Commissioners Will Appeal Montrose Hospital Ruling
by Peter Shelton
Aug 03, 2011 | 2856 views | 0 0 comments | 12 12 recommendations | email to a friend | print
Judge’s Decision Goes Against BOCC in County vs. Hospital Trustees

MONTROSE – The Montrose Board of County Commissioners have voted 2-1 to appeal a judge’s ruling that went against them in the ongoing fight over Montrose Memorial Hospital. The decision came in the course of a special meeting on Aug. 2.

District Judge Jeff Herron ruled in favor of the hospital Board of Trustees in their effort to lease the hospital’s assets to a new nonprofit entity, Montrose Memorial Hospital, Inc. on Thursday, July 28.

The BOCC had sued to prevent the transfer.

At the time of Judge Herron’s decision, commissioners Ron Henderson and David White issued a joint statement saying: “We would have liked a different outcome because Montrose Memorial Hospital is a significant asset of the people of Montrose County, but we hope to work with the Hospital Board of Trustees in a positive manner to maintain the quality of the hospital.”

Commission Chair Gary Ellis said, in part: “I believe the Judge’s ruling puts to rest the legal issues that were raised. I look forward to a positive working relationship with the Board of Trustees as well as the Board of Directors of the new nonprofit hospital.”

But the conciliatory tone changed abruptly at Tuesday’s meeting. Ellis cast the lone vote against moving forward with an appeal, saying: “My personal belief is it’s time to let this go. I’m not really interested in spending more taxpayer money.”

Henderson, who made the motion to appeal, and White, who seconded, were adamant that a different outcome was possible “with a new set of eyes on this thing.” White claimed that Judge Herron had admitted being “out of his league on this type of business law” and insisted that “issues the county raised were not addressed” in the judge’s decision.

Referring to the fact that MMH was established in 1946 as a public facility, Henderson said, “To allow the [hospital’s] assets to be passed over to private owners is immensely troubling to me.”

White concluded, “We’re trying to fix something that isn’t broken. I look at this appeal as a time-out for all citizens to have a say.”

The citizens present, nearly filling the county meeting room, had a lot to say, most of it opposed to further legal action.

Suggesting continued negotiations with the board of trustees, Montrose resident Jim Anderson said, “This is not a national security issue. So why not negotiate this in public rather than take a chance on losing an appeal. Why not see if we can’t settle this?”

Several speakers asked about the cost in taxpayer dollars to pursue the appeal. County Manager Jesse Hunt was asked more than once what the county had paid so far in lawyers’ fees. (The BOCC has been represented by Denver attorney Ellen Stewart of Berenbaum, Weinschienk and Eason.) Hunt’s answer each time was: “I don’t have that with me.” Retired surgeon Ted Dickenson said that his “very broad” and very conservative estimate had each side spending in excess of $150,000 to date, and that the total “could reach a million dollars before all is said and done.”

One speaker asked when Commissioner Henderson was going to end his “long-running spat” with MMH. “That’s not true,” Henderson responded. “That’s just your opinion.”

Although it was not mentioned further, the reference was to a legal action brought by MMH against Henderson, Olathe resident Richard Harding, and Montrose private investigator Ivan Buchanan in 2000, when Henderson first sought election to the Board of County Commissioners. The three men found themselves on the wrong side of a restraining order, and then a permanent injunction, for possessing and displaying confidential hospital records.

The three claimed they had found evidence of fraud in the hospital’s billing records. But the State Attorney General found no such mismanagement, and District Judge Richard J. Brown issued a restraining order in July 2000, after Henderson repeated the claims in a campaign letter and once invited voters at a campaign event to come see if their names were on the hospital credit balance list. Henderson lost the election in November of that year, and Brown wrote up the permanent injunction in February 2001. The defendants in the more recent fight, the hospital trustees, asked that the 2001 injunction be admitted as evidence in the current BOCC lawsuit, and Judge Herron agreed, but made no mention of it in his ruling.

The current fight began a year ago, when hospital trustees voiced a fear of the consequences should Colorado’s ballot amendments 60 and 61 pass in the November 2010 elections. The so-called anti-tax measures would have meant dramatically increased taxes for MMH, according to Trisha Dickenson, a trustee at the time. “What can we do to protect our hospital?” Dickenson recalled thinking. “Our attorney said, form a non-profit and lease the hospital to it. That was the safest thing we could do. It was being done successfully all over the country. When the amendments didn’t pass, that was great. But they will be back again. We told the commissioners about what we were doing; they weren’t happy. We negotiated. They sued.”

The trustees did form a new 501(c)(3), called Montrose Memorial Hospital, Inc., and a new board of directors. But the BOCC objected, Commissioner White said on Tuesday, because “they negotiated [the terms of] the lease with themselves. The trustees appointed themselves to the new MMHI board,” and the county was losing control of a valuable asset.

Judge Herron’s ruling found for the trustees; it said essentially that they could proceed with the lease transfer.

But the BOCC is not giving up its fight, despite pleas from audience members to “let it go.” The county has 45 days from the judge’s final order to file an appeal.

Dennis Olmstead of Montrose summed up the sentiments of the majority: “What is the possible harm to the hospital [to go nonprofit]? Why in these hard economic times do we continue this pissing contest?”

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