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Settlement Revives the Vision

$12 Million Award: Former Hospital Administrators victorious in suit against the state Department of health Services.

By Norma A. Aguilar, Staff Writer

The vision of a health care facility in Calexico may once again be revived in the wake of a recent $12 million settlement awarded to Jay Ash and Randy smith, former administrators of the Calexico Hospital management Group.

“I said I would give the majority of it to build a hospital,” Smith said in a telephone interview Friday. “I still stand by that statement.”

Ash and Smith recently won a lengthy jury trial in Imperial County against the state Department of Health Services. A jury found that DHS was responsible for the hospital's demise by not inspecting the facility in a timely manner.

Without approval from the inspectors, the hospital could not bill Medicare and Medi-Cal, which provided coverage for the majority of its patients. Ash and Smith poured their won money into the facility to keep it afloat.

The $12 million judgment was one of the largest monetary awards in Imperial County court history.

Dan Lawton, attorney for Smith and Ash, said an offer to share in the proceeds of the judgment was made both to the city of Calexico and the Heffernan memorial Hospital District board on separate occasions. Both offers were declined.

The city received the offer because its Redevelopment Agency not only owned the Calexico Hospital building but loaned Smith and Ash some $450,000 in operating capital while they waited for state inspectors to certify the hospital. Smith and Ash put up their homes as collateral for the loan.

Heffernan was asked because it was the governing body overseeing the hospital.

“Jay and Randy offered the district (as well as the city of Calexico itself) the chance to join our lawsuit,” Lawton wrote via e-mail. “Later, we offered the district a chance to share in the proceeds of our judgment at no cost to the district. The district and the city both turned us down.”

Lawton provided the Imperial Valley Press with a copy of a letter he asserts was sent to hospital board attorney Eduardo Rivera on Oct. 4, 2000, that contained Smith and Ash's offer to share proceeds of a judgment with the hospital district.

“We offered the hospital board (the chance) to join suit and share proceeds at no cost to them, and they turned it down,” Lawton said.
“Well, this puts it in a new light,” Falcon said after reading a copy of the letter. “But to tell you the truth, it really doesn't change anything because I investigated it...where there was mismanagement by both the board and management. I stand by it – I can prove it.”

The history of the now-defunct Calexico Hospital has been long and troubled. Claims of mismanagement by Smith and Ash were asserted by former hospital board members during Smith and Ash's tenure.

Falcon has maintained he thinks the closure of the hospital was a direct result of Smith and Ash's mismanagement.

Ash took exception to Falcon's claims of mismanagement.

“My problem with his statement was that he was not part of the board,” Ash said in reference to the hospital board members in place during his tenure.

Falcon, along with the late Lynn Ramsey, partnered in the early 1990's to look into the finances of the Calexico Hospital and its use of a half-cent sales tax that funded the district. Ramsey and Falcon did so as private citizens. It wasn't until several years later that Falcon ran for a spot on the hospital board.

Ash said that evidence presented during the trial disputed any claim of wrong doing. “It went before 12 jurors and they found no mismanagement,” Ash added.

Smith agreed and said he was not aware of any investigation and was not contacted at all.

‘If they conducted an investigation, nobody asked me for any information,” Smith said. “I don't know what they based it on.”

Still, Falcon, who was part of the board in 2000, said had the district beenaware of any offer to share in any judgment, the board might have accepted. 

“I would have worked with Ash and Smith if we had known about this letter,” Falcon said. “I want to show this to the board.”

 Both Ash and Smith said that offers to set up payment plans with the city were declined as well.

 “We have letters asking them (city officials) to set up payment plans and the City Council refused. Nobody would deal with us,” Smith said.

 Smith and Ash also said they think that if the city and board had been part of the suit, the final settlement could have been higher.

 Smith reiterated that his offer to help establish a medical facility in Calexico was firm.

“I'd welcome the opportunity,” Smith said. “I am still interested in accomplishing the mission...to participate to see a state-of-the-art facility built to serve the needs of the community.”

 Calexico City Councilman John Renison, who was on the council during the end of Ash and Smith's tenure, said he admired Smith's offer.

“I'm gratified to see him take this position,” Renison said. “He is to be commended for it. If that in fact is the case, I think we should pursue it and bring it to fruition. We should take this seriously, contact Smith and Ash to meet and discuss this issue and how we can put together an actual proposal.

 “After all the bad news regarding the ill-fated Calexico Hospital, there is light at the end of the tunnel,” Renison said.

 Staff Writer Norma A. Aguilar can be reached at 337-3452 or naguilar@ivpressonline.com