Norton Healthcare owns Kosair Children’s Hospital, which is supported in part by Kosair Charities.

Norton Healthcare owns Kosair Children’s Hospital, which is supported in part by Kosair Charities.

Although Norton Healthcare and the University of Louisville settled their legal difference at the end of last year, Norton Healthcare and Kosair Charities are still battling it out in court.

The attorneys for Norton Healthcare — Dustin Meek, of Tachau Meek PLC, and David Bradford, of Jenner & Block — have asserted that members of Kosair Charities’ Board of Directors have given donations to the University of Louisville, which they said at the very least represent a conflict of interest and at worst were kickbacks.

Meanwhile, the attorney for Kosair Charities, Donald Cox, of Lynch, Cox, Gilman & Goodman PSC, has argued that Norton’s attorneys are attempting to detract from the real matter at hand.

“In attempts to deflect the Court’s attention from its ever-changing stories about what happened to the $115 million in charitable donations, over the last few months, Norton has filed a series of subpoenas against at least twenty separate entities and individuals, which purport to seek completely irrelevant information from them,” states an April 4 court document.

Jefferson County Circuit Court Judge Mary Shaw has had to order both parties to fill requests for documents made by the opposing counsel, according to court filings, as attorneys for both sides have complained that the other is not making an effort to do so.

The saga started in 2014 when Kosair Charities sued Norton Healthcare over the alleged misuse of funds. Kosair Charities claims Norton misused $115 million designated to help charity care patients at Kosair Children’s Hospital. Kosair Charities is still seeking information regarding executive compensation from Norton, materials from Norton’s lobbyists, and a record of 10 percent of its transactions for charity care reports.

Norton has filed a countersuit against Kosair Charities and Randy Coe, president of Kosair Charities, claiming harm to the organization’s reputation and that Kosair Charities breached its affiliation agreement by failing to make scheduled payments to Norton. Norton also alleged that Kosair Charities kept money that donors were under the impression would go to Kosair Children’s Hospital, Norton and Norton’s fundraising arm Children’s Hospital Foundation.

In the countersuit, Norton is seeking payments that Kosair Charities owes Norton via their affiliation agreement, as well as seeking any money that Kosair Charities received that was intended to benefit Kosair Children’s Hospital but was not given to Norton. Norton also wants to leave the door open for possible punitive damages, recovery of legal expenses and relief for malicious prosecution.

“The claims are the frivolous and retaliatory product of Norton’s knee-jerk reaction to having been sued by its largest donor,” Cox stated in a court document.

The co-defendant in the countersuit, Randy Coe, notably is husband to Christe Coe, who is suing her sisters Mary Moseley and Dawn Hitron and two other people over potential sale of the Galt House Hotel and other Al J. Schneider Co. assets.

Part of the case for Norton’s claim that Kosair Charities damaged its reputation is a statement Christie Coe made a decade ago to Lynnie Meyer, chief development officer and system vice president for women’s and children’s community partnerships. The statement indicated that Randy Coe is happy when Norton is not mentioned for its role as owner of Kosair Children’s Hospital.

“He absolutely loves it when an article comes out in the paper and only says Kosair … He loves it because it confuses the community, and he relishes in it, and he talks about it for weeks on end,” according to Meyer’s deposition of what Christe Coe told her.

Norton’s attorneys have requested to depose Christe Coe and argued their side in court Monday, but Cox, who also represents Randy Coe, argued that Christe Coe couldn’t testify in the case because of spousal privilege, a legal precedent that states a married person cannot be compelled to testify against their significant other.

Norton countered that the conversation and context of the conversation don’t fall under spousal privilege, particularly since Christe Coe made the comments to Meyer.

“This is a businesswoman,” Meek said of Christe Coe during the Monday hearing. “This isn’t a woman who when she voluntarily discloses things to Lynnie Meyer, when Lynnie Meyer is in a position of influence as the head of the Children’s Hospital Foundation, this isn’t someone who doesn’t understand the import of her work. …She knows who Lynnie Meyer is.”

Norton also has put forth a theory that Kosair Charities wants to get out of its agreement with Norton. The agreement, which took effect in January 2007 and ends December 2026, lays out a schedule for the annual contribution Kosair Charities pays out to Norton to support Kosairs Children’s Hospital and its pediatric services. The agreement is valued at nearly $117 million.

The agreement only limits the use of the funds to charitable, scientific and educational purposes related to the hospital. It can only be terminated if Norton consolidates or merges with another entity, if both parties agree to dissolve it, or if there is a breach of contract.

Norton’s attorneys point to appointment of Jerry Ward as chairman of Kosair Charities as the genesis for the troubles between Norton and Kosair Charities. Ward, they noted, owns a local real estate company and is on U of L’s Board of Overseers, which has more than 140 members. Ward has served on Kosair Charities board since 2009.

Ward’s appointment “happens to coincide with when the decision was made by Kosair Charities to cut off Norton and try to get out of the contract and at the same time a much greater generosity has been shown to U of L,” Bradford argued Monday on behalf of Norton. “We are not saying it is the same dollars. They can give their money to whom they want to give their money to, but it’s certainly relevant to what happened to this relationship.”

Norton is seeking any communications where Ward talked about not funding Kosair Children’s Hospital and directing funding to other organizations, as well as any contractual relationship Ward or his company have had with Kosair Charities and U of L.

“If he hasn’t done work or been paid by U of L personally, if he hasn’t profited personally from U of L, he can say there are no responsive documents,” Bradford said. “But if he’s been paid personally and benefited personally from U of L while he’s decided that tens of millions of dollars should be paid over there, at a time when he is cutting off Norton, that is certainly fair discovery.”

Prior to holding a position on Kosair Charities’ board, Ward was the exclusive real estate agent of U of L, consulting on lease transactions, the sale of donated properties and property management, Bradford said Monday citing a news article. “His bread has been buttered by U of L.”

In July 2012, Bradford said an internal email went out at Kosair Charities talking about getting out of its contract with Norton, and that same year, Kosair Charities gave U of L $8 million. The next year, Kosair Charities allegedly failed to pay Norton the $5.1 million it was owed per the affiliation agreement, meanwhile donating $7.3 million to U of L.

“This desire to get out of the contract is not happening in a vacuum,” Bradford said, briefly noting the controversy surrounding U of L President James Ramsey’s compensation.

Bradford added that Planning & Construction Associates, a company owned by another Kosair Charities board member, Patrick Miller, received $160,000 from U of L for work around the same time Kosair Charities donated money to the university.

Meeks indicated that Norton also believes it was improper for Kosair Charities to gave $3 million to Spalding University for naming rights to the Kosair Charities College of Health and Natural Sciences when Christe Coe was a member of the university’s board of trustees.

Norton has subpoenaed documents from U of L, Ward, Ward’s realty company, Spalding University and other parties related to their possible personal and business relationships.

In a court document, Kosair Charities’ attorney Cox said the “charitable conspiracy” is nonexistent and irrelevant to the case. “What does any of this have to do with the main issue in this case — namely, the whereabouts of $115 million in charitable donations?”

“The subpoenas are solely intended to harass the Members of the Board of Kosair Charities,” the document later states.

During Monday’s hearing, Cox called Norton’s allegations “a fantasy.”

Norton “just loves it when Mr. Bradford comes in and insults people on our board, accuses them of taking kickbacks. I mean that is what this has fallen down to,” Cox said, adding that Kosair Charities’ board members don’t make money for their board service. “These are not people who are in it for the money unlike the people at Norton who make millions and millions and millions of dollars every year. And our analysis of their income and salaries show they are beyond the pale.”

In court documents, both sides have taken cheap shots at each other.

When referencing Norton’s allegations that Kosair Charities ran misleading advertisements, Cox wrote in a court document: “The truth is, as any Louisville resident knows (or anyone not from Chicago knows), this is just not the case.” The Chicago mention is a direct shot at Bradford, who practices at a law firm in the Windy City, but was granted the ability to practice law in Kentucky for this case.

In one of Norton’s filings, its attorneys call out Kosair Charities for depositing money it owes Norton as part of the agreement into a fund overseen by the court.

“The money should be paid to Norton where it can be used to help children at Kosair Children’s Hospital.”