West Volusia Hospital Authority,
844 W. Plymouth Ave.,
P.O. Box 940,
DeLand, FLA 32721.
Chairman and Commissioners:
With the election results final, and a Board of Commissioners which appears designed to inspire optimism about the Authoritys future, this seems a good time to bring the present and in-coming Board members up to date on certain matters that may affect the Authority.
Authority: I normally refer to the West Volusia Hospital Authority simply as the Authority.
Effective Date: The effective date of Chapter 98-330, Laws of Florida, (commonly Ch. 98-330, L.F., or simply 98-330) was 30-May-1998.
Facilities: I use the term facilities to refer to the former West Volusia Memorial Hospital together with its supporting properties.
Hospital: I use the term Hospital or Hospital Corporation to refer to the entity operating the Facilities.
Lease: The term lease, unless otherwise qualified, refers to that agreement effective 01-Dec-1994 under which Hospital Corporation was to lease and operate the Facilities.
Open Records: and the term Open Records to refer to the provisions of §119.07, F.S., together with the provisions of Article 1 §24(a), Constitution of Florida.
Sunshine: I use the term Sunshine to refer to the provisions of §286.011, F.S., together with the provisions of Article 1 §24(b), Constitution of Florida.
As the present Board is all too painfully aware, the Hospital has operated out of the sunshine since 1994. By this, I mean that the meetings have not been properly noticed to the public, nor has the public been invited to attend and be heard on the decisions made. Additionally, the Hospital has refused production of its books and records for inspection by the public.
On 31-Mar-1999, the Hospital Corporation filed suit against the News Journal Corporation and Tanner Andrews, seeking declaratory relief effectively barring the named defendants, and others similarly situated, from ever inspecting its records or attending its meetings.
The Hospital Corporation claimed that,
pursuant to Ch. 98-330, L.F.,
and, later, also to Ch. 99-356, L.F.,
it was not obliged to comply with the provisions
of Sunshine and Open Records.
However, the constitutionality of these exemptions was
disputed by the named defendants.
Early this year, we saw a ruling from the Circuit Court
(#99-30725-CICI Memorial v News Journal)
saying that neither of the exemptions claimed by the
comported with the Constitution.
See Article 1 §24, Constitution of Florida.
The ruling itself is available on my web site:
From that ruling, we can deduce that the Hospital is obliged to comply with the requirements of Sunshine and Open Records. The Hospital has been under this obligation during the entire period from the beginning unto the time of the ruling. Barring a change in the law, the obligation continues until the Hospital Corporation ceases to operate the Facilities. This is because in operating the Facilities, the Hospital Corporation performs duties that would otherwise be performed by the Authority: prior to the Lease in 1994, the Authority operated the Facilities.
When you joined the Board, you were probably given a Government in the Sunshine manual. This handy reference can assist the non-lawyer in understanding the requirements of Sunshine, and the consequences of violations.
Perhaps the clearest example of a Sunshine violation would be a subject board meeting and making a decision without informing the public or allowing them to be heard. The law provides that decisions taken out of the Sunshine are null and void from the beginning and of no effect.
A necessary consequence of the ruling in #99-30725-CICI is that all acts of the Hospital, from the effective date of Ch. 98-330, L.F., up through the date of the ruling, or 15-Jan-2002, are null and void from the beginning.
Case #99-30725-CICI appears largely finished; there remain but a few pending post-decision motions before the Court, and the case should be closed.
In 99-30725-CICI, the Court asked that the issues related to acts taken prior to the effective date of Ch. 98-330, L.F., be separated from the issues of constitutionality, and filed as a separate matter. Those acts, together with the appointments of the persons making the acts, are the now subject of #2002-10126-CICI Andrews v MHS.
As stated above, acts taken out of the Sunshine are null and void from the beginning and of no effect. The emphasized language is distinguished from voidable, meaning acts that may be presumed valid and effective until set aside.
The Hospital Corporation has undertaken many acts during its sad, sorry lifetime. Certain of those acts were taken before the effective date of Ch. 98-330, L.F.; the balance were taken on or after the effective date.
In #2002-10126-CIDL, I am asking the court to declare that all of the acts taken out of the Sunshine during the time from the Lease up to the effective date of Ch. 98-330, L.F., are null and void from the beginning. The most interesting acts taken during this time are probably submissions of subsidy budgets and indigent care reimbursement requests. As these requests for funding were not legally made, the Authority ought to receive a refund of some few tens of millions of dollars. Naturally, the Hospital is going to be rather slow about returning the money.
It should be remembered that our policy allows them a limited period of time to submit indigent care bills. That time has of course elapsed for bills through 30-May-1998, for which reason none of the bills for that period can be re-submitted to the Authority.
In 1997, the Authority filed a complaint for declaratory
relief, seeking a determination that it might pay subsidies
and indigent care money to the Hospital Corporation
in spite of the Hospitals refusal to operate in the Sunshine.
It was determined in 1999 that the Authority might, if it wished,
pay such funds.
However, payment was made subject to a
Covenant and Undertaking of
Memorial Hospital-West Volusia, Inc.,
Memorial Health Systems, Inc.
That covenant is available on the web for convenience:
That covenant provided, essentially, that if it were determined that the Hospital Corporation had operated illegally out of the Sunshine, that the funds would be returned to the Authority. With the ruling in #99-30725-CICI, it becomes clear that the Hospital Corporation was required to (but did not) operate in the Sunshine.
I do not believe that the Authority has yet acted to collect those funds subject to the covenant. The money is several millions of dollars. The Authority ought therefore to consult with Counsel concerning the most expeditious method of recovery.
I would suggest using the money to form an endowment fund: we would use only the interest, and that only to fund indigent care. This would allow us to lower taxes significantly, if not to eliminate them entirely.
the Hospital again filed suit against the
News Journal Corporation
A copy of the complaint is available on my web site:
In essence, the Hospital is asking for a declaration that the ruling in #99-30725-CICI does not apply to them and that the named defendants should not have access to its records and meetings.
For various reasons, I do not believe that the Hospital is entitled to the relief sought. The basis of their prayer for relief is that in September of 2000, they terminated the Lease and purchased the Facilities from the Authority. However, since such a purported lease termination and purchase were, if attempted at all, were attempted in derogation of Sunshine. Accordingly, they are null and void.
I have made a counter claim to inspect certain records. I have as a subsidiary matter have required that the Court declare the lease termination and purchase to be null and void for non-compliance with the provisions of §286.011, F.S., so that they can not affect my rights of access to records and meetings. I anticipate that the Hospital Corporation will have some objection to this counter claim.
The Lease provided that the special right of early termination would be available only during a specified period of time, with delivery of notice of termination required by the end of March, 2000. That time has elapsed.
The decisions to send notice and to terminate the lease were taken out of the Sunshine. As noted above, such things are void from the beginning rather than voidable. Therefore, the Authority could not have received valid notice during the period in question, nor could the lease have been terminated during that time.
The Facilities could not have become available for sale, nor could the Hospital Corporation have bought them, because the lease termination was not properly noticed and carried out. Title to the Facilities, therefore, may prove an interesting issue.
It appears to me that, no one having legitimately terminated the lease or bought the facilities, the Authority still owns and leases them to the Hospital Corporation. This is not likely to be clear for a few years, as we wait for the courts to sort out several years of Sunshine violations. However, the Authority ought to pay attention and be ready.
The Hospital Corporation has held two meetings attempting to cure their Sunshine violations. I fear that neither effort was successful. I understand from counsel for the Hospital Corporation that they anticipate filing another action seeking a declaration that the meetings cured the violations.
I do not believe that the Hospital will prevail in that action. The attempted cure has been raised as an affirmative defense in #2002-10126-CIDL, and I anticipate seeing it again as to the counter claims in #2002-31972-CICI. In the end, however, the requirements of Sunshine do not appear to have been fulfilled and I do not believe that the purported cure will be declared effective.
When the matter is finally sorted out, I expect the Adventists to leave, the Hospital Corporation to fail entirely (whether through bankruptcy or negotiated dissolution is unclear). One day, you will wake up and have a hospital to run.
It is for this reason that I believe that we must not permit the Legislature to abolish the Authority. We will, at an unknown time in the future, likely have a hospital to operate or alien. While I might prefer to legally alien the facility rather than to have the Authority operate it directly, that decision will of course be up to the Board at that time.
I believe that the Board should carefully attend, by and through one or more members, all of the legislative delegation hearings for Volusia County. As elected officials, your voices should carry more weight for the public of the West Volusia Hospital Authority tax district than those voices of lobbyists or attorneys. At least in theory, no local bill that is not heard here in Volusia County at the delegation meetings should be passed in Tallahassee.
I hope that this has been enlightening to the Board members. Nothing contained herein should be construed as legal advice. If you have questions on any legal matter, you should consult with an attorney who is a member in good standing of the Florida Bar.
It is rarely wise to speculate on how the courts will ultimately rule on any matter. None the less, I have every hope that they will follow the law as clearly set forth in the statutes and case law, and that the taxpayers of West Volusia will ultimately see some relief.
More information about the pending lawsuits,
including the most interesting of my pleadings and papers,
may be found on the web:
and this letter itself may be found on the web as well.