Copiah Med. Associates v. Miss. Baptist Health Systems
| Docket Number: | 2001-IA-01536-SCT Linked Case(s): 2001-IA-01536-SCT ; 2001-IA-01536-SCT |
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| Supreme Court: | Opinion Link Opinion Date: 04-14-2005 Opinion Author: Carlson, J. Holding: The motion for rehearing is denied. The original opinion is withdrawn, and this opinion is substituted therefor. Reversed and Remanded. |
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| Additional Case Information: |
Topic: Contract - Subject matter jurisdiction - Compulsory counterclaim - Priority jurisdiction Judge(s) Concurring: Smith, C.J., Waller and Cobb, P.JJ., Graves and Dickinson, JJ. Non Participating Judge(s): Diaz and Randolph, JJ. Dissenting Author : Easley, J. Procedural History: Interlocutory Appeal Nature of the Case: CIVIL - CONTRACT |
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| Trial Court: |
Date of Trial Judgment: 09-14-2001 Appealed from: Copiah County Chancery Court Judge: J. Larry Buffington Disposition: The chancellor denied a motion to transfer this case to the circuit court. Case Number: 2001-51 |
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| Note: | Appellee's Motion to Strike Part IV of Appellant's Reply to the Mississippi Hospital Association's Amicus Curiae Brief in Support of Petition for Rehearing is denied. Motion to Stay filed by appellee is denied. Motion to Stay filed by appellee is denied. Motion for Factual Determination filed by appellee is denied. | |
| Party Name: | Attorney Name: | |||
| Appellant: | Copiah Medical Associates |
RENEE C. HARRISON, JAMES D. SHANNON, ELISE BERRY MUNN,
KELLEY M. BERRY, HOLMES S. ADAMS, TODD INMAN WOODS,
DAVID A. RUEFF, JR., OLEN C. BRYANT, JR. |
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| Appellee: | Mississippi Baptist Health Systems | MICHAEL B. WALLACE, D. COLLIER GRAHAM, ROBERT O. ALLEN |
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Synopsis provided by:  If you are interested in subscribing to the weekly synopses of all Mississippi Supreme Court and Court of Appeals hand downs please contact Tammy Upton in the MLI Press office. |
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| Topic: | Contract - Subject matter jurisdiction - Compulsory counterclaim - Priority jurisdiction |
| Summary of the Facts: | The motion for rehearing is denied, and this opinion is substituted for the original opinion. Copiah Medical Associates, a Mississippi general partnership consisting of practicing medical physicians operating in two Copiah County clinics, and Mississippi Baptist Health Systems, a Mississippi not-for-profit corporation engaged in the business of heath care, entered into a non-binding Letter of Intent which led to the execution of a Management and Consulting Services Agreement; a Net Lease Agreement where Copiah would lease a proposed new Hazlehurst clinic from Baptist; an Adoption Agreement, which activated specific provisions of the Letter of Intent where Baptist agreed to buy the land and pay the cost of construction of the new facilities; and two Net Leases where Copiah leased the two existing buildings in Hazlehurst and Crystal Springs from Baptist. After Copiah was notified that a partial audit revealed evidence of over-billing of Medicare and Medicaid, Baptist determined that Copiah was in breach of the Management Agreement and submitted a letter terminating the Management Agreement. Copiah filed a breach of contract suit in the Copiah County Circuit Court. Copiah later moved to amend the complaint to add counts of breach of good faith and fair dealing, breach of fiduciary duties, and requested punitive damages and attorneys fees and delete the request for specific performance. When Copiah notified Baptist that it repudiated the Net Leases on the basis that the leases were void because of Baptist’s illegal termination of the Management Agreement, Baptist filed suit in the Copiah County Chancery Court seeking specific performance of the Net Lease regarding the new Hazlehurst facility. Copiah moved to amend the circuit court complaint adding a declaratory action that the Net Lease was void and to change the request for specific performance to a request for damages. The circuit court granted Copiah’s motion to amend and denied Baptist’s motion to dismiss or, alternatively, to transfer the case to Copiah County Chancery Court. Copiah moved the chancery court to transfer Baptist’s lawsuit to circuit court. Baptist filed in the chancery court action a motion for judgment on the pleadings, seeking a permanent injunction requiring Copiah to occupy the new Hazlehurst clinic and liquidated damages at a rate of $513.25 per day since May 2, 2001, with costs and attorney’s fees. Copiah filed in the chancery court an amended motion to transfer and a request for alternative relief including dismissal or stay pending resolution of the circuit court matter. A special chancellor entered an order denying all requested relief and setting the case for trial. The Supreme Court granted an interlocutory appeal. |
| Summary of Opinion Analysis: | Issue 1: Jurisdiction of chancery court Baptist argues that the case should remain in chancery court because only the equitable remedy of specific performance can make Baptist whole. Specific performance of a provision in a lease-contract for the continued occupancy and use of the premises by the lessee for a specified purpose, and for a definite period of time, will not be ordered where the continued operation of the business of the lessee would require the superintendence of the court from time to time during the period of such lease. This breach of contract claim should have been brought in circuit court rather than chancery court. Issue 2: Compulsory counterclaim Copiah argues that the claims brought by Baptist in chancery court are compulsory counterclaims to Copiah's previously filed circuit court action. In determining the connection of the claim to the counterclaim, the court should look at whether the same evidence or witnesses are relevant to both claims; whether the issues of law and fact in the counterclaim are largely the same as those in the plaintiff's claim; whether, if the counterclaim were asserted in a later lawsuit, it would be barred by res judicata; and whether or not both claims are based on a common nucleus of operative fact. Here, both the circuit and chancery court actions involve the same evidence and witnesses. Although the Net Lease agreement is a separate contract from the Management Agreement, these documents are inextricably intertwined with one another. Both the claims pending in the circuit and chancery courts arose from the lengthy negotiations resulting in the complex business arrangement between the parties. Because both cases involve the breach of the same lease agreement, the parties are identical, and each action seeks to determine the parties’ contractual rights and responsibilities under the contract, the elements of res judicata are met. Therefore, the claims asserted by Baptist in the chancery court action should have been submitted as a compulsory counterclaim in the circuit court action. Issue 3: Priority jurisdiction Copiah argues that the circuit court has priority jurisdiction because its first-filed complaint was amended to include a declaratory action that the Net Lease is void as a result of Baptist’s breach of the Management Agreement and that the amendment relates back to the date of the original filing under M.R.C.P. 15(c). Where two suits between the same parties over the same controversy are brought in courts of concurrent jurisdiction, the court which first acquires jurisdiction retains jurisdiction over the whole controversy to the exclusion or abatement of the second suit. Because the circuit court acquired jurisdiction over this matter through the first-filed complaint, the chancery court action should be transferred to the circuit court. |
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