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Press Releases

January 4, 2001

CONTACT:
Eileen Cornish, Sharp HealthCare
(858) 499-4117

FOR IMMEDIATE RELEASE

Settlement reached in Grossmont Hospital lease lawsuit
Three-year legal dispute ends amicably

The Grossmont Healthcare District, Grossmont Hospital Corporation and Sharp HealthCare have settled a lawsuit filed by the district to overturn the May 29, 1991, 30-year lease of Grossmont Hospital to Sharp HealthCare. The settlement, benefiting both the hospital and the district, ends a three-year legal dispute and was reached on Jan. 3 after months of negotiations.

The district built Grossmont Hospital in 1955 and operated it independently until 1991. In 1991, the district entered into an affiliation with Sharp HealthCare that was designed to provide Grossmont Hospital with the advantages of being part of Sharp's regional network of hospitals. As part of the affiliation, the district entered into a lease agreement giving control of the hospital to Grossmont Hospital Corporation. The legality of the lease was challenged in 1997. An issue related to that challenge is currently pending action at the state Supreme Court.

The parties involved agree that the settlement is in the best interests of the communities they mutually serve and assures that Grossmont Hospital will remain affiliated with Sharp HealthCare through May 2021.

"The district has achieved its goal of reforming the lease to reflect terms it believes are needed to assure Grossmont Hospital is able to serve the community long into the future and after the affiliation with Sharp HealthCare ends," said Grossmont Healthcare District President Gloria Chadwick.

In announcing the settlement, Chadwick added: "The amended lease provides the district with five seats on Sharp's Gross mont Hospital Corporation board of directors that oversees the hospital's operations and also assures continued operations of the hospital by the district if control of the hospital were to revert to the district for any reason."

According to the terms of the settlement, Grossmont Hospital Corporation will pay $5 million to the Grossmont Healthcare District and return more than $400,000 in attorneys' fees paid to Grossmont Hospital Corporation under a previous court ruling.

Separately, the district will contribute $2.5 million to the Grossmont Hospital Foundation's "Partnership for the Future" campaign to build a new Emergency and Critical Care Center. This is part of the district's ongoing commitment to the hospital's capital campaign. Previously, the district has pledged $1.5 million toward this important community project, resulting in a total contribution of $4 million.

Dr. James Carry, chairman of Grossmont Hospital Corporation Board, welcomed the settlement of the lawsuit and said, "This settlement demonstrates a mutual respect among the parties for their positions and a desire to work collaboratively for the betterment of Grossmont Hospital and the community it serves."

The settlement includes an agreement that the parties will join in petitioning the California Supreme Court to dismiss the appeal pending at the state Supreme Court and ultimately bring the lawsuit to closure.   

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