SE Volusia hospital board votes to file suit over legal advice on failed merger

SE Volusia hospital board votes to file suit over legal advice on failed merger

NEW SMYRNA BEACH — The Southeast Volusia Hospital District board of commissioners voted unanimously Thursday night to file suit for legal malpractice against the firm of its former attorney for faulty advice he gave about its merger with Adventist Health Systems.

That merger became the focus of what some have called the largest violation of the state’s Sunshine Law ever challenged in court, and a judge ordered it undone.

“I am not at all optimistic we will negotiate a settlement,” Louis Mrachek, the hospital district’s litigation attorney, said by conference call during Thursday’s board meeting. “We have not even gotten a counter-offer.”

Board members voted in August to pursue a legal malpractice claim against Jim Heekin of the Orlando firm Lowndes, Drosdick, Doster, Kantor and Reed, for his advice to keep the public out of talks about Bert Fish Medical Center partnering with Adventist.

Circuit Judge Richard Graham threw out the 2010 deal, saying the 21 closed meetings held over 16 months that resulted in the merger violated the state’s Sunshine Law.

The Bert Fish Foundation, a philanthropic organization that gave the hospital to the public district in 1966, had filed suit against the merger because of the closed meetings. Graham made his ruling after a five-day court proceeding in February 2011.

The hospital district incurred $3.4 million in administrative and legal fees as a result.

In a letter to Heekins’ firm last year, Mrachek sought to recover not only those out-of-pocket expenses, but an additional $19.1 million in lost income to the hospital. But he said Lowndes’ would not budge.

“There is no way to move this matter forward without filing the lawsuit and starting the clock forward,” Mrachek told the board.

Board member Jackie Hercheck moved to proceed with the suit, backed with a second from board member Joe Benedict.

Mrachek said he plans to keep the complaint as simple as possible, to preclude as many delaying motions as possible. He anticipated it will be filed next week and said he is shooting for a trial date within six weeks.

At the same time as the lawsuit moves ahead, Mrachek said he will continue to push for a settlement.

“I believe this will move forward as quickly as possible,” he said. “We will get this thing moving post haste.”

The vote comes after the board met in December and continued that meeting into Jan. 17. Minutes of those meetings show Mrachek reported Daniel Gerber, representing Heekin’s firm in the malpractice litigation, stated: “Any alleged damages greater than the district’s or Bert Fish Medical Center’s past out-of-pocket expenses are not recoverable.”

Some of Bert Fish Medical Center’s costs are underwritten by taxpayers from Edgewater, New Smyrna Beach, Oak Hill and a portion of Port Orange. The hospital district’s tax rate of $3.30 per $1,000 of taxable value is the highest of any such district in the state.

Special Report: Hospital Wars