City of Lubbock lawsuit against Covenant thrown out of court - KCBD NewsChannel 11 Lubbock

City of Lubbock lawsuit against Covenant thrown out of court

LUBBOCK, TX (KCBD) - One aspect of the long-drawn-out and vicious fight between the City of Lubbock and businessman Ted Parker has been thrown out of court. 

City Hall Vs Covenant

On Friday U.S. District Judge Mary Lou Robinson dismissed the City's lawsuit against Covenant Health System.  The City sued to force Covenant to hand over certain records pertaining to Parker's company HealthSmart. 

The judge ruled that the City failed to prove that the court had jurisdiction.  The city claims that because it receives federal funds, the federal court has the authority to hear the case.   But the judge was very clear that the city missed every opportunity to prove jurisdiction.

"The city has not specified which federal award program is involved," the judge wrote.  

How Did This Start?

Parker no longer has controlling interest in the company but he did from 2004 though 2006 when Parker's related company AAG was the City's health insurance administrator. 

In March of 2006, the City sued AAG saying the company may owe the taxpayers a refund in excess of $200,000.  AAG countersued and accused the City of intentionally filing a false lawsuit. 

Over the course of time the city would continually increase the dollar value of its claim that Parker cheated the taxpayers.  Eventually the number reached $12 million but never once has the city provided documentation that directly backs up the claim.

Parker did admit to overpaying various health care providers on behalf of the city, but always denied anything other than accidental overpayments. 

Some Of The Lawsuits Settled

In October of 2010, the City settled two of the many lawsuits related to the Parker dispute.  In one settlement AAG/Icon paid $850,000 for the City's claims of malicious prosecution after Parker's company unsuccessfully sued City Manager Lee Ann Dumbauld and other employees of the City in Dallas County.

In another settlement, wherein the City was sued by its own liability insurance company, the City agreed to accept $500,000 and St Paul Travelers Insurance never has to pay another dime in the entire dispute. 

A Footnote: Lavish Expenses

Several lawyers hired by the City in the Parker dispute were found last year by a special KCBD NewsChannel 11 investigation to have billed the city for lavish expenses such as beer & oysters, steak dinners, filet mignon and Starbucks coffee.

Except to say that it's up to each attorney "to do what's right," the city never answered questions as to why taxpayers should foot the bill for items not related to legal expenses in the Parker dispute.

Copyright 2011 KCBD NewsChannel 11.  All rights reserved.

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