I made a trip to Frankfort Circuit Court this morning in part to obtain additional documents related to this legal dispute, but chiefly to attend the hearing in Judge Wingate’s court that rekindles the court proceedings that were stayed last February in order to give the two parties a chance for mediation. As I recently reported, court-ordered mediation failed to produce a mutually agreeable result. Several sources confirm my understanding that after two mediation sessions, the parties were offered a chance to continue and that the University of Louisville unilaterally declined to do so. UofL has not responded to my private email or public request for confirmation or comment. I had a naive hope that the report of the mediator to the court would illuminate matters, but alas, the brief report tells us nothing more than that mediation failed. Nonetheless, we have additional publicly available court filings that give us a pretty good idea of the issues in dispute.
First-round action.
This morning, as anticipated, Norton’s attorneys entered their motion to lift the stay (which was accepted), their motion to dismiss UofL’s counterclaims (also apparently accepted), and to submit their First Amended Complaint to the court. UofL objected to this latter motion on the grounds that the amended complaint contained a motion to enforce an oral settlement that Norton– but not UofL– claims to have been reached. Norton claims the the University blew up that agreement the next day by reintroducing poison pills that it knew would be deal-breakers. UofL claims the parties were still negotiating. The argument in court today was that if in fact an enforceable agreement had been reached, all the other collateral issues would fade away and the litigation that might otherwise take 5 or 6 years would be simplified. The Judge tended to agree with this argument.
When all was said and done, the gist of it is that Judge Wingate allowed Norton to file its amended complaint as is but required that the parties focus their discovery and litigation over the next 60 days on whether or not Norton and the University did in fact reach the oral agreement identified in the complaint that Norton wants the court to enforce. Norton would have at that time the option to file a separate motion to enforce.
Is the Commonwealth in or out?
A representative of Kentucky’s Attorney General’s Office was present but did not speak. No decision has been reached on whether or not the Commonwealth will join the case as has been strongly advocated by the University. The Governor and his administration are in the unenviable situation of possibly having to choose sides between the University of Louisville and the University of Kentucky! Although it should not make a difference, Stites & Harbison– the law firm representing the University of Louisville– is where the Governor used to practice law and is where his son (who is running for the office of Attorney General) is employed today. If this case goes on as long as some fear, it will become even more politicized than it is now.
The University’s Case. I was able to obtain the the University’s court filing responding to Norton’s original complaint and which makes UofL’s counter claims. It tells the University’s side of the story which not surprisingly is quite different from Norton’s. If the lease and affiliation agreement that are at the core of this dispute were used in a reading comprehension test, I believe that even a junior high school student would not agree with the University’s interpretation and on which it hangs its case. However, seems likely that extended deposition and other sworn testimony will be necessary to sort our fact from spin.
As I work through the new documents and attempt to reconstruct this morning’s arguments in their entirity, I will post new materials and may add additional commentary to this article.
Peter Hasselbacher, MD
President, KHPI
Emeritus Professor of Medicine, UofL
June 23, 2014, 1:00 pm
Downloads:
• UofL’s Answer, Affirmative Defenses, and Counterclaims Against Norton Healthcare, 1-29-2014 (pdf 2-2 MB)
• Exhibits to UofL’s Answer of 1-29-2014
A. KentuckyOne withdraws language of right of first refusal to enter pediatric affiliation agreement with university of Louisville, 9-10-2103.
B. Lease on land under Children’s Hospital, 12-8-1981.
C. Agreement to enter lease agreement. 8-12-1981.
D. Affiliation Agreement, 1962.
E. Agreement for Provision of Pediatric Critical Care … July 2006
F. UofL threatens breach of lease if not given access to Norton’s Board of Trustees Executive Meetings including closed executive sessions, 2-14-2011.
G. Norton’s attorneys argue such full access is illegal and improper, 2-15-2011.
• Audio recording of the hearing in Franklin Circuit Court, 6-23-2-14 (MP3 9.3 MB)
I was able to clean up my recording of the hearing above and edited the text to indicate that Norton’s second motion was to dismiss UofL’s counter-claims. Additionally I clarify that UofL’s objection to Norton’s motion to file its first amended complaint was based on an argument that the claim to enforce the oral settlement at issue should be entered separately rather than as part of the amended claim.
Judge Wingate allowed Norton to file its amended complaint as is, with the stipulation that after some 60 days of discovery, Norton would have an opportuinty to file a separate motion at that time to enforce the oral agreement. Both parties and the Judge seemed to agree that if the oral agreement was enforceable, that the corollary issues would fade away.
I posted the audio of this 8 min hearing altered only in that I removed hum and noise to improve audibility.
This announcement by UK and Norton this am is probably another piece of the puzzle. UK will be supporting additional training for medical personnel and support for research. Since UK accounts for something like 85% of the funded medical research in Kentucky, this is an area where U of L is weak and cannot compete:UK HealthCare and Norton Healthcare are building upon their history of collaboration to expand research and educational collaborations between the two institutions, with the goal of improving health and health care for all Kentuckians.
Beginning July 1, educational and research initiatives between UK and Norton will be lead by Dr. Stephen Wyatt, who most recently served two successful terms as the founding dean of the University of Kentucky College of Public Health……..
Facilitating collaborative research is a key component of the partnership and will benefit Kentuckians by expanding access to novel clinical trials only available at academic medical centers that, like UK, have major federal research designations in cancer, aging and translational science, while simultaneously expanding access to industry-sponsored trials at Norton Healthcare
……
The two institutions are also working together to improve education for health care providers and administrators in the state……