Walker County has paid attorneys about $65,000 in lawsuit with Erlanger

Hutcheson Medical Center continues to be at the center of legal arguments.
Hutcheson Medical Center continues to be at the center of legal arguments.

Walker County has paid about $65,000 to attorneys in its fight with Erlanger Health System.

Most of that money - $62,400 - has gone to the office of Stuart James, whom the county hired last year to fight Erlanger in U.S. District Court, records show. Another $2,500 went to Cartersville attorney Frank Jenkins.

Walker County is battling an Erlanger lawsuit that seeks $8.5 million. The county made public information on its payments to outside attorneys in a news release Wednesday as a response to an open records request filed last week.

The open records request, however, has not yielded any documents to confirm the amount of money paid. After the Times Free Press asked for any checks from the county to James or Jenkins (or invoices and bills from the attorneys), an administrative assistant said Thursday that no such records exist.

James and Walker County Attorney Don Oliver did not return calls seeking comment.

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In the release, James blames Erlanger for the amount of his bill to the county. If Erlanger had accepted a $1.3 million settlement offer, James wrote, the case would not be dragging on. Erlanger officials have said that was a lowball offer given that Walker County originally guaranteed half of the Chattanooga hospital's $20 million loan to Hutcheson Medical Center in 2011.

Meanwhile, Walker County Commissioner Bebe Heiskell's political opponents says the legal bills are an example of mismanagement. The county already employs Oliver full time. So why pay for more lawyers?

"The citizens of Walker County need to all question why we have a staff attorney, but yet we're hiring two outside law firms," said Shannon Whitfield, who is running against Heiskell in the November election.

Heiskell did not return a call seeking comment, but Oliver said in a statement that he has too many other responsibilities as county attorney to properly respond to Erlanger's lawsuit.

"I am responsible to protect and represent Walker County on a daily basis on a variety of issues," he said. "The hiring of an outside firm was the right thing to do in this matter. We needed a firm that could completely focus on the voluminous legal issues laid in our laps by Erlanger. We are doing all we can to protect the taxpayers of Walker County and hope the candidates in this race will support our efforts."

The $20 million loan didn't save Hutcheson. With the hospital dead and its campus sold to an outside health care company, Erlanger sued Walker County for $8.5 million. The county hired James and countersued, saying Erlanger intentionally mismanaged Hutcheson during the 2 1/2 years it ran the Fort Oglethorpe hospital.

A U.S. District Court judge did not go for Walker County's argument. James also argued the county didn't have to pay Erlanger because it enjoyed sovereign immunity from suit under the Georgia Constitution. The judge rejected that argument as well, saying the rule doesn't apply because Heiskell signed a contract.

Erlanger has filed a motion for summary judgment, which Walker County is contesting. Those arguments are pending.

Meanwhile, the county hired Jenkins to represent some members of Hutcheson's former governing board. That's because Erlanger can sue them individually, though Erlanger's lawyers have promised not to do so if the county government makes its payment.

"Walker County's board members have made great sacrifices to serve our community as volunteers," Oliver said in a news release, "and Commissioner Bebe Heiskell believes that protecting members asked to serve was and is the only reasonable response from the County."

James said in the release that Erlanger has not been as transparent about legal fees as the county has. He said he filed a records request asking how much Erlanger has paid Arnall Golden Gregory LLP, an Atlanta law firm representing Erlanger in its case with Walker County.

"We've been good stewards of taxpayer dollars used to pay for our professional services," James said. "However, we believe that the taxpayers of Chattanooga and Hamilton County will be shocked by the charges racked up by Erlanger's legal team. We hope this shock will lead to a public outcry for settlement of this situation once and for all."

Erlanger spokeswoman Pat Charles said Wednesday the hospital has paid about $44,100 in legal fees for the lawsuit with Walker County. She said she has sent this information to James' law firm.

Perry Lamb, a surgical technician at Erlanger who is also running for the Walker County Commissioner post, also criticized the legal expenses for the Walker County lawsuit, though $65,000 is less than 1 percent of the potential $8.5 million payment.

Lamb said the county doesn't have a strong case against Erlanger.

He said if he's elected he would try to settle with Erlanger, asking the hospital to let the county repay the debt incrementally.

"If we want any business to ever look at us as a legitimate county that they can come to," he said, "we have to show them we are willing to honor our debts."

Whitfield said he doesn't know what he would do with the Erlanger suit. He said he is at an "extreme disadvantage" about the specifics because not all pertinent documents would be available to him unless he is in office.

Contact staff writer Tyler Jett at 423-757-6476 or tjett@timesfreepress.com. Follow him on Twitter @LetsJett.

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