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Lefoldt v. Rentfro

United States Court of Appeals, Fifth Circuit

April 6, 2017

H. KENNETH LEFOLDT, JR., in his capacity as Trustee for the Natchez Regional Medical Center Liquidation Trust, Plaintiff - Appellant
v.
DONALD RENTFRO; CHARLES MOCK; WILLIAM HEBURN; LEROY WHITE; JOHN SERAFIN; LINDA GODLEY; LIONEL STEPTER; LEE MARTIN; WILLIAM ERNST; JENNIFER RUSS, Defendants-Appellees

         Appeal from the United States District Court for the Southern District of Mississippi

          Before JONES and OWEN, Circuit Judges, and ENGELHARDT, [*] District Judge.

          EDITH H. JONES, Circuit Judge:

         CERTIFICATE FROM THE UNITED STATES COURT OF APPEALS FOR THE FIFTH CIRCUIT TO THE SUPREME COURT OF MISSISSIPPI, PURSUANT TO MISSISSIPPI RULE OF APPELLATE PROCEDURE 20.

         TO THE SUPREME COURT OF MISSISSIPPI AND THE HONORABLE JUSTICES THEREOF:

         The above-styled diversity case involves outcome-determinative questions of Mississippi law. We have not been able to identify clear controlling precedents from the Supreme Court of Mississippi that would resolve this case. This Court hereby certifies questions of law to the Supreme Court of Mississippi for instructions concerning said questions of law, based on the facts recited herein, pursuant to Mississippi Rule of Appellate Procedure 20.

         STYLE OF THE CASE

         The style of this case is Lefoldt, Jr. v. Rentfro, 16-60491, in the United States Court of Appeals for the Fifth Circuit. The case is on appeal from a judgment of the United States District Court for the Southern District of Mississippi.

         STATEMENT OF FACTS

         Natchez Regional Medical Center ("NRMC") is a public, not-for-profit, community hospital owned by Adams County, Mississippi. In 2014, NRMC filed bankruptcy under Chapter 9 of the Bankruptcy Code, and a Trustee (Lefoldt) was appointed for the liquidation trust and given the right to pursue all claims or causes of action on behalf of NRMC.

         Appellant, the Trustee, sued the former directors and officers (collectively, "Officers") of NRMC alleging that the Officers breached their fiduciary duty of care, loyalty, and good faith. The Trustee's claims against the Officers arise from the performance of their duties on behalf of NRMC. In his complaint the Trustee asserts that the defendants were grossly negligent or abdicated their responsibilities in failing to bill patients for services rendered, respond to federal audits, and properly oversee the credentialing of its doctors. Among other allegations, the Trustee contends that NRMC's Chief Financial

         Officer did not have the formal training or experience in regulatory matters necessary to serve as the hospital's CFO. As a result of the Officers' misfeasance, the Trustee states that the hospital lost millions of dollars in revenue.

         The Trustee seeks to recover damages for the benefit of NRMC's creditors. The parties do not dispute that: (1) NRMC qualifies as a "government entity" under the MTCA, (2) the defendants qualify as "employees" of NRMC, and (3) the "act or omissions" complained of occurred within the course and scope of the defendants' employment with NRMC.

         The Officers moved to dismiss, arguing that they are immune from liability under the Mississippi Tort Claims Act ("MTCA"), Miss. Code Ann. § 11-46-1, et seq. The district court granted the motion to dismiss, determining that the plain language of the MTCA bars the ...


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