HMS drops lawsuit

Health Management Services (HMS), the company that was until recently overseeing the management of Crook County Medical Services District, has given notice that it will be withdrawing its legal claims against the district.

HMS filed suit against the district, claiming the company had been given 120 days of notice as per its contract, but was then 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. Had the notice period been followed, HMS would have continued to provide management services until August 13.

However, HMS claimed it was informed by letter on April 29 that the contract would be voided on May 1. According to the contract between the two entities, the CCMSD board must give 120 days of notice unless certain conditions are met; HMS argued that none of these reasons is mentioned in the letter received from the board of trustees’ legal firm, Hirst Applegate, on April 29.

HMS claimed damages in the amount of $144,422.70 – the total payment the company said it should have received during the notice period, according to the terms of the contract.

CCMSD moved to dismiss the complaint, arguing that HMS cannot sue a governmental entity without following Wyoming’s rules for doing so. Kara Ellsbury of Hirst Applegate, attorney for the board of trustees, responded to the complaint with a motion to dismiss.

In the motion, Ellsbury pointed out that CCMSD is a special hospital district established according to Wyoming Statutes and is therefore a local governmental entity. The response quoted the Wyoming Governmental Claims Act 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,” said Ellsbury’s response. As HMS failed to satisfy the requirements for making a claim, she argued that it must be dismissed.

On July 28, HMS presented a notice of its voluntary dismissal of the case without prejudice, effectively dropping its claims against the district and bringing this lawsuit to an end.