New allegations in contractor's defence against Ottawa Hospital lawsuit

One of the contractors named in a lawsuit launched by the Ottawa Hospital denies any involvement in an alleged scheme to defraud the hospital.

DRS Construction and its owner Gerry Dubé instead make a number of new allegations against hospital employees and other vendors, including individuals and companies not named in the hospital lawsuit.

Among the allegations are that:

• other vendors not named in the original lawsuit paid for trips for hospital employees.
• DRS did supervise work at the homes of high-ranking executives of the hospital at fair market value.
• high-ranking hospital employees frequently asked DRS to provide hockey tickets for special events.

In January, the hospital named five contractors, their owners as well as two hospital employees in an alleged scheme to defraud the hospital, including DRS and Dubé.

The hospital suit claims companies gave the two employees kickbacks, including lavish trips, deals on cars and renovations. 

In return, the suit alleged the contractors received "improper procurement advantages," including influence over tenders as well as allegedly getting paid for "improper and inflated invoices" for no work or work that was not completed.

DRS and Dubé deny all the allegations in the hospital's suit in the opening line of its statement of defence, filed in French on Tuesday, Mar. 29.

In particular, the defence statement rejects any responsibility for allegations of bad faith, conspiracy, fraud, extortion, inflated prices, price fixing, or contract fixing, breaking contracts, enrichment without cause, damages or losses alleged by the Ottawa Hospital. 

DRS claims other vendors paid for trips

DRS and Dubé deny participating in or paying for flights and/or trips for Ottawa Hospital employees, according to the statement.

Instead the defence statement claims the hospital has confirmed that hospital employees received paid trips or flights that involved co-defendants Larry St-Pierre and Guy Adrian Lapierre; as well as Michael Nolan, president of Bradford Construction and (former hospital employee) Tim Richards.

The statement goes on to claim "other hospital vendors" have also been involved in paid trips, but said the hospital refuses to divulge who they are.

The statement admits DRS Construction had been hired to supervise work at the residence of co-accused hospital employee, Frank Medwenitsch but several other hospital employees as well, including COO Cameron Love, VP Finance Richard Wilson, and director of projects Michele Emond.

But DRS denies receiving less than market price for its work.

Hospital accused wrong company, statement claims

The hospital statement of claim alleged DRS removed a tree from the home of Medwentisch.

But the defence by DRS Construction and Dubé states the text used as proof that a contractor was coming to Medwentisch's home was actually from a phone that belonged Michael Nolan of Bradford Construction.

"For reasons unknown to DRS Construction and Dubé, The Ottawa Hospital chose not to add Michael Nolan and/or Bradford Construction as one of the defendants in this suit."

The defence includes another incident from the original hospital claim, where a text used as evidence alleged to have come from DRS, was actually, according to thedefence, coming from a the number belonging to Bradford Construction. 

DRS also denied giving any gifts in order to obtain advantages.

"On the contrary," asserted the defence statement, "several highly placed hospital employees, including but not limited to Cameron Love, Len Gauthier, Michelle Emond and Fred Kendall requested on several occasions that DRS Construction provide hockey tickets for special events (...)."

None of the claims have been proven in court.

The defence goes on to assert that DRS and Dubé have a legitimate claim in their allegation that the hospital has not paid $1.5 million in outstanding invoices.

DRS had already filed a lawsuit claiming the unpaid invoices. The hospital has asked the court to combine the two suits. In a separate filing, DRS rejects the notion the two suits are related. 

The Ottawa Hospital said it anticipates more statements of defence to be filed in coming weeks but won't comment while the issue is before the court.

"We are following due process and throughout this process we will continue to act in the best interests of the hospital and the community we serve," a hospital spokesperson said in a statement.

"In the meantime we continue to reinforce our zero tolerance for fraud, or any behaviour that breaches hospital policies and values. We are also regularly assessing and implementing enhancements to our policies, processes and controls to protect the hospital from the risk of fraud."