IN THE UNITED STATES COURT OF APPEALS

FOR THE FIFTH CIRCUIT

No. 18-60581

H. KENNETH LEFOLDT, JR., in his capacity as Trustee for the Natchez 

Regional Medical Center Liquidation Trust, 

 Plaintiff - Appellant

v.

HORNE, L.L.P., 

 Defendant - Appellee

Appeal from the United States District Court 

for the Southern District of Mississippi

Before HAYNES, GRAVES, and HO, Circuit Judges.

JAMES C. HO, Circuit Judge:

For over a century, Mississippi has required that a public board speak 

and act only through its minutes. See Bridges v. Clay Cty. Sup’rs, 58 Miss. 

817, 820 (Miss. 1881). Mississippi courts will not give legal effect to a contract 

with a public board unless the board’s approval of the contract is reflected in 

its minutes. “Otherwise, an individual member of the board or agent thereof 

would be capable of binding the board and expending the public taxpayers’

money without the benefit of the consent of the board as a whole.” Butler v. 

Bd. of Sup’rs for Hinds Cty., 659 So.2d 578, 579 (Miss. 1995). The public 

interest protected by the minutes rule is “paramount to other individual rights 

United States Court of Appeals

Fifth Circuit

FILED

September 6, 2019

Lyle W. Cayce

Clerk

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which may also be involved,” id., and Mississippi courts “strict[ly] adhere[]” to 

the rule even when “the rule may work an apparent injustice.” Id. at 581–82

(quoting Colle Towing Co., Inc. v. Harrison Cty., 57 So.2d 171, 172 (Miss. 

1952)).

In this case, a private accounting firm, Horne, L.L.P., asks us to enforce 

the minutes rule against the Natchez Regional Medical Center, a community 

hospital owned by the Adams County Board of Supervisors. The Medical 

Center (through its bankruptcy trustee, H. Kenneth Lefoldt) brought this suit 

against Horne alleging accounting malpractice. Horne claims the suit must 

fail because there can be no accounting malpractice claim without proof of a 

professional relationship, and there is no record evidence on the minutes here 

that the Medical Center ever entered into a professional relationship with 

Horne.

We agree with Horne, as did the district court. Accordingly, we affirm.

I.

From 2009 to 2014, Horne served as the Medical Center’s auditor. 

Horne’s services were provided pursuant to a series of engagement letters with 

the Medical Center. Each of those engagement letters contained an arbitration 

clause. The letters were executed by Charles Mock, the Medical Center’s chief 

financial officer. But none of them were ever incorporated into the Medical 

Center’s board minutes.

In 2014, the Medical Center filed for bankruptcy. The United States 

Bankruptcy Court for the Southern District of Mississippi established a 

liquidation trust and appointed H. Kenneth Lefoldt as its trustee. Acting in 

this capacity, Lefoldt filed the underlying action against Horne, contending 

that Horne was guilty of professional malpractice when it failed to detect 

significant flaws in the Medical Center’s financial controls. According to the 

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complaint, Horne’s supposed lapse resulted in the loss of millions of dollars in 

unbilled revenue that contributed to the Medical Center’s descent into 

bankruptcy. 

After the complaint was filed, Horne moved to stay the proceeding so 

that the parties could start the arbitration process as stipulated in the 

engagement letters. The district court denied the motion. The Medical Center

successfully argued that, as a public body, it could speak and act only through 

the minutes of its board of trustees, and that the arbitration agreement was 

never approved in the board’s minutes.

On appeal, we affirmed on this point. We noted that, out of all the 

minutes entered into the record, the board only referenced its contractual 

relationship with Horne three times. Lefoldt v. Horne, L.L.P., 853 F.3d 804, 

808–09 (5th Cir. 2017). And each of those occasions referred only to a one-year 

contract signed in 2009. No mention was made of two subsequent agreements 

executed in 2010 and 2012. Accordingly, we held that the 2010 and 2012 

engagement letters failed as a matter of law. Id. at 813–14. 

On remand, Horne moved for summary judgment on all claims stemming 

from the 2010–2013 audits, using the same argument that the Medical Center 

successfully invoked to void the arbitration agreement—that the agreement 

failed under the minutes rule. As Horne explained, the Medical Center must 

prove the existence of a professional relationship in order to prevail on its 

malpractice claim. Horne argued that, by voiding the 2010 and 2012 

engagement letters under the minutes rule, the Medical Center invalidated the 

basis for that relationship. The district court granted summary judgment to 

Horne.

In response, the Medical Center attempted to submit additional evidence 

into the record to prove the existence of a professional relationship with 

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Horne—namely, minutes from the board’s regular session meetings on

January 19, 2011 and March 16, 2011, as well as minutes from the board’s 

executive session meetings. Based on this new evidence, the Medical Center

asked the district court to reconsider its grant of summary judgment.

The Medical Center admitted, however, that this evidence was in fact 

not new at all—the Center had access to its own minutes throughout the 

proceedings. It nevertheless sought to excuse its tardiness on the ground that 

the minutes became relevant only when the district court granted summary 

judgment to Horne. The district court rejected this explanation and denied the 

motion. This appeal followed. 

II.

Mississippi law requires that a plaintiff in an accounting malpractice 

case prove by a preponderance of the evidence the existence of a professional 

relationship. Great S. Excavators, Inc. v. TEC Partners, LLP, 231 So.3d 1011, 

1014 (Miss. Ct. App. 2017). A plaintiff may satisfy this burden in one of two 

ways. It may demonstrate that the parties entered into a contract. Or it may 

show that the parties were in privity with one another, such that the 

accountant assumed a duty to handle the plaintiff’s delineated interests with 

professional competency and care. Wirtz v. Switzer, 586 So.2d 775, 779 (Miss. 

1991) (quoting 1 AM. JUR. 2D Accountants § 15 (1962)), abrogated on other 

grounds by Upchurch Plumbing, Inc. v. Greenwood Utils. Comm’n, 964 So.2d 

1100 (Miss. 2007).

This court has already determined that, by virtue of the minutes rule,

the Medical Center never formed a contract with Horne to perform the four 

audits conducted from 2010 to 2013. Lefoldt, 853 F.3d at 813–14. So for the 

Medical Center to survive summary judgment, it must show that it was in 

privity with Horne. See, e.g., Edmonds v. Williamson, 13 So.3d 1283, 1290 

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(Miss. 2009) (recognizing a professional relationship even though client never 

signed an agreement); Singleton v. Stegall, 580 So.2d 1242, 1244 (Miss. 1991) 

(recognizing a professional relationship after the client paid the lawyer’s fee). 

The Medical Center must prove that it manifested its intent to engage Horne’s

services and that Horne either consented to provide those services or failed to 

manifest its lack of consent, while reasonably knowing that the Medical Center 

would rely on Horne to perform. Gibson v. Williams, Williams & Montgomery, 

P.A., 186 So.3d 836, 848 (Miss. 2016).

With that goal in mind, the Medical Center draws this court’s attention 

to the four annual audits Horne conducted from 2010 to 2013. It notes that, in 

previous cases, Mississippi courts have been willing to infer the continuation 

of a professional relationship after an initial exchange of services. See Baker 

Donelson Bearman Cladwell & Berkowitz, P.C. v. Seay, 42 So.3d 474, 485 

(Miss. 2010). We have previously recognized as valid the 2009 engagement 

letter between Horne and the Medical Center. Lefoldt, 853 F.3d at 814. There 

is no doubt that a professional relationship formed as a result of that 

engagement letter. The Medical Center therefore argues that the four

subsequent audits are evidence that Horne and the Medical Center intended 

to continue the professional relationship created by the 2009 engagement 

letter beyond the initial one-year contract period. 

This evidence would have been sufficient to overcome summary 

judgment, but for the fact that the Medical Center is a community hospital run 

by a public board and therefore subject to Mississippi’s minutes rule. KPMG, 

LLP v. Singing River Health Sys., 2018 WL 5291088, at *5 (Miss. 2018); see 

also MISS. CODE § 41-13-35(3). But as such, the Medical Center is limited in 

the type of evidence that it can use to prove its intent to maintain a professional 

relationship with Horne. Under Mississippi’s minutes rule, a public board 

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“speaks and acts only through its minutes.” Wellness, Inc. v. Pearl River Cty. 

Hosp., 178 So.3d 1287, 1290 (Miss. 2015). The minutes are the “sole and 

exclusive evidence of what the board did” in its official capacity. Smith v. Bd. 

of Sup’rs of Tallahatchie Cty, 86 So. 707, 709 (Miss. 1921).

As we have previously held, the minutes initially submitted by the 

Medical Center made no mention of doing any business with Horne beyond the 

2009 engagement letter. Lefoldt, 853 F.3d at 809. So based on the record 

before it, the district court was right to conclude that the Medical Center failed 

to offer any competent evidence that it was in privity with Horne.

Accordingly, we affirm.1

 

1 The district court did not abuse its discretion when it denied the Medical Center’s 

motion to reconsider based on its belated submission of additional board minutes. See, e.g., 

Templet v. HydroChem Inc., 367 F.3d 473, 477 (5th Cir. 2004) (abuse of discretion review 

applies when district court refuses to consider new materials). As we have explained, the 

content of the board minutes has played a central role in the case ever since the Medical 

Center challenged the engagement letters under the minutes rule. The Medical Center has 

presented no legitimate excuse for its delay.

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