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High court won't rehear pension case

September 10, 2010|By TRISH RUDDER

BERKELEY SPRINGS, W.Va. -- At a 5-0 vote on Thursday, the West Virginia Supreme Court of Appeals refused to hear War Memorial Hospital's petition for rehearing their case and the decision stands, court spokeswoman April Harless said Thursday.

Attorneys for Morgan County and War Memorial Hospital were not satisfied with the state high court's 5-0 decision last June that granted 15 hospital employees the right to receive the hospital's terminated pension plan funds.

A Petition for Rehearing was filed in July.

The West Virginia Supreme Court of Appeals, which returned from summer recess on Tuesday, scheduled the petition for rehearing on Thursday.

Morgan County Commission president Brenda J. Hutchinson said Wednesday that county attorney Richard Gay recommended to the commission that the Supreme Court be asked to review their decision.

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"Counsel explained that several points of law need to be reviewed," Hutchinson said.

According to the Petition for Rehearing, one point was raised that IRS tax rulings were never met in the plan termination process and therefore the plan was not terminated.

The petition stated the hospital's constitutional right to follow IRS tax law was violated.

"We respectfully disagree," attorney Richard Gay said Wednesday after learning of the court's decision

"We are considering all other options," he said.

The hospital was still owned by Morgan County in 2007, when 15 female hospital employees filed a lawsuit against the hospital, its board of directors, then-hospital President John Borg and Valley Health Systems, the firm that managed the hospital.

On May 4, 2009, 23rd Judicial Circuit Judge John C. Yoder ruled in favor of the employees that the hospital's pension plan was terminated effective Dec. 31, 2003, and that the surplus funds of about $675,000 should be distributed to them.

The defendants appealed Yoder's decision, but the supreme court upheld his decision in June.

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 lawsuit.

In 1987, the hospital stopped the plan and a defined contribution plan was put in its place. The assets of the old plan were frozen, according to the lawsuit.

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

The lawsuit is asking for "an amount in excess of $1 million in compensatory and punitive damages, plus interest, costs and attorney fees," Lawrence M. Schultz, the employees' attorney, had said.

The issue of whether the hospital was in violation of fiduciary duty has not yet been decided, Schultz said.

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