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Vidant suit moved; emails offer details

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By Ginger Livingston
The Daily Reflector

Thursday, June 13, 2019

A lawsuit over the governance changes involving Vidant Medical Center’s Board of Trustees has formally been moved to Pitt County and includes emails that show a difficult negotiation between sides.

The two sides in the dispute agreed last month to change the venue of the case — originally filed in Orange County — to Pitt County because most of the participants are located in here. The documents in the case were filed in Pitt County Superior Court on Tuesday.

The University of North Carolina System and East Carolina University last month filed a complaint against Vidant Medical Center and Pitt County because the two entities approved changes to the hospital board’s governance structure. The changes stripped the UNC Board of Governors of its ability to appoint nine members to the hospital’s Board of Trustees. The appointment power was given to the Board of Trustees.

The court documents included emails from the attorneys representing the two sides. The emails show that prior to filing the complaint, attorneys for UNC and Vidant Medical Center spent four days trying to reach an agreement that would allow them to continue negotiations.

The emails, which were filed as exhibits, show representatives of the hospital and county met with representatives of UNC and East Carolina on May 16 to discuss the governance changes.

There was discussion about releasing a joint public statement about the dispute. There also was discussion about both sides signing a “standstill agreement” that would have put further actions on hold for 60 days and called on the two sides to not disparage each other.

The proposed agreement also sought to keep settlement discussions, held on May 15, confidential.

Starting on the evening of May 16, emails indicate the discussions about a joint public statement were coming apart.

Noah Huffstetler, the attorney representing UNC and ECU wrote the following: “East Carolina University and the University System reached out to Vidant and Pitt County to raise concerns about the impact Vidant Medical Center’s recent governance change would have on the longstanding affiliation agreement involving the Brody School of Medicine and Vidant. Executive leadership of all entities met to discuss those concerns, and we expect those conversations to continue. The parties recognize the importance of the affiliation agreement to health care in North Carolina, and we are hopeful that the conversations will be productive.”

More than 90 minutes later Michael W. Mitchell, the attorney representing Vidant and Pitt County, submitted a statement he characterized as projecting “a slightly more unified front and positive outlook.”

That statement said, “East Carolina University and the University Systems reached out to Vidant Medical Center and Pitt County to discuss the recent change to Vidant’s governance, and to express concerns about whether the governance change would affect the longstanding affiliation between the Brody School of Medicine and Vidant. Executive leadership of all entities met in good faith to discuss those concerns, and they had productive conversations. The parties reaffirmed their commitment to the affiliation between Brody and Vidant, and they recognized the importance of this affiliation to health care in eastern North Carolina. Those conversations are continuing and we are optimistic they will continue to be productive.”

Huffstetler responded the afternoon of May 17: “our client representatives” believed their statement “more accurately describes where the parties are in their discussions.”

Emails indicate the two attorneys talked via telephone. An email from Mitchell included a draft of the “standstill agreement.” Huffstetler sent a counter proposal on May 18.

On May 19, Mitchell wrote there were concerns about the negotiations.

“UNC/BSOM’s positions have repeatedly changed on a number of material issues” including the issuance of a statement, actions involving control of Vidant and the board seats and the opportunity to speak to the Pitt County Board of Commissioners and the Vidant Board of Trustees, Mitchell wrote.

“It’s extremely difficult to negotiate with parties whose positions are changing this often and this quickly,” Mitchell wrote. He ended the message by reaffirming the hospital and county’s wish to continue discussions “about how to strengthen the relationship between Vidant and the BSOM.”

The next day, May 20, UNC and ECU filed a complaint seeking an injunction to halt the governance changes. A judge signed a temporary restraining order preventing any actions related to the governance change on May 24. Four days later, on May 28, the two sides agreed to enter mediation and agreed to a request to change the case’s venue to Pitt County.

Also on May 28, the state Senate introduced its budget for fiscal years 2019-21 which included a provision that stripped Vidant Medical Center of Medicaid reimbursements related to its service as the medical school’s teaching hospital.

The House and Senate are negotiating the final budget. Pitt County Rep. Greg Murphy is one of the House conferees.

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