Appeal filed in Natchez Regional lawsuit that was tossed out

Published 12:04 am Thursday, July 28, 2016

NATCHEZ — The bankruptcy estate of the former Natchez Regional Medical Center has appealed this month a federal judge’s decision to toss out a lawsuit against its former administration and board members.

Kenneth Lefoldt, the certified public accountant charged with managing the bankruptcy, had previously filed a lawsuit against former NRMC chief executive officers Bill Heburn and Donny Rentfro and former Chief Financial Officer Charles Mock alleging that they committed professional malpractice that resulted in the public hospital’s 2014 bankruptcy.

In an April order ultimately dismissing the case against the administrators, U.S. Southern District of Mississippi Judge Kenneth Starrett said the former administrators had been accused of being “grossly negligent in their duties, failing to bill patients for services rendered, respond to federal audits or oversee credentialing of doctors, among other alleged malfeasances.”

The former hospital board was also accused of having “abdicated their responsibility to oversee NRMC’s officers.”

Starrett ultimately ruled that the case against the former administrators and board members could not move forward because of the Mississippi Tort Claims Act, which in part states that, “No employee may be held personally liable for acts or omissions occurring within the course or scope of the employee’s duties.”

Federal courts can consult and apply state laws that are applicable to a particular case. In this instance, the defendants introduced the MTCA into the discussion in their motion to have the lawsuit dismissed.

“It is undisputed that Defendants’ alleged tortuous acts and omissions occurred within the course and scope of their duties as employees of NRMC,” Starrett wrote. “Plaintiff has not identified any allegation of conduct which constitutes fraud, malice, libel, slander, defamation or a criminal offense. Accordingly, the Court finds that Plaintiff’s breach of fiduciary duty claim is subject to the MTCA, and Defendants’ Rentfro, Mock and Heburn are immune from personal liability.

The case against the former board was dismissed in part because the plaintiff “does not dispute that the Board Defendants were ‘employees’ of NRMC … or that their alleged tortuous acts and omissions occurred ‘within the course and scope of their employment’ by NRMC,” Starrett wrote.

The court finalized the order dismissing the case July 15, and Lefoldt immediately filed an appeal of the decision with the Fifth Circuit Court of Appeal. No date has been set for the appeal.

The 2014 bankruptcy action eventually resulted in the sale of the county-owned hospital to a private company, Community Health Systems, which eventually rebranded the hospital as Merit Health Natchez and merged the former Natchez Community Hospital with it.

When the hospital sale went through in October 2014, CHS paid $10 million for the facility.

To cover the cost of paying off the county-backed bonds associated with the hospital, CHS also agreed to pre-pay $8 million in ad valorem taxes.