H. KENNETH LEFOLDT, JR., IN HIS CAPACITY AS TRUSTEE FOR THE NATCHEZ REGIONAL MEDICAL CENTER LIQUIDATION TRUST
DONALD RENTFRO, CHARLES MOCK, WILLIAM HEBURN, LEROY WHITE, JOHN SERAFIN, LINDA GODLEY, LIONEL STEPTER, LEE MARTIN, WILLIAM ERNST AND JENNIFER RUSS
OF JUDGMENT: 04/06/2017
ATTORNEYS FOR APPELLANT: BRENT B. BARRIERE ALYSSON LEIGH
MILLS D. SKYLAR ROSENBLOOM REBECCA SHA DOUGLAS DRAPER LESLIE
COLLINS GRETA BROUPHY JOHN THOMAS LAMAR, JR. TAYLOR ALLISON
HECK JOHN THOMAS LAMAR, III
ATTORNEYS FOR APPELLEE: ROY A. SMITH, JR. STEVEN JAMES
GRIFFIN MICHAEL F. MYERS
RANDOLPH, PRESIDING JUSTICE.
After Natchez Regional Medical Center ("NRMC")
filed for Chapter 9 bankruptcy, H. Kenneth Lefoldt, who had
been appointed trustee for the NRMC Liquidation Trust, sued
NRMC's former directors and officers in the United States
District Court for the Southern District of Mississippi,
alleging breach of fiduciary duties of care, good faith, and
loyalty. The directors and officers sought dismissal under
Federal Rule of Civil Procedure 12(b)(6) and argued that they
were immune under the Mississippi Tort Claims Act
("MTCA" or "Act"), Mississippi Code
Section 11-46-1, et seq. The district court agreed
and granted dismissal to the directors and officers. Lefoldt
appealed, and the Fifth Circuit certified the following
questions to this Court:
1) Does the MTCA furnish the exclusive remedy for a
bankruptcy trustee standing in the shoes of a public hospital
corporation against the employees or directors of that public
2) If the answer to the foregoing question is affirmative,
does the MTCA permit the trustee to pursue any of the claims
identified in his complaint against the officers and
directors of NRMC in their personal capacity?
Lefoldt v. Rentfro, No. 16-60491, *6 (5th Cir. filed
April 6, 2017). Pursuant to Mississippi Rule of Appellate
Procedure 20(a), we answer the first question in the
AND PROCEDURAL HISTORY
The Fifth Circuit provided a statement of the facts, which we
recite, verbatim, below:
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 "acts 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
Trustee's claims against the Officers. . . .
Lefoldt, No. 16-60491, at **2-3.
The Fifth Circuit observed that this Court has not resolved
"whether the MTCA bars a governmental entity from suing
its own employees." Id. at *5. Accordingly, the
Fifth Circuit asks this Court "to determine whether the
MTCA ties the hands of the sovereign from pursuing claims
against its servants." Id.
the MTCA provides the exclusive remedy for a public
hospital's bankruptcy trustee who, on behalf of the
public hospital, sued former officers and directors of that
A careful reading of our laws reveals that a case such as
presented today was not contemplated by the MTCA. The purpose
of the MTCA is to protect public entities from being sued for
the acts of their servants. It is perfectly clear that the
Act does not refer to claims "by" the sovereign.
Its application comes about only as to claims
"against" the sovereign. Looking at its plain
language, "claim" is defined as "any demand to
recover damages from a governmental entity as
compensation for injuries." Miss. Code Ann. §
11-46-1 (Rev. 2012) (emphasis added). "Claimant" is
defined as "any person seeking compensation
under the provisions of this chapter, whether by
administrative remedy or through the courts."
Id. (emphasis ...