Here Comes ‘Cumis’

What is “Cumis?”  

A. A type of cloud usually only seen in Arctic or Antarctic climate zones, but now drifting toward mid-latitudes.  

B. A spice employed exclusively by chef Emeril in his curry dishes.  

C.  A diminutive of the name of the Lithuanian fisherman, Cumisiulionis, who first discovered how to pepper and pickle herring in the 12th century.  

D. The right of a California litigant to independent counsel.  

E. The surname of the last pitcher to strike out Babe Ruth.


One is tempted to continue to invent false answers to surround the correct one, but fun and games must eventually give way to full column writing. In literal terms, the answer is none of the above. Rather, Cumis was part of the name of an insurance business. In the early 1980s a lawsuit arose between the San Diego Navy Federal Credit Union and Cumis Insurance Society Inc. A December 3, 1984 decision by California's Court of Appeal for the Fourth Appellate District established the precedent allowing the appointment of independent counsel for the defense of insureds when their insurance company has a conflict of interest.

What does that have to do with the price of celery in Comptche? Again, literally speaking, not much. However, in the grand scheme of healthcare on the Mendocino Coast, Cumis arrived at Mendocino Coast District Hospital (MCDH) wrapped in the gauzy ribbons of a closed session item at a May 22, 2019, special board meeting.

The case of Hardin v. MCDH, et al has wended its way through federal court for multiple years. The hospital's current board of directors (BOD) has employed their Cumis right to independent counsel to watch over the lawyers originally employed from Gordon & Rees LLP to defend the institution itself, its former Chief Executive Officer (CEO), former Chief Financial Officer (CFO), and former President of the BOD (see the AVA online archives for details on how the case began).

The MCDH administration has refused to tell the public, which ultimately foots the bill, how much the Hardin case has cost the hospital or how much it is projected to cost should it go to trial. Court filings, however, indicate Hardin is suing for $5 million in damages. Hospital officials have stated that the hospital's insurance, through BETA, a healthcare facility insurance group, will pay a portion of the legal costs. Presumably, the refusal by MCDH to inform the public regarding the legal costs stems from a desire to keep Ms. Hardin and her attorney in the dark about how much MCDH is willing to spend on the matter. The employ of the Cumis counsel is almost standard practice now for an entity like MCDH to protect its backside from a legal team that is essentially beholden to BETA more than it is to the hospital.

The Ellen Hardin case stems from her claim that former CEO Bob Edwards and former CFO Wade Sturgeon harassed her on the job after she discovered billing fraud that Sturgeon allegedly covered up. Court documents and other sourcing indicate a lengthy list of names of those who filed workplace complaints against Sturgeon, including the then administrator of the hospital's North Coast Family Health Center (NCFHC) on through numerous hospital employees. Many of these folks informed Edwards about their problems. Edwards seemingly chose to ignore all this to keep Sturgeon on the job as CFO and, in turn, the former president of MCDH's Board of Directors, Steve Lund, backed Edwards all the way, including voting to give Edwards a contract extension just months before the public would have its say in electing four new members to the MCDH Board of Directors.

Those new board members voted to dismiss Edwards in January, but as part of his contract they were forced to pay him one year's salary as a going away present. Newly released emails from November, 2018, show that Lund attempted to orchestrate a performance evaluation review for Edwards last autumn, months ahead of when it was scheduled to occur. A review to be performed by the lame duck BOD. The outcome would have further cemented Edwards in place and certainly would have delayed the new board's ability to get rid of him. Former BOD member Peter Glusker objected to Lund rushing into the performance evaluation and Glusker's vehement objection seemingly stopped the process.

Early this year, the strategy of the Gordon & Rees attorneys, employed by MCDH through BETA insurance, has become clear. They have sought the records from Ms. Hardin's two previous employers. What they appeared to be digging for was a pattern in Hardin's employment showing that she repeatedly sought monetary relief through harassment claims or claims that higher-ups caused her intentional distress in the workplace.

An additional Gordon & Rees ploy was to demand the court appoint a psychiatrist to give Ms. Hardin an examination (known in legal parlance as an Independent Medical Exam or IME). For a deeper dive into the particulars see the AVA of March 20, 2019.

Federal judge Thomas Hixson ruled on both these matters on April 4, 2019. First, on the mental exam the judge stated, “There are no 'specific facts,'... indicating that Hardin’s emotional distress claim is anything more than her testimony that the Defendants’ [MCDH et al] alleged actions upset her. There is therefore no 'good cause' for a mental exam under Rule 35. Defendants’ motion for a mental examination is DENIED.”

With respect to MCDH et al using the records from Hardin's prior employers, Judge Hixson ruled, “The Supreme Court has recognized '[t]he concern that employers might as a routine matter undertake extensive discovery into an employee’s background,' and has noted the power of the lower courts 'to invoke the appropriate provisions of the Federal Rules of Civil Procedure [to] deter most abuses.' [Hixson cited a case in support] The Court does so here. None of the Defendants’ proffered relevance arguments is sufficient to overcome Hardin’s privacy objections. Indeed, even absent a privacy objection, the Court would not have found that the subpoenas to her former employers satisfy Rule 26’s relevance and proportionality requirements. Defendants' motion to use Hardin’s former employment records is DENIED.”

About six weeks later the new MCDH Board of Directors invoked their right to Cumis counsel. Saddled with this case from a previous administration it is a good bet that most, if not all, the current board members would prefer to settle the Hardin case and move on. Meanwhile, depositions of those who worked under Edwards and Sturgeon, and in many situations complained bitterly about them, continue in San Francisco and here on the Mendocino Coast. The bottom line now is how many millions will the Hardin case ultimately cost MCDH and its source of financial support, the taxpayers?

(More on the Hardin case and other MCDH matters at malcolmmacdonaldoutlawford.com.)

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