Trustmark Nat'l Bank v. Meador

• Citation: 81 So.3d 1112
• Decision Date: 08 March 2012
• Docket Number: Nos. 2009–IA–01939–SCT,2009–IA–01940–SCT.,s. 2009–IA–01939–SCT
• Court: United States State Supreme Court of Mississippi
• Parties: TRUSTMARK NATIONAL BANK, Frank Hart and Alvis Hunt v. C. Brent MEADOR, M.D.Mississippi Baptist Health Systems, Inc., C. Gerald Cotton, Lu Harding, Charles Harrison, Eric A. McVey, III, M.D., Kurt Metzner, James P. Wigley, Trustmark National Bank, Frank Hart and Alvis Hunt v. C. Brent Meador, M.D.

81 So.3d 1112

TRUSTMARK NATIONAL BANK, Frank Hart and Alvis Hunt

v.C. Brent MEADOR, M.D.Mississippi Baptist Health Systems, Inc., C. Gerald Cotton, Lu Harding, Charles Harrison, Eric A. McVey, III, M.D., Kurt Metzner, James P. Wigley, Trustmark National Bank, Frank Hart and Alvis Hunt

v.C. Brent Meador, M.D.

Nos. 2009–IA–01939–SCT

2009–IA–01940–SCT.

Supreme Court of Mississippi.

March 8, 2012.

Brian C. Smith, William F. Ray, Jackson, attorneys for appellants.

Michael S. Allred, attorney for appellee.

D. Collier Graham, Jackson, Rex Morris Shannon, III, Jeremy Luke Birdsall, attorneys for appellants.

Before DICKINSON, P.J., CHANDLER and KING, JJ.

CHANDLER, Justice, for the Court:

¶ 1. On August 31, 2004, Dr. Carroll B. Meador filed his Complaint against Mississippi Baptist Health Systems, Inc. (MBHS), Trustmark National Bank (Trustmark), and Doe Defendants 1 through 10, for breach of fiduciary duties, interference with fiduciary duties, interference with contract rights, interference with prospective business advantage, intentional infliction of emotional distress, deceit, fraud, and retaliatory discharge. On December 30, 2004, Meador filed an Amended Complaint, adding as defendants Central Medical Management, Inc.; Jackson Medical Clinic, Inc.; Jackson Medical Clinic, P.A.; Jackson Medical Clinic, LLC; Premier Medical Management of Mississippi, Inc.; James C. Bethea; William A. Causey, M.D.; C. Gerald Cotton; Lu H. Harding; Charles Harrison; Frank Hart; Alvis Hunt; Eric A. McVey, III, M.D.; Kurt W. Metzner; M. Kent Strum; James F. Wigley; and Doe Defendants 1 through 40; and adding as causes of action conspiracy, gross negligence, state-law antitrust claims, tort arising out of contract, and breach of covenants of good faith and fair dealing.

¶ 2. On February 3, 2005, Defendants Alvis Hunt and Frank Hart filed a notice of removal to the United States District Court for the Southern District of Mississippi. In an order filed March 9, 2007, the district court granted remand of the case, finding the federal bankruptcy proceedings in the case had been concluded and only state claims remained. On January 3, 2008, Trustmark, Hunt, and Hart filed a motion for summary judgment and motion to dismiss. MBHS filed a motion for summary judgment on February 15, 2008. On August 20, 2008, Meador filed a memorandum in opposition to summary judgment, along with an affidavit of Meador. On December 19, 2008, MBHS filed a motion to strike portions of Meador's affidavit. In a hearing on February 19, 2009, the trial court judge denied the motion to strike. Arguments on the summary judgment motions also were presented at the February 19, 2009, hearing, and on July 2, 2009, the court issued an order denying defendants' motions for summary judgment and motions to dismiss. On February 11, 2010, this Court issued an order staying the proceedings and granting defendants' petition for interlocutory appeal on the trial court's denial of summary judgment and motion to strike.

¶ 3. We find that the trial court abused its discretion in refusing to strike portions of Meador's affidavit. We also find the trial court erred in denying Trustmark and MBHS' motions for summary judgment. Therefore, we reverse the denial of the motion to strike the portions of the affidavit and reverse the trial court's denial of summary judgment in favor of Trustmark and MBHS. We find the other issues presented to be without merit.

FACTS

¶ 4. Meador's relationship with MBHS began in the 1990s when he was employed as the Medical Director of the Chemical Dependency Center of Mississippi Baptist Medical Center, Inc. (MBMC), an affiliate of MBHS. In that capacity, in 1996, Meador founded Byram Family Medical Clinic, P.A., in Byram, Mississippi, and Mobile Physicians' Services, Inc. A dispute arose between Meador and MBHS, which led to settlement negotiations between the parties. During those settlement negotiations, Meador sent MBHS a letter on February 17, 1999, with a proposed complaint, which listed as defendants MBHS; MBMC; Farris Consultants, Inc.; Brent Farris, and C. Gerald Cotton. The proposed complaint alleged fraud in the inducement, promissory estoppel, detrimental reliance, intentional infliction of emotional distress, breach of contract, breach of implied covenant of good faith and fair dealing, conversion, unfair competition, interference with business relations, tortious breach of contract, and unjust enrichment. In August 1999, Meador and MBHS agreed to a settlement in which MBHS paid Meador $352,500. The settlement agreement contained a mutual-release clause and covenant not to sue.

¶ 5. A large factor in the dispute between MBHS and Meador was a $230,000 line of credit from Trustmark, taken out by Meador. After Meador defaulted on the loan, Trustmark filed a complaint against Meador on May 21, 1998, in trial court, asking for $243,828.35 in damages. In response, on July 15, 1999, Meador filed an answer, setoff, and counterclaim against Trustmark, alleging breach of contract, conversion, breach of fiduciary duty, breach of implied covenant of good faith and fair dealing, interference with business relations, invasion of privacy, and negligence, and asking for punitive damages of at least $1 million on top of $350,000 in economic losses. On July 10, 2001, the trial court judge entered an order along with a memorandum opinion, granting summary judgment in favor of Trustmark against Meador. On September 7, 2001, a final judgment was entered, granting summary judgment against Meador, and ordering Meador to pay Trustmark $308,839.58. Meador filed a notice of appeal, which ultimately was dismissed.

¶ 6. Meador filed a petition for bankruptcy on June 6, 2002. On July 7, 2004, the bankruptcy court issued a discharge of some of Meador's debts, including the entire judgment in favor of Trustmark. Less than two months later, Meador filed complaints against Trustmark and MBHS.

¶ 7. In response to motions for summary judgment by MBHS and Trustmark, Meador submitted a memorandum in opposition to those motions, along with an affidavit. In the affidavit, Meador asserted that he did not become aware of any fraudulent activities between MBHS and Trustmark until 2004, while MBHS and Trustmark were under federal investigation. Meador claimed he learned this information in 2004 from Brent Farris, a former “principle employee or managing consultant of MBHS,” who had “a significant responsibility for transactions which I carried out with them.” Meador further asserted that Farris had informed him that:

[T]here had been an agreement between MBHS and Trustmark National Bank to exert financial duress upon me in order to deprive me of my medical clinic in Byram, Mississippi and also Mobile Physicians Services, a company I had organized. Mr. Farris informed me that there are available through the United States Department of Justice taped conversations between Trustmark and MBHS confirming this fact.

Meador had to submit Farris's possible testimony by affidavit because, at the time of the affidavit and at the time of the hearing, Farris was a fugitive unable to be deposed.

¶ 8. At the February 19, 2009, hearing on motions by MBHS, Hunt, Hart, and Trustmark for summary judgment, and to strike portions of an affidavit submitted by Meador, counsel for MBHS argued that Meador's complaint in this case alleged the same claims-based on the same facts-that were alleged in a 1999 draft complaint sent to MBHS. MBHS argued that the 1999 dispute between Meador and Trustmark was settled for $352,500, with a mutual-release agreement, releasing both sides from any future claims. MBHS also stated that the motion to strike should have been granted for three reasons: (1) Meador's affidavit contained hearsay statements; (2) it was not based on Meador's knowledge; and (3) “there were conclusionary statements in the affidavit with no factual support.” Meador responded by asserting that Farris would have supplied the information on which his affidavit was based, but that he had been out of the country and unreachable at the time. Meador also argued that the mutual-release agreement presented by MBHS was not an authentic document, because the “type font on the pages that he supposedly initialed is different from the others.”

STANDARD OF REVIEW

¶ 9. This consolidated case was petitioned to this Court based on the following: 1) the trial court's order denying the motion to strike portions of Meador's affidavit; and 2) the trial court's order denying summary judgment in favor of Trustmark and MBHS. A court's grant or denial of a motion to strike an affidavit is subject to an abuse-of-discretion standard of review. Schmidt v. Catholic Diocese of Biloxi, 18 So.3d 814, 832 (Miss.2009). This Court reviews a trial court's grant or denial of a motion for summary judgment under a de novo standard of review. Young v. Smith, 67 So.3d 732, 741 (Miss.2011).

DISCUSSION

I. WHETHER THE TRIAL COURT ERRED IN ITS REFUSAL TO STRIKE PORTIONS OF MEADOR'S AFFIDAVIT BASED ON HEARSAY.

¶ 10. The trial court abused its discretion in denying Trustmark's and MBHS' motions to strike parts of Meador's affidavit. In response to Trustmark's and MBHS' motions for summary judgment, Meador relied solely upon his own affidavit to support his theories of fraud and fraudulent concealment. ¹ Meador's only evidence to support his claim for fraudulent concealment is based on what he learned from Brent Farris. This Court finds that these statements are hearsay, not personal knowledge. In his affidavit, Meador claimed that Trustmark and MBHS conspired against him to damage his financial interests. Specifically, Meador stated that it was his “belief that Trustmark and MBHS are still actively engaged in a common plan and scheme to damage [his] business, professional practice, credit, reputation, and other business opportunities.” Meador stated that, in 2004, he was told by former MBHS consultant Brent Farris that Trustmark and MBHS had...