Hutcheson Medical Center at Fort Oglethorpe, Ga.Officials for Hutcheson Medical Center say prominent Chattanooga law firm Miller & Martin committed fraud.
In a federal court filing this afternoon, attorneys for the North Georgia hospital said that attorney Ward Nelson shared Hutcheson's confidential information with Erlanger Health System four years ago. Nelson was representing Hutcheson at the time, and the two hospitals were negotiating a management agreement for Erlanger to take over Hutcheson's operations.
According to the court document, Nelson blind carbon copied Erlanger officials on emails to Hutcheson. In those emails, Nelson supposedly wrote about Erlanger as if its leaders were not reading the conversation, misleading Hutcheson's officials. Some of Nelson's messages said "confidential" at the top of them, according to the filing.
Hutcheson officials say they learned about this through the discovery process in a current lawsuit with Erlanger.
"The new evidence that has come to light is nothing short of remarkable," wrote the hospital's new attorney, Rachel Fields.
Erlanger officials declined to discuss the specifics of the accusation this afternoon, two hours after Hutcheson filed the accusation in U.S. District Court in Rome, Ga.
"It would be premature for us to comment since we just received the document and have not had time to review it," Erlanger chief administrative officer Gregg Gentry said.
In April 2011, Erlanger became the manager of Hutcheson, which was millions of dollars in debt. But, Hutcheson officials now say, Nelson steered them toward an agreement that was "highly favorable" for Erlanger.
When Erlanger began managing Hutcheson, it extended a $20 million line of credit to the hospital. But after the two parted ways in August 2013, Erlanger filed a lawsuit in U.S. District Court, demanding its money back. Hutcheson filed a countersuit, claiming Erlanger's officials never held up their end of the management agreement.
Both cases are still pending.
According to today's filing, Hutcheson officials say that Nelson encouraged them to sign a deal that "overcollateralized" the hospital. If it couldn't pay Erlanger back, according to the filing, Erlanger could then take Hutcheson's main campus and nursing home -- a "multi-million dollar windfall" for Erlanger, Fields wrote.
Billy Eiselstein, general counsel for Miller & Martin, defended Ward's representation of Hutcheson: "We stand by the work that our attorneys did for Hutcheson Medical Center. When Hutcheson now complains that we shared information with Erlanger, it relies on emails that also included the counties, which we did not represent, and those emails were not privileged."
Staff writer Kate Belz contributed to this story.