Nevada County Picayune and Gurdon Times Newspaper Archive

City Dropped From Suit

Gurdon is no longer being sued by a Tennessee bank because of the city's former hospital building.

Gurdon Mayor Rick Smith said BankTennessee, of Collierville, Tenn., voluntarily dropped the city as a defendant in the suit. This occurred Thursday, Feb. 3, on the second day of the trial.

In addition, Elton Stewart was also dropped as a defendant, while Cliff Coleman and Coleman Research were not.

"I'm glad it turned out the way it did," Smith said of the city's being sued. "There is still a possibility Gurdon could be in the running for a residential care facility after the case is over."

The old hospital building has been licensed by the state for 25 beds for a residential care facility.

The suit was filed because of a loan obtained by Coleman Research. Coleman took the loan out to help purchase the building in early 1999.

Coleman used the money to buy the facility and was given a warranty deed from the city at the conclusion of the transaction.

The bank alleged Coleman and Stewart fraudulently obtained the loan, though evidence shown during the trial helped eliminate Stewart as one of the defendants.

According to Gurdon City Attorney Taylor King, work was being done to renovate the facility before the money ran out.

Then it appeared as though Coleman and Stewart signed papers with the bank showing no liens against the building, though there were several outstanding liens because of the contractor not getting paid.

King said it was up to the buyer and seller to make this disclosure, with the city being under contract to the buyer Stewart who had the right to purchase the building.

Stewart then sold the hospital to Coleman, though the check he was given was reportedly no good.

At the time this occurred, Gurdon's City Council approved the sale of the hospital, without knowing anything untoward was going on.

When the suit was filed, Gurdon was dragged into it, with the bank's attorneys claiming the city didn't sell the hospital with a clear title.

However, King said, the entire transaction was nothing more than a routine sale of property and Stewart did received a warranty deed at the time.

Originally, Coleman approached the city asking to buy the hospital and turn it into a residential care facility. His earlier efforts to procure the now-defunct Pineview Nursing Home had failed.

The city had been told by Coleman the facility would be up and running by the middle of April in 1999. April came and went with the building still closed.

Renovation work was done, until the contractor couldn't get paid for his efforts.

The idea Coleman had pitched at the time was the center would offer laundry facilities for the residents, along with social activities and transportation provided for outings, medical appointments and other needs.

Each of the rooms was to have its own central heat and air unit so the resident could set the temperature at their personal comfort level.

Coleman said meals would be provided to the residents and a full-time doctor would be on staff by July.

But, none of these grandiose plans ever came to fruition, and the hospital still sits abandoned.