Mississippi Litigation Review & Commentary : Mississippi Personal Injury Lawyer & Attorney : Phillip W. Thomas Law Firm : MS Litigation Review & Commentary

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The Mississippi Business Journal's quarterly health care issue contained an article on the unsuccessful efforts in the Mississippi Legislature to pass a bill requiring nursing homes to carry liability insurance. Here is a link to the digital issue. The article starts on page 32.

In the article Jackson attorney John Maxey speaks on behalf of the nursing home industry, which opposes efforts to require nursing homes to carry liability insurance. In an email to the MBJ on the issue, Maxey dropped this bombshell:

“The overwhelming majority of nursing homes already have liability coverage in place, and the remainder make provisions within their business model to satisfy any court-ordered financial obligations that might arise.”

Really? Thanks for the info. Mr. Maxey, because lawyers in your firm who are defending nursing home cases sing a different tune.

Maxey's assertion that nursing homes can pay any judgment directly contradicts what lawyers in Maxey's law firm tell plaintiff lawyers when negotiating settlements. When defending cases alleging negligence by nursing homes, lawyers in Maxey's firm tell plaintiff lawyers that uninsured nursing homes will declare bankruptcy if a large judgment is obtained in the case.

The typical nursing home that Maxey's firm defends operates as a limited liability company (LLC). A different company owns the building and certificate of need for the nursing home. The LLC operating the nursing home has little or no assets because it is a shell corporation with the profits drained off to the owners.

This organizational structure is designed to insulate nursing home operators from liability for abuse and neglect. Nursing home defense lawyers use it as a hammer to drive down the settlement value of cases. The organizational structure has made the bankruptcy threat appear very real to lawyers representing the victims of nursing home neglect.

But now John Maxey says it's a bluff. This is a big deal.   

For prior posts on the issue of Mississippi's uninsured nursing homes, click here.

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On December 27, 2010 attorney Sherrie Moore sued the Allen, Cobb, Hood & Atkinson law firm of Gulfport in federal court for sexual discrimination and retaliation. The law firm has been around for many years under various names. Here is the Complaint.

Moore alleges that in 2003 she joined the firm as an equity partner. She alleges that the firm had an unwritten policy against hiring African-Americans. Moore further alleges that in April 2010, an associate with the firm brought two white secretaries at the firm into his office and warned them that people like them would likely be targeted for violence at the upcoming Black Spring Break event on the Coast.

Moore alleges that she then confronted the associate about the inappropriate behavior. She alleges that the associate complained to the other partners, who met and decided to fire Moore. She alleges that she was terminated despite earning the largest bonus in the firm in 2009.

Moore's attorneys are John Maxey and Heather Aby of the Maxey Wann firm in Jackson.

Here is Allen Cobb's Answer, in which the firm denies Moore's allegations. The firm's attorneys are Taylor Smith and Michael Hudson from the Kullman Firm in Tupelo.

My take:

Wow. The allegations sound like scenes from the movie Blazing Saddles.

Cases against lawyers and law firms are knife fights. Cases between lawyers are worse. Just ask the losers of Scruggs-gate.      

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On December 7, 2009 Natchez Regional Medical Center filed a fifty-three page Complaint against Quorum Health Resources and two Quorum employees (Jeffrey Wesselman and Michael Anderson) who formerly served as the CEO and CFO of NRMC. Here is the Complaint, which NRMC filed in federal court in the Western Division for the Southern District of Mississippi.

NRMC announced the lawsuit last March, as I reported here.

Quorum had a contract to manage NRMC. NRMC’s Complaint alleges that Quorum, Wesselman and Anderson committed fraud and gross mis-management of NRMC. The central allegation of the Complaint is that Quorum and its employees falsely reported to the NRMC board of trustees that the hospital was profitable when in fact, the hospital was actually losing money. The Complaint alleges that the false reports were made so that NRMC would renew Quorum’s management contract. Under the contract, NRMC paid Quorum $200,000 per year and covered the salary and costs associated with the CEO and CFO.

Allegations that Quorum mismanaged the hospital include that Quorum:

• directed NRMC to enter into contracts with physicians that violated federal Stark Laws;
• failed to increase medical services rates to reflect market conditions, resulting in millions of dollars in lost revenue;
• excessively staffed NRMC;
• directed NRMC to purchase supplies from vendors with relationships with Quorum;
• mismanaged physician contracts;
• accounting irregularities and misrepresentations; and
• other mis-management.

The Complaint provides many factual details to support the allegations.

The pleaded causes of action are:

1. breach of fiduciary duty;
2. breach of contract;
3. breach of duty of good faith and fair dealing;
4. negligence;
5. fraud;
6. negligent misrepresentation;
7. aiding and abetting breach of fiduciary duty;
8. fraudulent transfers under Mississippi Uniform Fraudulent Transfers Act; and
9. corporate waste.

NRMC’s attorneys are John Maxey and Kelly Hollingsworth of Maxey Wann and William Ryan and Kevin Hroblac of the Whiteford Taylor firm in Baltimore.

So far no attorney has appeared for Quorum.