Commissioners pay $81,781 as local share to settle hospital employee pension lawsuit
A settlement was reached last month in the remaining issues raised by a lawsuit brought by 15 War Memorial Hospital employees against the Morgan County Commissioners and Valley Health Systems over surplus money in a retirement fund.
The employees received a settlement amount in addition to the $675,000 surplus in the account, plus interest.
From Morgan County government’s portion of the settlement bill, the employees received another $400.000. Of that, the county’s insurance company paid $350,000 and the commissioners owed $50,000 from county funds.
In addition, the commissioners were responsible for paying $31,781 in post-judgment interest.
Some $57,100 of the money due from the county was actually fronted by Valley Health Systems. To repay this amount, the commissioners forgave Valley Health a lease payment for the present hospital building.
The rest of the settlement total – or $24,681 — came from general county funds.
In addition to money paid to the employees, the Morgan County Commissioners have paid a little over $6,000 this year to Attorney Richard Gay for legal services related to the case.
The rest of Gay’s legal fees were covered by insurance.
The Valley Health Systems portion of the settlement is considered confidential.
The employees’ attorney, Lawrence Schultz, said, “Our clients are extremely pleased with the settlement. We believe justice was done after many years of injustice.”
Suit filed in 2007
The lawsuit was filed in June 2007 by the employees in an effort to recoup a $674,351 surplus accrued in a defined benefits pension plan after the plan was discontinued by the hospital.
For more than eight years, hospital officials tried to close down the pension fund, distribute about $10,000 to each of the covered employees and use the surplus toward the new hospital now under construction.
The West Virginia Supreme Court last year upheld a ruling by Circuit Judge John Yoder that the employees were the only ones with a right to the money in the pension plan, based on the wording of the original contract.
Issues that then remained to be resolved were the employees’ claims of breach of fiduciary duties by hospital officials. They were seeking more than $1 million in damages, interest and attorney fees.
The Morgan County Commissioners were involved because War Memorial Hospital was still owned by county government when the lawsuit was filed.
Under the hospital sale contract, the commissioners are responsible for any legal actions filed before Valley Health Systems, Inc. bought the hospital in the spring of 2010.
The employees who brought suit for the pension funds were Jennifer Baker, Sharon Hendershot, Janet Horner, Barbara Johnson, Terry Kesecker, Carol Layton, Tanya Manley, Helen Miller, Christine Mullen, Ruth Smith, Bernice Stotler, Dee Ann Stotler, Linda Stotler, Nancy Waugh and Barbara Yost.