Ingram wants legal fees for hospital tax injunction

Ingram wants legal fees for hospital tax injunction

Judge Hill hears arguments in Circuit Court

news@theeveningtimes.com

State Senator Keith Ingram is asking a judge to award him legal fees to cover the cost of filing an injunction which he led to stop the previous hospital tax from being collected.

But according to the county, Ingram asked for the injunction on his own and he and the former Crittenden County Hospital Association board members misled the Quorum Court and the public and are the reason the hospital failed and ended up costing county taxpayers over $200,000 to keep the building maintained.

Attorneys Chadd Durrett and County Attorney Joe Rogers presented arguments to Circuit Court Judge Victor Hill on Thursday.

Durrett argued that since the court sided with Ingram and ruled that $20,000 was collected illegally and couldn’t be used for any other purpose, that under the law he is entitled to recover attorney fees from that money.

“This refund resulted from the actions of the county,” Durrett said. “It (tax) wasn’t stopped before this $20,000 was collected. The court found that was an illegal exaction. That is why we have this fund. This is why I feel entitled to attorney’s fees.” Rogers countered that Durrett did not file a request for attorney’s fees within the given 14 days after the ruling under the law; that the injunction should not have been granted because Ingram had no right to ask for the injunction without the county being a party to it; and that he did not have standing to file it because he did not file it as a class action lawsuit.

“For those reasons alone, we feel the motion for at- torney’s fees is invalid,” Rogers said. “His petition did not seek a refund. He could have amended it to ask for a refund. He didn’t do that. Therefore there is no basis under the case law or statute for any fees.”

Rogers further argued that Ingram is the one who lobbied the county to hold the election and that he and the hospital board misled the public to support the tax knowing that the hospital was in more serious financial shape than they let on.

“There is no disputing the county was acting at the request of Mr. Ingram as a member of the hospital board to pass this tax to save the hospital,” said County Attorney Joe Rogers. “Mr. Ingram either knew or should have known that even with this tax you’re not going to be able to save this hospital. It closed because of the financial condition of the hospital. Then all of a sudden Mr. Ingram is up here demanding the county stop the tax.”

Rogers also said the county objected to the injunction

because by law the

only way a tax could be stopped was by vote of the people.

“The law doesn’t provide any basis for the county to stop the tax,” Rogers said.

“The only way to stop a tax statutorily is to send it back to the people. And this is what the county did.”

County voters passed a one cent sales tax in June 2014 to support the operation and maintenance of the former Crittenden Regional Hospital.

The tax would have generated

$30 million over five

years.

But despite passage of the tax, CRH filed for bankruptcy and closed its doors in August 2014 leaving behind more than $30 million in debt, including a lien on the building which belongs to the county.

Ingram filed the injunction to stop the collection of the tax but the county objected, claiming it was entitled to use the money to cover the cost of keeping the utilities on and the building secured, and that it could only be repealed by the voters.

Circuit Court Judge Victor Hill agreed with Ingram and granted the injunction on the grounds that the tax was put in place to specifically repair, renovate, equip, and maintain Crittenden Regional Hospital and no other purpose. And that since the hospital had closed, there as no reason to collect the tax.

The tax was subsequently repealed by the voters, but about $20,000 was still collected.

Durrett countered that he Ingram filed the injunction at the request of Arkansas Department of Administration and Finance, which was tasked with sending out notices to businesses to start collecting the tax.

“They told me they had to have an order to stop the taxes from being collected,” Durrett said. “So I went in to court hurriedly and got an ex-parte order.”

That order was, however, revoked the same day by the issuing judge who cited that he was misled by Durrett that the county was a party to the injunction.

Durrett said the reason he did not ask for attorney’s fees at the time was because he never anticipated there would be any money collected from the tax, and that it was only collected because the county fought him because they wanted to use the money for other purposes.

“It never occurred to me that the county and Mr.

Rogers would not want the tax stopped,” Durrett said.

“But it turns out they did want the tax. The vast majority of the attorney’s fees were incurred after they started fighting me.”

Durrett also said that Ingram did have standing as a taxpayer of the county to file the injunction.

“He is a taxpayer,” Durrett said. “He filed it on behalf of the taxpayers. It was not called a class action, true.

But it doesn’t take any effort at all to see that our actions to stop the tax was on behalf of the class of taxpayers.”

Rogers called County Judge Woody Wheeless who testified about a pattern of deceit by Ingram and the hospital board to get the tax passed.

Wheeless said he repeatedly asked for financial information from the hospital but never received any documentation. He further testified that it was Ingram who approached him asking him to support the tax and that at no time was he made aware of the true financial condition of the hospital.

It was later disclosed that hospital management kept the money from employee’s hospital insurance premiums and stopped making payments to the pension program, none of which was disclosed publicly at the time.

“They never shared any financial documentation with me,” Wheeless said. “Other than he (Ingram) was wanting me to get on board and support this tax.”

Ingram and CRH CEO Gene Cashman, along with board chairman David Rains, later appeared before the Quorum Court to advocate for passage of the tax, and a “save our hospital” campaign was launched to convince the public to support the tax.

Wheeless said had he been made aware of the true situation of the hospital’s finances he never would have supported the tax.

“I would not,” Wheeless said.

Wheeless said when the hospital closed it cost the county $223,000 for utilities,

insurance, and security.

Wheeless said he believed the county was legally entitled to use the money from the tax to keep the hospital buildings maintained until they could find another operator.

“I immediately tried to find somebody to occupy that building,” Wheeless said. “But I was told that in order to do that we needed to maintain the integrity of that property which meant keeping the utilities going and that we had to have security there.”

Durrett argued that the county was against the injunction because they wanted to still be able to use that money even though they were not going to use it to operate a hospital, as the tax specified.

“That’s what the tax was for,” Durrett said to Wheeless. “You felt you could use that money to pay the electric bill and make repairs.”

Durrett countered that claims that Ingram and the other board members knew the hospital was going to fail was “ludicrous.”

“They wouldn’t be up there asking for a sales tax if they thought it would fail, would they?” Durrett asked. “I can’t believe that they are trying to tell the court that Mr. Ingram and the hospital board misled the county into passing this sales tax when they knew the hospital would fail.”

“I don’t know,” Wheeless answered.

Rogers concluded by arguing that the county is the ultimate victim of Ingram’s scheming because they were left holding the bag for $223,000 when the hospital

folded.

“I don’t know whether the hospital association did or did not know it was going to fail,” Rogers said. “But it is pretty evident to me that if somebody had been doing their job, somebody would have realized that tax was not going to help them.”

Hill said he would issue his ruling within a week.

By Mark Randall