CCMSD calls for lawsuit to be dismissed

Crook County Medical Services District (CCMSD) has moved to dismiss the complaint filed against it by Health Management Services (HMS), the management company with which the district severed ties earlier this year. The motion rests on the argument that HMS cannot sue a governmental entity without following Wyoming’s rules for doing so.

The case is based on claims from HMS that the company was given 120 days of notice as per its contract, but then “inexplicably” dismissed without payment. According to the complaint, the five-year contract states that payment for HMS’s services would take the form of five percent of CCMSD’s total gross operating revenues.

This contract was due to come to an end on September 30, but was terminated early. HMS claims that no grounds were given for this “unilateral decision” to void the agreement.

Kara Ellsbury of Hirst Applegate, attorney for the board of trustees, has responded to the complaint with a motion to dismiss, based on the argument that CCMSD is a special hospital district established according to Wyoming Statutes and is therefore a local governmental entity.

“Accordingly, HMS’s claim against CCMSD is subject to the Wyoming Governmental Claims Act (WGCA),” says Ellsbury’s response. “…HMS did not comply with the WGCA, however, including by failing to present CCMSD with a notice of claim as required by the WGCA; therefore, its claim against CCMSD is barred.”

The response quotes the WGCA provision that no action can be brought against a governmental entity unless the claim is first presented to that entity as an itemized, written statement within two years of the date of the actions that resulted in the claim.

“HMS failed to present CCMSD with a notice of claim,” says Ellsbury’s response, presenting the argument that HMS failed to satisfy the requirements for making a claim and therefore it must be dismissed.

Attached to the motion is an affidavit from Mark Erickson, chairman of the CCMSD board, asserting that HMS “did not present CCMSD with a notice of claim at any time”.

In “an abundance of caution”, the motion also includes additional defenses. Firstly, that the original complaint fails to state “claims upon which relief can be granted”; second, that damages are limited by the provisions of the WGCA; third, that it was HMS that first breached its contract with the district, not CCMSD.

Ellsbury’s motion also argues that HMS’s own actions caused or contributed to the alleged damages; that the contract was voidable by CCMSD; that it could transpire as the case continues that HMS’s claims are “barred by unclean hands” or other issues; and that it could be found that HMS failed to mitigate its damages.