Wellness, Inc. v. Pearl River County Hospital and Nursing Home
178 So. 3d 1287
| Miss. | 2015Background
- Pearl River Community Hospital (Board-governed) contracted with Wellness, Inc. (Sept. 14, 2011) for renovation of twelve rooms; the contract included a mediation/arbitration clause in its "Standard Terms and Conditions."
- The Hospital sued Wellness and others in Nov. 2013 alleging fraud, conspiracy, breach of contract, etc.; the case was removed to federal court and later remanded to state court where proceedings were consolidated.
- Wellness moved to compel mediation and (if necessary) arbitration and to stay proceedings based on the arbitration clause; the trial court denied the motion after a hearing.
- Wellness appealed the denial; this Supreme Court reviewed de novo whether an enforceable arbitration agreement existed between the Hospital and Wellness.
- The Court focused on Mississippi law requiring public boards to record contracts or sufficient contract terms in their minutes; the Board minutes here contained only general references to Wellness and payment authorizations, not the contract terms or arbitration clause.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether a valid arbitration agreement exists between the Hospital and Wellness | Hospital: No valid agreement because the Board minutes do not sufficiently memorialize the contract or its arbitration clause | Wellness: CEO Boleware signed the agreement; Board discussed/approved the project and paid invoices, so arbitration clause should be enforceable | Held: No — arbitration clause unenforceable; minutes lack sufficient terms to bind the hospital |
| Whether an exception should be carved to excuse the minutes requirement (a "Wellness exception") | Hospital: Public‑policy and stare decisis require enforcing the minutes rule; no exception should be created | Wellness: Board discussion, member testimony, and payments show ratification; equitable exception should apply | Held: No — Court refuses to create an exception; public‑policy protection of board approval and public funds controls |
Key Cases Cited
- Thompson v. Jones Cty. Cmty. Hosp., 352 So. 2d 795 (Miss. 1977) (minutes must contain enough terms to determine liabilities and obligations)
- Cheatham v. Smith, 92 So. 2d 203 (Miss. 1957) (entire contract need not be on minutes where sufficient terms, e.g., name and salary, are recorded)
- Butler v. Bd. of Supervisors for Hinds County, 659 So. 2d 578 (Miss. 1995) (minutes rule protects the public treasury and prevents individual agents from binding public boards)
- Trinity Mission Health & Rehab. of Holly Springs v. Lawrence, 19 So. 3d 647 (Miss. 2009) (party seeking arbitration bears burden to prove an arbitration agreement exists)
- Tupelo Auto Sales, Ltd. v. Scott, 844 So. 2d 1167 (Miss. 2003) (order denying motion to compel arbitration is appealable)
- AT&T Techs. v. Communications Workers of America, 475 U.S. 643 (U.S. 1986) (arbitration is a matter of contract and cannot be compelled absent agreement)