Prudential officer sues Hopkins

September 07, 1994|By David Conn | David Conn,Sun Staff Writer

A top official with the Prudential Insurance Co. of America has sued the Johns Hopkins Health System Corp. and an affiliate for $30 million, claiming she was libeled in a letter written by Hopkins' chairman, who accused her of unethical behavior.

Barbara B. Hill, vice president for health care policy at the Prudential, said in her lawsuit that a letter from H. Furlong Baldwin, chairman of Hopkins' board of trustees, to Prudential's chairman attacked her professional reputation and competence.

Ms. Hill's lawsuit, filed Friday in Baltimore City Circuit Court, is a counterclaim to a $50 million case that Hopkins filed against Ms. Hill and Prudential in March. Both the lawsuit and the countersuit concern the sale in 1991 of part of Hopkins' health maintenance organization to Prudential, which Hopkins charged was tainted by Ms. Hill's alleged conflict of interest.

Before the sale, Ms. Hill was president of the Hopkins HMO, then called the Johns Hopkins Health Plan. Afterward, she and her executive staff moved over to the renamed Prudential Health Care Plan of the Mid-Atlantic.

In her counterclaim, Ms. Hill alleges that she was libeled and defamed in a letter sent to Prudential Chairman Robert C. Winters by Mr. Baldwin, who also is chairman of Mercantile Bankshares Corp.

Mr. Baldwin's letter, written in December, accused Ms. Hill of secretly helping Prudential in the negotiations over the HMO sale, in violation of her responsibilities as head of the Hopkins HMO. Flaws in the sale agreements that resulted from Ms. Hill's alleged misconduct, the letter states, "are generating losses for Hopkins that may range as high as $10 million per year."

Because of that letter, the counterclaim maintains, Ms. Hill "has suffered and continues to suffer harm and actual damages . . . including prejudice in her profession and employment, impairment of her reputation and standing in the community, personal humiliation, and mental anguish and suffering."

Libel actions may not be filed against statements made in an official court document, such as a lawsuit. But they can be based on private communications, such as Mr. Baldwin's letter. Ms. Hill must be able to show that the letter caused her significant harm.

Her countersuit names as co-defendant the Johns Hopkins Medical Services Corp. Ms. Hill is asking for $5 million in actual damages and $25 million in punitive damages.

Ms. Hill was out of town yesterday and could not be contacted.

Mr. Baldwin could not be reached for comment. A Hopkins spokesman refused to comment, except to say, "Our response will be filed with the court."

In addition to striking a sharp counterattack to the extraordinary charges in the Hopkins suit -- which expand on Mr. Baldwin's letter -- Ms. Hill's complaint provides the most detailed explanation to date of her side of the story.

Rather than concealing her employment talks with Prudential, as Hopkins has claimed, Ms. Hill's countersuit says she informed top executives at Hopkins in January 1991. That was a month before the two institutions signed letters of intent for the sale of the HMO, and four months before the deal was completed.

A press release Hopkins issued a day after the letters of intent were signed on Feb. 19, 1991, "explicitly stated that Hill would be the president of the new Prudential Health Care Plan," according to Ms. Hill's suit.

Hopkins, in its earlier lawsuit, has accused Ms. Hill of concealing important financial details of Prudential's offer and making a competing bid for the HMO look inferior in comparisons she drew up for Hopkins executives.

But her counterclaim lists five consultants and law firms that Hopkins hired to evaluate the bids and negotiate with Prudential at various stages of the deal. The suit states that Hopkins officials were fully aware that Ms. Hill was negotiating with Prudential's team in April and May, when the final details were ironed out.

After Dr. James A. Block became chief executive of the Hopkins Health System in 1992, he "quickly became dissatisfied with the relationship between [Hopkins] and Prudential and began searching for a 'deal breaker' that would enable him to get out of the contracts," the counterclaim says.

Dr. Block told The Sun in April that Hopkins filed suit because the HMO sale was "a business negotiation that we feel was flawed at its inception. There's absolutely no hidden motive, no hidden agenda on our part."

Finally, the counterclaim says former Hopkins executives, who headed the negotiations with Prudential, earlier this summer confirmed Ms. Hill's and Prudential's account of what happened in 1991.

"In depositions in this action, [former Hopkins Chief Executive Dr. Robert] Heyssel and [former Hopkins General Counsel Paul] Rosenberg have confirmed the substance of [Prudential's] account and shown the allegations in the Baldwin letter to be false and without foundation," the lawsuit states.

Dr. Heyssel and Mr. Rosenberg yesterday declined to comment on the case.

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