Attorney Cries Foul at Tulare Hospital’s Actions

While directors at the Tulare Local Health Care District (TLHCD) turned a collective blind eye to their behavior, at least two of the District’s leaders worked to illegally remove the medical staff at Tulare Regional Medical Center (TRMC), says Michael Amir, an attorney representing the dispossessed Medical Executive Committee (MEC).

The picture Amir paints is one of TRMC failing basic federal safety standards set by the Center for Medicare and Medicaid Services, and TLHCD CEO Dr. Yorai “Benny” Benzeevi and director Dr. Parmod Kumar turning the negative report into an opportunity to rid themselves of the MEC. Named as co-defendants in the suit are TRMC, Healthcare Conglomerate Associates, which operates TRMC and is owned in part by Benzeevi, and Professional Medical Staff of TRMC, the group gathered to replace the MEC.

‘Orchestrating Everything’

“What’s forming for me is Benzeevi coming in and, with Kumar’s help, taking over,” Amir said. “They’re the ones literally orchestrating everything.”

With an April trial date looming for the MEC’s lawsuit against the TLHCD’s Board of Directors and others, details are emerging that show the defendants in the case knew their action to remove the MEC was illegal and would divert money from construction of the District’s long-overdue expansion into a protracted legal defense, Amir said.

More concerning, TLHCD’s directors appear to have completely given over their oversight duties to a private, for-profit company run by Benzeevi, Amir says, and did so without considering the consequences.

“I don’t view them (TLHCD directors) as being bad people,” said Amir. “They just didn’t do their job.”

MEC Suddenly Replaced

The MEC began its lawsuit after it was replaced—initially at an illegally-noticed meeting of TLHCD’s Board on January 26, 2016, then again at a second meeting February 15, 2016. The elected leaders of the MEC, a body that by law must be independent from the hospital administration, were not notified of the action to cancel their contract with the hospital. Those leaders maintain the action violates the MEC’s bylaws and District rules.

At both meetings, the Board then voted to replace the MEC with a new committee apparently quickly concocted. Attorneys for the MEC, as well as the California Medical Association and the Center for Medicare and Medicaid Services (CMS), have said the move violates several state and federal laws intended to keep doctors free from outside, profit-driven influence.

The judge presiding over the case declined to issue a temporary restraining order against the MEC’s replacement in March of last year, citing his concern for the continued operation of the hospital. That concern, says Amir, was falsely created by the District, which put forth the notion TRMC would close if the MEC were not replaced.

“As far as the lawsuit is concerned, one of the primary things the court hung its hat on was the hospital was going to be closed if the MEC wasn’t removed,” Amir said.

That fear was born from a safety report issued by CMS that included a long list of safety violations at TRMC, including issues with the MEC. The Board, in its response to the MEC’s suit, claimed it had to replace the MEC to prevent the CMS from ending its ability to treat patients under the programs it runs. When the CMS was informed of the MEC’s replacement, it responded that the action was illegal, Amir said.

“The judge was under the assumption if he did anything, the hospital would close,” he said. “There is no truth behind the statement CMS will close hospital.”

Foot-dragging

The events leading up to the removal of the MEC are coming forth as depositions from the defendants are finally being taken after what Amir calls intentional delays. That process, described in the MEC’s court filings, has been hindered by an apparent lack of preparation by the defense counsel, as well as last-minute notices to their clients regarding times and places their sworn testimony would be taken, he said.

Defendants in the case were also apparently not instructed by their attorneys to provide documents demanded by the plaintiffs, nor had defense counsel started the search for those documents as late as four weeks ago, despite promising to do so months earlier.

According to court filings dated December 16, 2016, the defense has yet to confirm the late-January depositions of Kumar and Benzeevi. The defense also failed to respond to notices of an earlier scheduled deposition date for the pair, again despite weeks of attempts by the plaintiffs to communicate with them.

‘Cryptic Response’

On November 30, three days before the depositions’ originally scheduled dates, the defense finally broke its silence in a “one-line, cryptic response.” It read: “We are working on our answer to you and should have to you soon.” (sic)

The next day, the defense demanded the plaintiffs cease the discovery process, citing a settlement conference scheduled for February. Amir called the demand “another stunt to further delay discovery” that ended in defense attorneys claiming their clients were unavailable for the early-December dates that had been proposed weeks earlier, though apparently never acknowledged by the defense’s council.

In its filing, plaintiffs describe defense’s behavior as an “apparent strategy of running the clock out” as the April trial date nears, and Amir’s team worries the delays will continue if a referee is not appointed by the court.

“Given the prior conduct noted above, we are concerned that the upcoming depositions will be hampered by the same frivolous tactics and positions,” the document reads. Judge David Mathias will rule on a request by the plaintiffs for a discovery referee at a hearing scheduled for January 26.

A settlement conference is still scheduled for February, Amir said.

The Depositions

What Amir sees as delaying tactics by the defense are made clear in the deposition of Dr. Gary Walter, taken August 10 of last year. When Walter was asked by Amir’s co-counsel, Jason Baim, if he had seen the notice of deposition before the day of the deposition, he said he could not recall ever seeing it or a previous notice.

“OK, so your lawyer never gave you this document?” Baim asked.

Before he could answer, defense attorney Benjamin Fenton objected, citing attorney-client privilege. Walter eventually said he had been told by his counsel he would be deposed, but he was not aware he was required to bring any related documents to the deposition.

A transcript of the three-hour examination shows Fenton objecting to all questions regarding defense’s preparation for the depositions, as well as its apparent actual lack of preparation.

Baim to Walter: You don’t recall being told that or being aware of (the notice of deposition)?
Walter: No.
Baim: Okay. You don’t recall having any conversations with counsel about this document?
Fenton: Well, I am going to object as attorney-client communications, and instruct the witness not to answer.
Baim: Did you ever search for any documents that you were to bring with you to this deposition?
Walter: No.

Fenton eventually took the position that all discussion by the new MEC leaders during meetings, as well as who attended them, is also privileged information his clients may not discuss. It eventually emerged that Walter, who now serves on the replacement MEC, did not find out who would serve with him until he attended the first meeting in January of last year, and that he was asked to serve by Kumar.

When asking if members of the community, Board members or others not on the MEC attended those meetings, Baim met with Fenton’s objections again. He specifically asked if Board Chair Sherrie Bell or other TLHCD directors attended, but Walter was instructed not to answer.

Sanctions Threatened

As the depositions went on with a two-hour questioning of Dr. Joshua Trujillo, also on August 10, the mood was somewhat hostile as Fenton continued to make objections Baim found frivolous. Fenton again told his client not to tell Baim if he’d been told to prepare for his deposition, prompting a frustrated and bemused Baim to threaten action.

“We’ll seek sanctions against you again,” he told Fenton. “It is going to be a fun motion.”

“Good,” Fenton responded. “We will seek sanctions against you.”

Baim, however, eventually got the answers he sought:

Baim: Did you receive a notice of deposition prior to appearing here today?
Trujillo: No.
Baim: You didn’t, okay. Were you ever given a copy of a notice of deposition that had certain… certain request for documents on it?
Trujillo: No.

Baim then showed Trujillo the notice of deposition:

Baim: Have you ever seen this document?
Trujillo: I was shown it earlier today, but not before today.
Baim: OK, so before today, you never saw this document or any document like this one?
Trujillo: Correct.

‘All Sorts of Lawyers’

The testimony of Dr. Frank Macaluso perhaps best establishes the plaintiffs’ contention those who now make up the replacement MEC knew removing the original MEC would be rife with legal problems, and they discussed it at their meetings.

“Well, I think everyone, you know, was concerned about potential legal challenges,” Macaluso said when asked about not following the MEC’s bylaws and rules in replacing it. “We just had a discussion, you know, I said: ‘Well, somebody is going to challenge this. Yeah. Yeah—oh, yeah, it’s going to be challenged. But, what’s going to happen? How is that going to occur?’”

Macaluso laid out his vision of what might happen to Tulare Regional:

“There is going to be this lawyer and this lawyer, and you know they are going to have all sorts of lawyers in here,” he said. “You’ve got, you know, basically I brought up these—you are going to have so many lawyers in this place, you guys won’t know what is going to happen.”

And, he feared those attorneys’ fees would eat away at money the District could spend to complete the unfinished hospital expansion.

“All that money that was going to build that tower is going to go pay for lawyers,” Macaluso said. “There was a lot of discussion about lawyers, and it doesn’t always go positive when you’re having physicians talking about lawyers.”

Lawyers Wrote ‘Community Letter’

Also deposed by Amir was Tulare Mayor Carlton Jones, who signed a so-called “community letter” to the California Medical Association that took the organization to task for supporting the former MEC’s suit against TLHCD and HCCA. More than a dozen other community leaders, including many elected officials, also signed the letter, which it now appears was a public-relations effort by the TLHCD.

“He confirmed our suspicion it was not something drafted by the community leaders, but by the hospital,” Amir said of Jones’ testimony. “This (community letter) is false, not organized by the community leaders.”

Amir said that during the deposition of former TLHCD Chair Sherrie Bell, Bell confirmed the community letter was drafted by the District’s attorneys.

It also appears Kumar discussed Jones’ deposition with him repeatedly before it occurred, with Jones giving permission to Kumar to have an attorney call him. Attorney David Krol, who represented Jones at the deposition, was cautious as Amir learned how their attorney-client relationship formed, objecting to the point Amir appeared agitated.

Krol represents Kumar in a lawsuit against Dr. Abraham Betre claiming, amongst other things, invasion of privacy and “intentional interference with prospective economic relations.”

“So I am trying to find out, what, just the identity of the attorney, who you’re trying to protect, the day before you actually lawyer up,” Amir told Jones. “So, again, let me ask my question. Because I don’t—if I don’t get an answer, I am going to have to go to court. And I don’t want to do that. I am not trying to threaten you. All I want to know is: Who did you talk to?”

In a later interview, Jones said he hired Krol, whom he paid out of his own pocket, because it would have been unwise not to have counsel during the deposition.

“Anytime there’s an attorney in the room, you need an attorney with you,” he said.

Signers Didn’t See Letter’s Text

He also said he had nothing to do with authoring the letter to the CMA. Instead, he thought he was affirming a letter approved by the TLHCD Board in support of it and the hospital.

“I didn’t write that letter at all,” Jones said.

Jones testimony also revealed he did not see the text of the letter before adding his name to the signature page, nor had he seen the letter from the CMA to TLHCD. He said he was asked on short notice to come to the hospital parking lot at night by Kumar to sign the letter.

“My intent in signing the letter was I’m signing a letter that was written and submitted by the Board and my signature is just a signature of support,” Jones testified. “And, so when I read the letter, it’s the Board saying these are the issues we’re having, as a community leader will you support our efforts to fix them?”

Trust Issues

Too much trust and failure to check facts are at the heart of this lawsuit and TLHCD’s other troubles, Amir says, and the testimony of Bell, the district’s former chairwoman, reveals what happened out of the public eye.

“What came out of Sherrie Bell was a complete abdication of responsibility to Dr. Benzeevi,” Amir said. “Benzeevi had no experience, and Bell knew it.”

Bell’s testimony makes it clear Benzeevi took advantage of board members facing continual financial losses and a community that was afraid of losing its hospital, Amir said.

“What she testified was that in 2015 the hospital was in big trouble and were looking to partner with one of these big hospital systems,” he said. “At the last minute, Benzeevi came in with this company HCCA. He also said he could finish the construction, that he had a construction company.”

Bell and the other directors failed to find out if the fees Benzeevi and HCCA demanded were in line with those paid to other hospital administrators. They also failed to practice due diligence regarding Benzeevi’s qualifications to oversee such a large operation.

“To me it became clear that sometime in late 2015 or 2014, the Board said here, Benzeevi, you do everything,” Amir said.

Meanwhile, the District has been under fire for failing to complete its expansion at TRMC, or to provide accounting of how $85 million in voter-approved bonds for the project were spent. Lack of transparency was at the heart of a recent election that saw Bell and Laura Gadke defeated by two-to-one margins at the polls, and so it may be that change is coming from the top down at TLHCD.

The district is also facing other lawsuits regarding the legality of its conduct, and in late 2016 it laid off 29 employees. Recently, District employees have reported their paychecks bounced, with District officials blaming a change in banks for the dishonored checks.

Kumar is also facing a recall effort to remove him from District leadership. He and the District did not respond to inquiries regarding this report.

Jones, who took over as mayor just last month, is hopeful the new makeup of the Board will lead to change there, and is taking a wait-and-see attitude.

“Everything operates by majority vote,” he said. “With (new directors) up there, let’s see what changes they can make.”

Depositions referenced in the article are available for viewing below.

(Carlton Jones)

(Frank Macaluso)

(Joshua Trujillo)

(Gary Walter)