Court rules in favor of TMH

Collection company owner denies criminal, malicious wrongdoing

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— The Memorial Hospital has "received very little," of the nearly half million dollars owed to it by a now defunct Craig collection company, hospital officials said.

"We have received one check from PozNet," said Sandy Chamberlain, TMH patient financial services manager.

That check, issued late last year by PozNet Solutions Inc., or PozNet Recovery Services, was for $2,247, a fraction of the $448,716 the company owes TMH, a county-funded entity.

It is unlikely TMH will ever see the full sum, or even partial sums, of the total judgment leveled against the company, said Barry Bergman, TMH chief financial officer.

"We'll never see that" money, Bergman said. "If we get a portion of that back, it would be amazing."

In December 2005, TMH entered into a contract with PozNet for the company to provide collection services on roughly half of the hospital's receivable and delinquent accounts.

The contract soured quickly, according to court records, prompting TMH to file a civil lawsuit with the company and its former president and sole shareholder, Craig resident Kelly Grinolds.

When reached on his cellular telephone Friday, Grinolds said he was out-of-town and not in a position to go into detail about the circumstances surrounding the PozNet/TMH dispute.

"If you run the story the way it is, because I've got a lot to say : people are going to make their own assumptions.

"There's two sides to every story, guys. There's just a whole lot to it."

He pledged to sit down with the Daily Press next week to discuss the situation further and in more detail.

Although Grinolds did not discuss specifics of the dispute, he said that "nothing criminal, nothing malicious" was involved and that there existed extenuating circumstances.

"Did I make some bad business decisions?" said Grinolds, who owned the collection company since 2000. "You're damn right I did." And, he added, "things just went from bad to worse."

Rumors of him stealing company money or having a gambling problem are a "horrendous distortion," he said.

"My God, where did somebody come up with that crap?" Grinolds said.

He also said that instead of cutting and running when things got bad at PozNet, he stuck around, worked with a court-appointed receiver at the company and has been "up front and honest with everybody."

"There's a lot that went on," he said, "a lot that personally went on with myself and with that company."

The TMH suit was settled with a default judgment in November 2007. The default judgment was entered after the court heard no response from the defendant.

The court ordered $133,241 in direct damages, an additional $266,484 damages and $48,990 in costs and attorneys fees.

A second judgment in December 2007 ordered to disregard the PozNet corporate entity and enter judgment against Grinolds. Again, no dispute was filed with the court.

Grinolds said not disputing the court filings were "decisions I decided to make on this whole thing that will probably come back to haunt me."

According to the TMH complaint:

• TMH received four checks in February and March 2006 from PozNet for funds collected on the hospital's behalf. All four checks bounced.

• The collection company failed to deposit and maintain funds collected on TMH accounts in a trust account, as required by Colorado law and terms of the contract.

• The company then failed to remit funds collected from April to June 2006, and attempts to contact the company in May and June went unanswered.

• PozNet informed TMH in June 2006 that the company was closing the hospital's account and would return hospital funds the next month. The funds were not paid back.

The TMH complaint alleged breach of contract, breach of fiduciary duty, conversion, civil theft, violation of the Colorado Consumer Protection Act and requested a "complete and accurate" accounting of funds collected on hospital accounts and transactions concerning the trust account.

In a separate court filing, TMH contended that PozNet "funds and assets were commingled with those of Mr. Grinolds and were used for non-corporate purposes."

It's a claim Grinolds disputed; he said he left the company with $1.56 in his bank account and lost everything he had except his home.

Bergman said the monetary loss stemming from the PozNet dispute isn't a deathblow to the hospital but added, "whenever someone doesn't pay, it hurts."

Grinolds said the implication that he somehow committed criminal acts while running his company is false.

Criminal "is a word that is like a freaking knife to me," he said.

He added, "I've always tried to be real up front with people and always kept an accounting. : I always conducted my business : (so) I could show people I never hid a freaking thing.

"I just want to do what's right."

Comments

AltitudeAdjustment 6 years, 11 months ago

I am sorry to see that the hospital is having to deal with businesses who can't keep their contractual obligations. A half a million dollars is a lot of money. Why did it take so long for this story to surface? Court cases are a matter of public record aren't they?

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diggerswife 6 years, 11 months ago

Poznet stiffed a whole bunch more people than just the hospital. Poznet collected money for me too and didn't pay it. I would love to know what Kelly Grinolds did with all our money.

I run a home business and contracted with Poznet to collect on some bad debts. I called and called and called Kelly for months and never got a reply until I got a letter from an attorney saying that I would get less than 2% of the money I was owed. I didn't even know Poznet was able to collect the money until then. I got a statement from the attorney stating that shortly after I contracted with Kelly he collected the money I was due, the collection fees as per my service contract, and interest on the money. All Kelly had to do was keep any money over what I was due and give me the rest. He kept it all. I had to prove to the attorney that I didn't get any of the money Kelly had collected. It took two more months before I got a check.

The attorney took a share of the money too so there was little left to pay the people Kelly was working for. Until I saw the hospital story I didn't know how much money Kelly got away with. Must have been some big business ventures that we all paid for.

How is this not criminal? What did you do with all that money Kelly? What bad business decisions did you make this communtiy pay for??? What did you anticipate your decisions would do to benefit all of us?

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Cole White 6 years, 11 months ago

I can't wait to hear what Kelly has to say next week. I bet money that he doesn't explain nothing and if he does it will be some load of crap. We used his business and he took us for about $10K. I am sure that if the County had informed the citizens of the fact that he was defaulting then I and many others could have been spared the money we lost. Why wouldn't the Hospital go public with this earlier? (don't tell me your attorneys said you couldn't - that would be as big a load of crap as what Kelly would say) I started doing business with Poznet at the end of 2005 and had I known Kelly had stiffed a bunch of other people I would never had used his services. Where was the Hospital Board during all of this? We keep hearing how the Hospital is under new management, but where is the Board oversite? We agree to give them money and they aren't even being good stewards of the money they have or being straight forward with the citizens they serve and work with! I know it's not the Hospital's fault that someone took them for a ride, but why wasn't the public warned earlier about Kelly's actions. As a division of the County the Hospital and County has a feduciary responsibility to warn others when riminal and predatory business activities are going on. I wonder what would have happened at the last election if this had come forward earlier? How long has the Daily Press been sitting on this?

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Cole White 6 years, 11 months ago

One other note -- It is great to see more people are concerned with a Sonic coming to Craig than whether one of our local citizens robbed us of what is likely closel to a million dollars if you add up all the money he never paid. Sadly, we will never know exactly what was taken to fund Kelly's "activities."

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