Delaware Corporation's Own Press Release Thwarts Attempt to Dodge Wrongful Death Suit
A Lackawanna County Court of Common Pleas judge has denied a health company's attempt to escape a wrongful death lawsuit against one of its hospitals, finding "extensive evidence" to refute its argument that it did not have control over the hospital.
January 23, 2020 at 03:50 PM
3 minute read
The original version of this story was published on Delaware Law Weekly
A Lackawanna County Court of Common Pleas judge has denied a health company's attempt to escape a wrongful death lawsuit against one of its hospitals, rejecting its argument that it did not have control over the hospital.
Judge James Gibbons denied defendant Community Health's preliminary objection argument that the court lacked personal jurisdiction in the case.
The underlying suit alleged negligence in the care provided by Regional Hospital of Scranton to the deceased Karen Kowalski.
Community Health argued it is a "fictitious creation used for marketing. It does not own, operate, or maintain hospitals, does not employ any healthcare providers and was not involved in the treatment of Karen Kowalski."
However, Gibbons held that there was evidence to the contrary, including a passage from a press release in which Community Health CEO Wayne Smith, discussing the acquisition of Regional Hospital, stated that Community Health "looks forward to implementing strategies, including capital investment and physician recruitment," with Regional Hospital.
Gibbons wrote in his opinion, "Here we have extensive evidence from Community Health that it maintains significant control over the hospitals it owns, including Regional Hospital. We find that control over the retirement benefits, the requirement that employees list Community Health as their employer, and the statement provided by Smith on behalf of Community Health, instrumental in this determination."
Additionally, Gibbons rejected the defendant's argument that the plaintiffs' assertion that Community Health maintains and operates Regional Hospital was baseless. Gibbons said the contacts Community Health has with Regional Hospital are not "random or fortuitous."
"While Community Health has a principal place of business in Tennessee and is incorporated in Delaware, the burden still remains slight," Gibbons said. "In the instant case, plaintiffs' claim arises from actions which arose at Regional Hospital, in Scranton, Lackawanna County, Pennsylvania. Pennsylvania has an interest in adjudicating medical malpractice disputes that occur in a hospital in Pennsylvania, controlled by a non-resident corporation."
Gibbons continued, "Based upon the record, our exercise of specific personal jurisdiction over Community Health is permitted by the laws of the commonwealth and the Constitution of the United States. Thus, this preliminary objection will be overruled."
The plaintiffs are represented by James Mundy of Powell Law, who did not respond to a request for comment.
"It's very important … that you establish who the corporate entity is and who holds the four pillars of responsibility," Mundy said, "The probelm here is the owner has been, until now, evading that responsibility,
Community Health and Regional Hospital are represented by Holli K. Bott of Burns White, who did not respond to a request for comment.
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