Sutter Health ordered to pay Marin General $11 million
Published: Thursday, January 17, 2013 at 3:57 a.m.
Last Modified: Thursday, January 17, 2013 at 3:57 a.m.
A court-appointed arbitrator has ordered Sutter Health to pay $11 million to Marin General Hospital Corp. for legal fees and interest stemming from a lawsuit in which Marin General was deemed the prevailing party.
"We are hopeful that this decision marks the end of the long-running dispute between Marin General Hospital and Sutter Health, and that both organizations can once again focus 100 percent on meeting the health care needs of Marin and the North Bay," said Lee Domanico, CEO for Marin General Hospital.
The order by Rebecca Westerfield, the arbitrator who heard the case, comes after she ruled in June 2012 in Marin General's favor and ordered Sutter Health to pay Marin General $21.5 million. The retired Circuit Court judge from Kentucky found that Sutter inappropriately transferred $11.3 million of Marin General money into a pension plan for Sutter employees, improperly charged the hospital for the use of capital, failed to adequately cooperate with the information technology transition at the hospital and underfunded physician recruitment.
Marin General had accused Sutter Health of illegally taking $120 million in profits from the hospital before it returned control to the Marin Healthcare District in June 2010. Because Marin General was awarded far less than it had sought, Sutter Health asserted that Westerfield's decision had exonerated it.
In August, however, Westerfield officially designated Marin General as the prevailing party, clearing the way for the hospital to seek reimbursement of legal fees and other expenses.
Karen Garner, a Sutter Health spokeswoman, said Tuesday, "The awarding of attorney fees was simply the final procedural step of this case, and it doesn't change the fact that the arbitrator rejected the bulk of the district's nearly $300 million claim."
Westerfield, who announced her latest ruling late last week, also ordered Marin General to pay Robert Heller of Belvedere $848,202 to cover his legal fees and other costs. Heller served as chairman of the board that oversaw Marin General when it was under Sutter Health's control, and Marin General named Heller as a defendant in its suit.
Westerfield dismissed Heller from the case in December 2011.
After learning that he had been awarded legal fees, Heller issued this statement: "Not only did the judge's dismissal vindicate the actions of the former Marin General board of directors, but the order to pay for my defense proves that this suit never should have been filed in the first place."
All rights reserved. This copyrighted material may not be re-published without permission. Links are encouraged.