UNIVERSITY NURSING ASSOCIATES v. Phillips

• Decision Date: 13 February 2003
• Docket Number: No. 2001-CA-01375-SCT.,2001-CA-01375-SCT.
• Citation: 842 So.2d 1270
• Parties: UNIVERSITY NURSING ASSOCIATES, PLLC and The University of Mississippi Medical Center v. Billie PHILLIPS.
• Court: Mississippi Supreme Court

842 So.2d 1270

UNIVERSITY NURSING ASSOCIATES, PLLC and The University of Mississippi Medical Center v. Billie PHILLIPS.

No. 2001-CA-01375-SCT.

Supreme Court of Mississippi.

February 13, 2003.

Rehearing Denied May 1, 2003.

Jerrald L. Shivers, M. Curtiss McKee, Jackson, attorneys for appellants.

Sharon Marie Garner, Mary Marvel Fyke, Jackson, attorneys for appellee.

EN BANC.

WALLER, J., for the Court.

¶ 1. This matter involves an appeal from a chancellor's order denying a motion to compel arbitration and granting an accounting. Finding that the plaintiff has a right to an accounting and that the defendants did not waive their right to arbitrate, we affirm in part; reverse and render in part; and remand for further proceedings.

FACTS AND PROCEDURAL HISTORY¹

¶ 2. Billie Phillips joined the faculty of the University of Mississippi School of Nursing in November, 1995, and signed an "Employment Contract" with the School of Nursing. In 1998, Anne G. Peirce, the new Dean of the School of Nursing, instituted a policy whereby all employees were required to participate in a faculty practice plan for earning outside income. Phillips was required to sign a separate "Employment Agreement" ("PLLC Employment Agreement") with University Nursing Associates, PLLC ("the Nursing PLLC"), which addressed the conduct of her duties with the Nursing PLLC.² The PLLC Employment Agreement contained an arbitration clause as follows:

16. Arbitration of Disputes: Any controversy or claim arising out of or relating to this Agreement, or the breach thereof, shall be settled by arbitration in accordance with the rules of the American Arbitration Association. Judgment upon the award rendered by the arbitrator may be entered in any court of competent jurisdiction....

The PLLC Employment Agreement is a contract which is separate from her employment contract with the University.

¶ 3. Phillips participated in the Nursing PLLC plan for approximately two years. After her returns from the practice plan were very disproportionate to the amounts she had contributed, she sought an explanation and an accounting from the Dean. The Dean refused to provide an accounting but allowed Phillips an extension of time to renew her PLLC Employment Agreement. Because of her unhappiness with the Nursing PLLC plan, Phillips balked at signing an annual renewal of the PLLC Employment Agreement. She wrote a letter to the Dean of the School of Nursing stating that if she did not receive an accounting she "intend[ed] to proceed to file an action requesting an accounting in Chancery Court." Thereafter, the School of Nursing immediately relieved Phillips of all of her duties, did not offer to renew her contract, and requested Phillips to vacate her office by September 5, 2000.

¶ 4. The University informed Phillips that she had a right to file a grievance concerning its decision. She filed a request to invoke the grievance procedure with the University. According to Phillips, the grievance committee responded that grievances concerning the PLLC Employment Agreement did not fall under the University grievance procedures. The University admitted to informing Phillips that she could file a grievance but denied that it had informed her that the PLLC Employment Agreement did not fall under the University grievance procedures.

¶ 5. On September 15, 2000, Phillips filed a petition for an accounting in the Chancery Court for the First Judicial District of Hinds County, Mississippi. The named respondents were the Nursing PLLC, the University of Mississippi Medical Center and Unacare Health Center.³ Phillips' only request for relief was for the respondents "to provide a full and complete accounting of all funds taken in, expended by or otherwise disbursed by the University Nursing Associates, PLLC, or Unacare, relating to wages paid any [University] employees who perform services at the clinic pursuant to a practice plan agreement." Phillips requested all gross nursing practice receipts, nursing practice business expense deductions and all other related documents such as invoices, receipts, purchase orders, payroll stubs, etc., used in calculating the net earnings of University Nursing Associates, PLLC.

¶ 6. The University and the Nursing PLLC filed an answer and affirmative defenses on November 9, 2000. In their first affirmative defense, the University and the Nursing PLLC set out that any disputes concerning the agreement were to be settled by arbitration:

1. In paragraph 16 of her employment agreement University Nursing Associates, PLLC, (Exhibit C to the petition), the petition agreed to settle all controversies or claims arising out or relating to the agreement by arbitration.

Phillips filed various discovery requests seeking information consistent with the petition for accounting. The University and the Nursing PLLC filed a response to Phillips' requests for discovery on December 15, 2000, objecting on the "grounds of relevance and the plaintiff's lack of legal standing to obtain this proprietary information."⁴

¶ 7. Phillips filed a motion to compel and noticed it for hearing on March 2, 2001. After the chancellor was informed of the arbitration clause, she directed the parties to submit briefs, and after consideration thereof, the chancellor held that the University and the Nursing PLLC did not waive enforcement of the arbitration clause by filing their answer and asserting the arbitration clause as an affirmative defense, but that waiver occurred as a result of the failure of the University and the Nursing PLLC to request arbitration in a timely manner. The petition for accounting was granted. The University and the Nursing PLLC appeal from this order.

DISCUSSION

I. WHETHER PHILLIPS IS ENTITLED TO AN ACCOUNTING.

¶ 8. We have previously defined an accounting as a written financial statement containing all receipts and disbursements:

An accounting is by definition a detailed statement of the debits and credits between parties arising out of a contract or a fiduciary relation. It is a statement in writing of debts and credits or of receipts and payments. Thus an accounting is an act or a system of making up or settling accounts, consisting of a statement of the account with debits and credits arising from the relationship of the parties.

State ex rel. King v. Harvey, 214 So.2d 817, 819 (Miss.1968) (citing Black's Law Dictionary 34-36 (4th ed.1957)). Also, an accounting implies that one is responsible to another for moneys or other things, either on the score of contract or of some fiduciary relation, of a public or private nature, created by law, or otherwise. 214 So.2d at 819-20; Miller v. Henry, 139 Miss. 651, 103 So. 203 (1925) (quoting Whitwell v. Willard, 42 Mass. (1 Met.) 216).

¶ 9. Although every contractual agreement does not give rise to a fiduciary relationship, in Mississippi, such a relationship may exist under the following circumstances: (1) the activities of the parties go beyond their operating on their own behalf, and the activities for the benefit of both; (2) where the parties have a common interest and profit from the activities of the other; (3) where the parties repose trust in one another; and (4) where one party has dominion or control over the other. Hopewell Enters., Inc. v. Trustmark Nat'l Bank, 680 So.2d 812, 816 (Miss.1996) (quoting Carter Equip. Co. v. John Deere Ind. & Equip. Co., 681 F.2d 386 (5th Cir.1982)).

¶ 10. We find that a fiduciary relationship existed between Phillips, the University and the Nursing PLLC. The uncontroverted facts from the face of the pleadings show that Phillips was required by her employment contract to work at a University-operated clinic. According to the employment contract, if Phillips in her capacity as a nurse received earnings from any source other than her salary, she was allowed to keep the first $10,000, and was then required to contribute to the Plan fifty percent of any earnings in excess of $10,000. However, in practice, Phillips was required to contribute all of her nurse-related earnings⁵ in excess of $10,000. At the end of the year, she then was given "a return." In the fiscal year 1998-99, Phillips paid approximately $6,000 to the Plan, meaning that she earned $6,000 from sources other than her regular salary, but only received $767.00, far less than fifty percent, back, without any explanation for the reduction.

¶ 11. This scenario squarely meets the conditions needed for the creation of a fiduciary relationship. (1) The activities of the parties go beyond their operating on their own behalf, and the activities for the benefit of both; and (2) Where the parties have a common interest and profit from the activities of the other. The activities that Phillips was required to perform were to her benefit and that of the University and the Nursing PLLC. She was allowed to keep some of her earnings and was given a return on her contributions. The University and the Nursing PLLC benefitted because she was working at a University-sponsored clinic and because Phillips was required to make contributions to the Plan. (3) Where the parties repose trust in one another. The University and the Nursing PLLC did not have to trust Phillips because she was required to perform the activities given her and to contribute her earnings to the Nursing PLLC for its management of her funds. (4) Where one party has dominion or control over the other. The University and the Nursing PLLC definitely exercised dominion and control over Phillips. In fact, when she refused to submit to the Plan's terms, she was fired.

¶ 12. We have refused to recognize the existence of a fiduciary relationship in cases where the relationship between the two parties was no more than "an arms-length business transaction involving a normal debtor-creditor relationship." Merchants & Planters Bank of Raymond v. Williamson, 691 So.2d 398, 404 (Miss. 1997). The relationship between Phillips, the University and the Nursing PLLC was...