Opinion ID: 1823927
Heading Depth: 1
Heading Rank: 3

Heading: Representative Read

Text: ¶ 11. John Read has served continuously as a member of the House of Representatives, 112th District, since January 1993. During his time in office, Read, also a licensed pharmacist, has been employed by Controlex Enterprise, doing business as Sav Rex Pharmacy, in Gautier, Mississippi. Read testified that he is not a shareholder of Controlex, but that he is a salaried employee. Read testified that reimbursements from the Medicaid Division go directly to Controlex Enterprise, and any Medicaid funds received by Read are received only indirectly in the form of salary. Read stated that his salary is not based on a percentage of the corporation's Medicaid business. ¶ 12. Read executed a participation agreement in 1974 on behalf of Sav-Rex Pharmacy. The participation agreement bears Read's signature as partner. Prior to Read's testimony regarding his role at Sav-Rex, at the hearing on the motions for summary judgment, counsel for Read stipulated that Read is a partner in the drugstore, but that he is not the controlling partner. However, in an effort to clarify his employment status, Read testified at trial that at the time the agreement was executed, he and two others were planning on establishing a partnership. However, because one of the partners backed out, the partnership was never formed. ¶ 13. Like Howell, Read has participated in the appropriation of funding to the Medicaid program. During Read's tenure in officeseven Medicaid appropriations bills were passed. Read voted yea on four bills, voted present on two bills, and was absent for the vote on one bill. ¶ 14. Both Howell and Read are required to file annually a sworn Statement of Economic Interest provided by the Mississippi Ethics Commission. See Miss. Code Ann. § 25-4-27 (1999). The statement requires a listing of all public bodies from which the legislator received compensation in excess of $1,000 during the preceding year. Neither Howell nor Read disclosed their receipt of compensation from Medicaid. ¶ 15. Jones filed this action against Howell in the Chancery Court of the First Judicial District of Hinds County on July 24, 1995, alleging that Howell's compensation as a Medicaid provider depends upon the appropriation of funds authorized by the Mississippi Legislature during his terms of office. Thus, Jones argues that Howell is interested in a contract authorized by the Legislature in violation of Section 109. On July 31, 1995, Jones filed an amended complaint, adding as a defendant Kilmichael Drugs, Inc. Jones requested a declaratory judgment that Howell violated Section 109 and that Howell is ineligible to hold office while receiving Medicaid reimbursements. Jones also requested injunctive relief prohibiting Howell from receiving, from the Medicaid Division or Kilmichael Drugs, Inc., Medicaid reimbursements while Howell is a member of the Legislature and for one year thereafter. The complaint and amended complaint also named the Medicaid Division as a defendant and requested injunctive relief prohibiting the Medicaid Division from disbursing Medicaid payments to Howell or Kilmichael Drugs, Inc. while Howell is a member of the Legislature and for one year thereafter. Additionally, the complaint sought restitution from Howell for compensation received from Medicaid in violation of Section 109. ¶ 16. Read intervened as a defendant. On March 11, 1996, the Mississippi Ethics Commission, having been joined as a party plaintiff by order of the court, filed a complaint in intervention against Howell, Kilmichael Drugs, Inc., and the Division of Medicaid. ¶ 17. On December 8-9, 1997, the chancery court denied the parties' motions for summary judgment and proceeded to a bench trial. The court entered its amended opinion and final judgment on August 31, 1998. The chancellor found that the interests of both Howell and Read violated Section 109. The court permanently enjoined Howell, Kilmichael Drugs, Inc., and Read from further receipt of Medicaid reimbursements, effective from the date of final judgment until one year after the expiration of Howell's and Read's respective terms of office. The court also permanently enjoined the Division of Medicaid not to reimburse Howell, Kilmichael Drugs, Inc., or Read for further Medicaid reimbursement payments, effective for the same period. ¶ 18. The chancellor denied the plaintiffs' request that the court require Howell and Read to reimburse the State for all Medicaid funds paid to them while they served in the Legislature. The chancellor stated that the plaintiffs' proof of net profits was largely speculative and conjectural and that the true amount of damages could not be reasonably ascertained. The chancellor also stated that there was no real injury sustained by the State that would support an award of damages. ¶ 19. The chancery court granted Howell's and Read's request for a stay of enforcement of the judgment pending appeal. Jones and the Mississippi Ethics Commission filed notices of appeal to this Court. Howell and Read also filed notices of appeal. The parties raise the following issues: I. WHETHER THE CHANCELLOR ERRED IN FINDING THAT THE RECEIPT OF MEDICAID FUNDS BY HOWELL, KILMICHAEL DRUGS, INC., AND READ VIOLATED SECTION 109. II. WHETHER THE CHANCELLOR ERRED IN FINDING THAT HOWELL AND READ SHOULD NOT BE REQUIRED TO MAKE RESTITUTION OF FUNDS RECEIVED IN VIOLATION OF SECTION 109. III. WHETHER THE CHANCELLOR ERRED IN GRANTING A STAY OF ITS INJUNCTION PENDING APPEAL WITHOUT REQUIRING HOWELL AND READ TO POST BOND OR SECURITY. IV. WHETHER THE CHANCELLOR ERRED IN NOT ADMITTING INTO EVIDENCE THE SUBMITTER AGREEMENT DATED JANUARY 9, 1992, AND THE DIRECT DEPOSIT AUTHORIZATION DATED AUGUST 14, 1992.