Rainbow Pete v. Coast Hospital

by Mark Scaramella and Bruce Anderson

Every few years Fort Bragg's Mendocino Coast District Hospital gets into the news. In the mid-90s it was turf battles between the Hospital and some of its better paid doctors. In the late 90s it was an employee strike caused by the Hospital's board of directors who thought employees should pay for most of their own medical insurance while management forked over more money to powerful senior doctors.

Given the high-intensity internal rivalries, over-paid doctors with exclusive contracts, strikes, management turnover, chronic funding difficulties, doctor and patient defections, surprise firings and resignations, it's surprising that the hospital stays open.

But Coast Hospital not only has stayed open, but its popular support is the envy of the County's for-profit medical centers. It's a fine little community owned hospital, one of the few left in the state.

The day-to-day operation of the hospital is mostly funded by public and private insurers (mostly medicare, and to a lesser extent medicaid), hospital privilege fees paid by the small army of Coast doctors, some private payments, a hospital tax on the real estate in the hospital's far-flung district, which includes Navarro at its south end, inland half-way to Willits, east to include Comptche, and the entire north coast from Elk to the county's northern border. There's also an active support foundation that constantly raises money from sources in the District as well as out-of-district donors.

The hospital is so popular that in late 2000 hospital district voters approved a $5.5 million construction bond to renovate, upgrade and seismically retrofit the aging hospital building and add two new buildings — an outpatient facility and a materials handling/storage building.

Hospital management immediately proceeded to set up the bond sale and hired an architect to design the upgrades and new facilities and prepared to put the work up for bid.

In August of 2002, the hospital began the project by calling for bids for site prep for the new construction. Nobody bid. It's not clear why nobody bid. Perhaps the Hospital didn't advertise widely enough; perhaps the few locals who might ordinarily have bid were busy. Perhaps Fort Bragg's remote location made the job seem impractical, not worth it, to outside construction companies.

But no bids were received for the site prep work, the initial stage of construction.

The hospital then decided to ask for bids on a two-phase general contract that represented the whole works, a total project contract. This time Coast received four bids, the lowest of which was submitted by Peter Richardson's Rainbow Construction of Ukiah. But Richardson's "low" bid for the combined project was $1.4 million over the architect's estimate of how much the work should cost, and 25% more than the Hospital had budgeted for the work.

No contract was awarded.

Back to the drawing board.

Frustrated, the Hospital decided to turn management of the project over to a small Southern California project management outfit called EJM/KKG under a $700,000 professional services contract. EJM/KKG quickly repackaged the project into dozens of sub-projects broken down by industrial trade. EJM/KKG also "value engineered" the design to lower estimated costs. Further, they agreed to manage the entire project, including overhead functions like setting up the construction site, providing site security, scheduling and coordinating the individual contracts, and quality control. They'd even provide an on-site office/trailer from where they'd schedule upwards of 60 individual construction contracts, ensuring that the roofers didn't appear before the foundation was laid, for instance.

This summer, work began at the hospital grounds. Initial contracts were awarded for surveying, demolition, excavation, underground plumbing, erection of the pre-fab structures and so on. Additional contracts are planned for carpentry, insulation, plumbing, and other basic work. According to EJM/KKG, breaking down the total project into these individual contracts will bring in more bids from around the state at costs the Hospital is prepared to pay. EJM/KKG's theory has been borne out in most cases; initial bids and awarded contracts are in line with projected costs.

Work was finally moving along, and moving along within Coast Hospital's projected total project budget.

But not so fast.

In October, Peter Richardson, having been turned down as general contractor, decided to throw a monkeywrench into the works. Working with a Bay Area-based industry/labor non-profit called the Construction Industry Force Account Council (CIFAC) that specializes in scrutinizing public contract bidding processes, Richardson and CIFAC sued the Hospital, its Board President Charlene McAllister and its CEO Bryan Ballard for not getting competitive bids before hiring EJM/KKG to shepherd the construction.

Richardson and CIFAC wanted Mendocino County Superior Court Judge Leonard LaCasse to issue a court order to stop work already under way and reopen the entire contract to competitive bidding which, presumably, would give Richardson's Rainbow Construction Company another chance at the apple.

One of CIFAC's members is the North Coast Builders Exchange on whose board of directors Rainbow Construction's Vice President Doug Anderson happens to sit.

Rainbow's complaint about the contracts for the work at Coast Hospital includes an allegation that the Hospital District is not paying "prevailing wages" and a fatuous charge that the work underway is being done in "sweatshop conditions," as if the foundations were being poured by Indonesian seamstresses.

These complaints are ironic, to say the least, because Rainbow has a well-deserved reputation for being aggressively anti-union, which hasn't prevented Richardson's inland Republican allies at the Ukiah School District from blessing Rainbow with all its major construction projects over the past decade. Richardson also got the County contract for the undersized administration building on Low Gap Road. Characteristically, Richardson had to be compelled by the County to complete the job.

Richardson was a staunch supporter of former County District Attorney Susan Massini. Massini rewarded Richardson when the great friend of the working stiff made a citizen's arrest of four Carpenters Union business agents in Ukiah at a school construction site when Massini, dutifully standing by her man, subsequently filed criminal trespassing charges against the four who were merely going about their job of inspecting the working conditions where some of their union members were working for a Rainbow subcontractor.

The charges were patently bogus — the law has a specific provision allowing union reps onto worksites, a fact Massini's two senior deputies pointed out to her at the time. The union reps were quickly exonerated at their entirely unnecessary Ukiah trial in 1996, but not until Massini had arrested one of them a second time for the crime of walking past her office. Massini said she thought the guy "might" be carrying a bomb. He wasn't.

But Richardson doesn't let his antipathy towards unions get in the way of the pursuit of his own business interests.

The suit against the Hospital is based primarily on an opinion from the California Legislative Counsel's office (obtained through Senator Wes Chesbro's office) that the Hospital District, as a public entity, is required to get competitive bids and follow the detailed rules for awarding public construction contracts.

The Hospital hotly denies the allegation that they ignored the competitive bidding laws, pointing out that they tried to get competitive bids and were unsuccessful, only then turning to EJM/KKG under a professional services contract which is exempt from competitive bidding. EJM/KKG in turn is bidding out each part of the construction in accordance with the competitive bidding rules.

The Hospital also informed Judge LaCasse of the obvious — that Rainbow was simply a "disappointed bidder" and the suit was little more than retaliatory harassment from Richardson because his Rainbow Construction outfit had not got the whole contract for its inflated bid of 25% more than estimated costs.

EJM/KKG also advised the judge that if work was stopped for an indefinite period it would cost the Hospital an estimated additional $160k or more to get it going again, assuming nothing else changed.

In early November, Judge LaCasse, splitting the difference as local judges often do to appease community big shots like Richardson, refused to issue the stop-work order requested by Richardson, but he did issue a show-cause order requiring the Hospital to provide additional information concerning the legalities of their contracting methods. There's also a question before the court about the adequacy of EJM/KKG's performance bond since they're not acting as a contractor, but as a project manager.

Richardson also charged that EJM/KKG's owners don't have a contractor's license, but that claim seems unfounded since they do have licenses under their own names but not under the company name of EJM/KKG.

On November 20, the Hospital's board of directors formally agreed to pay the mounting legal expenses to defend their project team's handling of the work.

The next court date is now set for Friday, December 19th in Judge LaCasse's courtroom in Ukiah. Both sides are expected to file arguments and responses prior to the showdown date, but Coast Hospital is already the loser because it has to pay to defend itself against Mr. Sour Grapes' action against it, which is really an action against the thousands of people who depend on Coast Hospital for their medical care.

There may be technical legal problems with the Hospital's contracting, but with Richardson as the plaintiff it's hard to escape the underlying message: if you don't give me the contract at something near my price, you'll end up paying just as much in extra legal fees and construction delays.

If Richardson wins, he just might force the Hospital to start over or re-bid the rest of the work. He might even try to get "damages" for Rainbow. But even if Richardson doesn't get his way in this particular case, he'll still be sending his intimidating message to other of the County's public entities who don't play ball with him. Pay or play. I don't care if you're a community owned hospital or a school district.

Who Is Peter Richardson?

Peter Richardson first settled in the Covelo area of Mendocino County where he was widely assumed to be in the more exciting sectors of agriculture. Like many another Mendocino County groovy guys, Richardson's private life isn't as scrupulously legal as he pretends his public concerns are.

Superior Court records show that Richardson, was arrested January 26, 1998, for allegedly beating his wife. The records also indicate an arrest on January 27, 1998, but there are no additional charges listed. At the time of the January 26 arrest, Richardson was charged with a felony violation of Section 273.5(a) of the Penal Code, infliction of corporal injury on a spouse. There is nothing in the record showing a bail amount or an Own Recognizance release agreement for Richardson, nor is there a record of Richardson's arraignment, or even a date for his arraignment. The next entry in the record is June 25, 1998, when Deputy DA Beth Norman filed one misdemeanor count against Richardson for corporal injury to a spouse.

The five month delay in filing a complaint against Richardson and the reduction of charges from a felony to a misdemeanor seemed inexplicable, as did the lack of a record of an arraignment date or a bond posting to ensure Richardson's appearance. According to an inter-departmental memo to all deputy DAs, then-DA Susan Massini's policy was that caseloads are to be cleared weekly. Massini demanded that her deputies either file or drop charges within a week of receiving a complaint from law enforcement. The reduction of Richardson's charges from a felony to a misdemeanor also violated Massini's policy of filing the most serious charges possible as leverage to force a defendant to plea bargain.

The reason for the five month delay in filing charges against Richardson was that Massini believed she had a personal conflict of interest — which was quite true.

Massini, not wanting to prosecute one of her biggest political supporters and risk alienating his support in her re-election bid against Norm Vroman, sent the case involving her pal to the State Attorney General's Office for prosecution. But the AG considered the matter as a simple and straightforward domestic violence prosecution and, perhaps not realizing just how deeply beholden Massini was to Richardson, sent the case back to Massini. Why would the Mendocino County DA bother sending such a case to the State AG's office in the first place?

The AG's mystified response indicated that they had no idea why Massini was claiming to have a conflict, and, like much of Massini's correspondence from her time in office, Massini's original cover letter to the AG was missing from the file.

Much of the information one would expect to find in the court file in People v. Peter Alfred Richardson, case number 98-1502, was obviously lacking . According to Sheriff's Department Records, however, Richardson was arrested at approximately 9pm on January 26 for assaulting his wife and he was charged with a felony. He was fingerprinted, photographed and released at around 11pm after posting $15,000 bail. At 7 the following morning, the 27th of January, Richardson was again arrested for violating a court order. This time his bail was set at $30,000. Less than two hours later Richardson had again made bail and was again released.

Richardson's second arrest was for violating a temporary restraining order obtained by his wife with the help of the arresting officers in the first case. They noted Mrs. Richardson had bruises on her face, chest and back. The arresting officers felt Mrs. Richardson was in danger from her husband, and she expressed the same sentiment, hence the TRO.

But where were the contempt of court charge and the two bail bond slips? And where was the arresting officer's affidavit of probable cause in support of Richardson's arrest?

Answer: Peter Richardson had two files. Another file, which the court clerk called an "open court file," had the missing information. Court staff didn't know why there were two separate files, each containing part but not all of the information stemming from what was essentially one incident.

The content of the second file helped explain why all the records were not kept together. The missing bail bond slips showed that the $30,000 bond was paid by check in the full amount by a man whose name is illegible. Paying bond by check to get out of jail is strictly against the rules. Also in the second file is the two arresting officers' brief narrative of probable cause supporting the arrest of Richardson. When Richardson was arrested on the 26th for felony corporal injury to a spouse the narrative read: "Richardson came home under the influence of alcohol, an argument ensued. Richardson became combative against his wife, who he has two toddler children with. Richardson pushed his wife against the wall and shoved her in a bathtub. Richardson used an open hand to shove his wife. He also grabbed her by both arms and violently shook her. Richardson's wife sustained red marks on her face, chest and back."

The second is for his arrest the next morning, the 27th, and is self explanatory: "Suspect violated an emergency protective order by calling his wife saying that he wanted her off the hill. Victim is afraid for her life. Suspect was arrested on Deputy Cash's (probable cause)."

But before Richardson's arrest and the single misdemeanor charge filed by Beth Norman on June 25, Richardson had been ordered to appear on February 27. At that hearing Susan Massini told the judge that charges had not yet been prepared and the case was continued until March 20. On the 20th Massini again personally appeared for the People and again insisted the People were not ready to file charges against Richardson. From there the record jumps back to the original file and the reduced charges filed by Beth Norman. In both files the felony charge of violating an emergency restraining order was not mentioned. It is as though it never existed as far as the DA's office was concerned. But the Sheriff's Department arrested Richardson on that charge and there is the matter of the $30,000 bail, paid by check.

Massini was simply delaying Richardson's case while she was attempting to dump it off on the AG. Massini continued to delay the case after the AG's refusal to accept it, putting the trial until February of 1999.

But Richardson — a man so full of himself he practically prances down the street with a meticulously coifed groovy guy braid running from the back of his tanned head to his belt — would never come to trial. With the November 1998 elections looming, and Richardson's support in her pocket, Massini would see to it. On December 22, while Massini was "vacationing" in Hawaii to recover from losing her re-election as DA, Assistant DA David Basner went into court to dismiss the charges against Richardson.

Basner listed the reason for the dismissal as "per the age of the case," and since there had been no more complaints, Richardson was entitled to "DA Diversion." A "DA Diversion" is nothing more than a slow-mo dismissal — if Richardson stays out of trouble for the next year his record will be wiped clean. Of course the reason for "the age of the case" was Massini's failure to prosecute it — the diversion came just a bit early.

Standard practice is to wait a year after an arrest before offering a defendant a diversion, which would have meant that Richardson was not eligible for diversion until at least January 27th of 1999. But Massini couldn't wait that long, her term in office ended January 4, 1999, when Norm Vroman, a man less given to mercy for wife beaters than his "feminist" predecessor, was sworn in as Mendocino County District Attorney. Massini jumped the date to pay off her campaign debt to Richardson, and, in an effort to give her and her political supporter a fig leaf of cover, Massini was bold enough to include a letter from Mrs. Richardson, written on Victim Witness stationary (a division of the DA's office) in which the Missus recants her original story of abuse at the hands of her husband.

Mrs. Debby Sue Richardson, not unlike the vast majority of battered women who continue to live with their tormentors, subsequently claimed she "fell."

Mrs. Richardson later divorced her batterer husband.