OAG: Over $635.2K claim is ‘sweetheart backroom deal’

The Office of the Attorney General is digging its heels over what it describes as a “sweetheart backroom deal” for two Rota physicians who are claiming $635,187 in benefits from the Rota Health Center and the Commonwealth Healthcare Corp.

The lawyer for RHC and CHCC, Civil Division chief Christopher M. Timmons, said that Drs. Francois Claassens and James Toskas have asked the Superior Court to enforce the deal.

He said the “sweetheart backroom deal,” if made at all, is in contravention of Commonwealth law and was made by “self-dealing medical professionals who lacked the legal authority to make any such deal in the first place.”

Timmons made the assertion in RHC’s and CHCC’s reply to Claassens’ and Toskas’ opposition to the motion to dismiss their lawsuit.

The two doctors are suing RHC and CHCC for breach of contract and quantum meruit.

Quantum meruit determines the amount to be paid for services when no contract exists or when there is doubt as to the amount due for the work performed, but done under circumstances when payment could be expected.

Claassens is demanding payment of $308,000 for all administrative leave, while Toskas is seeking payment of $327,187 for all administrative leave.

RHC and CHCC have filed a motion to dismiss the case.

The doctors, through counsel Stephen Nutting, opposed the motion.

Nutting said the court should find the contracts legal and enforceable because the director of Office of Personnel Management approved the terms at the time of their initial employment and subsequently approved the terms during the renewal process.

Nutting said the court should find that even if the RHC resident directors and Rota mayor did not have the authority to bind the government in their agreements with the doctors, agents with authority later ratified the doctors’ contracts, including the terms in dispute, during the renewal process when they were fully routed.

“The doctors’ additional services to Rota greatly benefitted its people, the CNMI government, and the local community as a whole,” said Nutting, adding that to refuse to compensate Claassens and Toskas would be “a malfeasance” by the OAG.

Timmons said the two doctors assert that RHC and CHCC are engaged in semantics by urging the court to enforce Commonwealth law and binding precedent.

Timmons said the doctors take issue with RHC’s and CHCC’s reference to the excepted service regulations applicable to “administrative leave,” arguing that their (doctors) contracts could have “used other titles such as “annual leave,” “comp-time,” or “overtime” to describe the same thing.

He said Claassens’ and Toskas’ fundamental argument is that CHC entered into an agreement to pay some of the highest public salaries in the Commonwealth (over a $150,000 annual salary plus $800 per month housing allowance) under which the salaried doctors allege to have worked more hours than were required.

Collectively, Timmons said, Claassens and Toskas seek to be compensated almost a million dollars over and above their guaranteed annual salaries, which have already been paid.

He said RHC and CHCC simply ask the court to apply CNMI Supreme Court precedent to strike contract provisions that impose obligations on the government that contravene law and regulations.

Timmons said the crux of CHC’s argument is that binding CNMI Supreme Court precedent states that “government bodies are not bound by contracts that exceed statutory grants of authority,” and that “a person contracting with a public entity is charged with knowledge of the statutes governing employment with that entity.”

He said Claassens and Toskas seek to enforce supplemental provisions they allege to be included in their employment contracts.

Timmons said the doctors ask the court to enforce benefits that are in excess of statutory grants of authority, exactly what the court is prohibited from doing by the high court’s precedent.