Hospital lawsuit dismissed against Belen, county

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A decision by a district court judge last week put the Belen hospital project back on track.

After nearly an hour of arguments from attorneys representing the city of Belen, Valencia County and the village of Los Lunas, Second Judicial District Court Judge Valerie Huling ruled that Los Lunas did not have standing to bring a case against Belen and the county, and granted a motions to dismiss the case.

This third round of litigation about the hospital began when the village filed suit in July, just weeks after a memorandum of understanding was adopted between Belen and the county to build a hospital in Belen.

As part of the MOA, the city would solicit and select a health care provider to build and manage the hospital, and the county would convey the mill levy money to that company once the hospital was certified and operational.

Los Lunas claimed the agreement was illegal because the county could not delegate its authority to select a health care provider for the hospital to Belen. The lawsuit also alleged former Valencia County Commissioner Donald Holliday was not a commissioner at the time of the vote on the MOA.

Los Lunas Mayor Charles Griego said he was disappointed the judge didn't feel the village had standing. The village can appeal Huling's decision to the New Mexico Court of Appeals.

Griego said the issue is on the council's agenda tonight.

"A decision will be made that night as to where go from here," Griego said.

In 2012, the village began working with Miller Architects, an Oklahoma-based company, that plans to develop a privately-owned hospital in Los Lunas. Darin Miller, the CEO of Miller Architects, had said the Valencia Region Medical Center didn't need the mill levy funding for the hospital, but later admitted the money was needed to operate additional services at satellite clinics.

After the judge's decision, officials from both the county and Belen said they looked forward to the project moving forward.

"The decision by the commission, the whole intention was to bring a health care facility to the community," said Valencia County Commission Chairman Charles Eaton. "Hopefully, this will move the project forward. It has been delayed for many, many years. I hope this can bring a fractured community together, and we can address our other pressing issues."

Belen Mayor Jerah Cordova said the judge's decision removed a roadblock that kept the city from moving the project to next level.

"Now that that roadblock is out of the way, the city will be able to push the project forward," Cordova said.

The mayor said the city and its partners in the project are looking at a time line that puts the hospital under construction by the end of this year.

"This week, Ameris, as well as a number of partners, many of whom we've seen before, will be in Belen and in Valencia County and the Albuquerque area, meeting with key local partners as well as doctors and others to ensure that everyone is still engaged and interested," he said. "I anticipate one outcome of this week will be to finally start signing paperwork to initiate financing."

Cordova said Stern Brothers, a bond company based in Chicago, is still the financing partner for the project.

"We have worked on this project for many years, made an immense investment on Christopher Road and Camino del Llano," Cordova said. "This is our opportunity to take this to the next level, which is basically the financing component. We never stopped working, not for one second, not even when this lawsuit was filed."

Attorney Charles Rennick, representing Belen, called the village's claim of injury to establish standing in the case hypothetical.

"There is no injury in fact. The village claims if they have the hospital, they will receive direct economic benefit to the community," Rennick said. "This is speculative — if they had the hospital, they would be eligible for the mill levy. And if Belen does not get the hospital, there is no guarantee that Los Lunas will."

Rennick went on to say there was no restriction on the county to award the mill levy funding to only one hospital. He went on, saying that for the village to enjoy the economic benefit of the mill levy, somebody has to build the hospital and the village has to be rejected by the county for the money.

"None of that has happened," he said. "This is a political decision of the county commission to allocate money here and not there."

If the agreement was determined to not be valid, it doesn't benefit Los Lunas, the attorney argued.

"It would go back to the county commission for another political decision," Rennick said. "They are not required to allocate the mill levy to any particular place."

Whether Holliday was a commissioner or not when the MOA between the county and Belen was approved in July wasn't something Desiree Gurule, attorney for the county, argued before the judge. Rather, she contended that the village was not one of three people — a private person, the district attorney or state attorney general — who could bring such a complaint.

"The village can't bring action on behalf of the state," Gurule said. "The commissioner in question … is not named, is not a party in this action, and he is no longer a commissioner, so he can't be removed. The available remedy is removal."

Holliday cast the tie-breaking vote at the July 17 commission meeting to enter into the MOA with the city. Five days prior, the house where he had lived in the village of Bosque Farms was sold.

Gurule went on, saying the goal of the mill levy was a hospital within the community that would benefit both Belen and Los Lunas.

"Where it stands is of private interest but it is not a disadvantage to one person in the community," she said. "The county entered into the MOA to start a hospital lawfully."

Larry Guggino, attorney for the village, said the county has no authority to take an illegal vote.

"It's pretty clear the county has the authority to decide what to do with the mill levy, but it has no authority to take an illegal vote and then award a contract," Guggino said.

He continued, saying the gap of five days between the sale of Holliday's residence and the commission vote meant the commissioner was no longer a commissioner.

"If he has no permanent residence or maintains no residence in the district, he is presumed to have resigned. He already resigned. He is no longer a commissioner, no longer eligible to vote," he said.

Guggino said Holliday did not have to give a formal letter of resignation. The fact that he no longer had a residence in his commission district meant he automatically and immediately resigned.

"Where the hospital is located does have an impact," he said. "The harm to be created is involved by one commission who greatly reduced the heart of the function of government. This is not 'Los Lunas gets the hospital.' The village will forgo property taxes and development opportunities, all because of an illegal vote."

The vote was also inappropriate because it delegated the county's authority to the city in picking a health care provider.

"If you look at the health care facilities contract, the county has no say, no review by the county commission. It's automatic," Guggino said of the provider selection process. He added that nothing has been done with the project that relied on the MOA.

"They knew this was a problem. We brought it to their attention right away," Guggino said.

The judge dismissed the village's request for an injunction based on Holliday's vote, saying she could have accepted the argument the village brought if not for the fact that the statute stipulated a "private person."

Huling said in regards to standing, the village had not brought proof there was "injury in fact … the harm is speculative. You may not get anything."

The case ended up in front of Huling after 13th Judicial District Court Judge George Eichwald recused the case from the entire district in January.


-- Email the author at jdendinger@news-bulletin.com.