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Mariner Health Care Inc. v. PricewaterhouseCoopers LLP

The plaintiff should have been allowed to voluntary dismiss its suit claiming that the defendant/auditor caused another company, which acquired and merged with the plaintiff, to purchase the plaintiff at an artificially inflated cost of more than $535, under O.C.G.A. § 9-11-41, since there were no counterclaims or other claims of action pending against the plaintiff.

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In 1998, Paragon Health Network, Inc., acquired and merged with Mariner Health Group, Inc. MHG. After the merger, both companies ended up in bankruptcy, resulting in the post-bankruptcy creation of Mariner Health Care, Inc. Mariner. On August 29, 2002, Mariner filed a complaint, which it later amended, in Fulton County State Court. The complaint alleges that auditor PricewaterhouseCoopers, LLP, and former MHG officers Arthur Stratton, Jr., David Hansen, Paul Diaz and Douglas Stone committed fraud that caused Paragon to purchase MHG at an artificially inflated cost of more than $535 million. Pricewaterhouse filed no counterclaims against Mariner, but filed a third-party complaint against former MHG directors Stiles Kellett, Jr., and Samuel Kellett, for indemnification or contribution should it be found liable to Mariner in the primary action. The Kelletts filed their own third-party complaint against Stratton, Hansen, Diaz, Stone and a Pricewaterhouse partner for contribution or indemnification.

Stratton, Hansen, Diaz and Stone, in turn, asserted counterclaims against the Kelletts for contribution, and Stratton also filed a claim for indemnification against the Kelletts. Stratton, Hansen, Diaz and Stone initially filed counterclaims against Mariner. But in March 2004, pursuant to OCGA § § 9-11-41 a & c, they voluntarily dismissed their counterclaims against Mariner.

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