Morgan County pays interest on hospital lawsuit

February 24, 2011|By TRISH RUDDER |

BERKELEY SPRINGS, W.Va. — Morgan County has paid its share of the $47,945 post-judgment interest due to 15 former War Memorial Hospital employees who sued the hospital over its defined benefit pension plan.

At the Feb. 17 meeting of the Morgan County Commission, commissioners Brenda J. Hutchinson and Bradley J. Close approved a payment of about $24,000 after a closed meeting with legal counsel.

The money is to be reimbursed to the county by the liability insurance company, Hutchinson said.

Nathan Cochran, an attorney with the office of Richard Gay, who represents the hospital and the county in the matter, met with Hutchinson and Close to discuss the court order that granted the post-judgment interest in the May 4, 2009, decision.

The employees were to be paid $500,000 by the hospital, Hutchinson said.

The amount was paid out of lease money that Valley Health pays the county to rent the current hospital while its new hospital is being built, she said.

The hospital was owned by the county at the time of the lawsuit, but Valley Health managed it. Valley Health purchased the hospital assets from Morgan County in 2010. The purchase was agreed upon in December 2008 and finalized in March 2010 after Valley Health received its Certificate of Need approval from the state.

The lawsuit was filed in June 2007 by 15 female hospital employees against the hospital and its board of directors, hospital President John H. Borg and Valley Health.

The plaintiffs 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.

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

On May 4, 2009, Morgan County Circuit Court Judge John C. Yoder of the 23rd Judicial Circuit ruled in favor of the employees.

The hospital appealed the lower court's decision but it was upheld by the West Virginia Supreme Court of Appeals in June 2010. The hospital asked for the decision to be reviewed, but its petition for rehearing was denied in September 2010.

The court order issuing that post-judgment interest be paid was filed Jan. 28, 2011.

The trial for the second part of the lawsuit regarding the hospital's breach of fiduciary responsibilities is set for July 11 in Morgan County Circuit Court.

Commission President Stacy A. Dugan recused herself from discussing the lawsuit because she is employed by Valley Health.

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