The status quo remains on the Tulare Local Healthcare District’s Board of Directors after a brief hearing Friday morning, though arguments will continue Monday.
That means that Richard Torrez, a member of the board, and Bruce Greene, an attorney representing Healthcare Conglomerate Associates, have not been forced to recognize Senovia Gutierrez as a seated member of the board.
It also means that officials with Healthcare Conglomerate Associates (HCCA) could continue to seek — or even finalize — a loan on behalf of the district.
The Tulare County District Attorney’s office had sought to force Torrez and Greene to recognize Gutierrez, and attorneys for the district had joined the action and hoped for a temporary restraining order to stop HCCA from executing any loan or entering into any contracts without the approval of the board.
Attorneys for the healthcare district also hoped to force HCCA to turn over large amounts of financial documents, including financial statements, balance sheets, payroll reports, vendor contracts, accounts payable and receivable reports, and other financial data regarding the hospital to the district.
HCCA doesn’t presently provide such detailed information publicly, though it is provided at the company’s other managed hospital, the Southern Inyo Hospital in Lone Pine.
After arguments from each side, the Hon. Judge Melinda Reed stated that she couldn’t reach a decision without reading objections filed by Robert Welsh, an attorney with BakerHostetler representing Torrez and Greene.
Welsh came to court Friday morning with those objections, which had not been previously provided to the court; Reed stated she had not had a chance to read them yet.
Lawyers with the district attorney’s office, the healthcare district, and representing Gutierrez all told Reed that time is of the essence in forcing the recognition of Gutierrez.
“The district is in crisis,” Deputy District Attorney Trevor Holly said. “They don’t have a functioning board of directors.”
“We believe she became a board member the day she took the oath of office,” he continued.
Mandy Jeffcoach, an attorney for the district, stated that the board has been unable to act on their concerns regarding financial and other matters at the hospital. Their hands have been tied by HCCA, she stated, and the company will not recognize any of their actions until Gutierrez is declared a board member.
She also noted a provision of the Management Services Agreement, signed by Torrez and members of the prior board, that states members of the board can’t enter the hospital without HCCA’s express permission.
Welsh stated that the matter was best left to the next hospital board meeting on September 27, when he stated the plan is to recognize Gutierrez, though Holly stated there is no guarantee another roadblock won’t appear that would delay her recognition even further.
He also stated that Greene sought independent legal counsel that backed up his interpretation of Elections Code 15400, the statute which has been cited as the reason that he, Torrez, and Healthcare Conglomerate Associates don’t consider Gutierrez a board member, even though she was elected and sworn in — and survived a recount.
“It seems clear the act is ministerial and has not been done,” Reed stated.
“[Greene and Torrez] have acted reasonably in their understanding of the law,” Welsh replied.
He also stated that the district attorney’s lawsuit had been “hijacked” in pursuit of other goals, before Reed cut him off.
Jeffcoach later stressed that even if Reed were to continue arguments to Monday, HCCA could potentially finalize a loan today unless some form of action was taken, asking for an interim order to prevent the company from seeking out any financing on behalf of the district.
Lawyers representing the Tulare Local Healthcare District claim they’ve received confirmation that the company continues to seek a loan, potentially up to $22m, Jeffcoach stated. She claims she received confirmation that the company continues to seek financing.
Welsh stated unequivocally that he objected to any such order; and that while he did not know whether the company was seeking any loans, it would prevent them from responding to potential financial issues as they arise.
Continued arguments will be heard Monday morning at 8:30am in Department 1 of the Tulare County Superior Court.