You closed on a medical practice, and now the deal has gone sideways. Maybe the revenue you were shown does not match the money coming in. Maybe the buyer is stalling on your earnout, or sitting on escrow funds that belong to you, or trying to enforce a non-compete you never expected.
A medical practice sale dispute lawyer helps the owner, seller, or buyer force the other side to honor the purchase agreement, unwind a bad deal, or recover the money at stake. At the Law Offices of Parag L. Amin, P.C. (LawPLA), we represent the business side of these fights in Los Angeles and across California.
A medical practice sale dispute is a contract and fraud fight, not a patient-care case. The core question is simple: did each party get what the deal promised, and if not, what does the law let you recover?
We protect your business, livelihood, and legacy. If you are buying or selling a medical practice and the deal is in dispute, call +1(213) 293-7881 to talk through where you stand.
What a medical practice sale dispute lawyer actually does
A medical practice sale dispute lawyer represents the buyer or the seller when a transaction breaks down before, during, or after closing. The work is business litigation: reading the purchase agreement, finding the promises that were broken, and building the leverage to get paid or get out. We do not handle patient-injury or malpractice claims, and we do not represent patients or employee plaintiffs against practices.
Most of these disputes trace back to one document: the purchase agreement (the master contract that governs the sale). Inside it live the reps and warranties (short for representations and warranties, the factual promises each side makes), the earnout terms, the escrow and holdback provisions, the indemnification language, and any non-compete.
When something goes wrong, the answer is almost always somewhere in those pages, or in what was said during due diligence (the review period where the buyer inspects the practice's books, contracts, and compliance).
Here is what these disputes sound like in plain terms, and where each one leads:
| What you are dealing with | The likely claim | What is on the clock |
| The seller lied about revenue or patient volume | Fraud, misrepresentation, or breach of the reps | Reps survival period and the statute of limitations |
| The buyer will not pay an earnout you hit | Breach of contract and breach of good faith | Earnout records and contract deadlines |
| Money is stuck in escrow and will not release | Indemnification or holdback dispute | Notice deadlines written into the agreement |
| You are hit with a non-compete after selling | Enforceability under Sections 16600 and 16601 | The restriction's scope and duration |
Each of those has a legal path, and each has a deadline. Call +1 (213) 293-7881 and we will tell you which one you are on.
When the seller misrepresented the practice
If the seller overstated revenue, collections, or patient volume, or hid liabilities, California gives a buyer real recovery routes. The strongest are fraud, negligent misrepresentation, and breach of contract, often pleaded together. Which one fits depends on what the seller knew and how the promise was made.
| Recovery route | What you must show | When it fits best |
| Fraud (Civil Code 1572) | The seller knew the statement was false and meant to induce the deal | Deliberate lies or hidden liabilities, and it can open broader damages |
| Negligent misrepresentation | The seller was careless, with no reasonable grounds to believe it | The "numbers were just off" situations |
| Breach of contract | A signed representation or warranty turned out to be false | The cleanest path, usually with no need to prove intent |
Fraud is the heaviest hammer. Under California Civil Code section 1572, deceit includes stating something as fact that is not true, or suppressing a fact you have a duty to disclose, with intent to induce the deal. You can read the statute directly on the state's government site: California Civil Code section 1572. Proving fraud is harder because it requires intent, but it can open the door to broader damages.
Negligent misrepresentation is the middle ground. The seller made a false statement of fact carelessly, without reasonable grounds to believe it was true. You do not have to prove they meant to lie, only that they were wrong and should have known better. That fits a lot of "the numbers were just off" situations.
Breach of contract is often the cleanest. When the seller signs reps and warranties, they are making binding factual promises: that the financial statements are accurate, that billing was done correctly, that the practice holds the licenses it claims, that it complies with the Corporate Practice of Medicine rules, and that there is no known fraud or abuse. If any of those was false, that is a breach, full stop, and you may not need to prove anyone's state of mind.
How long do reps and warranties last after closing?
Reps and warranties do not last forever. Most purchase agreements give them a survival period, often somewhere between 12 and 36 months, and some carve out longer or indefinite windows for core items like tax, title, or fraud. Once that clock runs out, the promise may no longer support a claim, so the survival period is one of the first things we check.
This is also why timing matters so much. A buyer who suspects the seller inflated the practice needs to act inside that survival window and inside the statute of limitations. Waiting can quietly close doors. If you think the practice you bought was not what you were shown, call (213) 293-7881 before the survival period lapses.
Earnout fights: when the price depends on future performance
An earnout ties part of the purchase price to how the practice performs after closing, and it is one of the most common sources of dispute. The seller says they earned the payment; the buyer says the target was missed. The fight usually turns on vague metrics, undefined accounting, and how the buyer ran the practice during the earnout period.
The trouble starts with sloppy drafting. If the agreement says the earnout depends on "net revenue" or "collections" but never defines how those are measured, both sides read the number their own way. Does the buyer get to subtract new overhead? Whose accounting method controls? When the contract is silent, the parties end up litigating what the term was supposed to mean.
There is a second, sharper problem: a buyer who runs the practice in a way that defeats the earnout. Maybe they move patients to another location, cut the marketing that drove volume, or shift billing so the target practice looks weaker on paper. California law implies a covenant of good faith and fair dealing in every contract, which means a buyer generally cannot take deliberate steps to sabotage a payment they owe.
Proving it takes financial records, communications, and often an accounting expert, but it is a recognized claim.
If you are a seller staring at an earnout that keeps shrinking for reasons you cannot explain, that is worth a hard look. Call +1 (213) 293-7881 and we will walk through the metric language and the numbers.
Escrow and holdback disputes
An escrow or holdback keeps part of the purchase price parked to cover problems that surface after closing. When the buyer claims a breach and the seller says the money should be released, you get a holdback dispute. The contract's indemnification terms usually decide who is right.
Here are the mechanics. At closing, a slice of the price (the holdback) is set aside, sometimes with a neutral escrow agent, to secure the seller's indemnification promises. If the buyer later discovers, say, a billing problem or an undisclosed liability, they make a claim against those funds. The seller who believes the claim is inflated or bogus wants the money released on schedule.
These fights are really about three things: whether a valid claim exists under the indemnification clause, whether it clears any deductible or cap the parties negotiated, and whether the buyer followed the required notice procedure. Miss a notice deadline and even a good claim can fail. Sitting on a weak claim to keep the seller's money can itself be a breach.
Because the dollars are already identified and set aside, holdback disputes can move faster than open-ended damage claims. If money that should be yours is stuck in escrow, call +1 (213) 293-7881.
Are non-competes enforceable when you sell a practice?
Usually not, with one major exception that applies squarely to practice sales. California voids most non-competes, but it allows a reasonable one when you sell the goodwill of a business. So the enforceability of a non-compete in your deal depends on whether it fits that sale-of-a-business exception.
The default rule is strict. California Business and Professions Code section 16600 makes contracts that restrain someone from practicing their profession void as a matter of public policy. In the ordinary employment setting, non-competes are essentially unenforceable in this state.
The sales context is different. Business and Professions Code section 16601 lets a buyer enforce a reasonable non-compete against a seller who sold the goodwill of the business or substantially all of its assets. The logic is fair: a buyer paying for a practice's goodwill (its patient relationships and reputation) should not have the seller reopen next door and take it all back. You can review the exception on the state's government site: California Business and Professions Code section 16601.
The dispute lives in the details. Was there really a sale of goodwill, or was the "sale" a thin wrapper around what is actually an employment relationship? Is the restriction reasonable in geography and duration, or so broad it sweeps past the goodwill actually purchased? Does the selling clinician's continued employment or transition role change the analysis? Sellers argue the clause is overbroad and void; buyers argue it is exactly what 16601 protects. Both can be right depending on how the papers were drawn.
We handle this on either side. If you are a buyer trying to enforce a bargained-for restriction, or a seller facing a non-compete that reaches too far, call +1 (213) 293-7881.
What about the selling clinician's transition period?
Many deals keep the selling physician on for a transition, as an employee or contractor, to hand off patients and stabilize revenue. Disputes here overlap with the sale terms: how long the transition lasts, what the clinician is paid, and how leaving early affects the earnout or non-compete. We keep these questions inside the deal, not general staffing complaints.
That said, if the real problem is an internal falling-out among owners, or a dispute about staff and employment practices, those belong to different pages: medical practice partnership disputes and medical practice employment disputes. This page stays on the transaction between buyer and seller.
Who is even allowed to buy the practice under CPOM rules?
In California, a non-licensed person or company generally cannot own a medical practice. That rule is the Corporate Practice of Medicine (CPOM) doctrine, and it shapes who can buy, how the deal is structured, and whether the whole thing holds up. A sale built on a bad structure can unravel.
CPOM keeps medical judgment with licensed clinicians rather than investors. Because of it, most deals involving outside capital use a two-part structure: a professional corporation owned by licensed physicians delivers the care, and a management services organization (MSO, the company that handles the business side) contracts with that professional corporation for administrative services. The Medical Board of California explains the ownership rules on its government site: Medical Board of California practice information.
Disputes arise when the structure was done wrong. If the MSO agreement gives the non-licensed side too much control over clinical decisions, or the money flows in a way that looks like fee-splitting, a regulator or a counterparty can challenge it, and the value you thought you bought can evaporate. Buyers who discover a defective structure after closing may have misrepresentation or breach claims tied to the seller's compliance reps.
For field-specific structuring, including dental deals, see dental practice ownership and buyout disputes. If you are worried the structure under your deal will not hold, call +1 (213) 293-7881.
How quickly do you need to move?
Sooner than most people think. Deal disputes run on multiple clocks at once: the reps-and-warranties survival period, contractual notice deadlines, and the statute of limitations for fraud and contract claims. Missing any one of them can end an otherwise strong case.
The survival period may be as short as a year. Indemnification clauses often require written notice of a claim within a set number of days after you discover the problem. Fraud and contract claims each carry their own filing deadlines under California law. On top of that, evidence gets stale: bank records, patient volume data, and the emails that show what was said during due diligence are easiest to pin down early.
Acting early also preserves options. A prompt, well-documented demand sometimes resolves a holdback or earnout without litigation. Wait too long and your leverage, and your legal rights, both shrink. Call +1 (213) 293-7881 to map the deadlines on your deal.
How we work: AgileAffect
Our approach is called AgileAffect, and it means we build the commercial strategy first, then choose the legal tactics that serve it. Before filing anything, we ask what outcome actually protects your business: the fastest path to the escrow money, an unwound deal, an enforced non-compete, or a negotiated exit. The litigation follows the goal, not the other way around.
In practice that means we read the purchase agreement closely, quantify what you stand to gain or lose, and pressure-test both sides' positions. Some disputes resolve with a sharp demand and a clear damages model. Others need a filed complaint and discovery to shake loose the records. We keep you informed on cost and realistic ranges, and we do not promise outcomes we cannot control.
Many of these matters also touch a straightforward breach of contract claim at their core, and they all sit under our broader medical practice disputes work.
Ask LawPLA
Q: I bought a practice and the seller lied about revenue. Can I sue?
A: Likely yes. If the seller overstated revenue, collections, or patient volume, you may have claims for fraud, negligent misrepresentation, and breach of the reps and warranties in your purchase agreement. Which fits depends on what the seller knew and how the promise was made. Act inside the survival period and the statute of limitations. Call +1 (213) 293-7881 to have the agreement reviewed.
Q: The buyer will not pay my earnout. What are my options?
A: Start with the contract's earnout language and how the metric is defined. If you hit the target, non-payment may be a straight breach. If the buyer ran the practice to sink the numbers on purpose, California's implied covenant of good faith and fair dealing may apply. Both usually need financial records and often an accounting expert. Call +1 (213) 293-7881 to review the numbers.
Q: Can a non-doctor buy my medical practice in California?
A: Generally not directly. The Corporate Practice of Medicine doctrine keeps ownership of the practice with licensed physicians, so deals with outside capital typically use a professional corporation plus a management services organization (MSO). If your structure gives the non-licensed side clinical control, it can be challenged. Call +1 (213) 293-7881 if you are unsure your deal is sound.
Q: Is the non-compete I signed when I sold my practice enforceable?
A: It might be, which makes practice sales different from ordinary jobs. California voids most non-competes but allows a reasonable one tied to the sale of a business's goodwill under Business and Professions Code section 16601. Enforceability turns on whether goodwill was truly sold and whether the scope is reasonable. Call +1 (213) 293-7881 for an assessment of your specific clause.
Q: How much of these disputes settle before trial?
A: Many resolve without a trial, especially holdback and earnout fights where the money is already identified. A well-documented demand with a clear damages model often moves the other side. We cannot promise any particular result, but we build every matter so it is ready to file if negotiation stalls. Call +1 (213) 293-7881 to discuss your leverage.
FAQ
Do you handle medical malpractice or patient-injury cases?
No. This is business litigation over the purchase or sale of a practice, not patient care. We represent owners, buyers, and sellers on deal disputes: fraud, breach of contract, earnouts, escrow, and non-competes. We do not take patient-injury, malpractice, or employee-plaintiff cases.
What is a holdback, and why is part of my money still with the escrow agent?
A holdback is a portion of the purchase price set aside after closing to cover problems the buyer might discover later, usually tied to the seller's indemnification promises. It sits in escrow until the agreed release date or until a claim is resolved. Disputes turn on whether a valid claim exists and whether notice rules were followed.
Does it cost more to pursue fraud than breach of contract?
Fraud claims generally take more work because you must prove the seller's intent, which means more discovery and often deeper financial analysis. Breach of the reps and warranties can be cleaner when the promise was simply false. We often plead them together and tell you early which theory carries the strongest, most cost-effective path.
We are still in due diligence and I found a problem. Is it too early to call?
No, that is often the best time. A dispute caught before closing can be fixed through renegotiated terms, a bigger holdback, or walking away. Once you close, your options narrow to post-closing claims. Getting advice during due diligence can save the deal or save you from a bad one.
Do you represent buyers, sellers, or both?
Both, on the business side of a transaction. We take buyers pursuing a seller who misrepresented a practice, and sellers chasing an earnout or fighting an overbroad non-compete. We do not represent patients or employee plaintiffs. Each matter is assessed for conflicts before we take it on.
Talk to a medical practice sale dispute lawyer
If you are buying or selling a medical practice and the deal has turned into a dispute, the sooner you understand your position, the more options you have. We will read the purchase agreement, map your deadlines, and give you a straight read on what the fight is worth.
Call the Law Offices of Parag L. Amin, P.C. at +1 (213) 293-7881 to talk with a medical practice sale dispute lawyer about your transaction. Protecting your business, livelihood, and legacy starts with one conversation.