WHEELING – A judge has denied a request for preliminary injunction in a lawsuit against Alecto Healthcare Services.

A hearing was held on the plaintiff’s motion requesting a preliminary injunction. At the hearing, the parties acknowledged that the dispute over the contract arising out of the Medical Transcription Services agreement was subject to arbitration and that the arbitration had already been initiated.

During the hearing on the motion for preliminary injunction, the parties elicited witness testimony, and the court admitted certain exhibits into evidence.

The parties then represented that they would both request a copy of the hearing transcript and stated that setting a deadline to submit a supplemental memorandum regarding the plaintiff’s motion for preliminary injunction one week after receipt of the transcript was agreeable.

“Further, as indicated at the conclusion of the hearing, defendants’ motion to dismiss was denied and defendants’ motion to compel arbitration and stay pending arbitration was granted,” the order states. “Per this Court’s previous order confirming the pronounced order of the Court during the hearing, this civil action has been stayed pending arbitration, with the exception of the Court’s consideration of, and ruling upon plaintiff’s motion for preliminary injunction.”

The court finds that Diskriter has failed to make a “clear showing” that it is entitled to such relief under the four factor test and that Diskriter’s motion for preliminary injunctive relief should be denied.

In 2011, Diskriter Inc. entered into a medical transcription services contract with Ohio Valley Health Services and Education Corporation, according to a complaint filed Nov. 3 in Ohio Circuit Court and removed to federal court on Nov. 13.

Diskriter claims in April, Alecto purchased OVHSEC. OVHSEC assigned the agreement to Alecto and Diskriter accepted the assignment.

After the assignment, Alecto breached the agreement by not using Diskriter as the exclusive vendor for transcription services at the contracted locations, according to the suit.

Diskriter claims as of on Nov. 1, Alecto has ceased using Diskriter for any transcription services and secured services from a third-party competitor.

As a result of the breach of agreement, Diskriter has experienced a significant loss of revenue, money damages and interruption of business resulting in immediate and irreparable harm, according to the suit.

Diskriter claims as a result of the breach of agreement, it is incurring a monthly revenue loss of approximately $60,000.

The plaintiff has invested significant time and investment in being prepared to complete its obligations under the agreement, according to the suit.

Diskriter claims it has invested significant amounts of money in equipment and information technology to service the agreement and has invested annual in excess of $120,000 in equipment, maintenance and training.

The plaintiff will suffer irreparable losses related to the investment in employees, equipment and IT infrastructure and will be required to lay off and/or terminate the current 27 full-time employees who currently service the agreement, according to the suit.

Diskriter is seeking an injunction enjoining the defendants from utilizing the transcription services of any other person or entity during the term of the agreement. It is being represented by Jeffrey A. Grove and David L. Delk Jr. of Grove, Holmstrand & Delk.

The defendants are represented by Sharon L. Potter and Christina S. Terek of Spilman Thomas & Battle.

U.S. District Court for the Northern District of West Virginia case number: 5:17-cv-00170

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