St. John’s Medical Center is waiting out the clock on a legal battle with a tenant.
Medical Professional Landlease operates out of the “Brown Building,” an edifice adjacent to the Sage Living nursing home construction site. The corporation rents the land the building sits on from St. John’s, and its tenants are medical providers not associated with the hospital.
It sued to stop the construction in September, alleging its lease with the hospital had been breached by a loss of parking and because its patients had to navigate a series of fences to reach the entrance. The company filed a request for a preliminary injunction that would have stopped the construction, and St. John’s filed for a competing injunction that would have removed the corporation from the building.
Teton County District Court Judge Timothy Day, who has been hearing the case, filed an order last month that denied both requests and set up St. John’s ability to wait out the litigation. He noted his court was not the right place to hash out what boils down to a landlord-tenant dispute.
“This case may be ill suited to the confines of judicial remedies available through litigation,” he wrote in denying the injunctions. “This dispute may better be resolved through mediation or other means than through the very public process of litigation.”
In reading the leases and amendments signed by the two parties over the years, Day found the corporation, which Drs. Richard Sugden, Jim Little Sr. and Michael Enright run, had a right to stay in the Brown Building until March 8. However, he set the pretrial conference for the case to be April 6, after the tenants will need to vacate.
In his order he told the parties to make “good-faith efforts” at mediation by late January. Sugden said mediation could potentially lead to outcomes amenable to his company, such as altering the Brown Building to be smaller so that it better accommodates the future Sage Living. He said an agreement like that would allow the corporation and its tenants to stay in the building even after Sage Living is finished.
“It would take out my office and exam rooms,” he said, “but that’s OK. I can use other rooms in the building.”
St. John’s CEO Paul Beaupre dismissed the idea of mediation, saying the hospital will tear down the building when the lease ends. In ending Sugden’s lease, Beaupre said, the hospital has offered him office space on campus at a “fair market rate,” as federal anti-kickback laws require, but Sugden has not responded.
Beaupre said Sugden and his tenants cannot remain in the Brown Building because it must be removed to allow Sage Living construction to be completed on schedule. Court documents submitted by the hospital claim delayed construction would cost between $500,000 and $700,000.
“We modified our plans,” Beaupre said. “As long as we get access as the judge says we should, it will not put us behind schedule. If there’s another roadblock, then we’ll be behind schedule, and it will be more expensive.”