MEMPHIS, Mo.- A judgement was rendered in Scotland County Circuit Court on Friday in a civil suit brought against Scotland County Memorial Hospital by former CEO Dr. Randall Tobler, MD. The suit was filed in March of 2023 in connection with the August 2022 termination of Dr. Tobler’s employment with the hospital. Chief Financial Officer Michael Brandon’s employment was also terminated at that time.
Dr. Tobler’s original petition to the court sought remedy on four counts filed against the hospital and Achim Hoyal. Count one alleged violations of the Missouri Sunshine Law by Scotland County Hospital. Counts two, three and four were leveled against both the hospital and Hoyal. Those counts included slander/defamation, civil conspiracy and tortious interference with business expectancy, respectively.
First Judicial Circuit Presiding Judge Rick Roberts ruled to dismiss counts two, three and four on December 12th, 2023. A bench trial was held on the remaining count on September 23rd, 2024.
On Friday, Judge Roberts issued his ruling in the case, finding in favor of the plaintiff, Dr. Tobler. His ruling stated that the court found a preponderance of evidence that the hospital purposely violated state law by: failing to provide timely notice of the meetings of August 15th and 16th, 2022 to all elected board members, failing on August 15th, 2022 to meet in the meeting place as established by the by-laws of the defendant which was accessible to the public, and by failing to provide 24 hours notice to the public of these meetings, as well as failing to establish an exception to the notice requirements as prescribed by state law.
In his order, Judge Roberts leveled a civil penalty of $5000 against the hospital. He further ruled that all votes, records and decisions made or actions taken in the meetings of August 15th and 16th, 2022, are void and held for naught. Judge Roberts added that Dr. Tobler had sought attorney fees in this action, but that no claim for such fees was made during the trial. He allowed Dr. Tobler 15 days from the date of the judgement to file a motion seeking those fees and costs.
Following this judgement, Dr. Tobler issued a statement to Echo Menges that was published in the Edina Sentinel. The published quote was as follows:
"I appreciate Judge Roberts' thoughtful careful and thorough decision," he said. "It provides vindication from me and establishes accountability for the hospital's illegal, knowing, and purposeful violations of the Sunshine Law. It's not only a victory for me but as important for the people of Scotland County and the entire hospital service area. They deserve hospital leadership that can be trusted to provide the essential health care needs of the community. I’m glad the cloud of suspicion that came out of the allegations that arose during the illegal meeting that I and my family has had to live with for over two years–that cloud has finally been lifted."
On Monday, Scotland County Hospital CEO Meagan Weber issued the following statement to KMEM News:
“As always, the Hospital Board and Administration are completely dedicated to the success of Scotland County Hospital and bringing quality healthcare services to our region. Our staff continue to work through challenges together, and I’m very proud of the teamwork across the organization over the last two years. Rural healthcare has extra challenges, and our employees are dedicated to overcome those hurdles for our patients and community.”
Also on Monday, Scotland County Hospital released an official statement:
Statement of Scotland County Memorial Hospital District Board
Among its other functions, the Board of Directors, as the governing body of Scotland County Hospital, is tasked with overseeing the Hospital’s various operations, setting policies and strategic goals for the Hospital, and hiring and evaluating leadership. As the area’s largest healthcare provider, and the largest employer in the counties it serves, the financial condition of the Hospital is of paramount importance to the region– and the Board’s oversight of the Hospital’s financial activities is required in order to ensure its sustainability. It is the duty of the elected Board members to act as stewards of the Hospital’s resources.
As many of you are aware, Scotland County Hospital has faced several significant challenges over the last several years. In the years leading up to 2022, the Hospital faced an urgent financial crisis, lacked efficient and accurate billing and accounting processes, weak internal controls, and poor employee retention.
The issues facing the Hospital came to a head in August of 2022. A recent article by Rudi Keller in the Missouri Independent stated that the Hospital had $8.2 million in cash on hand at the beginning of 2022. This is not accurate. The number reported by Mr. Keller actually reflects the amount of total cash on hand as of June 30, 2021. Mr. Keller’s reporting is also misleading in that it includes funds that are not available for use in the Hospital’s operations. In actuality, by June 30, 2022, cash on hand had been significantly depleted so that only $602,126 cash remained available for operations. This is significant because it put the Hospital on the threshold of being unable to make its bi-weekly payroll.
It was during this time the Board discovered that the prior administration had not accurately reported to it certain financial information. The Board also learned of the existence of multiple one-signer accounts as well as previously undisclosed bank accounts. These discoveries prompted the Board to take action.
Due to emergency financial concerns for the Hospital, the Board held emergency closed meetings on August 15th and 16th of 2022. During that time, the decision was made to immediately notify Michael Brandon of the termination of his position as Chief Financial Officer, and to accept the immediate resignation of Dr. Randall Tobler as Chief Executive Officer. While Dr. Tobler had an existing contract concerning his employment as a physician, he never entered into a written contract with the Hospital to serve as its CEO. Although Tobler served as full-time CEO, he continued to receive his salary as a full-time physician on the Hospital’s Medical Staff.
After the meetings, Board members Bob Neese and Joe Doubet voiced concerns about how and where the Emergency Closed Meetings had been held. To address these concerns, on August 30, 2022, during the first regularly-scheduled Hospital Board meeting to follow the Emergency Meetings, the full Board individually brought up for their discussion and vote those same personnel matters addressed at the meetings held two weeks earlier on August 15th and 16th. After substantial discussion of the personnel issues, the Board again voted to immediately terminate Dr. Tobler’s employment as CEO and Michael Brandon’s employment as CFO.
There were legitimate concerns expressed about the condition of the financial records of the Hospital and retail pharmacy. The Board’s concerns about the condition of the Hospital’s financial records were not unfounded. As noted by Forvis Audit Firm’s Report of Fiscal Year 2021-2022:
“the District lacked a system of internal controls that operated effectively to prevent or detect material misstatements for the year ended June 30, 2022. We noted that this lack of effective internal control structure resulted in material entries to various financial statement line items as described below. Due to the various financial statement line items impacted and material nature of the misstatements we found the lack of internal control to be pervasive.
We noted the District was unable to reconcile cash to the confirmed bank balance for the year ended June 30, 2022, due to not reconciling the account on a regular basis throughout the year. Through audit procedures we were able to identify approximately $340,000 of net adjustments; however, the remaining approximate $240,000 variance could not be determined which could affect additional financial statement line items.”
Upon the recommendation of the FBI, the Board attempted to conduct a forensic investigation of both the Hospital and retail pharmacy financial records. The forensic audit of the Hospital was completed by Forvis, at a cost of $9,314.09, on November 27, 2023. Although the auditors identified several unusual manual adjustments to cash accounts, they were not determined to be fraudulent in nature. The forensic audit of the pharmacy accounts, however, could not be completed due to the large number of missing financial records and the lack of required information the auditors needed to complete an investigation. As stewards of the Hospital’s resources, the Board and Administration elected to move forward and focus on the future well-being of the Hospital’s finances while making improvements and strengthening accounting practices.
At the Board’s invitation, on October 27, 2022, Casey Lawrence, the Director of Sunshine Law Compliance with Missouri’s Attorney General’s office came to Scotland County Hospital and presented training on the Missouri Sunshine Law. All current Board members, as well as the Hospital’s CEO and COO attended. Also in attendance were Achim Hoyal and Brenda Prather.
On March 8, 2023, Randall Tobler filed a Petition against the Hospital in the Circuit Court of Scotland County. Although the lawsuit included several other claims that were dismissed on multiple occasions by the Court, Tobler’s sole remaining claim alleged that the Board had violated the Missouri Open Records and Meetings Law, commonly referred to as the Sunshine Law, when it held the two Emergency Closed Meetings on August 15th and 16th of 2022. The Board’s Chairperson, Lori Fulk, recently gave testimony during the bench trial of that action. The issue to be decided by the Court was whether the Hospital Board failed to provide sufficient notice of the two meetings, as required by the Sunshine Law, and if so, whether such failure to provide notice was done knowingly or purposely.
On Friday, November 8, 2024, the Court issued its decision in the matter. Although Mrs. Fulk testified to the contrary, the Court found that the Board purposely failed to provide sufficient notice of the Emergency Closed Meetings. While the Board is, of course, disappointed with the Court’s ruling on this matter, we continue to feel strongly that the Hospital did not knowingly or purposely violate the Sunshine Law, and we will thoroughly examine our options with regard to any appeal in the days to come.
In the meantime, please know that Scotland County Hospital will continue to focus on our mission to provide quality, affordable healthcare to our community, as well as a rewarding and supportive work environment for our employees and staff.
