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The Journal Gazette

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Friday, March 01, 2019 1:00 am

Lutheran ordered to pay legal fees

Hospital sued ex-CEO over stock options

JIM CHAPMAN | The Journal Gazette

An Allen County judge Thursday ordered Lutheran Health Network and its parent company to pay more than $210,000 for attorney fees and costs sought by individuals and companies in the aftermath of a lawsuit settled last year.

Judge Nancy Eschcoff Boyer gave Lutheran Health Network of Indiana LLC, Lutheran Health Investors LLC and CHSPSC LLC (Community Health Systems) until March 28 to pay $210,650 to the individuals and companies that asked to be reimbursed.

Boyer said in her 20-page decision the individuals and companies were subpoenaed to provide documents and testimony in a case Lutheran Health Network and its parent company, Community Health Systems, brought against former CEO Brian Bauer in 2017.

Boyer ordered the following amounts to be paid for attorney fees: $71,835 to Indiana University Health, $39,680.05 to Joseph Oscar Mitson, $27,045.86 to Thomas Kelley, $26,872.96 to Charles Surack and Sweetwater Sound Inc., $15,206.35 to Kyle Witwer and Witwer Construction Inc., $12,097 to Andrea Schenkel, $10,330.50 to William Schenkel, $3,883 to Darrick Hoopingarner and $1,200 to Aaron Garofola. The judge also ordered IU Health be reimbursed for $1,200 in costs.

“We respectfully disagree with the judge's decision that she has jurisdiction over all fee petitions and are evaluating our options for appeal,” Tomi Galin, senior vice president of corporate communications and marketing at Community Health Systems, said in an email Thursday night. “It is important to note the trial judge in Indianapolis made the opposite determination regarding this issue in the same case.”

Fort Wayne attorney Mark GiaQuinta, who represents Kelley, Surack, Witwer, the Schenkels, Hoopingarner and Garofola, said he has asked the Marion County magistrate to reconsider his decision. GiaQuinta said that decision was issued before he and others could file a response.

The plaintiffs argued Boyer no longer had jurisdiction over the attorney fees and their amounts because the lawsuit was settled in a Tennessee court. Boyer said she never terminated the Indiana proceedings and that several of the “non-parties” filed their petitions before the lawsuit was settled.

Most of those who are entitled to be paid for attorney fees were listed in the ruling as “non-parties,” with the exception of IU Health, which was listed as an “intervenor.”

“The non-parties had no clue that their window of time for filing requests for attorneys' fees was coming to an abrupt end,” Boyer wrote. “Indeed, plaintiffs led the non-parties and IU Health down the 'primrose path.'”

Boyer said the individuals and companies seeking reimbursement for attorney fees “were required to endlessly search for information, communication, documents and emails with respect to the identify of the elusive 'Sajin Young,' who plaintiffs believed was single handedly bringing about the demise of plaintiffs.”

The non-parties selected by the plaintiffs included not only individuals who were previous employees of the Lutheran Health Network, but also members of the plaintiff's volunteer board of directors, Boyer wrote. The plaintiffs sought out corporations and individuals who constructed buildings for plaintiffs and/or IU Health, the judge said.

Craig Sorg, former director of imaging at Dukes Memorial Hospital, admitted in a letter to The Journal Gazette in November he was responsible for the “Sajin Young” account on Facebook that disparaged Lutheran Health CEO Mike Poore. The account has since been removed from Facebook.

Lutheran Health Network and its parent company settled their lawsuit against Bauer in November. The lawsuit alleged Bauer violated the restrictive covenants of his stock option agreement.

Under the terms of the agreement, Bauer is prohibited from disclosing any confidential, proprietary or non-public information obtained during his employment with Lutheran and from soliciting for employment any Lutheran employees until June 13, 2020. The stock option agreement and the injunction entered by the Williamson County, Tennessee, court enforcing that agreement remain in effect. The parties agreed to keep other terms of the settlement confidential.

Last month, IU Health named Bauer president of its expanding Fort Wayne services. Bauer has been an IU Health consultant since 2017.

Dr. William Cast, co-founder of the nonprofit NICHE (or Northeast Indiana Citizens for Healthcare Excellence), said NICHE agreed with Boyer's decision. He said “a lot of effort was required from the non-parties that we thought was excessive.”

jchapman@jg.net