Case: 24CH2:17-cv-00229-CB Document #: 21 Filed: 08/09/2017 Page 1 of 13

IN THE CHANCERY COURT OF HARRISON COUNTY, MISSISSIPPI

SECOND JUDICIAL DISTRICT

SRHS AMBULATORY SERVICES, INC. PLAINTIFF

V. CAUSE NO.: 17-229(4)

PINEHAVEN GROUP, LLC AND DEFENDANTS

FIRST AMERICAN TITLE COMPANY

ANSWER AND DEFENSES OF PINEHAVEN

GROUP, LLC TO AMENDED COMPLAINT

COMES NOW Pinehaven Group, LLC, a Mississippi limited liability company

(hereinafter "Pinehaven"), by counsel and responding to the Plaintiff's Amended Complaint states

as follows, to-wit:

FIRST DEFENSE

The Mississippi Attorney General issued opinion number 2016-00048, dated May 27,

2016, at the request of Singing River Health System. Copy of that Opinion is attached hereto as

Exhibit A. In that Opinion, the Attorney General opined as follows:

A. A non-profit corporation formed by a community hospital is not a community

hospital as defined under 41-13-10(c) M.C.A.;

B. The proposed transaction as described in the Opinion, since it does not involve a

community hospital, does not require the approval of or ratification of the Board

of Supervisors of Jackson County, Mississippi, the owner of SRHS.

Other opinions of the Mississippi Attorney General have expressed similar conclusions

with respect to a non-profit corporation in which a community hospital is the sole member.

The filing of the Amended Complaint by Plaintiff in this cause is in opposition and

definace of the various opinions of the Mississippi Attorney General.

Case: 24CH2:17-cv-00229-CB Document #: 21 Filed: 08/09/2017 Page 2 of 13

SECOND DEFENSE

The Amended Complaint filed herein fails to state a claim or cause of action against

Pinehaven.

THIRD DEFENSE

Pinehavens contract to sell the subject property and the actual sale of said property was

with and to SRHS Ambulatory Services, Inc., a Mississippi non-profit corporation. Accordingly,

the sale and purchase of the subject real property is controlled by the Mississippi Non-Profit

Corporation Act, Sections 79-11-101, et seq., Miss. Code Ann. Section 79-11-151(d) provides

that each non-profit corporation shall have and exercise, without limitation, power:

(d) To purchase, take, receive, lease, take by gift, devise or bequest, or otherwise

acquire, own, hold, improve, use and otherwise deal in and with real or personal

property, or any interest therein, wherever situated.

FOURTH DEFENSE

Plaintiffs Articles of Incorporation filed with the Mississippi Secretary of State on

August 27, 1998, states that It is organized under the Mississippi Non-Profit Corporation Law

for charitable purposes, and further states as a purpose of the corporation . . . to acquire

property, real, personal, or mixed, by purchase, gift, devise or bequest, unconditionally . . .

FIFTH DEFENSE

In the Amended Complaint filed in this cause, SRHS Ambulatory Services, Inc. admits its

failure to act, as it now states it was required to so do, in the acquisition of the subject property

from Pinehaven. Equity demands that Plaintiff should not now benefit from its own failure to

follow procedures which it states it had a duty to undertake.

Case: 24CH2:17-cv-00229-CB Document #: 21 Filed: 08/09/2017 Page 3 of 13

SIXTH DEFENSE

Any claim now asserted by Plaintiff is barred by the applicable Mississippi Statutes of

Limitation.

SEVENTH DEFENSE

The relief sought by Plaintiff is barred by the doctrine of laches, Plaintiff having waited

almost a decade prior to seeking the relief now claimed in the Ameded Complaint filed herein.

EIGHTH DEFENSE

Plaintiff alleges in the Amended Complaint (paragraph 11) that the sale and purchase of

the subject property was approved by resolution of the Board of Trustees for Singing River

Health System. Pinehaven asserts as an affirmative defense that the Board of Trustees for

Singing River Health System is a necessary party to this proceeding as required by Rule 19

M.R.C.P.

NINTH DEFENSE

Pursuant to the terms of the Contract for the Sale and Purchase of Real Estate dated July

26, 2007, (Exhibit B to the Amended Complaint filed herein) under Section 18(2.3), Plaintiff

represented that all approvals and other requirements required by buyer will be deemed

approved and satisfied by buyer at the end of the seventy (70) day due diligence period or buyer

may terminate this Contract. Buyer never terminated the Contract, thereby representing that all

approvals and other requirements had been met to buyers satisfaction. Buyer is estopped from

now, more than nine years later, filing a complaint maintaining buyer had in fact not obtained all

approvals necessary to close under the terms of the Contract for Sale.
Case: 24CH2:17-cv-00229-CB Document #: 21 Filed: 08/09/2017 Page 4 of 13

TENTH DEFENSE

Pinehaven herein incorporates by reference those affirmative defenses enumerated in

Rule 8 M.R.C.P. as if fully set forth herein. In the event that further discovery reveals the

applicability of any such defenses, then Pinehaven reserves the right to offer proof in support

thereof as an affirmative defense herein. Such defenses are incorporated herein by reference for

the specific purpose of not waiving any such defense.

ELEVENTH DEFENSE

Plaintiffs damages, if any, were caused by its own acts or omissions.

TWELFTH DEFENSE

Pinehaven reserves the right to assert any additional affirmative defenses which may be

discovered during the course of additional investigation and discovery.

THIRTEENTH DEFENSE

And now, responding paragraph by paragraph to the allegations of the Amended

Complaint, Pinehaven, by counsel, states as follows:

PARTIES

1. Pinehaven admits that SRHS Ambulatory Systems, Inc., is a Mississippi non-

profit corporation. All other averments are denied.

2. Admitted.

3. Pinehaven is without knowledge or information sufficient to form a belief as to

the truth of the allegations contained in Paragraph 3 of the Amended Complaint and therefore

denies the same.

JURISDICTION AND VENUE

4. Pinehaven admits that this Court has jurisdiction over the parties and the subject

matter of the Amended Complaint. Pinehaven admits that the property in question is located in
Case: 24CH2:17-cv-00229-CB Document #: 21 Filed: 08/09/2017 Page 5 of 13

Harrison County, Mississippi, Second Judicial District. The remaining allegations contained in

Paragraph 4 of the Amended Complaint are denied.

5. Admitted.

FACTS

6. Pinehaven admits that on or about December 17, 2007, Plaintiff acquired from

Pinehaven certain property located in Harrison County, Mississippi. Pinehaven denies that

Plaintiff attempted to acquire the property in question.

7. The allegations of Paragraph 7 of the Amended Complaint are admitted except it

is affirmatively stated that Plaintiff acquired said property and did not attempt to acquire said

property, and Pinehaven denies that the Deed attached as Exhibit A warrants the title to the

property conveyed.

8. Pinehaven admits that the subject property was part of 1,145 acres of land that

Pinehaven acquired in June of 2007. The price per acre alleged by Plaintiff is denied.

9. Admitted.

10. Pinehaven is without knowledge or information sufficient to form a belief as to

the truth of the allegations of Paragraph 10 of the Amended Complaint and therefore denies the

allegations contained in Paragraph 10.

11. Pinehaven admits that the Board of Trustees for Singing River Health System

(SRHS) authorized the purchase of the subject property pursuant to the terms of the

Agreement. All remaining allegations in Paragraph 11 are denied by Pinehaven.

12. Denied.

13. Denied.
Case: 24CH2:17-cv-00229-CB Document #: 21 Filed: 08/09/2017 Page 6 of 13

14. Pinehaven is without knowledge or information sufficient to form a belief as to

the truth of the allegations contained in Paragraph 14 of the Amended Complaint, and therefore

denies the same.

15. Pinehaven admits that on December 17, 2007, the purchase price for the subject

property was tendered by Plaintiff and received by Pinehaven. Pinehaven admits that the deed

was delivered to Plaintiff and recorded. Pinehaven further states affirmatively that the deed was

accepted by Plaintiff as is, where is and with all faults basis, without representations,

warranties and covenants, expressed or implied of any kind or nature. Pinehaven further admits

that the title commitment from First American Title Company was issued with an effective date

of December 17, 2007.

16. The allegations in Paragraph 16 of the Amended Complaint are denied.

17. The allegations in Paragraph 17 of the Amended Complaint are denied.

18. The allegations in Paragraph 18 of the Amended Complaint are admitted.

19. Pinehaven is without knowledge or information sufficient to form a belief as to

the truth of the allegations contained in Paragraph 19 of the Amended Complaint and therefore

denies the same.

COUNT I

THE ATTEMPTED PURCHASE AND ATTEMPTED SALE OF THE SUBJECT

PROPERTY IS VOID, OR IN THE ALTERNATIVE, VOIDABLE, BECAUSE THE
SALE WAS NOT RATIFIED BY THE BOARD OF SUPERVISORS OF JACKSON
COUNTY, MISSISSIPPI AND IT WAS NOT IN COMPLIANCE WITH MISSISSIPPI
CODE ANN. 43-37-3

20. In response to Paragraph 20 of the Amended Complaint, Pinehaven re-

incorporates and re-alleges its responses to the preceding paragraphs.

Case: 24CH2:17-cv-00229-CB Document #: 21 Filed: 08/09/2017 Page 7 of 13

21. In response to Paragraph 21 of the Amended Complaint, Pinehaven states that the

Mississippi Code sections as they existed in 2007, as referenced by Plaintiff, speak for

themselves. Pinehaven is without knowledge or information sufficient to form a belief as to the

truth of the remaining allegations contained in Paragraph 21 and therefore denies the same.

22. Pinehaven is without knowledge or information sufficient to form a belief as to

the truth of the allegations contained in Paragraph 22 of the Amended Complaint and therefore

denies the same.

23. Pinehaven is without knowledge or information sufficient to form a belief as to

the truth of the allegations contained in Paragraph 23 of the Amended Complaint and therefore

denies the same.

24. Pinehaven is without knowledge or information sufficient to form a belief as to

the truth of the allegations contained in Paragraph 24 of the Amended Complaint and therefore

denies the same.

25. Pinehaven is without knowledge or information sufficient to form a belief as to

the truth of the allegations contained in Paragraph 25 of the Amended Complaint and therefore

denies the same.

26. Pinehaven is without knowledge or information sufficient to form a belief as to

the truth of the allegations contained in Paragraph 26 of the Amended Complaint and therefore

denies the same.

27. Pinehaven is without knowledge or information sufficient to form a belief as to

the truth of the allegations contained in Paragraph 27 of the Amended Complaint and therefore

denies the same.

Case: 24CH2:17-cv-00229-CB Document #: 21 Filed: 08/09/2017 Page 8 of 13

28. Pinehaven is without knowledge or information sufficient to form a belief as to

the truth of the allegations contained in Paragraph 28 of the Amended Complaint and therefore

denies the same.

29. Denied.

30. Denied.

COUNT II

NEGLIGENCE

31. In response to Paragraph 31 of the Amended Complaint, Pinehaven re-

incorporates and re-alleges responses to the preceding paragraphs.

32. Denied.

33. Denied.

34. Denied.

COUNT III

FIRST AMERICAN TITLE INSURANCE COMPANY

35. In response to Paragraph 35 of the Amended Complaint, Pinehaven re-

incorporates and re-alleges responses to the preceding paragraphs.

36. Pinehaven is without knowledge and information sufficient to form a belief of the

truth of the allegations of Paragraph 36 and therefore denies the same.

37. Pinehaven is without knowledge sufficient to form a belief as to the truth of the

allegations contained in Paragraph 37 of the Amended Complaint, and therefore, denies the

same.

38. Pinehaven is without knowledge sufficient to form a belief as to the truth of the

allegations contained in Paragraph 38 of the Amended Complaint, and therefore, denies the

same.
Case: 24CH2:17-cv-00229-CB Document #: 21 Filed: 08/09/2017 Page 9 of 13

39. Pinehaven is without knowledge sufficient to form a belief as to the truth of the

allegations contained in Paragraph 39 of the Amended Complaint, and therefore, denies the

same.

40. Pinehaven is without knowledge sufficient to form a belief as to the truth of the

allegations contained in Paragraph 40 of the Amended Complaint, and therefore, denies the

same.

41. Pinehaven is without knowledge sufficient to form a belief as to the truth of the

allegations contained in Paragraph 41 of the Amended Complaint, and therefore, denies the

same.

42. Pinehaven is without knowledge sufficient to form a belief as to the truth of the

allegations contained in Paragraph 42 of the Amended Complaint, and therefore, denies the

same.

43. Pinehaven is without knowledge sufficient to form a belief as to the truth of the

allegations contained in Paragraph 43 of the Amended Complaint, and therefore, denies the

same.

COUNT IV

DISGORGEMENT

44. In response to Paragraph 44 of the Amended Complaint, Pinehaven re-

incorporates and re-alleges responses to the preceding paragraphs.

45. Denied.

COUNT V

DAMAGES

46. Pinehaven incorporates and adopts the allegations contained in Paragraph 1 - 45

of the Amended Complaint as if herein fully set forth.

Case: 24CH2:17-cv-00229-CB Document #: 21 Filed: 08/09/2017 Page 10 of 13

47. Denied.

48. Pinehaven is without knowledge or information sufficient to form a belief at to the

truth of the allegations contained in Paragraph 48 of the Amended Complaint, and, therefore

denies the same.

49. Pinehaven is without knowledge or information sufficient to form a belief as to

the truth of the allegations contained in Paragraph 49 of the Amended Complaint, and, therefore

denies the same.

Responding to the unnumbered paragraph beginning on Page 11 of the Amended

Complaint beginning with the phrase WHEREFORE, PREMISES CONSIDERED, Pinehaven

denies the allegations therein and specifically denies that the Plaintiff is entitled to any relief

whatsoever from Pinehaven.

COUNTERCLAIM FOR DECLARATORY JUDGMENT

Comes now, Pinehaven group, LLC, (Counter Plaintiff) by and through its attorneys

and files its counterclaim against SRHS Ambulatory Services, Inc., (Counter Defendant) and

seeks a declaratory judgment with respect to the following facts:

A. Counter Plaintiff and Counter Defendant entered into a contract for the sale and purchase

of real estate by written instrument dated July 26, 2007. (The purchase contract) a true

and correct copy of the purchase contract is attached as Exhibit B to the Amended

Complaint filed by SRHS Ambulatory Services, Inc., in this cause.

B. Under the terms of the purchase contract Counter Defendant affirmatively stated that it

had all approvals necessary to complete the transaction provided by said contract.

C. Pursuant to the contract the transaction provided for therein was closed on December 17,

2007 and after payment of a real estate commission and closing costs, the sum of

$3,478,500.00 was paid to American Bank of Texas, which held a first deed of trust lien
Case: 24CH2:17-cv-00229-CB Document #: 21 Filed: 08/09/2017 Page 11 of 13

against said property. In return for the payment, the American Bank of Texas executed

and recorded a partial release of the subject twelve acre tract of land from the lien of its

deed of trust.

D. Counter Plaintiff, Pinehaven Group, LLC, is entitled under the provisions of Rule 57

(B)(1) as the grantor under the deed to Counter Defendant recorded in the Land Deed

Records of Harrison County on December 18, 2007, to a determination of its right, status,

or other legal relations affected under the Mississippi Statues sought to be applicable and

controlling relative to the transaction completed under the purchase contract, the

necessary parties to approve said transaction, and to further obtain a declaration of rights,

status or other legal relations under the deed and completed land transaction now being

denied by Counter Defendant.

WHEREFORE, PREMISES CONSIDERED, Counter Plaintiff prays that upon

consideration of the allegations by SRHS Ambulatory Services, Inc., in the Amended Complaint

filed in this cause and the answers and responses, including affirmative defenses plead by

Pinehaven Group, LLC, that this Court will enter a declaration of rights, status or other legal

relations thereunder as provided by Rule 57 (B)(1) M.R.C.P. finding that Counter Defendant,

SRHS Ambulatory Services, Inc., is entitled to no relief sought in its Amended Complaint filed

in this cause. Counter Plaintiff further prays that this Court enter an order awarding Pinehaven

Group, LLC, its costs incurred in defending this action, including reasonable attorneys fees, as

shall be mandated by equity considering the failure of SRHS Ambulatory, Inc., to abide by real

property purchase procedures which it now contends that it was obligated to follow.
Case: 24CH2:17-cv-00229-CB Document #: 21 Filed: 08/09/2017 Page 12 of 13

Respectfully submitted, this the 9th day of August, 2017.

PINEHAVEN GROUP, LLC, DEFENDANT

and COUNTER PLAINTIFF

BY: WHITTINGTON, BROCK & SWAYZE, PA

Attorneys for Defendant and Counter Plaintiff

BY: /s/ H. D. Brock

H. D. BROCK
Mississippi Bar #4563

WHITTINGTON, BROCK & SWAYZE

P.O. Box 941
Greenwood, MS 38935-0941
T: 662-453-7325
F: 662-453-7394
hdb@whittingtonlaw.com
Case: 24CH2:17-cv-00229-CB Document #: 21 Filed: 08/09/2017 Page 13 of 13

CERTIFICATE OF SERVICE

I, H. D. Brock, of counsel to Defendant, Pinehaven Group, LLC, certify that I have this

day filed the foregoing with the Clerk of the Court using the ECF system, which sent notification

of such filing to the following:

Patrick R. Buchanan
Brown Buchanan, P.A.
234 Caillavert Street, Suite 100
Biloxi, Mississippi 39530
email: mailb@brownbuchanan.com

Michael E. Bruffey
925 Tommy Munro Drive, Suite H
Biloxi, Mississippi 39532
email: michaelbruffey@yahoo.com

Attorneys for Plaintiff and Counter

Defendant, SRHS Ambulatory Services, Inc.

G. Dewey Hembree, III

McGlinchey Stafford, PLLC
P. O. Drawer 22949
Jackson, MS 39225-2949
email: ghembree@mcglinchey.com

Attorney for First American Title Insurance Company

SO CERTIFIED this the 9th day of August, 2017.

/s/ H. D. Brock
H. D. BROCK

H:\user1\HDB\Glenn Miller\pinehaven answer am comp.wpd

Case: 24CH2:17-cv-00229-CB Document #: 21-1 Filed: 08/09/2017 Page 1 of 2
Case: 24CH2:17-cv-00229-CB Document #: 21-1 Filed: 08/09/2017 Page 2 of 2