On Jan. 20, former Yadkin Valley Community Hospital operations group HMC/CAH was ordered by a judge to pay a total of $148,091.66 in damages to Yadkin County. County officials have been waiting patiently to see if the amount would be paid. HMC/CAH had a 30-day time frame to appeal the damages, which they did not, said County Manager Lisa Hughes, and the county has yet to see any money from HMC/CAH.
Last week the county filed a new motion with the court requesting a specific date be set for the damages to be paid and an additional fee to be charged for each day the group fails to pay the damages.
The order for the damages amount to be paid was given by Judge Terrence Boyle in the Eastern District following back and forth motions from Yadkin County and HMC/CAH after the initial closure of the hospital. In February of 2015, the county initiated a proposal process to locate a new management company to run the hospital and negotiations with HMC quickly turned sour. On May 22, 2015, HMC/CAH closed the doors of the hospital though the lease term, extended at their request, was not slated to end until July 31. The county filed a temporary restraining order in an attempt to keep the hospital open at least through the end of the lease term as they continued to work to find another group to operate the facility.
HMC/CAH defied the restraining order, claiming they were evicted from the premises by local law enforcement. Boyle later deemed those allegations false and ordered the company to pay damages to the county for legal fees and the costs associated with keeping EMS personnel on site at the hospital 24/7 in the wake of the unexpected closure.
In the months since the hospital’s closure, the county has been locked in a legal battle with HMC/CAH. The initial contempt of court ruling came on June 16, 2015, from Boyle, with him finding HMC/CAH in contempt for violating the restraining order. HMC/CAH filed a motion on Aug. 4. 2015, stating that “neither contract, read individually or collectively, forbids CAH 10 from closing the hospital before the end of the lease period.”
County Chairman Kevin Austin called HMC/CAH’s claims “balderdash” and said the group tried at every turn to thwart the county in reclaiming the property and moving forward with establishing a new medical facility.
Hughes said HMC/CAH is continuing to “grasp at straws” in order to avoid paying the penalties against them.
On Feb. 9, HMC/CAH filed motions against board of commissioners Chairman Kevin Austin and Hugh Chatham Memorial Hospital, one of the organizations which submitted a proposal to potentially take over the Yadkin County hospital, claiming they had “secretly agreed” not to extend HMC’s lease upon expiration and to lease the premises to Hugh Chatham. The motion claims Hugh Chatham, Austin and other unnamed parties, “tortiously interfered with the existing management relationship between the plaintiffs, breached the duty to negotiate and contract in good faith, made fraudulent misrepresentations, fraudulently concealed material facts, and engaged in unfair and deceptive trade practices.”
Though HMC/CAH still has a pending counterclaim in the Eastern District, their recent motion was filed in the Middle District. The complaint “demands a jury trial” and asks that the court “recover judgment against defendants in an amount in excess of $75,000 as will be proven at trial; the amount of damages be trebled pursuant to Chapter 75 of the North Carolina General Statues; the costs of this action be taxed against defendants; have and recover their reasonable attorneys’ fees as permitted by Chapter 75 of the North Carolina General Statutes and recover punitive damages.”
Last week’s motion from Yadkin County requesting a date for the damages to be paid by, states “defendants’ delay in meeting the civil contempt obligation imposed on them is part of a well-worn strategy more than familiar to the court. When this court ordered defendants to vacate the hospital, after considerable delay the county had to return to this court to secure its aid in enforcing that very clear directive. Here, too, the obligation to pay is clear and arises from contempt findings clearly specified by the court.”
The motion goes on to ask that the court “require that defendants to pay the civil contempt compensatory damages by a date certain; and be subject to further specified compensatory damages for each day beyond the deadline set by the court that the amounts are not paid.”
Kitsey Burns Harrison may be reached at 336-679-2341 or on Twitter @RippleReporterK.