Erlanger Health System has filed a new lawsuit that names Walker County as a defendant, but not Catoosa County.
Both counties agreed to back a $20 million loan that Erlanger made to Hutcheson Medical Center during a period when Erlanger was managing Hutcheson.
Hutcheson eventually filed bankruptcy, but it has reopened under new ownership.
Attorney Stuart James, special counsel for Walker County, said he was "surprised to see that a suit was filed against Walker but not Catoosa County."
He said that neither he nor any Walker County officials had been contacted by anyone from Erlanger before the suit was filed.
He noted that the issues in the new suit against Walker County appear to be substantially the same as those pending before the same Federal Court in Rome, Ga., in the claim filed by Erlanger against the Hospital Authority of Walker, Dade and Catoosa Counties and Hutcheson Medical Center. Walker and Catoosa Counties are not parties to that lawsuit.
He said Walker County tried to join in the lawsuit filed against the Hospital Authorities, but Erlanger opposed that effort and it was denied by the Court.
In the lawsuit, Erlanger says Catoosa County "appears willing to honor its obligations to Erlanger."
Here is the full Erlanger statement on that issue:
"The Authority, and by virtue of the assignment, Erlanger had and/or have virtually identical rights vis-à-vis Catoosa County under the intergovernmental agreement. Because Catoosa County appears willing to honor its obligations to Erlanger under the intergovernmental agency without the necessity of litigation, Erlanger has not named Catoosa County as a party to this case. Should Catoosa County fail to fulfill its obligations thereunder, however, Erlanger respectfully reserves the right to seek and to add it as a defendant in this action."
Don Oliver, Walker County attorney, said, “I was stunned to see Erlanger’s lawsuit and its footnote on Catoosa. I have had many conversations with Catoosa officials where they have agreed with my analysis, which is that based on the documents already in evidence in the prior cases, neither Walker County nor Catoosa County is liable to Erlanger for one penny. According to the Erlanger lawsuit, as confirmed by Catoosa official statements as quoted in last week’s Chattanooga Times Free Press article, it appears Catoosa is now ready for its taxpayers to pay Erlanger at least $8.5 million it does not owe. I am mystified to say the least.”
Attorney James said since he has been involved in representing Walker County as special counsel "no attorney from Erlanger has contacted me asking whether Walker County intends to honor "its obligations to Erlanger under the intergovernmental agreement without the necessity of litigation."
He stated, "I have been involved with this litigation for some time and counsel for Erlanger have been communicating with me - they know who I am. I have not been approached, nor have I received, any communication from Erlanger about whether Walker County intends to honor any alleged obligation under any alleged agreement with Erlanger.
"I would have expected to be contacted regarding this lawsuit before it was filed so that Walker County could be given the same opportunities Erlanger is apparently willing to give Catoosa. I have no knowledge of any potential agreement between Catoosa and Erlanger or any content of any agreement or statement that Catoosa intends to honor its obligations as described in the Erlanger complaint I received."
He said that no one from Erlanger or Catoosa have communicated any agreement or any statements regarding the claims arising from the lawsuit filed against Walker County. "It leaves me guessing as to whether there is some side agreement with Erlanger and Catoosa that undermines Walker County’s rights and the rights of its citizens," he stated.
Attorney James said he will be filing an answer on behalf of Walker County asserting that Walker County enjoys sovereign immunity from suit regarding the matters involving Hutcheson and, moreover, that the issues in the lawsuit involving Walker County can adequately be resolved in the currently pending bankruptcy and legal cases pending against the Hospital Authority."
He said an answer will be filed within the next week or so