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15 employees sue War Memorial Hospital over pension funds

June 29, 2007|By TRISH RUDDER

BERKELEY SPRINGS, W.Va. - A fight over pension funds has led 15 War Memorial Hospital employees to file a lawsuit against the hospital in Morgan County Circuit Court.

The suit was filed Tuesday against the hospital and its board of directors, hospital president John H. Borg and Valley Health Systems Inc., the firm that manages War Memorial Hospital.

The hospital is owned by Morgan County.

The lawsuit is asking for "an amount in excess of $1 million in compensatory and punitive damages, plus interest, costs and attorney fees."

Plaintiffs Jennifer Baker, Janet Horner, Sharon Hendershot, Barbara Johnson, Tanya Manley, Helen Miller, Christine Mullen, Ruth Smith, Bernice Stotler, Dee Ann Stotler, Linda Stotler, Barbara Yost, Carol Layton, Nancy Waugh and Terry Kesecker were participants in a defined benefit plan that was adopted by the hospital in 1972 to provide retirement benefits to its employees, according to the suit.

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In 1987, the hospital stopped that plan and a defined contribution plan was put in its place.

According to the lawsuit, the assets of the old plan were frozen and as of September 2005, "equaled $817,262 and its obligation to participants equaled $142,911, leaving a surplus of $674,351."

Lawrence M. Schultz, an attorney with Burke, Schultz, Harman & Jenkinson in Martinsburg who is representing the plaintiffs, said a trust fund probably was established and the assets grew to more than $800,000.

The hospital wants to pay only about $150,000 to the 15 women, which would give them an average of $10,000 each, depending on the length of their employment, Schultz said.

The hospital intends to use the surplus funds toward the construction of the new hospital in Morgan County, Schultz said.

However, the plan specifies that surplus assets could not be distributed to the hospital, and the plan could not be amended to permit the surplus assets to go to the hospital, but that the surplus assets could be distributed to the participants, he said.

In 2006, War Memorial sued the 15 women because they would not sign a waiver allowing the hospital to keep the surplus funds, Schultz said.

The lawsuit was dismissed Tuesday by a federal court in Martinsburg because it was out of its jurisdiction, Schultz said.

"The ERISA law does not apply to this government-run plan. A federal court cannot rule on this," he said.

Fourteen of the women still are employed; one woman resigned last year.

Schultz said the woman had more than 30 years of employment with the hospital, but would not sign the waiver and has received no retirement funds.

"War Memorial has a pre-existing legal duty to pay this woman her retirement funds, and they won't," Shultz said.

Richard G. Gay, attorney for Morgan County War Memorial Hospital, said he had not yet received a copy of the lawsuit and could not comment. Gay said as far as he knew, the surplus money is to be used in the construction of a new hospital.

Morgan County Commissioner Thomas R. Swaim, who is a hospital board member, said he did not attend the Tuesday board meeting and did not know anything about the lawsuit.

"I can't comment," Swaim said. "This is truly news to me."

Borg did not immediately return a phone message.

"What we cannot figure out is why in the world Morgan County Hospital would do this to these women," Schultz said.

The defendants have 30 days to file a response to the lawsuit, he said.

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