordinary negligence against Dr. Bang; Clarkson Optometry Georgia, Inc. d/b/a Clarkson Eyecare (where, according to Peavy, Dr. Bang provided post-operative care); Omni; Dr. Woodard, who claims to own Omni; and NovaMed, whose relationship with Omni is at issue in this appeal. Peavy claimed, as relevant to this appeal, that Dr. Woodard was acting “incident to, and within the course and scope of his agency or employment” with NovaMed, which therefore was vicariously liable for Dr. Woodard's torts.

Peavy then moved for partial summary judgment, seeking a ruling that NovaMed is Omni's true owner and alter ego, based upon a premise that “NovaMed controls every aspect of Omni's business.” In that regard, Peavy maintained that NovaMed had installed Dr. Woodard as Omni's “fake owner” with “exactly zero control over its business operations.” Peavy similarly alleged that “Omni is a sham corporation created and maintained in order to conceal the true corporate owner and employer of ․ Dr. Woodard — NovaMed.”

In so arguing, Peavy relied primarily on a Management Services Agreement (“MSA”) between Omni and NovaMed entered into in August 2000. Under the terms of the MSA, Omni appoints NovaMed as its “sole and exclusive agent” for the management of the “business affairs of [Omni's] medical practice,” and authorizes NovaMed to provide “Management Services” “in any manner [NovaMed] deems appropriate to meet the day-to-day requirements of the business functions of [Omni].” These “Management Services” include the “provision of equipment, supplies, support services, nonphysician personnel, office space, management, administration, financial record keeping and reporting, information systems and all other business office services necessary for the nonmedical operations of [Omni].” More specifically, NovaMed is responsible for, among other things, procuring medical supplies, obtaining licenses and permits “in connection with[ ] the operation of [Omni's practice],” hiring, training, and paying “all nonphysician personnel,” advising and assisting Omni to establish policies regarding the creation and maintenance of medical records, advising and/or directly negotiating contracts with third parties related to Omni's provision of medical services, billing and collecting payments for Omni's medical services, and depositing those funds into an account bearing NovaMed's name, although Omni “retain[s] all rights in and to such deposited funds,” subject to certain exceptions.

In support of his motion, Peavy also relied heavily on Dr. Woodard's deposition testimony. Dr. Woodard testified that he started working at Omni in 2001 and became its sole owner and medical director in 2004 or 2005. Dr. Woodard stated that he did not buy Omni from its prior medical director and that the process by which he became its owner is “hard to, kind of, describe it.” Dr. Woodard indicated that he did not know whether he had the right to sell the practice. Dr. Woodard further testified that Omni does not have corporate officers, that he does not file taxes on Omni's behalf, and that he does not receive any financial statements for the practice.

NovaMed opposed the motion for partial summary judgment, contending that it merely “oversee[s] Omni's day-to-day business functions unrelated to physician oversight and patient related care,” and that it therefore “does not have the required control over Omni to form any type of agency, alter ego application, or form of vicarious liability.” In support of its argument, NovaMed referenced other sections of the MSA providing that NovaMed “shall have and exercise absolutely no control or supervision over the provision of Medical Services,” which the MSA defines as “ophthalmic, optometric[,] and other related eye care services,” and that the parties are “independent contractors.” The MSA also states that while a five-member “Policy Board,” comprised of three representatives designated by NovaMed and two designated by Omni, recommends physicians and optometrists to be hired, Omni “shall have the right to accept or reject” any such recommendations. In addition, the MSA provides that while NovaMed is tasked with procuring medical supplies, Omni is responsible for “oversight, supervision[,] and ownership” of the medical supplies, and NovaMed's procurement of licenses and permits does not extend to “those relating to the provision of Medical Services.”

NovaMed also highlighted the affidavit of Alison Miller, NovaMed's associate risk and claims manager, who attested that NovaMed does not have an ownership interest in Omni, that Dr. Woodard is not an agent of or employed by NovaMed,² and that NovaMed only provides nonmedical services via the MSA and does not have any “control, authority, or supervision over the medical services, care, and/or treatment provided by Dr. Woodard [or Omni].”

Without citing any authority, the trial court granted Peavy's motion in a succinct, two-page order, finding that

NovaMed owns and controls the business affairs of Omni through [the MSA] and is its alter ego. Thus, the purported corporate separateness of Omni and NovaMed is not recognized. As such, Dr. Woodard is an agent/employee of NovaMed[,] which renders NovaMed vicariously liable for the negligence of Dr. Woodard.

There are no issues of genuine material fact remaining in this case with regard to the ownership of [Omni] and the claim of vicarious liability.

On appeal, NovaMed argues that the trial court erred in granting partial summary judgment because the “record is devoid of evidence establishing that NovaMed is the alter ego of Omni, and at a minimum, there is a genuine issue of material fact regarding the separateness of the entities.” We agree that summary judgment should not have been granted.

“Under the alter ego doctrine, equitable principles are used to disregard the separate and distinct legal existence possessed by a corporation where it is established that the corporation served as a mere alter ego or business conduit of another.” Lowery v. Noodle Life, Inc., 363 Ga. App. 1, 3(a), 869 S.E.2d 600 (2022) (quotation marks omitted).

To establish the alter ego doctrine it must be shown that the stockholders’ disregard of the corporate entity made it a mere instrumentality for the transaction of their own affairs; that there is such unity of interest and ownership that the separate personalities of the corporation and the owners no longer exist; and [that] to adhere to the doctrine of corporate entity would promote injustice or protect fraud.

McLean v. Cont'l Wingate Co., 212 Ga. App. 356, 359(2), 442 S.E.2d 276 (1994) (citation modified). The separate corporate entity should be disregarded under an alter ego theory only with “great caution.” Amason v. Whitehead, 186 Ga. App. 320, 321, 367 S.E.2d 107 (1988).

As a preliminary matter, we disagree with the trial court's conclusion that no issues of genuine material fact remain regarding Omni's ownership. While, on the one hand, Peavy points to testimony showing Dr. Woodard's limited knowledge of Omni's business affairs and all the ways that NovaMed controls the day-to-day business function of the practice to bolster his argument that NovaMed is Omni's true owner, the record contains contrasting evidence, by way of Dr. Woodard's and Miller's affidavits, showing that NovaMed does not have an ownership interest in Omni.

Where there is no ownership, the alter ego doctrine is inapplicable. See Gwinnett Prop., N.V. v. G+H Montage GmbH, 215 Ga. App. 889, 893(2), 453 S.E.2d 52 (1994). Here, the opposing record evidence regarding Omni's ownership gives rise to a disputed factual issue precluding summary judgment on this basis alone. See Moton v. Emory Healthcare, Inc., 377 Ga. App. 127, 132(1), 921 S.E.2d 708 (2025) (explaining that a “witness contradiction” was “precisely the type of conflict in the evidence that creates a genuine issue of material fact precluding summary judgment”); McLean, 212 Ga. App. at 360(2), 442 S.E.2d 276 (holding that “diametrically opposing evidence” as to whether a company president operated a parent corporation and its affiliates as an alter ego rendered summary judgment improper).

Moreover, even if it were undisputed that NovaMed owns Omni, viewing the record in favor of NovaMed, disputed issues of fact remain as to whether the evidence shows that NovaMed and Omni are “interchangeable entities.” Lowery, 363 Ga. App. at 3(a), 869 S.E.2d 600. Indeed, as discussed above, NovaMed is primarily responsible under the MSA for the multi-faceted business management of Omni, whereas Omni, through its physicians and optometrists, remains solely responsible for rendering medical services. The physicians and optometrists are Omni's employees, not NovaMed's, and to the extent that, as Peavy argues, NovaMed “influences” Omni's hiring decisions through Policy Board recommendations, Omni can “accept or reject” any such recommendation under the MSA. “[B]usiness relationships and interdependency of one corporation and another, alone, are insufficient to establish liability” under an alter ego theory. Lowery, 363 Ga. App. at 3, 869 S.E.2d 600. Because factual issues exist regarding whether the companies are separate entities, the trial court erred in granting summary judgment on this issue as well.

Given the record before us, genuine issues of fact remain for jury resolution on whether NovaMed owns Omni, disregarded the corporate entity, and is Omni's alter ego. See NEC Techs. v. Nelson, 267 Ga. 390, 397(5), 478 S.E.2d 769 (1996) (holding that the trial court correctly found that one corporation was not an alter ego of another where there was no evidence that it was an instrumentality for the transactions of the other or that there was commingling of money, records, or employees); Moton, 377 Ga. App. at 132(1), 921 S.E.2d 708 (reversing grant of summary judgment where witness contradiction created conflict in the evidence giving rise to genuine issue of material fact). Accordingly, we reverse the trial court's grant of partial summary judgment in favor of Peavy on his alter ego theory and remand this case to the trial court for further proceedings.

Judgment reversed, and case remanded.

FOOTNOTES

1.   According to NovaMed's brief, NovaMed Management Services, LLC is a wholly-owned subsidiary of NovaMed, LLC, and it provides financial, administrative, business, and management services to co-defendant Omni Eye Services of Atlanta.

2.   Dr. Woodard likewise attested in an affidavit that he is “not employed by or an agent of NovaMed.”

Fuller, Senior Judge.

Dillard, P. J., and Mercier, J., concur.