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
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