Tri-City Hospital pays $300,000 for alleged Brown Act violations

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HOSPITAL: Tri-City settles Brown Act lawsuit filed by former executives
Hospital agrees to pay $300,000, but admits no violation
By PAUL SISSON
February 25, 2010

Tri-City Medical Center has settled a lawsuit brought by a group of former hospital executives who alleged Tri-City violated the state's open meeting law, called the Brown Act, when four hospital board members put the executives on paid leave during a hastily called closed-door meeting in December 2008.

Ray Artiano, an attorney for the seven executives, said Thursday afternoon that Tri-City settled the case for $300,000, which will cover attorney's fees. The executives ---- who were later fired by Tri-City ---- have also filed a wrongful termination lawsuit that is still working its way through the courts.

Courtney Berlin, a spokesperson for Tri-City, confirmed the settlement in the Brown Act lawsuit this week. She said in an e-mail that it doesn't admit "any error on the part of our Board or any violation of the Brown Act."

"In order to preserve the company's resources, we felt it was appropriate to settle the matter," Berlin said.

Four of seven Tri-City board members voted during a special meeting on Dec. 8, 2008, to sideline the seven executives and call in an accounting firm to conduct a forensic investigation of the public hospital's books. Tri-City's former chief executive Arthur Gonzalez was put on leave during the same meeting.

In February 2009, the seven sued Tri-City's board, alleging it had violated several aspects of public meetings law.

The suit asked a Superior Court judge to declare the decision invalid, but more than one year later there had been no ruling in the case. Artiano said that when the suit was filed, there was some hope among the executives that a decision would come quickly and could result in them being reinstated.

In the intervening months, Gonzalez settled with the hospital district and found a new job running a large hospital system in Minneapolis.

In the wrongful termination lawsuits, the remaining executives are seeking more than $1 million each. Lawyers on both sides are now arguing whether the case belongs in federal or state court.

Artiano's clients include Doreen Sanderson, Tri-City's former vice president of human resources; Allen Coleman, former vice president of strategic services; Robert Wardwell, former chief financial officer; Daniel Groszkruger, former director of information systems; Ondrea Labella, former director of patient business services; Suellyn Ellerbe, former chief operating officer and chief nurse executive; and Terry Howell, former vice president of performance improvement.

Their salaries ranged from $194,000 to $325,000 per year.

While Artiano acknowledged that Tri-City has admitted no culpability with regard to open meetings law violations, he said the fact that the hospital settled means something.

"We thought the amount was sufficient to make a point, and now we will focus on the wrongful termination cases," Artiano said.