The V.I. Supreme Court ruled last week that Gov. Juan F. Luis Hospital cannot be directly sued. The proper entity to file against is the V.I. Government Health and Hospital Facilities Corporation, the court found.
The Health and Hospital Facilities Corporation was created by the V.I. Legislature in 1994 as an umbrella institution overseeing both of the territory’s hospitals.
The case arises from JFL allegedly stiffing a nursing company for hundreds of thousands of dollars.
Titan Nurse Staffing provided nurses from 2010 through June of 2013.
“Although JFL Hospital initially made timely payments toward Titan’s invoices, it began to fall increasingly behind,” Associate Justice Maria Cabret wrote in the court’s opinion. By April of 2013, JFL was $700,000 behind and by August 2013 the arrearage had grown to $800,000, according to the court.
The time period corresponds to a time of upheaval at the hospital. Sen. Alicia “Chucky” Hansen played a central role in that upheaval. In 2010, the hospital was struggling financially and hired Jeff Nelson, an outside “turnaround expert” to run the hospital with a mandate to make difficult decisions. Nelson laid off some staff, prompting Sen. Alicia “Chucky” Hansen (I-STX) and others to push for Nelson’s ouster.
“JFL is making more money than ever,” Hansen said in a July 12, 2012, press release. “Although Nelson is spreading doomsday predictions about the hospital’s finances, JFL’s financial statements show otherwise,” Hansen continued. Since that time, JFL has been in a continuous financial emergency. It has not paid utility bills in years. Meanwhile, Nelson was forced out, along with members of the hospital board, resulting in the loss of a quorum; the hospital ceased to issue bills at all and faced a temporary loss of Medicare certification.
Titan sued and the billing dispute went to mediation, where both sides notified the court the issues were resolved. Two months later, in February 2015, JFL changed its position and said it was going to trial because ““it appear[ed] unlikely” that the mediation settlement would be approved by the St. Croix District Governing Board.”
Titan asked for summary judgment in its favor and JFL argued V.I. law specifies the Virgin Islands Government Hospitals and Health Facilities Corporation is the proper entity to sue. JFL also argued the Hospitals and Health Facilities Corporation never gave explicit authority to enter the nursing contract so there was no enforceable contract.
The Superior Court ruled in favor of Titan and awarded it the $925,000 for preach of contract. JFL appealed.
In the Oct. 25 opinion, Cabret wrote that no law “expressly addresses whether JFL Hospital is subject to suit.”
But laws creating the Hospitals and Health Facilities Corporation give it the power to sue and the Supreme Court finds “it is clear that the Legislature did not intend to subject JFL Hospital to suit in its own name.”
The opinion determines there are only two previous cases that touch directly on whether JFL can be sued and both cases found it cannot. The high court ordered the case back to Superior Court with directions the court dismiss JFL from the case.
Chief Justice Rhys Hodge wrote a dissenting opinion arguing the Legislature has granted JFL the right to enter into contracts and therefore it implicitly granted JFL the capacity to sue or be sued.