Tri-City's Fired CEO Cleared Again of Wrongdoing

Hospital Attorneys Go 0 for 3

 

When Tri-City Medical Center fired Larry Anderson three years ago they wanted to save the $650,000 in severance pay his contract required if they fired him without cause. They chose to rely on an anonymous telephone call, followed by a secret internal investigation conducted by hospital attorneys, to come up with a list of fourteen reasons to fire him for cause. He was accused of one or more of the following offenses: committing a felony, an illegal act involving moral turpitude, a willful and dishonest act, or a breach of duties and obligations.

Without telling him in advance what the charges were, the hospital offered Anderson thirty minutes to defend himself at a hastily arranged board meeting. When he refused to attend the board voted to fire him.

After Anderson was denied unemployment insurance he lodged a complaint with the California Unemployment Insurance Appeals Board. The hospital's attorney was unable to provide sufficient evidence to support any of the four charges identified by the hospital as the most heinous, so Tri-City was ordered to begin paying into his benefits.

The charge that Anderson had "improperly used district funds/resources to investigate Matt Hall, Mayor of Carlsbad," struck me as an example of how the hospital's governing board has been mired in local politics. Anderson hired Farrah Douglas, a member of the Carlsbad City Council at the time, to be executive director of the hospital's Foundation Board. Mayor Matt Hall allegedly told her she'd have to resign from the Council because her job there would create a conflict of interest. The hospital's  attorney pointed out she didn't have to resign, just recuse herself from votes posing a possible conflict of interest. There was no evidence Anderson used district resources for anything other than a legal opinion. But it does raise the question of why Mayor Hall really wanted Douglas off the council.

In July 2014 Anderson filed suit in San Diego Superior Court in a complaint against attorney Larry Patterson, the hospital lawyer who conducted the secret investigation of the CEO. Two years later the jury held Patterson accountable to Anderson for $1.3 million in damages.

If Tri-City had fired its CEO because he couldn't get along with the board, (a collection of elected officials whose membership changes every two years), or because he wasn't an effective administrator, or simply because they didn't like him, they could have done so for $650,000. But the board chose instead to trump up charges stemming from an anonymous phone call.

Three court rulings have now made it clear that whatever shortcomings Larry Anderson had in the eyes of his employer did not rise to the level of a felony, an illegal act of moral turpitude, or a breach of his duties.

This year Tri-City fired Anderson's replacement, Tim Moran, after less than two years in the position and shortly after the San Diego Business Journal named him the Most Admired CEO of 2016. The hospital couldn't drum up even bogus reasons to can their new CEO this time around. They fired him without cause, rewarding him with $600,000 in severance pay, plus a year of medical and dental insurance. Unlike Anderson, he went quietly.

Before Moran's executive office chair had cooled, it was filled by Steven Dietlin, the hospital's chief financial officer, the hospital's third CEO in five years, raising the question of whether local politics, rather than job performance, is responsible for the hospital's CEO revolving door. Dietlin would be well-advised not to get too comfortable in his chair.

Two years ago, at the same time Anderson filed his malpractice lawsuit against Patterson, Tri City filed suit against the Medical Acquisition Company (MAC), the firm with whom Anderson had negotiated the hospital's purchase of a new building to be built on Tri-City's campus. The Medical Office Building (MOB) was built but remained vacant for two years, while the hospital took possession of it under eminent domain, depositing $5 million as its estimated amount of compensation to its owner, Charles Perez, President of MAC.

Tri-City wanted the deal it had signed with Perez to be nullified, claiming Anderson and Board Chair Rosemarie Reno had illegal conflicts of interest when it was signed. The judge threw out the claim against Reno. The jury found Anderson had no financial or personal conflict of interest either.

Judge Earl H. Maus's June 23 ruling in favor of Medical Acquisition Company, Inc. awarded the firm damages amounting to $20 million. The hospital was credited with the $5 million already deposited by the hospital in their eminent domain claim.

Not only did Tri-City fail to make its case against its former CEO, the ruling's financial damages do not reflect the costs of two years of litigation. Anderson estimates the amount owed Perez in attorneys' fees, as well as the hospital's two-year loss of projected revenue from rent and patient services fees adds up to at least $10 million.

Three years ago Tri-City could have purchased a new medical office building for $16.3 million. The hospital's failed lawsuit has raised that price to more than $30 million.

The only benefactors of the hospital's latest financial debacle seem to be Anderson and attorneys who get paid whether they win or lose. Maybe it's time for Tri-City to fire its General Counsel, Procopio, Cory, Hargreaves & Savitch LLP.

Grading on the Curve

Carlsbad's Intersection Circumspection

Carlsbad's elected officials took the city's vision of "a small town feel and beach community character" and twisted it into a developer-friendly General Plan. Fortunately, their questionable integrity and patronizing "we know best" attitude are not reflected in the leadership and staff of Carlsbad's talented, courteous and responsive city employees.

The 2009 public opinion survey that led to the development of the city's Community Vision produced statistically sound results. But Mayor Hall and his council colleagues used them to justify land use changes allowing shopping centers and multi-use commercial/residential housing near the beach and lagoon.

The most recent online survey, developed by city staff for the Tamarack Area Coastal Improvements Project, asks respondents to choose from three options designed to improve safety, beach access and traffic flow at the intersection of Carlsbad Boulevard and Tamarack. After careful consideration, I chose the Roundabout Plan for the reasons listed in the staff's comparative summary.

Improve pedestrian and cyclist safety and access:

The Roundabout Plan would widen the sidewalk on the west side of Carlsbad Boulevard, over the bridge, from 4 ft. to 16 ft; the safety buffer for bikes from 5 ft. to 8 ft. alongside Carlsbad Boulevard, and from 0 to 2 ft. along Tamarack.

Reduce air pollution, improve parking and landscaping:

It's the only option that would reduce air pollution and traffic noise. It would also add fourteen new parking spaces and provide larger gathering and viewing areas than the other two options.

Improve safety without sacrificing traffic flow:

Finally, the roundabout is the best way to improve safety for drivers, bikers and walkers without increasing drive through time. (See below)

 

To trust, but verify the staff report, I researched the results of studies comparing standard intersections vs. roundabouts nationwide. Here's what I found in an April 2016 report by the Insurance Institute for Highway Safety (IIHS) and Federal Highway Administration.

Safety:

Roundabouts typically achieve a 37 percent reduction in overall collisions, a 75 percent reduction in injury collisions, a 90 percent reduction in fatality collisions, and a 40 percent reduction in pedestrian collisions. Serious crashes are essentially eliminated because vehicles travel in the same direction and at low speeds, generally less than 20 mph in urban areas. They also reduce the likelihood of rear-end crashes by removing the incentive for drivers to speed up to beat light changes and by reducing abrupt stops at red lights.

Traffic flow

Several studies have reported significant improvements in traffic flow with conversion to roundabouts. Most research focused on single-lane roundabouts, as proposed for Carlsbad Boulevard/Tamarack. A study of three locations in New Hampshire, New York and Washington state, where roundabouts replaced traffic signals, found an 89 percent average reduction in vehicle delays and a 56 percent average reduction in vehicle stops.

Public opinion

Drivers may be skeptical of or opposed to roundabouts. But several Institute studies show opinions quickly change when drivers become familiar with them. In several studies, 36 percent of drivers supported the roundabouts before construction compared with 50 percent shortly after. Follow-up surveys after they had been in place for more than a year found public support increased to about 70 percent on average.

My first experience with roundabouts, called traffic circles at the time, occurred at DuPont Circle in Washington, D.C. It was a multi-lane nightmare. It took me several rounds of terror before getting the hang of it and exiting without incident. I swore off future encounters with the beast.

But a few years ago, when confronted with a single lane roundabout in Encinitas, I discovered their benefits of safety and convenience. So I welcomed Carlsbad's new version north of the village. I often cursed the yield sign as I drove south on Coast Highway, approaching the intersection intending to make a left turn. It forced me to estimate the speed of an oncoming car heading north on a collision course as it crested the hill ahead. The new roundabout has put an end to my flashbacks of games of chicken.

I've been critical of the city's elected officials for deferring to developers the shaping of Carlsbad's future. But with 22,000 additional residents expected to move into town over the next 20 years, decisions on traffic projects such as this one need to be made on their merits alone, despite the lingering distrust of the city's current elected leaders.

I think the Roundabout Plan is the best way to improve public safety, beach access and traffic flow. But citizen activists have shown the importance of being informed, involved and engaged in political action. So I'm hoping there will be a record number of respondents to this survey.

Thanks to citizen activism, a regional shopping center will not despoil a city lagoon, a puppy mill store has left town, and five candidates are challenging the two city council incumbents in the November election.