UW Medicine Summary Judgment

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Defendants Motion for Summary Judgment - 1
THE HONORABLE MICHAEL C. HAYDEN
IN THE SUPERIOR COURT OF THE STATE OF WASHINGTON IN AND FOR THE COUNTY OF KING PUBLIC HOSPITAL DISTRICT NO. 1 OF KING COUNTY, Plaintiff, v. UNIVERSITY OF WASHINGTON; and UW MEDICINE, Defendants. I. INTRODUCTION No. 12-2-34486-8 SEA DEFENDANTS MOTION FOR SUMMARY JUDGMENT
In 2010, Public Hospital District No. 1 of King County (the District) approached the University of Washington about integrating their health care systems. The District wanted to improve patient care, increase efficiency, and position itself to succeed under ongoing health care reform. After months of public meetings and negotiations, the parties entered a Strategic Alliance Agreement (Agreement) on June 30, 2011. The Agreement was authorized by state law, and both parties warranted they had authority to enter the Agreement. Now, over a year later, the District is trying to back out of the contract. After the University has expended considerable resources incorporating the Districts facilities into its
HILLIS CLARK MARTIN & PETERSON P.S.

1221 Second Avenue, Suite 500 Seattle, Washington 98101-2925 Telephone: (206) 623-1745 Facsimile: (206) 623-7789
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regional health care network, a new majority of commissioners now claims the District lacked authority to enter the contract and seeks a declaration from the Court that the Districts decision was ultra vires.1 The Districts arguments are unfounded. Two state statutes expressly authorize this type of agreement, and the parties carefully structured the sharing of responsibilities under the Agreement. The Districts attempt to break a contract it signed should be rejected, and summary judgment should be granted for the University. II. RELIEF REQUESTED
The University requests that the District be held to the contract it signed, and that the Districts lawsuit be dismissed. III. EVIDENCE RELIED UPON
The University relies on the contract. For additional background, the University submits the Declarations of Johnese Spisso and Sandra Sward. IV. STATEMENT OF FACTS
For summary judgment, the only facts necessary are the terms of the Agreement and its lawful passage by the Districts commissioners in May 2011. Decl. of Johnese Spisso Ex. A (Strategic Alliance Agreement); Decl. of Sandra Sward Ex. P (Resolution approving strategic alliance). Nevertheless, additional information is provided to the Court as background about the parties and the transaction.
Because the University believes the Complaint should be dismissed as a matter of law on the merits, this Motion does not address whether the District is entitled to seek declaratory judgment. Defendants Motion for Summary Judgment - 2 HILLIS CLARK MARTIN & PETERSON P.S.
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A.
THE PARTIES.
The University of Washington is one of the oldest state-funded institutions on the West Coast. Its roots date back to the Territorial Legislature, and it first opened its doors to students in 1861. Today, the University serves more than 45,000 students and employs more than 40,000 people. Pursuant to state statute, the University is controlled by a Board of Regents, whose members are appointed by the Governor with the consent of the state Senate. RCW 28B.20.100. The Universitys School of Medicine was established in 1946, and University Hospital was established in 1959. Today, the Universitys health care system is operated as UW Medicine, a comprehensive health system in Puget Sound that includes four hospitals, primary and specialty clinics, and an air ambulance service. In fiscal year 2012, UW Medicine had approximately 64,000 patient admissions across its four hospitals and more than 1.9 million visits to clinics and other ambulatory sites. Spisso Decl. 3. UW Medicines mission is to improve the health of the public by advancing medical knowledge, preparing the next generation of physicians, scientists, and other health care professionals, and providing outstanding clinical care. Id. Public Hospital District No. 1 of King County is a public hospital district serving south King County. Its facilities include Valley Medical Center, which is a 303-bed acute care hospital in Renton, and a network of primary and urgent care clinics. As a public hospital district, the District is authorized by the Legislature to carry out certain functions, including constructing a hospital or other health care facilities; buying, leasing and selling property; borrowing money; issuing revenue bonds; levying property taxes; and condemning property. RCW 70.44.060. The District also has the power to contract with other
Defendants Motion for Summary Judgment - 3 HILLIS CLARK MARTIN & PETERSON P.S.
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communities, corporations, or individuals for the services provided by said hospital district. RCW 70.44.060(3). The same statute also authorizes the District to enter agreements with other public
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For the Courts convenience, sections of the minutes relating to the Strategic Alliance Agreement have been highlighted. Defendants Motion for Summary Judgment - 4 HILLIS CLARK MARTIN & PETERSON P.S.
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entities for carrying out any of the powers authorized by this chapter. RCW 70.44.060(7) (emphasis added). The Agreement at issue was made pursuant to that legislative grant of authority, and similar authority found in other statutes. B. THE PROCESS.
Health care is continuously evolving, highly regulated, and competitive. Over the years, the District has considered combining and integrating with other entities to provide better and more efficient care for its patients. In 2010, in the wake of significant national health care reform, the District considered this strategy again. The District recognized that delivery of health care in the future will require participation in networks of health care professionals focused on delivering care that improves health, increases access, and reduces costs. Sward Decl. Ex. A at 5 (Dec. 15, 2010 minutes of Districts Board of Commissioners meeting).2 Integration of hospital systems allows for innovative approaches to care delivery, leading to better patient care, recruitment and retention of top physicians and staff, expanded quality control systems, and cost savings. Health care entities use a variety of approaches to combine their resources, including referral networks, mergers, buy-outs, partnerships, operating agreements, and other types of alliances as varied as the organizations involved. In 2010, the District formed a Presidents Advisory Council to assist in the investigation of options for partnership or affiliation. The Council raised 43 potential criteria
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for the Districts consideration, and then winnowed the list down to 12 top priorities for a potential alliance. Sward Decl. Ex. A at 5. With those criteria in mind, the District considered potential partners for an affiliation. The District also began discussions with
4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 Wilderness Lodge in Maple Valley, and March 29 at SeaTac City Hall. Id. Ex. D. Support for the alliance was overwhelming. The proposed alliance received support from more than 100 elected officials, doctors, and community members, including U.S. Senator Maria Cantwell, U.S. Senator Patty Murray, U.S. Representatives Jay Inslee,
medical staff and other key stakeholders. The District commissioners and the public were briefed at public meetings. E.g., id. Exs. A & B. Ultimately, the District chose to pursue a strategic alliance with UW Medicine. The District commissioners decided unanimously at a public meeting on January 18, 2011 to evaluate and negotiate a potential strategic alliance with UW Medicine. Id. Ex. B. The parties signed a non-binding letter of intent that same day. Id. Ex. C. The goals outlined in the letter included exploring the feasibility of a strategic alliance: to enhance and further the mission and vision of the District and UW Medicine by increasing access to health care services available to District residents, and to integrate the District Healthcare System into the operations of UW Medicine. Id. The parties then spent months negotiating, conducting due diligence activities, and gathering input from key stakeholders and the public. Six public meetings were held throughout the hospital district to discuss the proposed alliance: February 25, 2011 at the Kent Senior Center, March 3 at the IKEA Performing Arts Center in Renton, March 10 at the Coal Creek YMCA in Newcastle, March 16 at Covington City Hall, March 18 at the Lake
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David Reichart, Norm Dicks, and Adam Smith, and mayors of cities within the District Service Area. Id. Exs. E & F. The District commissioners were given regular updates about the progress of the
4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 C. THE AGREEMENT. At that meeting, the District voted to approve the Strategic Alliance Agreement by passing Resolution 968. Id. Ex. P. The resolution noted the overwhelming public support, and concluded it was advisable and fair to, and expedient for, and in the best interests of the District to enter into the Strategic Alliance Agreement, and to take the actions necessary to permit its implementation. Id. section. Id. Ex. M. During a special public meeting on May 3, Mr. Beal again walked the commissioners through the agreement page by page. Id. Ex. N. Revisions were made to the proposed agreement, and Mr. Beal provided an update to the District at the public meeting on May 23, 2011. Id. Ex. O. the board of commissioners to ensure ample opportunity will be afforded the Board to review the Strategic Alliance documents. Id. Ex. L (April 18, 2011 minutes). During the May 2, 2011 public meeting of the Districts commissioners, Mr. Beal made a detailed presentation about the proposed strategic alliance agreement, explaining the draft section by negotiations, and were advised during the process by experienced legal counsel, including inhouse General Counsel, David Smith, and outside counsel George Beal of Perkins Coie. Id. Exs. G-L (Minutes of District Board of Commissioners meetings on February 7, February 22, March 7, March 21, April 4, and April 18, 2011). The District planned special meetings of
The Strategic Alliance Agreement spells out the terms of a 15-year agreement to operate an integrated health care system that incorporates the Districts health care facilities
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into UW Medicine. Spisso Decl. Ex. A 10.1 (Strategic Alliance Agreement). The University and the District each agreed to certain limitations, and accepted certain responsibilities, under the Agreement. The University and the District decided the new
4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 The Districts commissioners retain important responsibilities. The Agreement contains a lengthy table listing 60 powers and obligations of the District, and identifying
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integrated system would be managed by a thirteen-member Board of Trustees (the Board) whose members would be all five District commissioners, five members of the public from within the District Service Area, two current or previous members of boards of other UW Medicine component entities or the UW Medicine Board, and the UW Medicine CEO or his designee. Agreement 3.2. Trustees are bound by fiduciary duties to the District Healthcare System, and must act in a manner believed to be in its best interests. Agreement 3.5. Trustees are also bound to follow the Ethics in Public Service Act and all other duties and obligations owed by public officers in Washington.3 Id. The day-to-day operations of the newly integrated system are handled by the CEO of the District Healthcare System, who reports to the Board as a whole, and whose responsibilities must be carried out consistent with the terms of the Agreement and applicable law. Agreement 3.8(a), (c). Although the University and the District decided to entrust this new Board with responsibility for daily operations, there are limits on the Boards authority. For example, without District consent, the Board cannot: transfer or encumber any material asset of the District unless agreed to by the commissioners, relocate the hospital, reduce the licensed bed capacity of the hospital, or eliminate core services unless expressly permitted by the Agreement. Agreement 7.1.
Brief biographies of the trustees are attached as Exhibit B to the Spisso Declaration. HILLIS CLARK MARTIN & PETERSON P.S.
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whether those responsibilities will be retained by the commissioners alone, delegated to the new Board of Trustees, or shared jointly. Agreement Ex. 3.10(c). Of the 60 items, 33 are listed as retained by the commissioners alone, and nine are listed as shared. Id.
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The District agrees, however, not to exercise that power in a way that would hurt the new District Healthcare System. Agreement 9.1. Defendants Motion for Summary Judgment - 8 HILLIS CLARK MARTIN & PETERSON P.S.
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The power to levy property taxes, for example, is reserved exclusively for the commissioners.4 Agreement 9.1. The District also retains the right to, among other things, annex territory into the District, control its own governance, hire a superintendent to manage its affairs, and sponsor educational programs to encourage health and wellness. Agreement 7.1 & Ex. 3.10(c). Where District responsibilities are shared with the Board, the Agreement makes clear that the Boards activities are intended to satisfy the Districts legal obligations. Agreement 3.10. In exchange for UW Medicines agreement to integrate the Districts health care facilities into UW Medicine, the District also agreed to certain reasonable limitations on its future activities. For example, the District agreed it would not establish a new health care facility in the District Service Area, transfer material assets of the District Healthcare System, or de-annex property from the District if it would impair the Districts ability to service its outstanding bonds. Id. 7.2. The District also agreed it would exercise its bonding powers to support certain activities specified in the Agreement. Id. 4.18(c). UW Medicine also agreed to limits on its future activities. For example, UW Medicine may not pursue new ventures within the District Service Area without the approval of the District. Agreement 6.6.
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Both parties agreed they had authority to enter the agreement. The District promised it had all requisite corporate power and authority to enter into this Agreement and to consummate the transactions contemplated by this Agreement. Agreement 8.1(a). The University made a similar commitment. Id. 8.2(a). Both parties also agreed they would terminate the Agreement only by mutual agreement or under certain, limited circumstances. Id. 10.2-10.5. None of those circumstances have come to pass. Now, however, there is one new District commissioner, and a new majority is seeking to undo the deal. For the reasons described below, the Districts complaint should be dismissed. V. STATEMENT OF ISSUES
Should the District be held to the terms of a properly authorized and valid contract it signed knowingly and voluntarily in 2011? VI. AUTHORITY
Summary judgment should be entered where there is no genuine issue as to any material fact and . . . the moving party is entitled to a judgment as a matter of law. CR 56(c). Here, the facts are not subject to dispute, and the law governing the case is clear. The District
20 21 22 23 24 25 26 27 28 Public hospital districts are municipal corporations. RCW 70.44.010. Municipal corporations are creatures of the state and derive their authority and powers from the states legislative body. Skagit Cnty. Pub. Hosp. Dist. No. 1 v. Dept. of Revenue,
had explicit statutory authority to negotiate and execute the Agreement, the District correctly represented it had such authority, and the Agreement is valid and enforceable as a matter of law. The Court should enter summary judgment for the University. A. THE AGREEMENT IS AUTHORIZED BY STATUTE.
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158 Wn. App. 426, 445, 242 P.3d 909 (2010). The Legislatures absolute control over the powers of municipal corporations is limited only by the constitution. King Cnty. Water Dist. No. 54 v. King Cnty. Boundary Review Bd., 87 Wn.2d 536, 540, 554 P.2d 1060 (1976).
4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 District to enter into contracts with other public entities for carrying out the Districts functions. Indeed, the power to enter such contracts is one of the central powers explicitly granted by the Legislature to a hospital district, and is conferred in the same statutory section
Here, the Legislature has authorized the District to make the Agreement in two statutes: (1) RCW 70.44, Public Hospital Districts, and (2) RCW 39.34, the Interlocal Cooperation Act. Both statutes are cited in the Agreement. E.g., Agreement at 1-3. In RCW 70.44, the statute authorizing the creation of public hospital districts, the Legislature granted hospital districts broad authority to enter into any contract with the United States government or any state, municipality, or other hospital district, or any department of those governing bodies, for carrying out any of the [hospital districts] powers. RCW 70.44.060(7) (emphasis added). In another provision of the same statute, the District is similarly permitted to contract with another public entity to own, operate, or manage a health care facility or to otherwise offer health care services. RCW 70.44.240. The Interlocal Cooperation Act also authorizes the Agreement. This Act authorizes public agencies, such as the University and the District, to jointly exercise [a]ny power or powers, privileges or authority exercised or capable of exercise by a public agency of this state and to enter agreements for joint or cooperative action. RCW 39.34.030(1)-(2). The authority conferred by the Interlocal Cooperation Act is in addition and supplemental to powers or authority conferred by any other law. RCW 39.34.100. By these statutes, the Legislature has unmistakably conferred broad authority on the
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granting a hospital districts other powers. RCW 70.44.060 (describing a public hospital districts various powers). The District and the University were keenly aware of these statutes when negotiating and executing the Agreement. The statues are cited repeatedly in the
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Agreement, e.g., Agreement at 1-3, and provided the legal foundation for the Agreements structure. Because the Legislature authorized the District to contract with other public entities, such as the University, to carry out any of the Districts legislatively granted powers, the Agreements establishment of the Board of Trustees is plainly lawful. B. THE COMPLAINT IDENTIFIES NO DEFECT IN THE AGREEMENT.
The District objects to the Agreement primarily because the Districts commissioners constitute only five of the thirteen members of the Board of Trustees. Compl. 7. As a result, the District complains that its commissioners may not vote to terminate or amend the Agreement unilaterally, do not have exclusive control over day-to-day operations of Valley Medical Center and some of the decisions affecting it, and are bound going forward to take steps necessary to implement the Agreement. Id. 6-11. None of these is a valid objection to the Agreement. 1. The Commissioners Need Not Constitute a Majority of the Board of Trustees.
The statutes permitting hospital districts to contract with other public entities for carrying out any of [the hospital districts] powers also authorize the formation of new joint governing entities to do so. RCW 70.44.240; accord RCW 39.34.030. Those statutes do not require that a public hospital districts commissioners compose a majority of any new governing board of directors. Id. In fact, the Public Hospital District statute does not even require commissioners to be membersnot to mention majority membersof a new joint
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governing board. The statute requires only that [t]he governing body of [any new] legal entity . . . include representatives of the public hospital district, which representatives may include members of the public hospital districts board of commissioners. RCW 70.44.240 (emphasis added). The Interlocal Cooperation Act similarly requires only that public agencies in joint agreements be represented on any joint board. RCW 39.34.030(4)(a); accord RCW 39.34.030(3)(b) (requiring only membership of a public agency in any new organization created by it pursuant to the Interlocal Cooperation Act). It does not require majority representation by any party. Id. Had the Legislature so desired, it could easily have required majority board representation by hospital district commissioners on any newly created joint governing boards. It did not, and the District has no legal basis to suggest that its commissioners must exercise majority control over the Board of Trustees. Cf. Concerned Citizens of Hosp. Dist. No. 304 v. Bd. of Commrs of Pub. Hosp. Dist. No. 304, 78 Wn. App. 333, 337, 897 P.2d 1267 (1995) (two public hospital districts combining to jointly operate two hospitals each had only five commissioners on new eleven-member board). Here, ten of the thirteen trustees must reside in the District Service Area and all five commissioners are entitled to serve on the Board. Agreement 3.2. This ensures significant representation for the people served by the District. 2. Municipal Corporations May Enter Long-Term, Binding Contracts.
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Although it initiated negotiations and ultimately signed the Agreement, the District now complains the Agreement is invalid because it limits the commissioners authority and
HILLIS CLARK MARTIN & PETERSON P.S.

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vests some decision making power in the Board of Trustees. E.g., Compl. 6-11. But most of the alleged limitations identified by the District are the same limitations imposed on any party to a contract. Thus, when the District complains that its commissioners may not vote to terminate the Agreement at its option, or amend the Agreement without the Universitys consent, the complaint rings hollow. Compl. 6, 11. One party to a contractespecially a significant contract like the Agreementis often not free to terminate that contract unilaterally for any reason.5 Public entities are bound to the terms of contracts they sign just like private parties. 10 Eugene McQuillin, The Law of Municipal Corporations 29.2 (3d ed. 2009) (the rules relating to contracts generally apply to agreements to which a municipal corporation is a party). The District suggests, however, that as a municipal corporation it may not be free to enter a contract that might limit its future range of activities. Compl. 12. It cites an Attorney General Opinion, 2012 AGO No. 4, as authority.6 Id. But as the Attorney General Opinion points out, specific statutory grants of authority permit municipal corporations to enter into contracts binding upon future boards of commissioners. 2012 AGO No. 4 at 3 (quotations and citations omitted). The Attorney General cites State ex rel. Schlarb v. Smith, 19 Wn.2d 109, 141 P.2d 651 (1943), as one example. Id. In Schlarb, Pierce County
Of course, the District can unilaterally terminate the agreement following the occurrence of a Triggering Event as defined by the Agreement, or an uncured default under the Agreement by the University. Agreement 10.2-10.5. 6 Attorney General opinions are not binding legal authority. Seattle Bldg. & Constr. Trades Council v. Apprenticeship & Training Council, 129 Wn.2d 787, 803, 920 P.2d 581 (1996). In any case, this particular Attorney General Opinion addresses whether a county board of commissioners can sign a contract that binds future members of that board of commissioners. 2012 AGO No. 4 at 1. That is not precisely the issue raised by the District in its complaint and, in any event, because the Districts commissioners serve staggered terms, RCW 70.44.040, the commissioners constitute a single continuous body, and any rule against binding successors does not apply to a continuous body, Taylor v. Sch. Dist. No. 7 of Clallam Cnty., 16 Wash. 365, 367, 47 P. 758 (1897) (enforcing contract between school board and teacher). Defendants Motion for Summary Judgment - 13 HILLIS CLARK MARTIN & PETERSON P.S.
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successfully compelled King County to levy a tax in compliance with a decades-long contract between the two counties to confine and improve the White River. 2012 AGO No. 4 at 3. As the Attorney General notes, that contract was held to be valid and enforceable pursuant to a specific statute authorizing counties to contract with one another for the improvement, confinement, and protection of rivers and banks. Id. Here, as in Schlarb, the Agreement is valid and enforceable because the District was authorized by statute to enter into it. In fact, it is well established that municipal corporations can enter contracts, even long-term, binding contracts, that necessarily constrain their behavior going forward. For example, in Pierce County v. State, 159 Wn.2d 16, 51-52, 148 P.3d 1002 (2006), the Washington Supreme Court struck down a ballot initiative that would have interfered with a contractual promise made to bondholders by Sound Transit, a municipal corporation, to use future tax revenue to repay bonds issued to fund the first phase of the Sound Transit public transportation project. In that case, Sound Transits contract with bondholders was binding even in the face of contrary legislative preferences expressed by the people of Washington in a ballot initiative. See id. Indeed, municipal entities would be badly handicapped without the power to contract. Consider the impracticality of a municipal entity embarking on any major public infrastructure project, for example, without the ability to enter into binding contracts. See id. at 52 (If we accepted the intervenors invitation to fundamentally alter our contracts clause jurisprudence, we would imperil the ability of state and local governments to finance essential public works projects such as elementary schools, fire stations, highways, and bridges, by casting considerable doubt on the reliability of pledged funding sources.). Therefore, [a] municipal corporation authorized to do an act has, in respect to it, the power to make all
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contracts that natural persons could make. McQuillin, supra, 29.8; see also, e.g., Tyrpak v. Daniels, 124 Wn.2d 146, 157, 874 P.2d 1374 (1994) (invalidating legislative effort to interfere with contract between Port of Vancouver and bondholders); Swinomish Indian Tribal
4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 the Agreement reserves for the District many of its legislatively granted powers, such as the power to exercise eminent domain, the power to levy taxes, and the power to issue bonds. E.g., Agreement Ex. 3.10(c). The District has committed to exercise some of those powers in
Cmty. v. Skagit Cnty., 138 Wn. App. 771, 779-80, 158 P.3d 1179 (2007) (approving contract between tribe, Skagit County, and other parties, requiring those parties to take actions to manage water flows in Skagit basin, and citing statutory authority for the agreement, including the Interlocal Cooperation Act); Concerned Citizens, 78 Wn. App. at 340-48 (approving establishment and actions of new entity and joint operating board created to administer hospitals in two public hospital districts). In this case, the District and the University carefully considered, over the course of many months, the terms of the Agreement and the benefits that would flow to the people served by the District Healthcare System. This is precisely the kind of innovative arrangement contemplated by the Legislature in authorizing cooperation among public entities operating health care systems. The Districts commissioners acted well within their legislatively granted authority in making the Agreement. 3. The Districts Commissioners Retain Many Exclusive Powers.
Contrary to the suggestions made in the Districts complaint, the Agreement reserves many important powers for the Districts commissioners. As described above, the Agreement carefully establishes the rights, responsibilities, and powers of the Board of Trustees, the District, and the University. In crafting the balance of responsibilities borne by the parties,
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furtherance of the Healthcare Systems priorities (not unlike, for example, a municipal corporations promise to bondholders to levy taxes to repay those bonds), but it has not relinquished those powers.
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C.
THE DISTRICT IS EQUITABLY ESTOPPED FROM CHALLENGING THE AGREEMENT.
In the Agreement, the District represented that it had all requisite corporate power and authority to enter into [the] Agreement and to consummate the transactions contemplated by [the] Agreement. Agreement 8.1(a). The University relied on that representation in executing the Agreement. Spisso Decl. 6-12. The District is therefore estopped from now arguing it lacked authority. The defense of equitable estoppel has three elements: (1) an admission, statement, or act inconsistent with the claim afterwards asserted; (2) action by the other party on the faith of such admission, statement, or act; and (3) injury to such other party resulting from allowing the first party to contradict or repudiate such admission, statement, or act. West v. Dept of Soc. & Health Servs., 21 Wn. App. 577, 579, 586 P.2d 516 (1978). Equitable estoppel can be applied against a municipal corporation where the municipalitys acts are within the general powers granted to the municipality even [if] such powers have been exercised in an irregular and unauthorized manner. Finch v. Matthews, 74 Wn.2d 161, 171, 443 P.2d 833 (1968). This means that, unless a strategic alliance with the University was wholly beyond the Districts legal authority, equitable estoppel can be applied to the District even if the Agreement is defective in some way. The three elements of equitable estoppel are met in this case: (1) The District represented it had the authority to enter into the Agreement; (2) the University entered into the
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Agreement on the strength of that representation; and (3) the University, having committed significant resources to the Agreement, would plainly suffer injury if the District is allowed now to claim it lacked authority to make the Agreement. The University has been integrating
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the District Healthcare System into UW Medicine for more than a year. UW Medicine has established an Operational Integration Oversight Committee. Spisso Decl 6. The Committee meets monthly to manage integration activities, which include enhancing and integrating clinical services, standardizing quality and safety assessment tools, and including Valley Medical Center leaders in UW Medicine management activities. Id. UW Medicine has modified its marketing and branding to include Valley Medical Center in print and radio advertisements, as well as on the UW Medicine web site. Id. 7. UW Medicine has also placed two members of the Board on its own board, including one District commissioner. Id. 10. As an integrated part of UW Medicine, District personnel have gained access to information about UW Medicine and its other hospitals that would not otherwise have been available to the District. Id. 8-10. Having spent months negotiating the Agreement, with the assistance of legal counsel at every step, and after having signed and begun implementation of the Agreement, the District cannot now claim it lacked power to make the Agreement. The District is equitably estopped from making this claim, and summary judgment for the University is appropriate on that basis alone. CONCLUSION
Whether an individual or a public entity, a party should be held to the terms of its contracts.
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Here, the District sought out an alliance with UW Medicine for the health care benefit of the community. After months of negotiations and public hearingsand with overwhelming public supportthe District commissioners approved the Strategic Alliance
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1221 Second Avenue, Suite 500 Seattle, Washington 98101-2925 Telephone: (206) 623-1745 Facsimile: (206) 623-7789 ND: 4842-8736-5137v5
Agreement in 2011. The Agreement itself is authorized by two state statutes, and supported by the body of contract law requiring governmental bodies to abide by their promises. Furthermore, the District warranted it had the authority to enter the Agreement, and cannot be allowed to claim otherwise after the University and the District together have already implemented its terms. In this lawsuit, the District now seeks to back out of its contractual obligations simply because a current majority of its commissioners has taken a different view of the Agreement. However, the District is legally bound to comply with the terms of the Agreement it signed. The Universitys motion for summary judgment should be granted, and the Districts complaint should be dismissed with prejudice. DATED this 15th day of November, 2012. HILLIS CLARK MARTIN & PETERSON P.S. s/Louis D. Peterson Louis D. Peterson, WSBA #5776 Mary E. Crego, WSBA #31593 Michael J. Ewart, WSBA #38655 Hillis Clark Martin & Peterson P.S. 1221 Second Avenue, Suite 500 Seattle, Washington 98101-2925 Telephone: (206) 623-1745 Facsimile: (206) 623-7789 Email: ldp@hcmp.com; mec@hcmp.com; mje@hcmp.com Attorneys for Defendants By

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Defendants Motion for Summary Judgment - 1

THE HONORABLE MICHAEL C. HAYDEN

HILLIS CLARK MARTIN & PETERSON P.S.

Defendants Motion for Summary Judgment - 7

Defendants Motion for Summary Judgment - 12

HILLIS CLARK MARTIN & PETERSON P.S.

THE DISTRICT IS EQUITABLY ESTOPPED FROM CHALLENGING THE AGREEMENT.

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