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Sanford sues Norberg for the money it paid for his practice

Dr. Jon Norberg exhales as he is acquitted of all charges Nov. 21, 2012, following a two-week trial in District Court in Fargo.

FARGO -- Sanford Health here is suing Jon Norberg, claiming that before the health system bought his practice, the orthopedic surgeon should have disclosed he was under investigation for allegedly drugging and raping his wife.

In a civil lawsuit filed Thursday in Cass County District Court, Sanford alleges that Norberg negotiated a deal with Sanford to buy his business for $276,000 on or around July 11, 2011. He also got a low-interest loan from Sanford for $374,000 related to his employment agreement, in what's been referred to in the Norberg's divorce case as a "retention loan," or signing bonus.

Sanford wants Norberg to return the $276,000 it paid for his practice and to immediately pay off the $374,000 loan.

About five days before the deal was finalized, the civil complaint states, police executed a search warrant on Norberg's south Fargo home based on allegations from his wife that he was drugging her with the sedative propofol without her consent, then having sex with her.

Cass County prosecutors later charged Norberg with felony reckless endangerment and gross sexual imposition, but a jury acquitted him in November 2012, deliberating for less than four hours.

In court documents, Sanford alleges Norberg "was not due any compensation from Sanford if he failed to maintain all licenses to practice medicine or prescribe drugs, failed to maintain hospital privileges, or was suspended from his employment for cause."

The lawsuit claims that the alleged fraud entitles Sanford to rescind the asset purchase agreement.

In a statement released to The Forum of Fargo-Moorhead newspaper Friday, Sanford's general counsel, Beverley Adams, said that the health system did not receive "all necessary information required to be disclosed that impacted the value of the practice."

"As a community nonprofit, Sanford has an obligation to recoup expenses that were incorrectly paid out," the statement from Adams said in part.

Norberg's medical license was suspended indefinitely in January 2012 after a complaint was lodged with the North Dakota State Board of Medical Examiners stemming from his use of propofol on his wife in their home.

Norberg testified during his recent divorce trial he is trying to regain his medical license and said his next step was to prepare a petition to the state's medical board.

Norberg declined to comment on the lawsuit Friday, saying he hadn't had a chance to read it yet.

But he also said the suit was not unexpected, given that part of the agreement was for him to work for Sanford, something he hadn't been able to do without a license.

The lawsuit also says Jon Norberg deposited $274,000 of the $276,000 Sanford gave him into a lawyer trust account per the order of Cass County District Court as part of his divorce from Alonna Norberg.

Alonna Norberg is also named in the Sanford lawsuit, but Sanford isn't seeking damages from her. She is listed as a stakeholder because of her interest in the money deposited in the attorney trust account. The divorce trial of the Norbergs, which will decide how to divide their assets as well as the physical and legal custody of the children, is awaiting a ruling from the bench.