More than six months after Adventist Health System purchased Memorial Hospital-West Volusia, a lawsuit to nullify the sale is still pending.

DeLand political activist Tanner Andrews, as a pro se litigant, is suing the West Volusia Hospital Authority, claiming that the hospital sale was illegal. When the case will be argued in court is still not clear.

A pretrial hearing on the Hospital Authority's motions to dismiss the suit was set March 5 before Circuit Judge Edwin Sanders in DeLand, but was abruptly canceled due to negotiations that resulted in the deletion of four of the 16 counts.

Andrews filed his original complaint in Circuit Court Sept. 27, just two days before the hospital sale closed. Despite Andrews' request for the court to stop the sale, the Hospital Authority relinquished ownership of the hospital Sept. 29, and Adventist Health System renamed the institution "Florida Hospital-DeLand" on Oct. 1. Also Oct. 1, Memorial Health Systems merged with Adventist Health System.

The change of the hospital's ownership followed months of negotiations between the Hospital Authority and Adventist Health System. The impetus for the sale came from Memorial Health Systems' decision to exit early from its 40-year lease of the hospital, after five consecutive years of operating losses at the facility.

Memorial Health Systems had leased the DeLand hospital from the Hospital Authority in 1994. Part and parcel with Memorial's decision to break its lease was its demand for $42.4 million from the Hospital Authority. Memorial said it had spent that much on capital improvements at the hospital.

Adventist Health System agreed to buy the DeLand hospital from the Hospital Authority for $35.8 million. Of that sum, $29.8 million was applied toward the repayment of Memorial's capital-improvement debt. The remaining $6 million was used to terminate a retirement plan for about 200 longtime hospital employees. The Hospital Authority netted no cash from the sale. Rather, the Hospital Authority had to pay almost $1 million in closing costs.

Andrews' lawsuit objects to the sale because, since Memorial Health Systems' operation of the DeLand hospital wasn't subject to the Sunshine Law, its debt in connection with the facility was incurred in secret and, the suit claims, shouldn't be shouldered by taxpayers.

Andrews' 12-count civil complaint includes, among other things, allegations that the sale price of the hospital had been negotiated out of public view; that the price was not based upon the fair-market value of the facility; and that there was no legal consideration (exchange of money or other value) provided to the Authority by the sale contract. The plaintiff also said his bid to purchase the hospital had been wrongly rejected. On Sept. 18, Andrews offered to buy the hospital from the Authority for $100, a proposal whose value, he claims, exceeded Adventist Health System's offer. The Hospital Authority quickly rejected Andrews' bid.

Although the sale of the hospital to Adventist Health System was consummated, the lawsuit remained alive. Despite Hospital Authority Commissioner Ray Long's assertion that the suit was "frivolous," the board's attorneys advised that responses to the civil action were required. Attorney William Sherman told the panel in November that the cost of responding to the suit could be as much as $6,000.

In November, Andrews submitted an amended complaint, reiterating the points in his initial filing and adding four more counts. The additional counts dealt, in part, with Andrews' requests to view financial records pertaining to the operation of the DeLand hospital. The Hospital Authority replied that since it did not maintain those records, it was not obligated to provide them.

Andrews also questioned the legality of the swing vote on the hospital sale, which was cast by Long, because Long's wife worked for the hospital at the time. Long answered that he had checked with the state ethics commission before voting, and pointed out that his wife lost her job when Adventist Health System took over the hospital, anyway.

The counts pertaining to the alleged conflict of interest and the demands for the above-referenced financial records have been resolved by the plaintiff and the Hospital Authority. At its regular monthly meeting on March 15, one of the Hospital Authority's lawyers told the board that Andrews had offered to drop the points about Long and his wife.

"He now recognizes that because that commissioner's spouse no longer works for Memorial Health Systems, he has no claim there," attorney Joe Dykes explained. "We're really giving up nothing."

Settling the four counts means both sides agree not to pursue payment for attorney's fees related to those counts. That part of the agreement rankled Hospital Authority Commissioner Jeff Portman.

"Mr. Andrews and his minions have cost this Authority thousands and thousands and thousands of dollars," Portman said, "and I'm not ready to let him walk away. It's not fair."

Portman pressed his attack on Andrews.

"It just galls me that someone like that continues to file frivolous lawsuits, and the judges don't do a d - thing about it," he added, insisting that the Hospital Authority seek to recover its expenses connected with Andrews' suit.

Commissioner Dick Pearce had a similar opinion.

"If he's to be prevented from being the self-appointed watchdog of this Authority, we need to kick him in the butt where it hurts," Pearce said.

"For a non-attorney, he's pretty adept at legal things," said Dykes.

Dykes told the board that its chances of collecting monies from the plaintiff are not very good, even though the Hospital Authority may prevail in court.

"Our opinion has been that the lawsuit can be defeated," Dykes counseled. "I had some dealings with the guy. He's thinking about what to do with this. This kid is no dummy. The lawsuit is one that can be defeated."

Authority Chairman Steve DeLuca termed Andrews' suit "the last pimple in the duck's butt," and recommended that the four counts in question be settled. The Authority voted 4-0 to drop those counts.

As his suit now stands, Andrews is asking the Circuit Court to "declare the MH-WV agreement null and void from the beginning" and to "grant such other relief as may be just." Andrews also is calling upon the court to "require the Authority to pay unto Plaintiff his fees and costs associated with this action."

Andrews earlier lost in one of his legal arguments. In a separate filing, he asked Judge Sanders to recuse himself, saying the judge may have a conflict of interest, in that he once was a member of the law firm that now works for the Hospital Authority. Sanders rejected the motion as "legally insufficient."

Andrews is a former candidate for the West Volusia Hospital Authority. In 1998 he unsuccessfully ran against Portman, an incumbent.

He also is a defendant in another hospital-related lawsuit. Memorial Health Systems is suing the Daytona Beach News-Journal Corp. and Andrews, claiming that it is not obligated to make public certain financial records that the News-Journal Corp. and Andrews have asked to see.

 

 

This article originally appeared in the August 24, 2000 issue of  The News-Journal
and is printed with permission