Mississippi’s “Minutes Rule” Determines Contract Enforceability

KPMG, LLC, provided annual auditing services for Singing River, a community hospital owned by Jackson County. In 2013, Singing River hired Horne, LLP, for their annual audit instead. Horne’s audit showed KPMG’s prior annual audits “had resulted in an $88,000,000 overstatement of Singing River’s accounts receivable” and an employee pension plan underfunded by around $150 million. Singing River and Jackson County filed a separate breach of contract, negligence and professional malpractice cases against KPMG. When KPMG moved to compel arbitration in the Singing River case, the Hinds County Circuit Court denied the motion because the contracts between KPMG and Singing River were not included in Singing River’s board minutes in sufficient detail. In Jackson County’s suit, the Jackson County Circuit Court sided with KPMG. Jackson County appealed. The Mississippi Supreme Court relied on the “minutes rule” used in the Singing River case and determined the terms and conditions of KPMG’s contracts were not included in sufficient detail to enforce the contract. Read the full case here.