YAKIMA, Wash. — A wrongful termination lawsuit brought by former Yakima Valley Community Foundation CEO John Colgan was dismissed Tuesday.
“The problem is, this case doesn’t have any legs,” Yakima County Superior Court Judge Susan Hahn told Colgan and his lawyer, J.J. Sandlin, meaning she found no legal basis for Colgan’s claims against the foundation, one of the state’s biggest community charities.
In his lawsuit, Colgan said his retirement in 2011 was a sham and that he was actually forced out for standing up to board members over racist comments and other misconduct.
Colgan claimed a now-former board member made derogatory comments about President Barack Obama and another allegedly conducted a fraudulent transaction involving a major asset known as the Davis Fund that cost the foundation approximately $225,000.
During a hearing before Hahn, foundation lawyer Kelby Fletcher argued Colgan was an at-will employee who signed an agreement releasing the foundation against “all claims” both known and unknown.
Colgan had 21 days to consider the agreement and seven days to renege even after he signed, Fletcher told the court. Colgan also received $350,000 in total salary and compensation for leaving.
“He had every opportunity not to sign the agreement,” Fletcher said, noting signed declarations by friends and peers of Colgan’s asserting they had advised him against it.
Sandlin portrayed his client as a whistleblower who signed the release agreement only under duress stemming from misguided “fealty to the objectives of the foundation.”
“Mr. Colgan was trying to protect the integrity of the foundation — up until the day he surrendered,” Sandlin said.
Fletcher disputed any contention that Colgan was under duress and said Colgan failed to report any of his whistleblower claims to the proper authorities, such as the state Human Rights Commission or the Auditor’s Office.
“These mechanisms are there. They’re available,” Fletcher said, adding, “Mr. Colgan sat on the rights he is now trying to assert.”
Hahn agreed and dismissed the lawsuit on the grounds there were no material issues of law that justified allowing the case to move forward.
“There were certainly remedies here. Mr. Colgan did not use those remedies,” she said.
After the hearing, Sandlin vowed to refile the case as a breach of contract claim. “We still have more grounds,” he said.
In a statement, foundation Chairman Bill Douglas said the lawsuit was without merit.
“The court’s determination affirms the independent inquiries of the board of directors, its attorneys, accountants and its new CEO, Linda Moore, and that the claims made are factually false and without legal basis,” he said.
The foundation was created in 2003 by the sale of Providence Yakima Medical Center to Health Management Associates, which owns Yakima Regional Medical and Cardiac Center and Toppenish Community Hospital.
Colgan served as CEO from the fall of 2004 until February 2011. In that time, the foundation’s assets grew from about $6 million to about $50 million.
His successor, Moore, said the foundation added $4.7 million in new funds in 2012, its best year ever for new assets, excluding the $20 million Davis Fund.
A separate lawsuit filed by a foundation staff member, Emily Medeiros, who also alleged a hostile work environment, has since been settled. Terms were not disclosed.
• Chris Bristol can be reached at 509-577-7748 or firstname.lastname@example.org. Follow him on Twitter at twitter.com/ChrisJBristol.