Hospital pension lawsuit could go to state Supreme Court

June 02, 2009|By TRISH RUDDER

BERKELEY SPRINGS, W.VA -- A 23rd judicial circuit judge has sided with 15 female employees of War Memorial Hospital, agreeing that the funds held in trust from the hospital's terminated pension plan should be distributed to them.

Judge John C. Yoder in a May 4 ruling agreed with the women's claim that the hospital's pension plan was terminated effective Dec. 31, 2003, and that the funds held in trust should be distributed to them.

The hospital and the others named in the suit have 90 days to appeal Yoder's ruling to the West Virginia Supreme Court of Appeals. No further action will be taken in the case until the Supreme Court makes a decision, Yoder wrote.

Lawrence M. Schultz, the employees' attorney, said Monday that the Supreme Court will not be back in session until September.  

Schultz said the good part of the ruling is that "Judge Yoder agreed with one of our main points that the plan was terminated and the hospital should not have tried all these years to seize the money for itself. But the downside of the ruling is that we lost our June 16 trial date, and these women will have to wait more months to learn the outcome of this case."


The employees filed a lawsuit in Morgan County in June 2007, naming the hospital, its board of directors, hospital President John H. Borg and Valley Health, the firm that manages the hospital. 

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

The lawsuit was filed over surplus pension funds of about $650,000 that the hospital wants to use to build a new hospital, and "has been trying to obtain the residual assets for its own use since at least 2003," Yoder wrote. 

"The Plan, by its plain language, prohibits Morgan County War Memorial Hospital (MCH) from having any 'right, title or interest in any portion of the Plan assets, nor may any portion of the Plan assets be returned to the employer (MCH), directly or indirectly,'" Yoder said in his ruling.

Richard Gay, the attorney representing War Memorial Hospital and the other defendants, said "we respectfully think the court made an incorrect determination as to whether the plan was terminated, and we plan to appeal this decision."

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.

At the time of the lawsuit's filing, 14 of the 15 employees were still working at the hospital. 

In 1987, the hospital stopped that plan and a defined contribution plan was put into place. According to the lawsuit, the assets of the old plan were frozen. 

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

In June 2007, two days before the women sued the hospital, a Martinsburg, W.Va., federal court dismissed the hospital's lawsuit because it was out of its jurisdiction, he said.

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

"Eventually this case will be tried in the Morgan County circuit court," Schultz said, "about exactly who gets the residual assets," and what the compensation will be.


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