MAYOR OKOLOISE, M.D. AND HOPE MEDICAL SERVICES, LLC
WILLIAM FRANKLIN YOST, M.D. AND DOCTOR'S MEDICAL CENTER OF PICAYUNE, PLLC
OF JUDGMENT: 04/25/2017
RIVER COUNTY CHANCERY COURT HON. M. RONALD DOLEAC JUDGE.
COURT ATTORNEYS: PAUL MANION ANDERSON L. CLARK HICKS, JR.
VICK K. SMITH SAMUEL STEVEN McHARD
ATTORNEYS FOR APPELLANTS: L. CLARK HICKS, JR. VICK SMITH, III
WILLIAM A. WHITEHEAD, JR.
ATTORNEYS FOR APPELLEES: PAUL MANION ANDERSON SAMUEL STEVEN
RANDOLPH, C.J., ISHEE AND GRIFFIS, JJ.
This appeal involves a business dispute between two
physicians. The chancellor awarded equitable damages in the
amount of $188, 622. We find reversible error and render
William Franklin Yost, M.D., owned and operated a
pain-management clinic in Slidell, Louisiana-Doctors Medical
Center, LLC (DMC-Slidell).
Within six months of opening DMC-Sidell, the Louisiana State
Board of Medical Examiners (LSBME) began an investigation of
Dr. Yost for illegally operating a pain-management clinic. On
April 24, 2012, Dr. Yost wrote the LSBME and stated,
"effective July 13th, 2012, I will no longer be
practicing in the area of chronic pain management by the use
of narcotic therapy." As a result, Dr. Yost and
officials with the LSBME agreed that Dr. Yost would retire
and cease the practice of chronic pain management through
narcotic therapy. DMC-Slidell closed on July 13,
Dr. Yost then opened a clinic in Picayune,
Mississippi-Doctors Medical Center of Picayune, LLC
(DMC-Picayune). In the summer of 2012, Dr. Yost began seeing
patients, including his former patients from DMC-Slidell. At
that time, the Mississippi State Board of Medical Licensure
(MSBML) required that all pain-management clinics be
registered and issued a certificate. Dr. Yost submitted an
application for registration to the MSBML in June 2012, but
the certificate was not immediately issued. Dr. Yost
continued treating patients for pain management, without a
certificate, until November 2012, when he reapplied. The
MSBML then issued Dr. Yost a certificate on November 16,
Mayor Okoloise, M.D., met with Dr. Yost in June 2012 and
began a discussion about affiliating with Dr. Yost. Dr. Yost
informed Dr. Okoloise that he had a pain-management practice
and that he was looking for another physician to take over
after he retired in the near future.
As a result of these discussions, on August 1, 2012, Dr.
Okoloise began practicing medicine with Dr. Yost at
DMC-Picayune. They formalized their relationship and signed a
"Personal Services Contract" on August 13, 2012.
Dr. Yost signed the contract as the member manager of
DMC-Slidell and DMC-Picayune, but not in an individual
The contract provided that Dr. Okoloise agreed to provide
certain physician services to DMC-Slidell and DMC-Picayune,
commencing August 1, 2012. The initial term of the contract
was for one year with automatic renewal, unless one of the
parties gave the other party notice in writing of the
intention not to renew the contract. The contract provided
that the medical clinics would at all times operate in
accordance with all applicable provisions of law and that
failure to operate in accordance with applicable laws, rules,
regulations, or directives would be a material breach of the
contract. The contract provided that early termination would
be accepted if either party committed a material breach or
lost the right to practice medicine and if the nonbreaching
party gave the breaching party sixty days' written notice
of the breach and the intent to terminate. The contract was
drafted by Dr. Okoloise's attorney, James Hautot, from
Lafayette, Louisiana, but both parties contributed to the
final contract terms.
At trial, Dr. Okoloise testified that, at the time he signed
the agreement, he was unaware of the LSBME's
investigation of Dr. Yost and he was unaware that Dr. Yost
was not properly credentialed in Mississippi. Dr. Yost
testified that, from the time the contract was signed until
Dr. Okoloise left, Dr. Yost only practiced medicine in
Mississippi. Dr. Yost believed that because the LSBME Board
had no jurisdiction in Mississippi, he was not violating his
promise not to practice pain management.
On September 4, 2012, Dr. Yost, his wife, and Dr. Okoloise,
met with Hautot in Lafayette, Louisiana. During this meeting,
the parties discussed Hautot's representation of Dr. Yost
before the LSBME. Both Dr. Okoloise and Dr. Yost executed a
written consent to Hautot's representation of Dr. Yost.
The MSBML was not aware of the investigation of Dr. Yost by
the LSBME. On November 16, 2012, the MSBML approved Dr.
Yost's application practice in pain management and issued
the required certificate.
Three days later, on November 19, 2012, Dr. Yost surrendered
his Louisiana medical license.
One month later, on December 19, 2012, Dr. Okoloise resigned
from DMC-Picayune. Dr. Okoloise delivered a resignation
letter to Dr. Yost. The letter stated that the resignation
was effective immediately, and it listed a number of
allegations against Dr. Yost and DMC-Picayune. Dr. Okoloise
testified that the clinic was being operated illegally, and,
thus he believed the contract to have been void at its
inception. Dr. Okoloise did not provide a sixty- day notice
of his intent to terminate the contract. Dr. Okoloise
testified that he had notified Dr. Yost on three different
occasions of numerous breaches but that he did not mention
his intent to terminate the contract until December 19, 2012.
After Dr. Okoloise resigned, several other DMC-Picayune
employees-Julie Brinkman, Kimberly Marshall, and Camille
Dimaggio-unexpectedly resigned. Another employee, Joanne
Myers, had resigned a few days before.
Testimony was presented that Dr. Okoloise had made plans to
open another clinic before he submitted his resignation. In
fact, Dr. Okoloise opened a clinic under the name of Hope
Medical Services, LLC (Hope Medical). On November 16, 2012,
Dr. Okoloise executed a lease agreement on a space to house
Hope Medical. Dr. Okoloise offered several members of the
DMC-Picayune staff an employment opportunity at Hope Medical.
The offers were made while Dr. Okoloise was employed by
DMC-Picayune. In addition, Dr. Okoloise instructed the staff
to access the patient list of DMC-Picayune and to send out
letters that provided the patients with notice of Dr.
Okoloise's new address.
On January 2, 2013, Hope Medical opened in Picayune. Hope
Medical employed Dr. Okoloise, Myers, Brinkman, Marshall, and
Despite the departure of Dr. Okoloise and the staff members,
Dr. Yost continued to operate DMC-Picayune. Dr. Yost employed
temporary staff and decreased the number of patients. Dr.
Yost also sought a buyer for the clinic.
Dr. Yost entered negotiations with Dr. Stephanie Dyer to
purchase DMC-Slidell and DMC-Picayune. Dr. Yost and Dr. Dyer
signed a memorandum of understanding for the sales price of
$1, 250, 000, but the sale was never finalized. Dr. Dyer
backed out after a conversation with Dr. Okoloise in which he
told her that a noncompetition agreement was in place. Dr.
Okoloise denied he had made that statement.
The Drug Enforcement Agency (DEA) began an investigation of
Dr. Yost and DMC-Picayune. Following the investigation, the
DEA did not file any charges against Dr. Yost. But, on
February 13, 2013, the DEA closed DMC-Picayune. That same
day, Dr. Yost voluntarily surrendered his Mississippi medical
license. The licensure surrender noted that Dr. Yost had
surrendered his Louisiana medical license for a pattern and
practice that violated Louisiana's pain-management rules
and that his conduct was in violation of the Mississippi
Medical Practice Act.
On January 7, 2013, Dr. Yost and DMC-Picayune commenced this
action in the Chancery Court of Pearl River County. The
complaint named as defendants Dr. Okoloise, Hope Medical, and
the four former employees of DMC-Picayune. The complaint
asserted twenty claims and demanded a judgment in the amount
of the fair market value of the clinic, which was valued at
$1, 198, 000.
After trial, the chancellor entered an opinion and final
judgment that addressed each claim. The chancellor dismissed
the following claims: accounting, breach of fiduciary duty
and breach of duty of loyalty, constructive trust, unjust
enrichment, embezzlement and misappropriation, slander per
se, libel, unfair competition, tortious interference with
business relationship, tortious interference with business,
breach of duty of good faith and fair dealing, fraudulent or
negligent misrepresentation, civil conspiracy, intentional or
negligent infliction of emotional distress, punitive damages,
indemnification, and injunctive relief. Yet the chancellor
determined that there was sufficient evidence to sustain
several claims against Dr. Okoloise and Hope Medical:
trover/conversion, defamation, breach of contract, breach of
duty of good faith, and misappropriation of trade secrets.
The chancellor found that "[Dr. Yost and DMC-Picayune]
should be equitably compensated for the damages they incurred
for these claims and losses." He awarded a judgment
against Dr. Okoloise and Hope Medical in the amount of $188,
622. The chancellor later modified the order and final
judgment on post-trial motions.
"This Court will not disturb the findings of a
chancellor unless the chancellor was manifestly wrong,
clearly erroneous or an erroneous legal standard was
applied." White v. White, 26 So.3d 342, 346
(Miss. 2010) (internal quotation marks omitted) (quoting
R.K. v. J.K., 946 So.2d 764, 772 (Miss. 2007)).
Further, we will not reverse a chancellor's findings
"where there is substantial evidence supporting those
findings." Madden v. Rhodes, 626 So.2d 608, 616
(Miss. 1993) (citing Cooper v. Crabb, 587 So.2d 236,
239 (Miss. 1991)). We recognize that "the chancellor,
being the only one to hear the testimony of witnesses and
observe their demeanor, is to judge their credibility. He is
best able to determine the veracity of their testimony, and
this Court will not undermine the chancellor's authority
by replacing his judgment with its own." Id.
(citing Mullins v. Ratliff, 515 So.2d 1183, 1189
(Miss. 1987)). "For questions of law, we employ a de
novo standard of review and will only reverse for an
erroneous interpretation or application of the law."
Boyd v. Tishomingo Cty. Democratic Exec. Comm., 912
So.2d 124, 128 (Miss. 2005) (citing In re Mun. Boundaries
of Southaven, 864 So.2d 912, 917 (Miss. 2003)).
Dr. Okoloise and Hope Medical raise four issues on appeal:
I. Whether the chancellor correctly found that Dr. Yost
proved every element of slander, including special harm