District to seek millions in legal fees
GREENBRAE — Marin General Hospital today said an independent arbitration judge declared Marin Healthcare District, which owns the hospital, the “prevailing party” in a long-running dispute with Sutter Health, which severed ties with the facility more than two years ago.
The health care district recently was awarded $21 million by the same judge, JAMS Arbitrator Judge Rebecca Westerfield, for its claims that Sutter Health didn’t meet all of its legal requirements upon severing its operation of Marin General.
But a clear winner was not immediately known because Marin General’s original lawsuit sought more than $120 million in damages. Much of that claim was related to Sutter’s practice of transferring cash from Marin General — and other Sutter affiliates — to its Sacramento headquarters.
With the declaration of Marin General as the victor, the health care district is entitled to seek reimbursement from the losing party for attorney’s fees, estimated to be several million dollars.
Former Marin General Hospital Corp. board Chairman Robert Heller, who was dismissed from the case prior to the beginning of proceedings by the arbitrator, was also named as a “prevailing party.” He was initially named in the lawsuit.
Marin General said it has until Sept. 10 to file for application for the additional funds, according to the ruling.
“We are gratified with this decision, and expect the hospital to receive significant compensation for the costs associated with forcing Sutter to live up to their contractual duties as they exited the hospital management contract,” Marin General Chief Executive Officer Lee Domanico said in a statement.
Mr. Domanico said Judge Westerfield’s decision showed that Sutter “willfully and purposely failed to meet their contractual duties as well as their duty of good faith and fair dealing.”
“This decision contradicts Sutter Health’s claim that they ‘won’ the arbitration,” Mr. Domanico added. ”Marin General is the prevailing party. That means we won and Sutter lost.”
Sutter Health issued a statement in response to the ruling, noting key Marin General claims were tossed out.
“This procedural decision doesn’t change the fact that the arbitrator rejected key claims,” the statement said. “We appreciate that the arbitrator did outline some principles in the ruling that, when applied, could mitigate the ultimate fee award.”
Both sides claimed victory after the ruling in June, with Sutter then saying that the award was “a fraction” of the Marin General’s claim, which Sutter estimated to be more than $300 million
The hospital has not determined what it will use the funds for just yet, according to Marin General spokeswoman Jamie Maites.
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