LAS VEGAS (FOX5) — Community Ambulance has filed a federal lawsuit against Dignity Health, alleging the hospital system concealed a corporate change of control to prevent the ambulance operator from exercising a contractual buyout option.
Ambulance Management Group, LLC (AMG) filed the complaint Aug. 5, and names Dignity Health as the sole defendant.
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AMG and Catholic Healthcare West (CHW) entered into a joint operating agreement in July 2010 to launch RBR Management, LLC, which does business as Community Ambulance Company (CAC). The agreement had a 30-year term and was designed to provide medical transportation services to Henderson and the greater Las Vegas area.
According to the complaint, CAC grew from three ambulances at its founding to more than 100, handling approximately 300 emergency and non-emergency transports per day and serving approximately 65% of Clark County, including the Las Vegas Strip. The company now handles approximately 90% of all special events in Clark County, the suit states.
The alleged concealment
The complaint alleges that CHW later changed its name to Dignity Health and, through a series of corporate restructurings, ultimately became a subsidiary of CommonSpirit Health — a change AMG says constituted a “Change of Control” under the terms of the 2010 operating agreement.
That agreement included a provision giving AMG the right to purchase Dignity Health’s membership interest in CAC if a change of control occurred. The suit alleges Dignity Health executives repeatedly and affirmatively told AMG that no such change had occurred, despite the California Secretary of State approving that change.
However, AMG says it had no way to easily access Dignity Health’s California corporate filings and relied on Dignity Health’s representations.
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The complaint also alleges that after CommonSpirit assumed control, Dignity Health’s conduct toward CAC changed. According to the suit, Dignity Health executives cycled through frequently, at times disengaging from CAC operations and at other times attempting to micromanage the company.
The complaint states that one Dignity Health executive directed AMG to transport patients at a special event to a Dignity Health facility regardless of whether it was the closest hospital or aligned with patient choice. The suit says AMG refused, citing patient safety, legal obligations, and the risk to CAC’s licenses and contracts.
The complaint also alleges Dignity Health declined to participate in community events where other hospital systems were present without prior approval, and that Dignity Health representatives repeatedly pressed AMG for data on patient transport routes to redirect more business to Dignity Health facilities.
AMG invokes buyout option
According to the complaint, AMG formally notified Dignity Health of its change-of-control discovery on May 5, and invoked the purchase option under the operating agreement. The suit states Dignity Health has refused to acknowledge the change of control and has declined to participate in the fair market value appraisal process required to complete the buyout.
AMG brings five claims against Dignity Health: breach of contract, breach of the implied covenant of good faith and fair dealing, fraud and intentional misrepresentation, and two counts of declaratory relief.
The ambulance operator provided FOX5 a statement, which read in part, “Before filing, AMG sought to resolve the dispute without litigation. AMG ultimately determined that legal action was necessary to protect its contractual rights and Community Ambulance’s ability to keep patients—not corporate interests—at the center of every decision. AMG nevertheless remains willing to pursue a good-faith resolution.
This action will not interrupt Community Ambulance’s operations, staffing, emergency response, special event coverage or service to Southern Nevada. Its medical professionals will continue making decisions based on patient needs, applicable protocols and their legal and ethical responsibilities.”
The company is seeking specific performance of the purchase option, compensatory and punitive damages exceeding $75,000, declaratory judgments confirming the change of control and AMG’s exercise of the buyout option, injunctive relief, and attorneys’ fees and costs.
Dignity Health has not yet filed a response in court, or responded to FOX5’s request for comment.
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