Attorneys: Toss health care foundation’s petition

Attorneys for the Idaho attorney general and Idaho Trust Bank were in court Tuesday morning asking a judge to throw out a petition by the Lewis-Clark Valley Healthcare Foundation Board of Community Advisors.

Deputy Attorney General Brett DeLange and Sam Creason, an attorney for Idaho Trust Bank, argued in a telephonic hearing with 2nd District Judge Jay Gaskill that the Lewis-Clark Valley Healthcare Foundation Board of Community Advisors did not qualify as a person, or a party of interest, and did not have standing in court to challenge the deal struck in August that the board says shuts out local input in deciding where grant money can be spent in the region.

In August, Idaho Attorney General Lawrence Wasden and Idaho Trust Bank, the trustee for the trust created in the wake of the sale of St. Joseph Regional Medical Center by the nonprofit Ascension Health to the for-profit RCCH Healthcare Partners in 2017, came to a nonjudicial binding agreement that restated what the board was supposed to do within the trust’s grant process.

Attorneys for Wasden and Idaho Trust Bank asked Gaskill to dismiss the case or make a ruling in the case from the pleadings that had been filed with the court in September and October.

Lawyers for the trustee and Wasden argued that the board, referred to as the Board of Community Advisors or BOCA in the trust document, was not recognized as a party of interest under Idaho’s Trust and Estate Dispute Resolution Act, known as TEDRA.

Jim McPhee, the board’s attorney, argued Tuesday that Wasden’s original trust, which was amended in August without the board being notified or without its agreement, gave the board power over the trust’s assets.

“The individuals appointed to this board are not beneficiaries, they are not trustees, they are not trustors,” DeLange argued as he pointed out there had been problems with the board since the trust was created that the August amendment intended to fix by getting the trust back to its original intent. “BOCA doesn’t have authority, the AG does.”

The trust is the first of its kind in Idaho and is of particular interest to Wasden, who set it up, DeLange said.

“The success is due in part to the board’s efforts,” DeLange said.

Trustee attorney Creason argued the board lacked standing in court to file the petition.

“Our injury is because we lost power,” Creason said, framing the board’s argument in its petition to the court. “If they are a third-party entity, then they have less jurisdictional standing. We never recognized a third-party entity.”

McPhee, arguing for the board, pointed to a phrase in the original trust that states “BOCA shall have an interest in and authority over trust assets.” The board determines annual and initial grants, McPhee said.

“To say the BOCA is without power over the assets is contrary to the terms of the trust,” McPhee argued.

The original trust document also gave the board exclusive power to bring a legal action against the trustee, Idaho Trust Bank.

“Certainly, they weren’t approving a document that gives power to something that’s not an entity,” McPhee said.

The board is asking Gaskill to invalidate the August agreement because they were not consulted. McPhee said Wasden had supervisory authority to enforce the trust and the board only was seeking to be afforded the rights conferred to it under TEDRA. The August amended trust agreement relegated the board to advisers cooperating with Idaho Trust Bank, he said.

“BOCA is a party, it’s signature is required,” McPhee said.

Gaskill asked if Wasden can terminate the trust and if the power to terminate the trust did not include the power to amend the trust. McPhee said Wasden did not have the power to amend the trust without the board’s approval.

“I thank everybody for dumping this matter on my lap,” Gaskill joked as he promised a ruling as soon as possible on the motions to dismiss or judgment on the pleadings in front of him Tuesday.

The trust, founded in 2017 by Wasden, was funded with $23 million from the $109 million sale of St. Joe’s and $2 million from RCCH. The hospital is now a part of LifePoint Health.

The trust is designed to make charitable grants, contributions or program-related investments to qualified exempt organizations that promote health, wellness or disease prevention for people within the hospital’s service area that includes Clearwater, Idaho, Latah, Lewis and Nez Perce counties in Idaho; Asotin, Garfield and Whitman counties in Washington; and Wallowa County in Oregon.

The Lewis-Clark Valley Healthcare Foundation has granted more than $1.1 million in Fast Tract Grants, Emergency Grants and Large Impact Grants this year to area nonprofits promoting health and wellness or disease prevention in the region. On Tuesday, the foundation announced grants to 14 nonprofit agencies totally $625,888 (see accompanying story).

Wells may be contacted at mwells@lmtribune.com or (208) 848-2275.