A decision awarding nearly $1 million to Newman Regional Health was overturned Friday by the Kansas Court of Appeals.
In September 2004, a Lyon County jury agreed with the hospital that Everton Oglesby Askey Architects breached its contract and implied warranty with the hospital in its design of Newman Medical Plaza, which houses physician practices. Since the building opened in early 1997, the hospital has dealt with problems that include leaking windows and building shifts because of soil problems, according to Gazette files.
The architect firm appealed the decision. On Friday, the appellate court overturned the decision in large part because it said the hospital filed the suit too late. At issue, according to the appellate decision, is whether building and leasing the office building was a proprietary function or governmental function. The hospital is not a private company; it is owned by Lyon County.
The appellate court decided that owning and operating the medical building meant the hospital was acting in a proprietary manner.
As such, it had three years to file a suit alleging breach of warranty and five years to file a suit for breach of contract.
Newman filed the lawsuit on July 31, 2002, four months after the five-year statute of limitations ran out, according to the appellate court.
Before filing the lawsuit, Newman spent years negotiating with the architects and project contractors to fix problems with the building, according to testimony at trial. And those problems continue, according to Terry Lambert, Newman chief executive officers.
“It’s an ongoing expense providing considerable repair to the building,” Lambert said Friday.
Back in late 2004, Lambert said the hospital had spent $300,000 on repairs.
The hospital’s original lawsuit also named Walton Construction Co., Fairbury Glass Co., Belles and Associates and Amco Insurance Co. as co-defendants with the architecture firm. The hospital settled with those firms for a total of $285,000.
It declined to settle with the architects, however.
"We believed they were the ones most responsible for our problems," he said in 2004.
The trial jury awarded the hospital $1,059,289 for the cost of repairs to the building and $133,404 for loss of income.
The award was reduced by $285,000, the amount the hospital received from the other defendants. The total Newman expected to receive from the architecture firm was $907,693 plus costs.
Now, however, the hospital will evaluate whether to appeal to the Kansas Supreme Court.
Lambert said Friday that he anticipated the hospital would appeal.