BLOUNT COUNTY, Tenn. — Blount Memorial Hospital filed a lawsuit on Wednesday asking to be declared independent from the Blount County Commission and the Blount County Mayor, after several weeks of controversy over the hospital's ownership and operations.
The lawsuit also asked for a ruling allowing BMH to proceed with plans to sell a facility in the Springbrook area for around $22.2 million. It was opened in 1996 and provided outpatient care, as well as other healthcare services, according to a press release from the hospital.
They claimed it was built without county funds, and also said it was not licensed as a hospital. However, the mayor previously alleged that it was purchased with "county revenues."
BMH said they planned to then lease the facility from the buyer and continue operations, hoping that the sale would "improve the financial condition of Blount Memorial Hospital."
They also asked for three members of the BMH board of directors to hold onto their positions after the Blount County Commission voted to remove them. The mayor previously asked Robert Redwine, Denny Mayes and Scott Powell to be removed from the board in a letter sent in November.
"Over the years, BMH has provided great service to our county in managing one of the county's prized assets. Unfortunately, BMH's board of directors, as well as the hospital administration, appear to have lost sight of BMH's role as the operator, not the owner, of the hospital, and we must immediately move forward in correcting this misconception," said the letter.
The letter also said Mitchell had "grave concerns" about how BMH is operated. In it, he said that BMH was appointed to operate the hospital on behalf of the county, but it never became the owner of any hospital assets.
The commission also voted to change how the hospital's nominating committee works, effectively changing the way the hospital's director is chosen. The three board members refused the mayor's request and are still serving out their terms, according to the lawsuit, even though it said the commission also passed a resolution that removed the three people.
It said the same resolution also purported to give the county the power to terminate its relationship with BMH and create a new non-profit to manage the hospital.
As a result of the lawsuit and the letter, the lawsuit said the possible buyer of the Springbrook facility reconsidered and delayed BMH'sability to meet its obligations with some of its debt.
BMH's lawsuit also claims they believe the commission violated Tennessee's Open Meetings Act because they said the public was not provided with advance notice of a specially-called meeting in November to discuss proposed changes to BMH, which would void some of the resolutions. The lawsuit alleges it was not publicly noticed "in a newspaper or otherwise."
It also made four specific assertions and asked the court to recognize them. Those assertions are listed below.
Blount Memorial Hospital’s directors and officers have the sole authority to operate and manage the hospital, and the county and the cities of Maryville and Alcoa and Maryville College possess no authority over the hospital other than the power to appoint its board of directors.
The county has no authority to remove hospital directors, and the removal of the three directors is invalid.
The county’s proposed restructuring of the nominating committee is invalid.
Blount Memorial Hospital – not Blount County – is the legal owner of the Blount Memorial Health Center at Springbrook facility and therefore has the legal right to sell it.
It claims that the Private Acts of 1945 and BMH's charter and bylaws show that it can operate independently from the county and the mayor. BMH was incorporated as a nonprofit in 1946 and the lawsuit said in 1947, the commission passed a resolution declaring that the county did not intend to operate a hospital, but instead intended to lease its space to an operating corporation.
It also emphasized that BMH was created for "the general welfare of society" and could not pay out dividends or profits among the board of directors.
The lawsuit also claims that interactions with the commission and the mayor have been "erratic and at times in violation of the laws governing operation of the hospital," according to BMH's release. It also claims the board does not believe the county would be able to smoothly create a new nonprofit corporation to keep the hospital open, should BMH be dissolved.