The owners of for-profit Pontiac General Hospital allegedly required the parents of medical school graduate Varun Chopra to make $400,000 in payments in exchange for accepting the 31-year-old into the hospital's family medicine residency program during the fall of 2016, according to a breach of contract lawsuit filed by Satish and Poonam Chopra.

Satish Chopra, an architect from Brampton, Ontario, said in court documents that he made the $400,000 payment to Pontiac General officials in three checks on Sept. 19 and Sept 20 because he was told by hospital officials and representatives it was the only way his son, now 33, could gain entrance into the residency program. The parents expressed shock at the demand, but wrote the checks, court records show.

Their lawsuit is one of a number of challenges the hospital and its owners are facing as they deal with an aging building, infrastructure and maintenance problems, charges of employee discrimination, accreditation citations, surprise state health inspections as they invest millions to turn around the hospital.

The hospital's CEO and co-owner, Sanyam Sharma, issued a signed residency contract to Chopra the same date as the final check, Sept. 20, a fact that the hospital doesn't dispute. Most unusual, the signed residency agreement also was completed before Chopra had applied to the Electronic Residency Application Service, an established first step that provides a hospital necessary documents to evaluate qualifications of a potential resident.

Sharma said in a 2017 deposition that he was told by other hospital officials the $400,000 was a "donation" and not a quid pro quo payment that allowed Chopra to enter the hospital's 16-physician family medicine residency program.

"One was a donation and one was an acceptance into the program," Sharma said in his deposition. "They're completely separate."

Several national medical education experts told Crain's they have never heard of a documented case where a hospital charged a medical school graduate a fee to enter a residency program.

While not technically illegal, paying fees for residency slots violates many professional medical standards. To become selected as a resident, student doctors apply early each year through what is called the "Match," which is governed by the National Residency Matching Program. Graduates are selected in March and typically start their residency in June.

Not in dispute is that Chopra was approved for residency by Pontiac General in September after his parents paid $400,000 and was to have started his residency on Nov. 1, 2016, after he secured a J-1 visa and a medical license from the state of Michigan.

Pontiac General spokesman Michael Layne, president of Marx Layne & Co., declined to comment on the Chopra lawsuit.

In the lawsuit filed in 2017 in U.S. District Court in Detroit, the Chopras claim they were instructed to pay the $400,000 to secure the residency position for their son, who had graduated in 2009 from American University of Antigua but was unsuccessful in matching in a U.S. or Canadian hospital residency program for the next seven years.

Andrew Broder, the attorney for the Chopras with Payne Broder & Fossee P.C. of Bingham Farms, said the case has many unusual aspects and difficult to pursue because the Sharmas have been uncooperative, leading District Judge Robert Cleland to cite them for contempt of court.

In his deposition, Sanyam Sharma acknowledged that Chopra was admitted to a month-long residency observership program in October before his residency would have begun. Chopra participated in the program in Pontiac from Oct. 3-26. He leased an apartment in a building the hospital owns along with six other residents and 14 medical students.

But at this point, different stories emerge about what happened next. Sanyam Sharma said Chopra voluntarily "left" the program. Satish Chopra said Priyam Chopra, Sanyam's mother and hospital COO, called Poonam Chopra on Oct. 26 to say Varun "was summarily dismissed from the residency program" and must leave, court documents say.

"(Varun) was advised he would not be able to start the residency program" and must leave the country because his J-1 visa sponsorship was being revoked, said Broder, adding that Chopra was not given any more information about why he was being sent home.

Chopra tried for several days while he was at Pontiac General to get residency and hospital officials, including Carol Samson, residency manager, and Nikhil Hemady, M.D., the hospital's program director and chief of staff, to explain why he was being asked to leave. Court documents state he was unsuccessful. On Nov. 2, he left for home in Brampton.

Samson, who has been residency program manager for 20 years, said in a deposition that she was told by Hemady that Chopra would not begin the program Nov. 1 as planned. She confirmed Chopra asked her why he could not begin and she told him she wasn't told and didn't know why. Shortly after, she informed the Educational Commission for Foreign Medical Graduates, which sponsored Chopra's visa, that Chopra would not be entering the program.

"Nothing like this has ever happened," she said in her deposition.

As the lawsuit continues past its 18th month, Cleland reached a major conclusion early on, in June 2017, about key facts of the case.

"It is further ordered as a sanction, and deemed established without further proof, that the donated funds in the amount of $400,000 were in fact an entry fee, and a mandatory component of the terms of the residency agreement, operating as a condition precedent to plaintiff Varun Chopra's entry into defendants' residency program."

In denying a summary judgment request from the Chopras and Sharmas in March, Cleland said what still is in dispute is whether Chopra actually "entered" the residency program. This is because while he was accepted and served a three-week observership pre-residency program, Chopra did not actually begin his residency on Nov. 1, nor did he serve as a resident for "the year" outlined in his contract, Cleland wrote.

On Aug. 29, Cleland issued his latest order denying the hospital's second motion for dismissal. He said Chopra provided "sufficient allegations ... to sustain recovery" of the $400,000 donation. He ordered a conference Sept. 6 between the parties at federal court in Detroit.