Community Health Alliance executives filed a lawsuit last week in district court demanding a former employee stop speaking negatively of the non-profit health provider. CHA also filed a temporary protective order against the employee to prevent him from divulging what they said is confidential information.
Jim Fleming, the employee, said he is preparing to fight the claims and has received assistance from the ACLU of Nevada.
Fleming, CHA’s former statistician, has publicly alleged CHA CEO Oscar Delgado, also a Reno City Council member, was knowledgeable about and allowed fraud and the misuse of grant funds.
Fleming posts detailed allegations against CHA and its executives on Facebook, LinkedIn and his Medium account.
“Data show that Community Health Alliance severely underperformed in its contractual duties relative to the funds it received from the state of Nevada,” Fleming recently wrote on Facebook. “Even worse, in an attempt to demonstrate costs that would justify continued state contracts at their current levels, CHA deliberately falsified employment records. These employee records were used to bolster the full-time equivalent (FTE) tally, and therefore the costs, that were dedicated to the program in 2020.”
The U.S. Department of Health and Human Services Office of Inspector General is investigating Fleming’s claim he filed last year. He filed the complaint with the federal agency saying he was fired by CHA in retaliation after he raised concerns about the nonprofit’s practices.
A SHORT HISTORY OF LIBERTY'S PROGREE THROUGH HE EIGHTEENTH CENTURY
Community Health Alliance in Reno sues former employee (original complaint)
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CODE: $1425
Alex R. Velto, Esq., SBN# 14961
Astrid A. Perez, Esq., SBN #15977
HUTCHISON & STEFFEN, PLLC
5371 Kietzke Lane
Reno, Nevada 89511
Telephone: (775) 853-8746
Facsimile: (775) 201-9611
Attorneys for Plaintiff Community Health Alliance
SECOND JUDICIAL DISTRICT COURT OF THE STATE OF NEVADA
IN AND FOR THE COUNTY OF WASHOE
COMMUNITY HEALTH ALLIANCE, a
Domestic nonprofit corporation.
Plaintiff,
vs.
JAMES FLEMING, an individual; DOES 1-
10 inclusive; and ROE CORPORATIONS 1-
10, inclusive.
Defendants.
Case No.:
Dept No.:
COMPLAINT
Arbitration Exempt
[Declaratory Relief Sought]
Plaintiff Community Health Alliance (“Plaintiff” or “CHA”), by and through its counsel
of record, Hutchison & Steffen, PLLC, hereby asserts the following claims against defendant
James Fleming (“Defendant” or “Jim” or “Fleming”), and represents the following to this
Honorable Court:
PARTIES, JURISDICTION, AND VENUE
1. At all relevant times here, Community Health Alliance has been a nonprofit
corporation formed under the laws of the State of Nevada, with a license to do business in
Nevada, and with a principal place of business in Washoe County, Nevada at 680 S. Rock
Blvd, Reno, NV, 89502.
F I L E D
Electronically
CV22-00066
2022-01-14 12:03:44 PM
Alicia L. Lerud
Clerk of the Court
Transaction # 8845058 : csulezic
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2. At all relevant times here, and upon information and belief, James Fleming
(“Fleming”) has been a resident of Washoe County, Nevada.
3. The true names and capacities of DOES I through X, inclusive, whether
individual, corporate, associate, or otherwise are unknown to Plaintiff who therefore sues said
defendants by such fictitious names. Plaintiff is informed and believes and therefore alleges
that each of the defendants designated as DOES 1 through 10 is responsible in some manner for
the events and happenings referred to in this action and proximately cased damages to the
Plaintiff as herein alleged. The legal responsibility of said defendant DOES 1 through 10 arises
out of, but is not limited to, their status as owners, officers, directors, advisors, employees,
agents, contractors, masters/servants, or joint venturers with Community Health Alliance.
Plaintiff will ask leave of this Honorable Court to amend this Complaint to insert the true
names and capacities of DOES 1 through 10, and when the same have been ascertained, to join
such defendants to this action together with the proper charging allegations.
4. The true names and capacities of ROE CORPORATIONS I through X,
inclusive, whether individual, corporate, associate, or otherwise are unknown to Plaintiff who
therefore sues said defendants by such fictitious names. Plaintiff is informed and believes and
therefore alleges that each of the defendants designated as ROE CORPORATIONS 1 through
10 is responsible in some manner for the events and happenings referred to in this action and
proximately caused damages to the Plaintiff as herein alleged. Plaintiff will ask leave of this
Honorable Court to amend this Complaint to insert the true names and capacities of ROE
CORPORATIONS 1 through 10, and when the same have been ascertained, to join such
defendants to this action together with the proper charging allegations. These ROE
CORPORATIONS include presently unknown entities publishing and/or sharing defamatory
statements in concert with people bound by confidentiality agreements with Plaintiff.
5. This Court has subject matter jurisdiction pursuant to NRS 4.370(1) because the
matter in controversy exceeds $15,000.00, exclusive of attorneys’ fees, interest, and costs.
6. This Court has personal jurisdiction over the parties, and each of them, because
the incidents alleged occurred in Washoe County, Nevada, and/or because each of the parties
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availed themselves of opportunities to conduct business in the State of Nevada, establishing
minimum contacts with the forum, and are therefore subject to personal jurisdiction in Nevada
on claims arising out of that contact.
7. Venue is proper in this District Court because James Fleming and DOES 1-10
are a resident of Washoe County Nevada, and/or ROE CORPORATIONS is a company formed
under the laws of the State of Nevada and does business within Washoe County, Nevada, and
the incidents alleged occurred in Washoe County, Nevada.
GENERAL ALLEGATIONS
8. Community Health Alliance (“CHA”) is a Health Center Program grantee under
42 U.S.C. 254b.
9. CHA provides an extensive range of healthcare services, including medical,
dental, and behavioral health services, to patients throughout Washoe County.
10. CHA provides services regardless of a patient’s insurance status or ability to
pay.
11. CHA manages a Women, Infants, and Children (WIC) Program.
12. CHA provides community education on health issues and outreach to
underserved populations.
13. CHA has six (6) healthcare centers in Washoe County.
14. CHA receives funding from federal grants and private donations and also bills
third-party payors for services rendered.
15. Each year, CHA is required to report on its performance to the Health Services
Resources Administration (“HRSA”), using measures defined in the Uniform Data System
(“UDS”).
16. The UDS is due to HRSA by February 15th
of each calendar year.
17. Defendant James Fleming is a former CHA employee.
18. Fleming began his employment with CHA on October 17, 2017, as an Electronic
Dental Record Specialist/Statistician.
///
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19. Fleming’s role largely consisted of extracting and reporting data related to the
services CHA provides and the patients CHA serves.
20. One of Fleming’s duties included providing CHA’s Finance Department with
data related to CHA’s UDS reporting.
21. Fleming’s employment with CHA was terminated on February 22, 2021 due to
attendance issues, repeated missed deadlines, and mishandling of CHA’s financial information.
22. Oscar Delgado (“Mr. Delgado”) has held the position of Chief Executive Officer
(“CEO”) at CHA since October 2019.
23. In or about June 2020, Casey Gillham (“Mr. Gillham”) was hired to be the Chief
Legal Officer at CHA.
24. Mr. Gillham received his Juris Doctor from the University of Oregon and has
been in good standing and an active member of the Nevada State Bar since 2010.
25. In August 2021, Mr. Gillham’s title and responsibilities changed, and he became
CHA’s Chief Administrative Officer.
26. Phil Nowak (“Mr. Nowak”) is the Chief Financial Officer at CHA and has held
that title since November 13, 2018.
27. Laura Evasovic (“Ms. Evasovic”) has been the Director of Finance at CHA
since June 12, 2018.
28. Michele Davenport (“Ms. Davenport”) is the Human Resources Director at
CHA and she has held that title since January 25, 2021. Prior to being promoted to Human
Resources Director, Ms. Davenport served as CHA’s Human Resources Coordinator from
September 6, 2017 to January 24, 2021.
29. Because CHA is a healthcare provider, it is committed to safeguarding and
maintaining the confidentiality, integrity, and availability of its patient, employees, and
proprietary information that relates to patient treatment, payment, or the health care operations
of CHA.
///
///
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30. As an employer in the medical field, CHA’s employment records also include
information about employee salaries, benefits, performance reviews, medical information, and
other sensitive human resources’ matters.
31. As an emerging leader in Nevada’s competitive healthcare field, CHA also
maintains proprietary information about its operations, associates, plans, developments,
financial information, strategies, purchasing, and marketing.
32. Because of all the numerous types of confidential and sensitive information
CHA possesses, it requires employees to agree to a Confidentiality and Information Access
Agreement (“Confidentiality Agreement”) as a condition of employment. Exhibit 1.
33. On October 17, 2017, James Fleming signed the Confidentiality Agreement.
Exhibit 1.
34. The Confidentiality Agreement states, in relevant part: “I understand and agree
that I must safeguard and maintain the confidentiality, integrity, and availability of all
Confidential information I use, disclose, and/or access at all times, whether or not I am at work
and regardless of how it was accessed.” Exhibit 1 (emphasis added).
35. Fleming also agreed that he “understand[s] that access to all CHA’s Information
Systems including Email and Internet are intended for business usage” and that he will “only
access or use the systems or devices that [he is] authorized to access and agree[s] not to
demonstrate the operation or function of any of [CHA’s] information systems or devices to
unauthorized individuals,” nor would he “use tools or techniques to break/exploit security
measures.” Exhibit 1.
36. Most importantly, Fleming committed to “not in any way divulge, copy, release,
sell, loan, alter, or destroy any Confidential Information except as properly authorized” and he
would “immediately report to CHA . . . any activity that violates this agreement.” Exhibit 1.
37. Fleming agreed that his obligations under the Confidentiality Agreement
continue even “after the individual is no longer employed by CHA” during which time he
would “continue to maintain the confidentiality, integrity, and availability of all Confidential
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Information even after termination, completion, cancellation, expiration or cessation of access
to CHA’s Information systems.” Exhibit 1 (emphasis added).
38. As a condition of employment, the Confidentiality Agreement was supported by
consideration.
39. Even absent consideration, the Agreement is enforceable because there is a
compelling public interest to protect confidential health information.
40. On December 13, 2021, nearly ten months after his employment with CHA was
terminated, Fleming posted to LinkedIn that he had “limitless access to CHA’s offsite servers,”
and reported on Mr. Gillham’s salary information and CHA’s unduplicated patient count.
Exhibit 2.
41. Since Fleming’s termination, he has maliciously made false and disparaging
statements against CHA, and CHA’s management.
42. Fleming’s false and disparaging statements have damaged CHA’s reputation.
43. On December 4, 2021, Fleming posted on Facebook, stating that CHA does not
do HIV screening. Fleming specifically stated, ‘[n]ever ever ever [sic] claim to do HIV
screening when your own reporting to HRSA shows that you do not.” Exhibit 2.
a. Fleming knew that his claim was false because, as part of his duties with
CHA, he collected information and reported on CHA’s HIV screening efforts.
On February 15, 2021, Fleming sent Ms. Evasovic an email in which he
reported on the number of HIV screenings CHA had conducted in 2020.
44. On December 13, 2021, Fleming posted to Facebook that CHA had engaged in
“massive fraud” for the years 2018-2020 related to its WIC program. Exhibit 2. In a separate
post on December 13, 2021, Fleming stated on Facebook that CHA used WIC program funding
as a “slush fund.” Exhibit 2.
a. Fleming knew these claims to be false because in 2020, Nevada’s
Department of Health and Human Services conducted a financial review of
CHA’s WIC Program to “ensure that expenses charged to the WIC program
during FY 2018 and 2019 were in accordance with established cost principles
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pursuant to 7 CFR 246 and 7 CFR 3016, and the provisions contained in the
Notice of Sub-grant award in effect for the stated periods.” On August 25,
2020, the Department of Health and Human Resources issued its Financial
Review Notification. The Financial Review Notification determined that “[n]o
findings were noted” related to CHA’s WIC Program.
45. On December 13, 2021, Fleming posted to Linked that Mr. Gillham fabricated
patient and public health statistics for the years 2014, 2015, 2016, 2017, 2018, and 2019 “in
return for millions of dollars of funding.” Exhibit 2.
a. Fleming knew these claims to be false because Mr. Gillham did not
begin his employment with CHA until June 22, 2020, approximately four
months after the UDS data for calendar year 2019 had been submitted to
HRSA. And even after Mr. Gillham began his employment with CHA, Mr.
Gillham was not responsible or involved in any way in collecting or reporting
statistical information to HRSA.
46. On December 13, 2021, Fleming posted on Facebook that Mr. Gillham forged
his law school transcript.
a. Fleming knew these claims to be false because on at least two occasions,
while still employed with CHA, Mr. Fleming met with Mr. Gillham in his office,
where Fleming could see Mr. Gillham’s law school diploma and law license
hanging above his desk.
47. On December 13, 2021, Fleming posted to LinkedIn that Mr. Nowak
“deliberately goos[ed] federal-health-grant-sensitive stats [sic]” to induce “seven figure
HOMELESS POPULATION MEDICAL AND SUBSTANCE TREATMENT 330(h) grant
fund amounts” and also referred to Mr. Nowak as a “sloppy thieve[ ].” Exhibit 2.
a. Fleming knew these claims to be false because: (1) the current CEO of
CHA took that position on or about October 2019; (2) Fleming was
responsible for extracting collected data for UDS submissions for
calendar years 2019 and 2020; (3) on February 15, 2021, Mr. Fleming
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sent an email to Mr. Nowak and Ms. Evasovic, stating that for the
calendar year 2020, CHA served 881 patients experiencing
homelessness; (4) CHA reported to HRSA serving 881 patients
experiencing homelessness in 2020, as reported by Fleming; (5) on
February 10, 2020, Mr. Fleming sent an email to Ms. Evasovic and Mr.
Nowak, stating that CHA had served 2003 patients experiencing
homelessness for calendar year 2019; (6) after further review and
discussions with a HRSA auditor, CHA reported serving 2,257 patients
experiencing homelessness for the calendar year 2019.
b. The difference of 254 served patients, over a two-year period, does not
indicate that Mr. Nowak “goosed” statistics in order to induce seven
figure grant funding, and the difference of 254 patients over a two-year
period would not have any effect on any grant funding CHA receives.
48. On December 14, 2021, Fleming posted to LinkedIn that Mr. Gillham and Ms.
Davenport “fabricated or lied about knowingly” the number of at-risk children and individuals
experiencing homelessness that CHA served in 2014, 2015, 2016, 2017, 2018, 2019, and 2020.
Exhibit 2.
a. Fleming knew these claims to be false because Mr. Gillham did not
begin his employment with CHA until June 22, 2020, approximately four
months after the UDS data for calendar year 2019 had been submitted to
HRSA. And even after Mr. Gillham began his employment with CHA, Mr.
Gillham was not responsible or involved in any way in collecting or reporting
statistical information to HRSA. Similarly, Ms. Davenport, as CHA’s Human
Resources Coordinator and then its Human Resources Director, was not
responsible or involved in any way in collecting or reporting statistical
information related to at-risk children or homeless patients to HRSA.
49. On December 28, 2021, Mr. Fleming posted on Facebook that under Mr.
Delgado’s supervision, Mr. Nowak “reported a vastly inflated and unrealistic number of
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homeless patients . . . in order to maintain and increase [CHA’s] current level of homeless
services as mandated by the stipulations of that grant money in section 330h of the Public
Health Services Act.” Exhibit 2.
a. Fleming knew these claims to be false because: (1) Mr. Delgado became
CEO of CHA in or about October 2019; (2) Fleming was responsible for
extracting collected data for UDS submissions for calendar years 2019 and
2020; (3) on February 15, 2021, Mr. Fleming sent an email to Mr. Nowak and
Ms. Evasovic, stating that for the calendar year 2020, CHA served 881 patients
experiencing homelessness; (4) CHA reported to HRSA serving 881 patients
experiencing homelessness in 2020, as reported by Fleming; (5) on February
10, 2020, Mr. Fleming sent an email to Ms. Evasovic and Mr. Nowak, stating
that CHA had served 2003 patients experiencing homelessness for calendar
year 2019; (6) after further review and discussions with a HRSA auditor, CHA
reported serving 2,257 patients experiencing homelessness for the calendar year
2019.
b. The data that CHA reported to HRSA is not “vastly inflated” beyond
what Fleming reported to Mr. Nowak and Ms. Evasovic. Moreover, the
difference of 254 served patients, over a two-year period, would not have any
effect on any grant money CHA receives pursuant to section 330h of the Public
Health Services Act.
50. Fleming’s statements about CHA, its employees, and officers, were false, and
exposed the association to hatred, contempt, ridicule, and obloquy, while reflecting poorly on
CHA and its Board.
51. Fleming’s statements concern the performance of the officers in their official
capacity in a manner that has had a deleterious effect on CHA’s ability function effectively.
52. Aside from those effects of Fleming’s statements, the language written about
CHA, its officers, and its employees negatively implicates the way those officers and/or
employees perform their duties and responsibilities as officers or agents of CHA, so as to have
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a natural tendency to affect the corporation disadvantageously in its business, service of the
public, and access to resources necessary for the fulfillment of its public service goals.
FIRST CAUSE OF ACTION
(Breach of Contract)
(Against James Fleming)
53. Plaintiffs repeat and reallege the allegations contained in paragraphs 1 through
52. as fully set forth herein.
54. Fleming entered into an agreement with CHA to which he is under the duty to
maintain the confidentiality and integrity of CHA’s proprietary information.
55. Fleming has released confidential and/or proprietary information about CHA.
56. Fleming has committed publicly to releasing further confidential information.
57. Fleming has stated publicly he has access to systems or devices he is not
authorized to have access to that contain confidential health and/or employee and/or proprietary
information.
58. Fleming has violated and is currently violating his agreement with CHA as
detailed above, constituting, inter alia, breaches of contract.
59. The confidentiality agreement was supported by consideration.
60. There is no privilege or justification warranting Fleming’s illicit conduct.
61. Fleming’s breach and potential breach creates irreparable harm that would
damage CHA’s reputation and potentially release confidential information of its patients, whom
are overwhelmingly a sensitive population.
62. Plaintiffs have been damaged by Fleming’s actions in an amount exceeding
$15,000.
63. Plaintiffs have been forced to retain an attorney to litigate this dispute and
should receive their attorney fees and costs.
SECOND CAUSE OF ACTION
(Breach of the Implied Covenant of Good Faith Dealing)
(Against James Fleming)
64. Plaintiffs repeat and reallege the allegations contained in paragraphs 1 through
63 as fully set forth herein.
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65. In every contract under Nevada law, including the one between CHA and
Fleming, there is a covenant of good faith and fair dealing.
66. Fleming entered into a valid agreement with CHA, to which Fleming agreed not
to release confidential information.
67. Fleming breached the implied covenant of good faith and fair dealing by
willfully engaging in activities in violation of the agreements in order to cause direct harm to
CHA.
68. Plaintiff have been damaged by Fleming’s actions in an amount exceeding
$15,000.
69. Plaintiffs have been forced to retain an attorney to litigate this dispute and
should receive attorney fees and costs.
THIRD CAUSE OF ACTION
(Business Disparagement)
(Against James Fleming)
70. Plaintiffs repeat and reallege the allegations contained in paragraphs 1 through
69 as fully set forth herein.
71. Upon information and belief, Defendants have made false statements to the
public via LinkedIn posts, Facebook posts, publication of articles, and sharing of information,
including, but not limited to: CHA does not provide HIV screening; CHA has engaged in
“massive fraud” for the years 2018-2020 related to its WIC program; CHA has used WIC
program funding as a “slush fund;” Mr. Gillham fabricated patient and public health statistics
for the years 2014, 2015, 2016, 2017, 2018, and 2019; Mr. Gillham forged his law school
transcript; Mr. Gillham and Ms. Davenport “fabricated or lied about knowingly” the number of
at-risk children and individuals experiencing homelessness that CHA served in 2014, 2015,
2016, 2017, 2018, 2019, and 2020; that Mr. Nowak is a “sloppy thieve[ ];” that Mr. Nowak
“deliberately goos[ed]” statistics in order to induce grant funding; that under Mr. Delgado’s
supervision, Mr. Nowak reported a “vastly inflated and unrealistic number of homeless patients
. . . in order to maintain and increase [CHA’s] current level of homeless services[.]”
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72. Defendants made these statements knowing they were false, or with a reckless
disregard for whether they were false.
73. Defendants made these statements with malice.
74. Plaintiffs have been damaged by Defendants’ actions in an amount exceeding
$15,000.
75. Plaintiffs have retained an attorney to litigate this dispute and should receive an
award of attorney fees and costs.
76. Plaintiffs are entitled to punitive damages arising out of the willful, intentional,
and/or reckless conduct of Defendants.
FOURTH CAUSE OF ACTION
(Slander Per Se)
(Against James Fleming)
77. Plaintiffs repeat and reallege the allegations contained in paragraphs 1 through
76 as fully set forth herein.
78. Upon information and belief, Defendants have made false statements to the
public via LinkedIn posts, Facebook posts, publication of articles, and sharing of information,
including, but not limited to: CHA does not provide HIV screening; CHA has engaged in
“massive fraud” for the years 2018-2020 related to its WIC program; CHA has used WIC
program funding as a “slush fund;” Mr. Gillham fabricated patient and public health statistics
for the years 2014, 2015, 2016, 2017, 2018, and 2019; Mr. Gillham forged his law school
transcript; Mr. Gillham and Ms. Davenport “fabricated or lied about knowingly” the number of
at-risk children and individuals experiencing homelessness that CHA served in 2014, 2015,
2016, 2017, 2018, 2019, and 2020; that Mr. Nowak is a “sloppy thieve[ ];” that Mr. Nowak
“deliberately goos[ed]” statistics in order to induce grant funding; that under Mr. Delgado’s
supervision, Mr. Nowak reported a “vastly inflated and unrealistic number of homeless patients
. . . in order to maintain and increase [CHA’s] current level of homeless services[.]”
79. Defendants have made these false statements that would tend to injure Plaintiffs’
trade, business, profession or office.
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80. Defendants intentionally made these statements knowing they were false, or
with a reckless disregard for whether they were false.
81. Defendants made these statements with malice.
82. Plaintiffs have been damaged by Defendant’s actions in an amount exceeding
$15,000.
83. Plaintiffs have retained an attorney to litigate this dispute and should receive an
award of attorney fees and costs.
84. Plaintiffs are entitled to punitive damages arising out of the willful, intentional,
and/or reckless conduct of Defendants.
FIFTH CAUSE OF ACTION
(Injunctive Relief)
(Against James Fleming)
85. Plaintiffs repeat and reallege the allegations contained in paragraphs 1 through
84 as fully set forth herein.
86. Fleming’s violation of the Confidentiality and Information Access Agreement
will cause CHA irreparable harm.
87. Fleming has violated and is violating the agreement by failing to safeguard and
maintain the confidentiality and integrity of CHA’s information by disparaging CHA and
sharing information confidential information with the public, for which injunctive relief is
necessary.
88. Plaintiffs have been and continues to be, irreparably harmed by this Defendant’s
actions.
89. Plaintiffs have a likelihood of success on their claims.
90. Plaintiffs are entitled to an injunction enjoining this Defendants from
disparaging CHA and sharing CHA’s confidential information.
91. Plaintiffs have retained an attorney to litigate this dispute and are entitled to an
award of attorney fees and costs.
92. Plaintiffs are entitled to punitive damages arising out of the negligent, willful,
intentional, and/or reckless conduct of Defendants
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SIXTH CAUSE OF ACTION
(Declaratory Relief)
93. Plaintiffs repeat and reallege the allegations contained in the above paragraphs
as though fully stet forth herein.
94. The Confidentiality and Information Access Agreement between CHA and
Fleming expressly provides that Fleming is not released from liability even though he is no
longer employed with CHA.
95. Each of Fleming’s wrongful acts alleged in this Complaint constituted willful
misconduct.
96. Therefore, CHA requests declaratory relief in the form of an order from the
Court that Fleming is not released from his wrongful acts.
WHEREFORE, plaintiffs pray:
1. For judgment against defendants, and each of them, for special, general and
compensatory damages in excess of $15,000;
2. For an injunction preventing Fleming from violating his agreements with CHA;
3. For declaratory relief;
4. For punitive damages;
5. For any other relief as the Court deems just and proper.
Affirmation Pursuant to NRS 239B.030. The undersigned affirms that the preceding
document does not contain the social security number of any person.
DATED this 14th
day of January, 2022.
HUTCHISON & STEFFEN, PLLC
By:
Alex R. Velto, Esq., 14961
Astrid A. Perez, Esq., 15977
5371 Kietzke Lane
Reno, NV 89511
Attorneys for Plaintiffs