Erlanger Asks Summary Judgment In Claim Against Walker County; Walker Still Resists

Wednesday, August 3, 2016

Erlanger Health System is seeking a summary judgment in its lawsuit against Walker County, Ga., seeking payment of a guarantee related to Erlanger's prior management of Hutcheson Medical Center at Fort Oglethorpe.

Erlanger, in addition, is asking for attorney fees in the case.

Walker and Catoosa counties guaranteed $10 million each of $20 million that Erlanger provided to try to save the failing hospital. It ultimately went into bankruptcy and closed.

Erlanger, taking into account some credits, is now demanding that it be paid $8,705,000 by Walker County.

It earlier reached a settlement with Catoosa County.

Erlanger also has a large claim against the Hospital Authority of Catoosa, Dade and Walker counties and Hutcheson Medical Center. Judge Harold Murphy of Rome, Ga., recently ruled that those entities are liable to pay Erlanger $36,379,968.20.

In a response filed on behalf of the citizens of Walker County, Special Counsel Stuart James said Erlanger moved for summary judgment based on its claim that Walker County breached the Intergovernmental Agreement by refusing to honor its guarantee of half the principal due under the line of credit. 

He said, "In making this assertion, Erlanger ignores a key fact of Georgia law:  it is simply not a party to the Intergovernmental Agreement, and more importantly, that Georgia’s Constitution limits the scope of Intergovernmental Agreements to protect its citizens.

"Because of Erlanger’s filing, the Federal District Court has several considerations in the case.  First, the court must determine whether the Georgia Constitution permits an Intergovernmental Agreement to give express or implied rights to a non-Georgia governmental entity.  Next, the court must decide whether The Hospital Authority of Dade, Catoosa and Walker counties may assign the rights it received under an Intergovernmental Agreement to a non-Georgia governmental entity or a non-governmental entity.

"There is no authority that allows for Erlanger to assert these rights under the Intergovernmental Agreement. While Erlanger may be able to assert rights against the authority under various contracts it had with the authority, only the authority can assert rights under the Intergovernmental Agreement against Walker County under the laws of the state of Georgia.”

Walker County Commissioner Bebe Heiskell said, “This is an incredible time in our county’s history.  We will continue to do all we can to be vigilant stewards of the taxpayer dollars entrusted to us.  This means that we will not allow an outside entity to come in and bend or even break the law to benefit their interests over those of the good citizens of Walker County.  We will continue to be vigilant in making sure that the Georgia state law is followed.”


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