A federal judge at Rome, Ga., has ruled that the Hospital Authority of Catoosa, Dade and Walker counties and Hutcheson Medical Center are liable to pay Erlanger Health System $36,379,968.20.
Judge Harold Murphy, in a 90-page opinion, discarded a counter-claim brought by Hutcheson against Erlanger.
He directed that Erlanger be paid $20 million for money it spent while managing the Fort Oglethorpe, Ga., hospital from 2011 to 2013 when Hospital Authority and Hutcheson officials terminated the agreement.
Erlanger is also to get $3,979,968.24 in interest and $12.4 million in late fees.
Judge Murphy said the case was "a fairly straight-forward suit under a note."
He said allegations by the Hospital Authority regarding Erlanger mis-management were in most cases "simply irrelevant."
The judge also threw out a Hutcheson assertion relating to an attorney allegedly being employed by Hutcheson and helping Erlanger at the same time.
Judge Murphy said Hutcheson "has had ample time" to investigate the matter of alleged Erlanger mismanagement.
He said Hutcheson "has produced nothing other than speculation to support its claims that Erlanger's actions caused it to lose profits."
The ruling said Hutcheson lost $25.4 million in 2011 and that was reduced to $13.5 million in 2012 and to $5.5 million in 2013.
Catoosa and Walker counties agreed to back the $20 million Erlanger help at $10 million each.
Erlanger is seeking to collect against the counties.
Hutcheson eventually filed bankruptcy and it was sold to a medical firm that is operating its emergency room and some auxiliary services.
Attorney Stuart James, who represents Walker County said Erlanger "will be looking for ways to collect from a hospital authority with little to no assets and Hutcheson, a hospital whose assets have been sold or are in the process of foreclosure by Regions Bank."
He said the court’s finding on Wednesday did not address the intergovernmental agreement to back the $20 million note.
He stated, “Unfortunately, the Hospital Authority’s counsel did not adequately respond to the allegations made against the Authority and by the Authority,” said James. “This places the Hospital Authority in an untenable situation.
”Because of this, Walker County is weighing options. The county legitimately claims that the Hospital Authority’s counsel did not provide the due diligence necessary to provide discovery. These missteps would allow Walker County to show that there can be no demand based upon counsel’s actions or lack of them.
“This situation has weighed heavily on the citizens of North Georgia for a long time. Walker County and Commissioner Heiskell are committed to finding the best way forward for its citizens. Georgia state law will provide the direction needed to address all of these issues and lead to the conclusion of a very dark time in the area’s history.”