Priority Hospital Group, Inc. v. James Manning, Pathway Healthcare, LLC, Pathway Rehabilitation Hospital of Bossier, LLC, and Dan Bob Turner

CourtLouisiana Court of Appeal
DecidedSeptember 23, 2020
Docket53,564-CA
StatusPublished

This text of Priority Hospital Group, Inc. v. James Manning, Pathway Healthcare, LLC, Pathway Rehabilitation Hospital of Bossier, LLC, and Dan Bob Turner (Priority Hospital Group, Inc. v. James Manning, Pathway Healthcare, LLC, Pathway Rehabilitation Hospital of Bossier, LLC, and Dan Bob Turner) is published on Counsel Stack Legal Research, covering Louisiana Court of Appeal primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Priority Hospital Group, Inc. v. James Manning, Pathway Healthcare, LLC, Pathway Rehabilitation Hospital of Bossier, LLC, and Dan Bob Turner, (La. Ct. App. 2020).

Opinion

Judgment rendered September 23, 2020. Application for rehearing may be filed within the delay allowed by Art. 2166, La. C.C.P.

No. 53,564-CA

COURT OF APPEAL SECOND CIRCUIT STATE OF LOUISIANA

*****

PRIORITY HOSPITAL GROUP, INC. Appellant

versus

JAMES MANNING, PATHWAY HEALTHCARE, LLC, PATHWAY REHABILITATION HOSPITAL OF BOSSIER, LLC, and DAN BOB TURNER Appellees

Appealed from the Twenty-Sixth Judicial District Court for the Parish of Bossier, Louisiana Trial Court No. 148,429

Honorable Ford E. Stinson, Jr., Judge

LUNN, IRION LAW FIRM Counsel for Appellant By: Ronald E. Raney William H. Priestley, Jr.

AYRES, SHELTON, WILLIAMS, Counsel for Appellees BENSON & PAINE, LLC By: J. Todd Benson

Before STONE, COX, and THOMPSON, JJ. COX, J.

This suit arises out of the 26th Judicial District Court, Bossier Parish,

Louisiana. Priority Hospital Group, LLC (“Priority”), appeals the trial court’s

granting of the motion for partial summary judgment filed by James Manning,

Pathway Healthcare, LLC (“Pathway Healthcare”), Pathway Rehabilitation

Hospital of Bossier, LLC (“Pathway Hospital”), and Dan Bob Turner

(defendants collectively referred to as “Pathway Defendants”). The partial

summary judgment dismissed with prejudice Priority’s claims against Mr.

Manning, Mr. Turner, and Pathway Hospital and dismissed Priority’s claims for

attorney fees against all parties. Priority’s breach of contract claim against

Pathway Healthcare was preserved, as well as a claim against Cornerstone

Healthcare Group. For the following reasons, we respectfully reverse the trial

court’s granting of the motion for partial summary judgment.

FACTS

Priority filed suit against Pathway Defendants on October 15, 2015.

Priority alleged the following in its petition. Priority contacted Pathway

Defendants on May 22, 2013, about purchasing Pathway Hospital. During

negotiations, Pathway Defendants stated they would require a nonrefundable

deposit of $400,000. Priority claims it did not agree to these terms, but did

agree to pay a $100,000 refundable deposit. On July 23, 2013, Priority sent a

letter of intent (“LOI”) to Pathway Healthcare regarding the potential acquisition

of Priority Hospital.

Pathway Hospital operates within Cornerstone Hospital. Cornerstone

Hospital owns and leases the premises to Pathway Hospital. Priority claims that

it needed to meet with Cornerstone privately concerning the lease before purchase, but Pathway Defendants would not allow it and insisted one of their

representatives be present at all meetings. Priority claims that by November 13,

2013, Pathway Defendants had not provided all of their financial records and

had not consented to Priority meeting with Cornerstone. In December of 2013,

Pathway Defendants allowed Priority to meet with Cornerstone.

On January 27, 2014, Priority learned from Cornerstone that Pathway

Defendants were in breach of their existing lease and any lease renewal would

contain additional terms. Priority claims Pathway Defendants intentionally

concealed these facts. On March 25, 2014, Priority notified Pathway

Defendants that it would withdraw from the purchase negotiations. Priority

claims that when it asked Pathway Defendants for the return of the deposit, they

gave excuses as to why it would be delayed. Priority states that Pathway

Defendants only claimed the deposit was nonrefundable once they learned

Priority would pursue legal action.

Pathway Defendants answered the petition on November 13, 2015,

denying the allegations. Mr. Manning, Mr. Turner, and Pathway Hospital also

filed a motion for partial summary judgment arguing Mr. Manning and Mr.

Turner should be dismissed because they only acted as agents and never

obligated themselves in their personal capacity. They argued Pathway Hospital

should be dismissed because it had “no contractual privity…, no duty,

contractual or otherwise, with [Priority].” They also argued that Priority’s

claims were frivolous, not warranted by existing law or a good faith argument

for the extension, modification, or reversal of existing law, and interposed for an

improper purpose, such as to harass or needlessly increase the cost of litigation.

2 In his affidavit, Mr. Manning states that he and Mr. Turner are the only

members of Pathway Healthcare, which is the owner of Pathway Hospital. He

states that as agents for Pathway Healthcare, they received a letter of intent and

confidentiality agreement from Priority. He states the $100,000 check was paid

by Priority to Pathway Healthcare and was endorsed by Pathway Healthcare.

He states that he never informed Priority that he would be personally

guaranteeing any obligation of Pathway Healthcare and would not sign an

indemnity agreement. Mr. Turner’s affidavit mirrors Mr. Manning’s affidavit.

Attached to Priority’s opposition to the motion for summary judgment is

Kemp Wright’s affidavit. Mr. Wright is a partner in Priority. He verifies

Priority’s account of the events leading up to the suit.

Mr. Manning stated in his deposition, that in his opinion, the untimely

lease payments had been taken care of early in negotiations, which was by the

middle of August of 2013. He stated that Priority knew (through face-to-face

meetings and phone calls) that they were a distressed property, which was the

reason behind the relatively low purchase price. He also stated that he told

Priority (over the phone) that Cornerstone added additional provisions to the

assignment of the lease.

Pathway Defendants filed a reply memo in support of the motion for

summary judgment. They argued Priority did not properly plead a cause of

action for fraud against Mr. Manning or Mr. Turner, and even if it did properly

allege fraud, it cannot prevail because it could have found out the information

without difficulty, inconvenience, or special skill. They also argue that Priority

asserts no cognizable claim for redhibition. Priority responded with a

supplemental memo in opposition to the motion for summary judgment.

3 On July 13, 2016, the trial court denied the motion for partial summary

judgment. The trial court found there was a genuine issue of material fact. The

trial court stated that Priority was not asserting a claim of fraud by silence, but

of fraud by action (misrepresentations, intentional nondisclosures, and

intentional concealing).

Pathway Defendants filed a writ with this Court, which was denied

because exercise of this Court’s supervisory jurisdiction was not warranted.

They also filed a writ with the Louisiana Supreme Court, which was denied.

On April 17, 2017, Priority filed an amended petition, adding Cornerstone

as a defendant. It asserts that Mr. Manning and Mr. Turner made intentional

misrepresentations which they did not assert during negotiations—that

Cornerstone was incorrect in its statement of the lease being in default. It claims

that Cornerstone and Pathway Defendants colluded to drive up the price of the

new lease between Priority and Cornerstone.

On April 25, 2019, Pathway Defendants filed a second motion for partial

summary judgment. They argued the trial court should dismiss Priority’s fraud

claims, or in the alternative, dismiss Priority’s claims for attorney fees. Pathway

Defendants asserted the same arguments as before that Mr. Manning, Mr.

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Priority Hospital Group, Inc. v. James Manning, Pathway Healthcare, LLC, Pathway Rehabilitation Hospital of Bossier, LLC, and Dan Bob Turner, Counsel Stack Legal Research, https://law.counselstack.com/opinion/priority-hospital-group-inc-v-james-manning-pathway-healthcare-llc-lactapp-2020.