Sutter, county reject settlement offer in lawsuit over new hospital

SANTA ROSA -- Sutter Health and the county of Sonoma have rejected a proposed settlement of a lawsuit filed by the North Sonoma County Healthcare District opposing Sutter's $284 million hospital project north of Santa Rosa.

The proposed settlement was made known when the suing parties, which includes the Palm Drive Healthcare District, announced they would appeal a Superior Court ruling that said they did not have legal standing to bring the lawsuit challenging the county's certification of the project environmental impact report. 

The new hospital will replace the seismically unfit Sutter Medical Center of Santa Rosa on Chanate Road.

The proposed settlement called for the establishment of a countywide health plan since the health care district, which oversees Healdsburg District Hospital, argued that Sutter's new hospital would have an adverse impact on the delivery of health care throughout Sonoma County. The settlement plan also included a possible funding pool for uncompensated care, possible modifications to the Health Care Access agreement and an increase in availability of health care specialists, among other elements.

It also called for Sutter and the county, which approved the 82-bed hospital last August, to pay for the district's attorney fees.

The Healdsburg district estimates that it has spent approximately $150,000 on the suit to date. Sutter has spent approximately $215,000 in the last two fiscal years defending itself and Sonoma County.

Construction of the hospital has not been impacted by the lawsuit or the appeal and is on pace to open in 2014.

Sutter Spokeswoman Lisa Amador said it is Sutter's policy to keep settlement discussions confidential.

William Arnone, counsel for the heath care district in Healdsburg, said that while the proposed settlement was turned down, Sonoma County Superior Court Judge Rene Chouteau granted the district's motion to recover filing costs associated with the lawsuit -- a sign that the district prevailed on some points. The cost of filing the suit is estimated at $5,500.

"It confirms the district did prevail on some important issues," said Mr. Arnone, a partner at Santa Rosa law firm Merrill Arnone & Jones.

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