MCHD faces Whistleblower Lawsuit

posted on:
April 7, 2005

author:
Staff

 A whistleblower lawsuit filed by a former Montgomery County Hospital District employee who claims she lost her job after she reported alleged illegal activity by district officials is set to go to trial May 13. 

On March 18, 9th state District Court Judge Fred Edwards denied a motion for summary judgment requested by the district in the lawsuit filed by Tonya Smith, who was fired in November 2003. Smith, the former records manager and board liaison for MCHD, alleges former Chief Administrative Officer Jim Hamilton illegally drafted and destroyed a contract for the sale of the River Pointe Building, which MCHD previously owned, and that she was fired when she reported the activity to a board member at the time.

In the lawsuit, Smith, 32, claims that Hamilton signed a contract with local facility manager Larry Calhoun to maintain the building. The contract, however, also authorized the sale of the building for a fee of 5 percent of the gross sale. While the contract was signed by Hamilton June 1, 2003, MCHD board members did not approve placing the building on the market until a July 8, 2003 meeting. Board approval would have been necessary for the contract to be valid since Hamilton was only authorized to spend up to $10,000 without the boards approval.

The sale of the River Pointe building, located at 200 River Pointe Drive in Conroe and where MCHD administrative offices are housed, was valued at $3.7 million when Hamilton signed the contract. A 5 percent commission would have been $185,000.

The MCHD board sold the building last April for $4.15 million, nearly $1 million less than the boards purchase price of $5.2 million in 2000.

When Smith learned about the contract signed by Hamilton, according to the lawsuit, she reported the incident to former MCHD board member Nicol Huff, to whom she also gave an original copy of the contract. Huff took the contract and confronted Hamilton. At that time, Smiths lawsuit alleges, Hamilton snatched the original illegal contract from Ms. Huffs hand and destroyed this official government document in front of (Smith).

In a deposition of Hamilton Jan. 20, Smiths attorney, Kevin Hood, asked Hamilton what type of contracts he could enter into without board approval.

Anything thats within my authorization of $10,000, price-wise, Hamilton responded.

When Hood showed Hamilton a copy of the contract he had signed, Hamilton said it was only a draft, because it needed board approval. But Calhoun met Hamilton through board member Bill Leigh, who suggested the Realtor. And when Hamilton met with Calhoun, according to the deposition, both Leigh and board member Eric Yollick were present.

During the meeting with the two (members of the) board of directors and Mister Calhoun, did you have any concerns that such a meeting might be a violation of the Open Meetings Act? Hood asked Hamilton during the deposition.

No, Hamilton responded, because we didn't have enough members there.

According to the Texas Open Meetings Act in the states Government Code, The authority delegated to a governmental body may be exercised only at a meeting of a quorum of its members. A grant of authority to three or more persons as a public body confers the authority on a majority of the number of members fixed by statute.

The law notes that, A quorum of a public body is a majority of the number of members fixed by statute. The Open Meetings Act defines quorum as a majority of the governing body, unless otherwise defined by applicable law.

With seven members on the MCHD board, a quorum would be four members, but Hood believes the meeting was still illegal.

To manipulate the system so you can get around a quorum is illegal in itself, he said.

The Open Meetings Act allows governmental bodies to meet in executive, or closed, session on matters involving real property. However, it also permits an executive session only where public discussion of the subject would have a detrimental effect on the governmental bodies negotiating position with respect to a third party. It does not allow a governmental body to cut a deal in private, devoid of public input or debate.

After Smith brought the contract to Huffs attention and Hamilton allegedly ripped it in two, Hamilton began a concerted effort to find any item to criticize Tonya, Hoods response to MCHDs motion stated.

Hamilton conducted a meeting of all department managers and requested that they compile a list of all complaints they had about Tonya, Hood continued in her motion. This list included such nefarious conduct as wearing jeans on a day other than Friday and bringing snacks to board meetings.

Smith eventually was removed as board liaison and reassigned to a storage warehouse to categorize official district documents for destruction. After seven days into her new duties, Hamilton fired her, according to Hoods response, by telling her, Its just not working out.

Hamilton, who began working as CAO in December 2002, stepped down when board members voted to begin a search for a new CAO in November. He declined to reapply for the job, and the board appointed Emergency Medical Services Director Allen Johnson as interim CAO in February.

Phillip Brechter, the districts attorney in the litigation, told The Courier Monday, I have a policy not to comment on pending litigation. Board chairman Francis Bourgeois also did not comment, except to say that it was his understanding the motion for summary judgment was denied and a trial date set for May 13.

Edwards also would not comment on why he denied the districts motion.

Smiths lawsuit does not ask for specific damages, such as restitution of back pay or to be returned to her job.

She really loved working there, Hood said. But they've made it just impossible.

He does not expect the district to ask for another motion of summary judgment.

With the attitude the district has taken, I would certainly expect them to take it to trial, Hood said. I certainly hope the citizens of Montgomery County pay attention to this and how the district is run.

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