HMS brings second lawsuit against CCMSD

Health Management Service (HMS) has filed a second lawsuit against Crook County Medical Services District (CCMSD). The new filing once again claims that the company, which managed the district for several years, is still owed payment for its services after the sudden termination of its contract.

The complaint claims that CCMSD retained HMS’s management services for five years, with the end date set at September 30, 2020. The agreed management fee was equal to 5% of the total gross operating revenue of the district’s facilities.

On April 15, HMS claims it received a 120-day notice of termination, which brought the contract’s end date to August 13. However, “inexplicably”, HMS was then notified that the district was “unilaterally voiding” the agreement effective May 1.

HMS claims that the district “did not articulate any grounds nor cite any contractual provisions authorizing its unilateral decision to void the management services agreement”.

HMS further claims that a letter dated May 18 was sent to inform the district that the company was still willing and able to perform the contractual terms through the 120-day termination notice period and expected payment through August 13.

The company claims CCMSD has failed to remit that payment or otherwise respond to the demand.

The complaint claims that CCMSD breached the duties it owed to HMS by ending the contract prior to the end of the notice period “and contrary to the express contractual terms.” The management company is therefore seeking damages of $144,422.70 – the amount it feels should have been paid for its services until the 120 days had expired – as well as attorney fees and costs incurred by the legal action.

This is HMS’s second filing against CCMSD since the two parted ways, and the complaint remains essentially the same. The first case was dismissed in July after the board of trustees filed a motion to dismiss on the basis that CCMSD is a local governmental entity covered by the Wyoming Governmental Claims Act.

The motion argued that this act contains a provision that no action can be brought against a governmental entity unless the claim is first presented to that entity in a written statement. This was not done, she said.

The complaint was withdrawn by HMS. A written statement was provided to CCMSD before the second claim was filed.

CCMSD has not yet responded to the complaint, which was filed on August 18.