Court Opinion

ID: 4666291
Source: CourtListenerOpinion
Date Created: 2021-03-10 01:00:43.06017+00
Date Added: 2024-06-11T08:02:48.109439
License: Public Domain

Case: 20-60742     Document: 00515772037         Page: 1     Date Filed: 03/09/2021

              United States Court of Appeals
                   for the Fifth Circuit                               United States Court of Appeals
                                                                                Fifth Circuit

                                                                              FILED
                                                                          March 9, 2021
                                  No. 20-60742                           Lyle W. Cayce
                                                                              Clerk

   Liberty Mutual Fire Insurance Company, as subrogee of
   Chickasaw County School District,

                                                           Plaintiff—Appellant,

                                       versus

   Fowlkes Plumbing, L.L.C.; Sullivan Enterprises,
   Incorporated; Quality Heat; Air, Incorporated,

                                                         Defendants—Appellees.

                  Appeal from the United States District Court
                    for the Northern District of Mississippi
                              USDC 1:17-CV-10

   Before Higginbotham, Costa, and Oldham, Circuit Judges.
   Per Curiam:*
          Liberty Mutual Fire Insurance Company appeals the denial of its
   motion to alter or amend the judgment, which the district court entered after
   we remanded the case with instructions to dismiss Liberty Mutual’s

          *
            Pursuant to 5th Circuit Rule 47.5, the court has determined that this
   opinion should not be published and is not precedent except under the limited
   circumstances set forth in 5th Circuit Rule 47.5.4.
Case: 20-60742              Document: 00515772037        Page: 2       Date Filed: 03/09/2021

                                         No. 20-60742

   complaint. Liberty Mutual contends that the district court was required to
   address the merits of its motion and that the court erred when it concluded
   that it could only comply with our mandate. We affirm.
                                              I.
           This insurance coverage dispute arises from a school fire in
   Mississippi’s Chickasaw County School District. Appellee contractors were
   restoring windows at the school when a fire broke out, destroying the
   building. 1 Liberty Mutual, the school district’s property insurer, paid for the
   damages and then brought subrogation claims against the contractors. 2 At
   summary judgment, the parties contested two central issues: whether a
   subrogation waiver had been incorporated into the school district’s contract
   with the contractors and, if so, whether that waiver precluded Liberty
   Mutual’s claims entirely or only partially. 3 The district court ruled that the
   school district and contractors had incorporated the subrogation waiver into
   the contract by reference, but it determined the waiver precluded only some
   of Liberty Mutual’s claims—those “for damages to property associated with
   the window restoration project.” 4 The district court then permitted the
   contractors to file an interlocutory appeal, which we accepted.
           Our inquiry began with the question of whether a valid contract,
   including the subrogation waiver, existed. 5 Liberty Mutual argued that,
   though the parties had signed an agreement, the subrogation waiver was not

           1
          Liberty Mut. Fire Ins. Co. v. Fowlkes Plumbing, LLC, No. 1:17-CV-010-GHD-DAS,
   2018 WL 842169, at *1 (N.D. Miss. Feb. 12, 2018).
           2
               Id.
           3
               Id. at *2.
           4
               Id. at *7.
           5
            Liberty Mut. Fire Ins. Co. v. Fowlkes Plumbing, L.L.C. (“Fowlkes I”), 934 F.3d 424,
   426 (5th Cir. 2019) (per curiam).

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                                          No. 20-60742

   valid because its terms did not appear in the school board’s meeting minutes
   as required by Mississippi law. 6 Although it was plausible that the contract
   did not meet the requirements of Mississippi’s minutes rule, we determined
   that “Liberty Mutual forfeited this claim by not advancing it in the district
   court, and so, “we treat[ed] the contract as a valid one.” 7
           We then observed that significant disagreement existed between the
   states on the scope of the contract’s subrogation waiver and that Mississippi
   had yet to weigh in on the issue. 8 So, we certified the following question to
   the Mississippi Supreme Court: “Is the waiver of subrogation between the
   school district and [the contractors] limited to damages to the Work or does
   it also apply to damages to non-Work property?” 9 The Mississippi Supreme
   Court answered that “the waiver of subrogation applies to work and non-
   work property.” 10 Based on this answer, we ruled that “the waiver provides
   the contractors with a complete defense to this subrogation suit.” 11 Thus, we
   reversed the district court’s summary judgment ruling and rendered
   judgment dismissing the complaint. 12 On remand, the district court followed
   our mandate and entered judgment in the contractors’ favor.
           Liberty Mutual then filed a motion under Federal Rule of Civil
   Procedure 59(e), asking the district court to alter or amend its judgment

           6
                Id.
           7
               Id.
           8
                Id. at 427-28.
           9
                Id. at 428.
           10
             Liberty Mut. Fire Ins. Co. v. Fowlkes Plumbing, L.L.C., 290 So. 3d 1257, 1261
   (Miss. 2020).
           11
             Liberty Mut. Fire Ins. Co. v. Fowlkes Plumbing, L.L.C. (“Fowlkes II”), 796 F. App’x
   851 (5th Cir. 2020) (per curiam).
           12
                Id.

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                                           No. 20-60742

   because the subrogation waiver was not enforceable under Mississippi law.
   In its supporting memorandum, Liberty Mutual asserted that we committed
   manifest error when we determined that it had waived the minutes-rule
   argument. The district court denied Liberty Mutual’s motion, noting that we
   did not remand for further proceedings on the merits. The district court
   acknowledged that Liberty Mutual characterized our decision as clearly
   erroneous, but it declined to revisit our ruling because a lower court “does
   not sit in appellate review of the Fifth Circuit’s rulings.” 13 Liberty Mutual
   appealed.
                                               II.
          Liberty Mutual contends that the district court incorrectly concluded
   that the mandate rule prevented it from addressing the motion to alter or
   amend because Liberty Mutual asserted an exception to that rule, namely
   that the decision was “dead wrong” and failure to correct it would be
   manifestly unjust. Liberty contends that our mandate rendering judgment for
   the contractors was “dead wrong” because it was based on our determination
   that Liberty Mutual failed to raise the minutes-rule argument at summary
   judgment. According to Liberty Mutual, it is “undeniable that Liberty
   Mutual argued in its briefs filed in [the district court] that the waiver of
   subrogation provision was not enforceable because neither the contracts
   themselves nor the specific terms were recorded in the School Board’s
   minutes as required by statute.”
          “The mandate rule requires a district court on remand to effect our
   mandate and to do nothing else.” 14 As a subspecies of the law-of-the-case
   doctrine, it forecloses the district court and any subsequent panel from

          13
            Liberty Mut. Fire Ins. Co. v. Fowlkes Plumbing, LLC, No. 1:17-CV-010-GHD-DAS
   (N.D. Miss. July 14, 2020) (order denying motion to alter or amend judgment).
          14
               Deutsche Bank Nat’l Tr. Co. v. Burke, 902 F.3d 548, 551 (5th Cir. 2018).

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                                            No. 20-60742

   reexamining issues of law decided by a prior panel. 15 “We review de novo a
   district court’s interpretation of our remand order, including whether the
   law-of-the-case doctrine or mandate rule forecloses any of the district court’s
   actions on remand.” 16 A Rule 59(e) motion “calls into question the
   correctness of a judgment.” 17 We review the denial of a 59(e) motion for
   abuse of discretion. 18
          The mandate rule is not “immutable,” 19 but it can be overcome only
   in strictly limited, compelling circumstances where “(i) the evidence on a
   subsequent trial was substantially different, (ii) controlling authority has
   since made a contrary decision on the law applicable to such issues, or (iii)
   the decision was clearly erroneous and would work a manifest
   injustice.” 20 “In practice, we have rarely used the last exception,” 21 the only
   exception Liberty Mutual invokes. Although Liberty Mutual asserted in its
   motion that the clearly-erroneous exception applied, the district court
   deferred to our mandate and denied the motion without reevaluating the
   waiver issue already decided by this Court.
          Liberty characterizes this deference as an abuse of discretion and
   directs us to several cases concerning Rule 60(b) motions to support its
   contention that a district court is required to address the merits of a post-

          15
               In re Deepwater Horizon, 928 F.3d 394, 398 (5th Cir. 2019).
          16
               Burke, 902 F.3d at 551 (internal quotations omitted).
          17
               Templet v. HydroChem Inc., 367 F.3d 473, 478 (5th Cir. 2004).
          18
               Schiller v. Physicians Res. Grp. Inc., 342 F.3d 563, 566 (5th Cir. 2003).
          19
               Webb v. Davis, 940 F.3d 892, 897 (5th Cir. 2019) (internal quotations omitted).
          20
               Hopwood v. Texas, 236 F.3d 256, 272 (5th Cir. 2000).
          21
               Burke, 902 F.3d at 551.

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                                             No. 20-60742

   judgment motion. For instance, in Silva v. Harris County, we held that “the
   district court does not have the option simply to deny the [60(b)] motion,
   without considering it on its merits.” 22 But it is not clear that the rationale
   for the Silva holding applies with equal force here. In Silva, we reasoned that
   “allowing the district court to consider a Rule 60(b) motion on its merits,
   despite a pending appeal, provides a logical and efficient method of resolving
   the motion” because “the district court in many cases ‘is better able than we
   to decide’ the validity of the motion” and could remove the need for an
   appeal. 23 But when the district court in Silva denied the 60(b) motion, an
   appeal was merely pending, and no mandate had issued. 24 Here, neither
   efficiency nor logic militate in favor of requiring the district court to reanalyze
   a legal question already argued to and decided by this Court. 25 Such a
   requirement would invite determined litigants to make Rule 59(e) and the
   clearly-erroneous exception “an auxiliary vehicle for the repetition of
   arguments previously advanced, without success, in appellate briefs,
   petitions for rehearing, and petitions for certiorari.” 26
           Even if we assume that a district court must address the merits of a
   Rule 59(e) motion in the face of this Court’s contrary mandate, there was no

           22
             5 F.3d 1496 (5th Cir. 1993) (per curiam); see also United States ex rel. Gage v. Davis
   S.R. Aviation, L.L.C., 613 F. App’x 445 (5th Cir. 2015) (per curiam) (citing Silva for the
   same proposition).
           23
                Silva, 5 F.3d 1496, at *3.
           24
              Id. at *1 n.4; see also Webb, 940 F.3d at 897 (noting in dicta that the mandate rule
   is discretionary, but ultimately concluding that the mandate rule was simply inapplicable
   because this Court’s prior orders did not “expressly or impliedly” decide the merits of
   appellant’s claims).
           25
              See Burke, 902 F.3d at 551 (The district court’s decision to reject the Fifth
   Circuit’s ruling as “clearly erroneous” on remand was “extraordinary conduct that would
   lead to chaos if routinely done”).
           26
                Laffey v. Nw. Airlines, Inc., 740 F.2d 1071, 1083 (D.C. Cir. 1984).

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                                           No. 20-60742

   error in denying the motion here; the prior decision was not clearly erroneous
   and Liberty Mutual does not identify a “manifest injustice” arising from the
   outcome. In defining the exceptional error required for relief from a mandate,
   we have admonished litigants that “[m]ere doubts or disagreement about the
   wisdom of a prior decision of this or a lower court will not suffice,” nor is it
   enough for the decision to be “more than just maybe or probably wrong; it
   must be dead wrong.” 27 If “the question is close, by definition it cannot be
   dead wrong.” 28
          During oral argument of the interlocutory appeal, we asked Liberty
   Mutual whether it had raised the minutes argument below. Liberty Mutual
   advised us that it “didn’t call out specifically the minute rule” in its
   opposition to summary judgment, but it had cited the Mississippi statute
   requiring public boards to approve contracts exceeding $50,000. Its first
   specific discussion of the minutes rule came in a sur-reply brief. Because the
   minutes-rule argument was not articulated in the opposition brief and
   arguments raised in a sur-reply are not properly preserved, we held that
   Liberty Mutual had forfeited the argument. We explained that:
          The closest Liberty Mutual came to arguing contractual
          invalidity was in its opposition to summary judgment, when it
          discussed the school board’s requirement to approve the
          project and then questioned whether A201-2007 was part of
          the contract that the school board approved. But that
          discussion never mentions the minutes rule or Mississippi
          cases applying it. Instead, it argued only that the school board
          was unaware of these conditions. Because Liberty Mutual has

          27
               Hopwood, 236 F.3d at 272–73.
          28
               Vine v. PLS Fin. Servs., Inc., 807 F. App’x 320, 327 (5th Cir. 2020).

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                                              No. 20-60742

           forfeited its argument, we treat the contract as a valid one. 29

           Although Liberty Mutual now boldly asserts that this determination
   was “dead wrong,” the substance of its argument has not changed since we
   heard it at oral argument. If we indulged the view most favorable to Liberty
   Mutual, its position would be arguable at most. In its Rule 59(e) motion and
   it briefs to this Court, the company contends that we “failed to recognize that
   the statutory requirement relied on by Liberty Mutual in its opposition to
   summary judgment did timely raise the enforceability of the waiver” and that
   the argument was presented in its sur-reply. Liberty Mutual also cites a
   sentence from the contractors’ summary judgment reply brief as evidence
   that the contractors interpreted Liberty Mutual’s opposition as raising the
   minutes-rule argument.
           We did not fail to recognize the first two arguments. As we explained
   during oral argument, a new argument cannot be raised for the first time in a
   reply brief, let alone a sur-reply. 30 And preserving an issue for appeal requires
   more than citing a statute from which the argument could be made; “the
   party must press not merely intimate the argument.” 31 As for the sentence
   Liberty Mutual now cites from the contractors’ reply, it makes no mention
   of the minutes rule, nor does it clearly indicate that the contractors
   understood Liberty’s opposition as raising the minutes rule. 32 The sentence
   in question deals with whether the school board actually saw the waiver

           29
                Fowlkes I, 934 F.3d at 426.
           30
                Hollis v. Lynch, 827 F.3d 436, 451 (5th Cir. 2016).
           31
             Keelan v. Majesco Software, Inc., 407 F.3d 332, 339–40 (5th Cir. 2005) (internal
   quotations omitted).
           32
              The sentence in question reads “Liberty Mutual’s position that the General
   Conditions form, itself, must be specifically presented and approved by the School Board
   is contrary to Mississippi law.”

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   document itself, and thus, it is better viewed as part of the dispute over
   whether the waiver was effectively incorporated by reference into the
   contract, which was a primary point of contention at summary judgment. 33
           Liberty Mutual has identified no error in our prior decision, let alone
   one so clear that it warrants the extraordinary relief of setting aside a
   judgment. 34 Disagreement with our ruling, however vigorous, does not
   suffice. Therefore, we affirm the district court’s denial of Liberty Mutual’s
   Rule 59(e) motion.

           33
                See Fowlkes, 2018 WL 842169, at *2–4.
           34
              Liberty Mutual does not explain here or in its Rule 59(e) motion the nature of
   the manifest injustice done by our decision. Liberty Mutual was contractually obligated to
   pay the claims of its insured. It would be entitled to recover from the contractors only if it
   could show they were at fault for the damage to the school building, a matter which has not
   been determined. Whatever “manifest injustice” may mean, it requires more than that the
   case was wrongly decided.

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