Both sides are claiming victory in the ugly legal battle between Summa Health and Western Reserve Hospital Partners.
A Summit County jury last week awarded Summa $906,464 in compensatory damages for breach of contract by Western Reserve Hospital Partners, the majority physician owners of the Western Reserve Hospital.
And Western Reserve says a verdict requiring a third-party appraisal of the Summa-owned building in Cuyahoga Falls where the hospital is housed will allow Western Reserve to finally buy the facility.
What remains unclear, however, is the future of the partnership that runs the hospital and the fate of the business itself.
The Summit County Common Pleas jury found both Summa Health and the doctors group at fault for violating agreements in their joint ownership of the hospital, awarding each the small sum of $10. The larger award to Summa was for the breach of a management services agreement.
The jury, which returned its verdicts Friday afternoon, ultimately awarded no punitive damages or attorney fees.
Spokesmen for Summa Health and the hospital this week thanked the jury for its consideration, but stopped short of discussing the future of the strained relationship between the two sides.
“We are pleased with the verdict and look forward to working with our physician partners to enhance the already great patient care being provided for the people of Cuyahoga Falls,” Summa spokesman Mike Bernstein said.
This comment was a departure from Summa’s previous statements indicating a desire to sever the relationship with Western Reserve and possibly sell its stake in the partnership. Pressed further, Bernstein declined additional comment.
Mark Bosko, Western Reserve Hospital’s spokesman, said the verdicts “will now allow Western Reserve Hospital to purchase the building in which the hospital physicians and staff have been delivering care to the community for more than seven years.”
The Cuyahoga Falls facility is owned by Summa and leased to the hospital business.
Asked what the verdict means for the partnership and the hospital, Bosko said, “The physician leaders of Western Reserve Hospital Partners are hopeful that time will bring clarity to the relationship with our minority partner.”
The legal battle is rooted in a 2009 partnership between Summa and Western Reserve to run the Cuyahoga Falls hospital. For about five years, everything appeared to run smoothly. That changed in 2014 when Western Reserve’s majority physician owners sought to end Summa’s minority ownership stake and Summa started scrutinizing how Western Reserve was being operated.
Judge Lynne Callahan, who presided over the trial, asked jurors to return Tuesday morning. Once they did, she polled them to make sure it was their intent not to award compensatory damages in two fiduciary claims in which they found for the hospital and doctors group, giving each $150,000 in punitive damages and attorney’s fees to be paid by Summa. The jurors affirmed this was their decision.
But the failure to award compensatory damages meant punitive damages and attorneys fees — which would have meant a hefty sum — also were off the table. In civil trials, punitive damages can’t be awarded unless a jury also awards compensatory damages, which compensate a plaintiff for injury caused by the defendant’s wrongful actions.
With a lack of compensatory damages, Callahan found for Summa on both claims.
Callahan urged the parties to try to reach a settlement, but this didn’t happen.
Other details of the jury’s verdicts include:
• A neutral third party must do an appraisal of the value of the hospital facility. Summa and the physician majority owners had appraisals done that varied drastically, with Summa’s at nearly $20 million and the doctors’ at $5.6 million.
• Summa is entitled to view books and records of the hospital.
A few issues remain to be settled in the case and Callahan gave the attorneys until next Tuesday to file briefs.
The parties could potentially appeal to the Ninth District Court of Appeals.
Bernstein wouldn’t say whether Summa will appeal.
Bosko said Western Reserve and its attorneys “continue to consider options and have not made any decisions at this time.”
Stephanie Warsmith can be reached at 330-996-3705 or swarsmith@thebeaconjournal.com. Follow on Twitter: @swarsmithabj and on Facebook: www.facebook.com/swarsmith.