Employees win partial victory in hospital case

A group of 15 War Memorial Hospital employees have won a partial victory in their lawsuit against the hospital over $800,000 in a pension plan.

Circuit Judge John Yoder granted partial summary judgment to the employees and delayed the trial on the remaining issues so the hospital administration and Valley Health System had a chance to appeal.

The judge's ruling forced cancellation of the trial, which had been set for June 16, and a pretrial hearing this week. No new trial date will be set until at least August or, if an appeal is made, until the State Supreme Court issues a decision.

The 15 longtime hospital employees filed suit in June, 2007. They are seeking control of the money in a defined benefits pension plan that was closed to new members in 1987.

Each of the employees is due about $10,000, accounting for nearly $150,000 of the fund.

Hospital officials have been trying to gain the $650,000 surplus in the fund for several years and planned to use the money toward a new hospital. The employees say it should be distributed to them as part of their retirement benefits.

In his order, Judge Yoder noted that the hospital board passed a resolution at the end of 2003 terminating the trust fund, then tried to rescind the termination two years later.

He ruled that the board had no right to change their mind on ending the retirement plan and that after the plan was terminated, all of the assets should have been distributed.

The order points out in several places that the plan never provided that the assets should revert to the hospital upon termination. The assets of the plan, however, may be distributed to the participating employees, according to the judge.

The current order makes no ruling on the employees' claims of breach of fiduciary duties by hospital officials or the more than $1 million being sought in damages, interest, costs and attorney fees.

Larry Schultz, one of the attorneys for the employees, said the remaining issues include the damages caused by the hospital's failure to disperse the pension funds and exactly how the excess $650,000 will be distributed.

Nathan Cochran, one of the attorneys for the hospital, said the judge's order gave them 90 days to appeal and they are presently deciding what to do.

The employees who brought the lawsuit are 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.