PATTON MEDICAL OF GULF COAST, INC. APPELLANT
MICHAEL RELLE, INDIVIDUALLY, AND ORTHOTIC & PROSTHETIC SPECIALISTS, INC. APPELLEES
OF JUDGMENT: 01/19/2017
HARRISON COUNTY CIRCUIT COURT, FIRST JUDICIAL DISTRICT HON.
LAWRENCE PAUL BOURGEOIS JR.
ATTORNEYS FOR APPELLANT: JAMES KENNETH WETZEL GARNER JAMES
ATTORNEY FOR APPELLEES: BLEWETT W. THOMAS
GRIFFIS, P.J., CARLTON AND TINDELL, JJ.
Patton Medical of Gulf Coast, Inc. ("Patton
Medical") claims that it entered into a joint business
venture with Michael K. Relle ("Relle Sr.") and
Orthotic & Prosthetic Specialists, Inc.
("O&P") to furnish orthotics and prosthetics in
the Mississippi Gulf Coast area. The business arrangement
failed. Believing it was still owed a portion of the joint
venture's profits, Patton Medical sued Relle Sr. and
O&P in Harrison County Court, seeking recovery under the
parties' business venture agreement and under
Mississippi's open-account statute, Mississippi Code
Annotated section 11-53-81 (Rev. 2012).
On Relle Sr.'s motion, the county court granted summary
judgment in his favor, finding Patton Medical could not
establish a triable issue of fact on its claim that Relle Sr.
was individually liable to it for unpaid profits. Having
prevailed on all counts against him, including the
open-account claim, Relle Sr. then moved for attorney fees
under section 11-53-81. The county court granted Relle
Sr.'s motion and awarded him $7, 000 in attorney fees.
The case proceeded to trial on Patton Medical's joint
venture claims against O&P, and the jury returned a
verdict for Patton Medical, assessing $101, 316.69 in
damages. The county court denied O&P's motion for a
judgment notwithstanding the verdict ("JNOV
motion"). ¶3. The parties appealed the county court
judgment and respective decisions against them to the
Harrison County Circuit Court. The circuit court affirmed the
county court's summary judgment in Relle Sr.'s favor,
and its $7, 000 attorney fees award under section 11-53-81.
It reversed the county court's denial of O&P's
JNOV motion and rendered judgment in O&P's favor.
Now on appeal to this Court, Patton Medical asserts that the
circuit court (1) erred in granting O&P's JNOV
motion, which reversed the county court's denial of that
motion and reversed the jury verdict in Patton Medical's
favor; (2) erred in affirming the county court's decision
granting Relle Sr.'s motion for summary judgment; and (3)
erred in affirming the county court's decision granting
Relle Sr.'s motion for attorney fees brought pursuant to
Mississippi's open-account statute.
Finding error in the circuit court's reversal of the
county court's judgment on O&P's JNOV motion, we
reverse and reinstate the county court jury verdict and $101,
316.69 damages award in Patton Medical's favor because
there was sufficient evidence to support its verdict and
award. Finding no error in the circuit court's affirmance
of the county court's summary judgment order in Relle
Sr.'s favor and its related award of $7, 000 in attorney
fees under section 11-53-81, we affirm that aspect of the
circuit court's judgment.
Patton Medical is a medical supply business that sells
orthotics and prosthetics and is located in Ocean Springs,
Mississippi. Its principals are Jay Rubenstein and Keith
Wade. In April 2010, Patton Medical's certified
prosthetist gave notice. Neither Rubenstein nor Wade were
certified orthotists or prosthetists at the time. Patton
Medical needed a certified orthotist/prothetist to continue
serving its patients, so Rubenstein and Wade weighed various
options to fill that void. They ultimately decided to contact
Relle Sr., then president of O&P, about Patton
Medical's need to associate a licensed orthotist and
prosthetist to treat its clients.
Relle Sr. and his son, Michael S. Relle ("Relle
Jr."),  worked as O&P's certified
practitioners, both were licensed to provide orthotic and
prosthetic services. O&P's primary facility is in
Covington, Louisiana. ¶8. Rubenstein, Wade, Relle Sr.,
and Relle Jr. had their first meeting in Slidell, Louisiana
to discuss O&P and Patton Medical doing business on the
Gulf Coast. In late April 2010 these individuals met a second
time. Relle Sr. and Relle Jr. traveled to Ocean Springs to
view Patton Medical's facilities and examine one of
Patton Medical's clients.
According to Patton Medical, Relle Sr. participated in these
meetings both individually and on behalf of his company,
O&P. Relle Sr., on the other hand, contends he
participated solely on O&P's behalf as its president.
According to the deposition testimony of Relle Sr. and the
testimony of Patton Medical's principals, Wade and
Rubenstein, at the second meeting Patton Medical, O&P,
and, according to Patton Medical, Relle Sr., consummated an
oral agreement to do business together on a temporary basis
to see whether O&P could meet Patton Medical's needs.
The parties agreed that there would be a 50/50 split of the
profits from the business.
The evidence in the record reflects that the parties also
agreed to the following division of responsibilities:
supply a prosthetist once a week to see
patients at the Patton Medical Ocean
provide the facility for seeing patients
provide patient billing, technical support,
purchasing, and accounting services
perform marketing and sales
cover warranty items
secure medical information for patient
According to O&P, Patton Medical was responsible for
fabricating (manufacturing) the orthotics and prosthetics.
Patton Medical did start off sending someone to O&P's
facility to do the fabrication for a few weeks. After about a
month, however, O&P told Patton Medical it would take
over the fabrication at O&P. Patton Medical agreed, and
O&P did the fabricating from that point forward.
The business venture continued for four or five months.
During this time O&P had business cards made for
Rubenstein and Wade, identifying them as "practice
managers" under O&P's name. In his deposition,
which was read at trial, Relle Sr. admitted the business
cards were prepared in furtherance of the oral agreement to
do a joint venture with Patton Medical. O&P also hired
another orthotist/prosthetist to work primarily with Patton
Medical. O&P received all payments from billings,
periodically provided an accounting to Patton Medical, and
paid Patton Medical over $196, 000 in 2010. Though, as noted,
the parties agreed that there would be a 50/50 split of the
profits; they ultimately disagreed on whether some costs,
primarily fabrication costs, should be deducted as expenses
before dividing the profits. According to Patton Medical, the
profits were to be split after subtracting the cost of
component goods. The record shows that the cost of component
goods did not include fabrication costs.
According to O&P, Patton Medical was responsible for
fabrication, and, under that scenario, it would receive 50%
of the profits. O&P asserts that when Patton Medical was
unable to fulfill this responsibility, O&P took over
fabrication. Taking over fabrication caused O&P to incur
these costs. The record shows that at this point, O&P
then began subtracting the fabrication costs from profits
before the 50/50 split.
Both Patton Medical's principals, Rubenstein and Wade,
testified at trial that there was never an agreement that
either company would charge fabrication costs against the
income derived in the business. The jury also heard testimony
from Relle Sr. (via his deposition read at trial) and Relle
Jr. that they did not recall advising Patton Medical that
O&P would deduct fabrication costs in the expense
calculation. Relle Jr. also testified, however, that when
Patton Medical agreed to have O&P do the fabrication, the
parties never discussed that O&P would assume the
The record reflects that before the end of 2010, O&P
terminated the parties' oral agreement to supply
orthotics and prosthetics. O&P described several reasons
for termination, including, among other reasons, patient
overload that O&P could not service, and Patton
Medical's inability to do the fabrication, which further
burdened O&P's limited resources. The last payment
O&P made to Patton Medical was in November 2010.
When the periodic accountings and payments stopped, Patton
Medical repeatedly tried to get in contact with O&P
regarding the status of payments, account receivables, and
expenses. Patton Medical received no satisfactory response
from O&P, so it hired an attorney who then sent a demand
letter to O&P under Mississippi's open-account
statute. In that demand letter Patton Medical sought "to
collect an open-account with your firm . . . for funds owed
to Patton Medical . . . for work performed for your
company." There was no mention of Relle Sr.'s
potential individual liability in the demand letter.
Patton Medical was unsuccessful in obtaining a satisfactory
response to its demand letter, so it sued O&P and Relle
Sr. Patton Medical sought to recover its remaining share of
profits under the parties' business venture and also
sought to recover for an open-account under section 11-53-81.
In its answer, O&P denied it was liable to Patton Medical
on an unpaid account. Likewise, in his answer, Relle Sr.
denied that he was personally or individually liable to
Patton Medical on an unpaid open-account. As for the joint
venture claim, O&P acknowledged that Patton Medical's
complaint concerned a joint venture between O&P and
Patton Medical but denied that Patton Medical was due any
additional sums earned through the joint business venture and
affirmatively stated that O&P had previously paid Patton
Medical one-half of the joint venture's net profits.
Relle Sr. similarly acknowledged the existence of a joint
venture between O&P and Patton Medical in his answer but
made no acknowledgment or admission as to the existence of a
joint venture between himself, personally, and Patton
Medical. Additionally, the evidence in the record showed that
during his deposition, Relle Sr. admitted to the existence of
a joint venture between O&P and Patton Medical.
of Relle Sr.
Before filing his answer, Relle Sr. moved to dismiss Patton
Medical's complaint against him under Mississippi Rule of
Civil Procedure 12(b)(6) asserting that it failed to state a
claim against him. This motion was eventually converted to a
summary judgment motion when both parties submitted matters
outside the pleadings during briefing.
After a hearing and considering all briefing before it, the
county court granted summary judgment in Relle Sr.'s
favor on January 14, 2013. This order was not certified as a
final judgment under Mississippi Rule of Civil Procedure
54(b). Nevertheless, Patton Medical appealed this ruling to
the circuit court on February 11, 2013.
on Patton Medical's claims against O&P
Beginning January 22, 2013, the case proceeded to a two-day
trial on Patton Medical's claims against O&P for its
remaining share of profits under the parties' joint
venture. At the close of Patton Medical's case, O&P
moved for a directed verdict, arguing that Patton Medical had
not established the existence of a joint venture under
Mississippi law. O&P also argued that it was impossible
for Patton Medical to prove that it had any degree of control
over patient treatment because, for it to do so, would
violate Mississippi law governing the practice of ...