Jury Sides with Community Medical, Shannon to Remain Part of Oncology Partnership

SAN ANGELO, TX — Shannon Medical Center must remain in the partnership with Triad, parent of the San Angelo Community Medical Center in the regional cancer center. Yesterday, a jury deliberated for about four hours to reach a verdict in favor of Triad and Community in the civil lawsuit between the two San Angelo hospitals. Shannon wanted to dissolve the Regional Cancer Treatment Center, which is located on Shannon’s campus.

This morning Shannon spokeswoman Lyndy Stone gave their side’s public response to the jury decision:

“While the outcome of this trial is not what we had hoped, we appreciate the jury for their time and work in reaching this decision. What is most important is the continuance of radiation cancer care here locally.

“The Cancer Center will continue to operate with our physicians and staff, without interruption to patient care. Shannon will continue to work for what we feel is in the best interest of providing exceptional care and service to the patients of West Texas,” stated Stone.

UPDATED 2:00 P.M. 8/9/2017

Jeremy Riney, CEO of San Angelo Community Medical Center said today, “We are pleased with the jury’s finding that Shannon Medical Center had no legal basis to dissolve our partnership in the Regional Cancer Treatment Center and must repay the partnership for multiple breaches of its fiduciary responsibilities. The Regional Cancer Treatment Center was founded as a collaborative community-wide solution for much needed radiation oncology services in San Angelo and the Concho Valley. It is gratifying that the original intent of the partnership will endure. We look forward to continuing to provide these important services through the Regional Cancer Treatment Center for cancer patients in the Concho Valley who need them.”

According to the civil suit filed in 340th District Court, in 1988 two nonprofit hospitals, Shannon and Angelo Community Hospital, formed a partnership operating a radiation oncology center so that patients from both entities wouldn’t have to travel for treatment.

Shannon provided $875,000 in funding for the initial equipment and to begin operations.  In 1995, Columbia Hospital Corporation purchased Angelo Community and three years later created Triad, a for-profit entity to own San Angelo Community Medical Center.

This is where the partnership gets complex.

Dr. John Bolen became a voting limited partner in Triad in 2012 and Dr. Don W. Hughes became a voting partner in 2015.  Dr. Bolen passed away in 2015 and his daughters are named in Shannon’s lawsuit as co-defendants with Triad.  Shannon asserts they purchased Bolen’s voting rights.  Triad disputes that.

The second amended petition from Shannon to the court shows that Shannon has 75 percent of voted units of ownership to Triad’s 25 percent.

The heart of the suit was that Shannon, the day-to-day operator of the partnership, “…may be forced to disclose its proprietary information and contacts to Triad, Shannon’s primary competitor.

Shannon and Triad recently competed directly for a contract with the City of San Angelo and Angelo State University to provide health care.

The suit maintained that, “Unless the partnership is dissolved, Shannon is forced to remain partners with an entity that wears two hats – one as Shannon’s partner and one as Shannon’s primary competitor.”

Shannon was asking the court to provide legal relief to be able to dissolve the partnership. “Because Shannon owns and/or has the right to vote 75 percent of the partnership’s units, Shannon has the right to dissolve the partnership.”

Shannon’s lawsuit asked the court to, “Appoint Shannon or a qualified person to carry out the winding up and to make any order, direction or inquiry that the circumstances require.”

We reached out to Triad for their reaction and it will be published here if they respond.

Click here for the previous story.

Update 11:05 a.m.

Jeremy Riney, CEO of San Angelo Community Medical Center said today, “We are pleased with the jury’s finding that Shannon Medical Center had no legal basis to dissolve our partnership in the Regional Cancer Treatment Center and must repay the partnership for multiple breaches of its fiduciary responsibilities. The Regional Cancer Treatment Center was founded as a collaborative community-wide solution for much needed radiation oncology services in San Angelo and the Concho Valley. It is gratifying that the original intent of the partnership will endure. We look forward to continuing to provide these important services through the Regional Cancer Treatment Center for cancer patients in the Concho Valley who need them.”