It's complicated: Erlanger/Hutcheson lawsuit questions county's relationship

Hutcheson Medical Center and Catoosa County's relationship status: It's complicated.

In a federal court filing last week, Hutcheson's attorney told U.S. District Court Judge Harold Murphy that the leaders of the hospital and the county used to totally be together four years ago.

But a lawyer for Erlanger Health System has questioned the relationship. Were Hutcheson and Catoosa County really that close?

The back-and-forth is part of a lawsuit between Erlanger and Hutcheson, who sued each other after going through their own breakup.

In 2011, leaders from the two hospitals agreed that Erlanger should run Hutcheson's day-to-day operations because Hutcheson was about $60 million in debt. Erlanger gave Hutcheson a $20 million loan backed by the Catoosa and Walker County governments.

But in 2013, Erlanger and Hutcheson split up. Erlanger sued, demanding its money. Hutcheson counter-sued, saying Erlanger hadn't lived up to its promises in the management agreement.

The cases are still pending. In court filings over the past two weeks, the two sides have argued about Hutcheson and Catoosa County's relationship.

Why? Because Catoosa County's relationship status with Hutcheson could determine whether Erlanger's lawyers get to see about 430 emails prior to going to trial against the north Georgia hospital. Those emails would give Erlanger information, and information would give Erlanger power.

The emails in question were sent in 2011 between Hutcheson officials and their attorney at the time, Ward Nelson. In addition to Hutcheson officials, members of the Catoosa County government, the Walker County government and the hospital authority read the emails in 2011. The hospital Authority is the board that governs Hutcheson.

Because members of Catoosa County and other groups saw the emails, Erlanger's lawyers say they should be able to see them as well. They say the groups who read them before were not on the same team as Hutcheson, so the emails aren't protected by attorney-client privilege.

Hutcheson's attorneys say Erlanger is wrong. The groups that saw it before, including Catoosa County, were on the same team as Hutcheson. It was like they were in a relationship.

Representing Erlanger, attorney Jennifer Shelfer wrote on March 27 that Catoosa County and Hutcheson "were not pursuing the same legal interests" in 2011.

Representing Hutcheson, attorney David Burkoff responded on April 10: "The Counties viewed a deal with Erlanger as in their own best interests. Certainly the Counties were not forced to make guarantees."

Even though the counties saw the emails, Burkoff said, those messages are still protected because of what he calls "common interest." Leaders from Catoosa and Walker counties were allowed to see the emails because they were in a relationship with Hutcheson. All of them wanted the same thing.

Erlanger says this relationship status is not true. So does the general counsel for Miller & Martin, the law firm that represented Hutcheson in 2011.

Two weeks ago, Hutcheson's new lawyer said Nelson committed fraud because he gave Erlanger officials some of his 2011 emails to Hutcheson. But Miller & Martin's general counsel, Bill Eiselstein, said Nelson could give Erlanger the emails because Catoosa and Walker counties read them.

Catoosa County officials also say that Hutcheson's description of their relationship is wrong.

In February, the County Commission hired Roger Forgey as a consultant. When Erlanger managed Hutcheson, Forgey was the North Georgia hospital's CEO.

In a letter to the county, Burkoff, who represents Hutcheson, wrote that hiring Forgey worried him because Forgey had access to Hutcheson's privileged information while working there.

Catoosa County Attorney Chad Young told Burkoff that Hutcheson's information was not private anymore since county officials were at the hospital's strategy meetings in 2011, when they discussed what kind of relationship they wanted to have with Erlanger.

"Any claim of privilege or confidentiality was waived with respect to the Catoosa County representatives who were present," Young wrote two months ago in a letter to Burkoff.

Walker County Attorney Don Oliver did not return a call seeking comment. But Heiskell, Walker's county commissioner, said she and the North Georgia hospital's officials are still on the same team.

"My relationship's always been good with Hutcheson," she said, "as far as I know."

Contact Staff Writer Tyler Jett at tjett@timesfreepress.com or 423-757-6476.