Court Opinion

ID: 9409777
Source: CourtListenerOpinion
Date Created: 2023-07-19 15:01:35.267554+00
Date Added: 2024-06-11T17:20:53.411761
License: Public Domain

USCA11 Case: 22-12748    Document: 27-1     Date Filed: 07/19/2023   Page: 1 of 6

                                                  [DO NOT PUBLISH]
                                   In the
                United States Court of Appeals
                        For the Eleventh Circuit

                          ____________________

                                No. 22-12748
                          Non-Argument Calendar
                          ____________________

       LATISHA BOLDEN,
                                                     Plaintiﬀ-Appellant,
       versus
       NAUTILUS INSURANCE COMPANY,
                                                   Defendant-Appellee.

                          ____________________

                 Appeal from the United States District Court
                     for the Middle District of Alabama
                  D.C. Docket No. 3:20-cv-00390-ECM-JTA
                          ____________________
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       2                        Opinion of the Court                    22-12748

       Before NEWSOM, LAGOA, and BRASHER, Circuit Judges.
       PER CURIAM:
              This is an insurance garnishment suit. Latisha Bolden sued
       Arnetta Moore, 1 who was insured by Nautilus Insurance Company
       through a policy held by the Alabama Education Association. Bol-
       den won a default judgment against Moore in state court for $2
       million, then amended the complaint to add Nautilus and the AEA.
             Nautilus removed the case to federal court. It also filed a
       counterclaim seeking a declaratory judgment that it did not owe
       coverage to Moore for the judgment against her because either
       Moore failed to cooperate in the litigation, as required by the insur-
       ance policy, or the event wasn’t covered by the policy. Nautilus
       then moved to dismiss the garnishment claim against the AEA and
       moved for summary judgment on its counterclaim for declaratory
       judgment. Bolden, in turn, moved to remand to the Circuit Court
       of Macon County because the AEA defeated diversity.
               The district court dismissed the AEA from the case as fraud-
       ulently joined and granted Nautilus’s motion for summary judg-
       ment on its counterclaim for declaratory judgment. Bolden ap-
       peals, arguing that the AEA was improperly dismissed and that the
       district court erred in granting summary judgement because there

       1Bolden also sued Dawn Smith-Tucker. The district court severed and re-
       manded Bolden’s claims against Smith-Tucker for lack of jurisdiction. We do
       not consider the claims against Smith-Tucker here.
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       22-12748               Opinion of the Court                          3

       was a genuine dispute of material fact about whether Moore coop-
       erated in the litigation. We disagree and affirm.
                                          I
               First, we address jurisdiction—speciﬁcally, whether the dis-
       trict court erred in dismissing the AEA from the case as fraudu-
       lently joined. Bolden is a citizen of Alabama; Nautilus is a citizen
       of Arizona; and Moore is a citizen of Michigan. Because the AEA
       is also a citizen of Alabama, the district court had jurisdiction only
       if the AEA was properly dismissed from the case.
               We review the denial of a motion to remand de novo. City
       of Vestavia Hills v. Gen. Fid. Ins. Co., 676 F.3d 1310, 1313 (11th Cir.
       2012). “When a plaintiﬀ names a non-diverse defendant solely in
       order to defeat federal diversity jurisdiction, the district court must
       ignore the presence of the non-diverse defendant and deny any mo-
       tion to remand the matter back to state court.” Henderson v. Wash.
       Nat’l Ins. Co., 454 F.3d 1278, 1281 (11th Cir. 2006). In such circum-
       stances, “[t]he plaintiﬀ is said to have eﬀectuated a ‘fraudulent join-
       der,’ and a federal court may appropriately assert its removal diver-
       sity jurisdiction over the case.” Id. (citation omitted).
               A defendant can succeed on its claim that a co-defendant was
       fraudulently joined by showing by clear and convincing evidence
       that there is no possibility the plaintiﬀ can state a cause of action
       against the non-diverse defendant. Id. The fraudulent joinder de-
       termination “must be based upon the plaintiﬀ’s pleadings at the
       time of removal, supplemented by any aﬃdavits and deposition tran-
       scripts submitted by the parties.” Le v. Wyeth, 428 F.3d 1317, 1322
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       4                       Opinion of the Court                   22-12748

       (11th Cir. 2005) (emphasis and citation omitted). “The proceeding
       appropriate ‘for resolving a claim of fraudulent joinder is similar
       to that used for ruling on a motion for summary judgment under
       [Federal Rule of Civil Procedure] 56(b).’” Id. at 1322–23 (citation
       omitted). Thus, “the district court must ‘resolve all questions of
       fact . . . in favor of the plaintiﬀ.’ But there must be some question
       of fact before the district court can resolve that fact in the plaintiﬀ’s
       favor.” Id. at 1323 (omission in original) (citation omitted).
              The AEA was not a proper party to the insurance-proceeds
       garnishment action. Alabama Code § 27-23-2 provides that, after
       obtaining a ﬁnal judgment for loss caused by bodily injury, as here,
       a “judgment creditor” like Bolden “may proceed against the de-
       fendant”—here, Moore—“and the insurer”—Nautilus—“to reach
       and apply the insurance money to the satisfaction of the judg-
       ment.” Neither the statute nor case law supports a suit against a
       third-party entity that is neither the insurer nor the insured.
               The AEA was neither the defendant in the initial action nor
       an insurer subject to an action under § 27-23-2. Nautilus submitted
       a declaration explaining that the AEA is the “insured unit,” not an
       insurer. The Certiﬁcate of Insurance lists Nautilus as the insurer
       and the AEA as the “Participating Unit,” while it lists “All Uniﬁed
       Members and All Student Members” as the “Insured.” Addition-
       ally, the Certiﬁcate of Insurance deﬁnes “insured” to mean “[a] nat-
       ural person who, at the time of . . . the alleged incidents, acts, or
       events which give rise to a claim . . . was a member of the unit
       named in the declarations page.”
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       22-12748                Opinion of the Court                          5

              Based on the pleadings and aﬃdavits, there is no reason to
       believe that the AEA is an insurer under Alabama Code § 27-23-2.
       Accordingly, Bolden does not have any plausible cause of action
       against the AEA and the district court properly dismissed the AEA.
                                          II
               On, then, to the summary judgment decision. “We review
       a district court’s grant of summary judgment de novo, viewing the
       evidence and drawing all reasonable inferences in the light most
       favorable to the nonmoving party.” Salinero v. Johnson & Johnson,
       995 F.3d 959, 964 (11th Cir. 2021) (citation omitted).
              “The law is clear that a judgment creditor’s right under § 27-
       23-2 to proceed against the insurance company to satisfy a judg-
       ment obtained against the defendant/insured is dependent upon
       the rights of the insured against its insurer under the policy.” St.
       Paul Fire & Marine Ins. Co. v. Nowlin, 542 So. 2d 1190, 1194 (Ala.
       1988); see also Barton v. Nationwide Mut. Fire Ins. Co., 524 F. Supp. 3d
       1219, 1228 (N.D. Ala. 2021) (“[R]ecovery under Section 27-23-2 is
       circumscribed by the coverage limitations of the insured’s insur-
       ance policy.”). Thus, in a § 27-23-2 action, the injured party “effec-
       tively stands in the shoes of the insured tortfeasor[] . . . in making
       h[er] claim, and [s]he is entitled to recover from [the insurer] only
       to the extent of [the insured tortfeasor’s] coverage for the claims
       asserted against them.” Admiral Ins. Co. v. Price-Williams, 129 So. 3d
       991, 997 (Ala. 2013).
            Under the terms of her insurance contract with Nautilus,
       Moore was required to “cooperate with [Nautilus],” including by
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       6                       Opinion of the Court                   22-12748

       “attend[ing] hearings and trials” and “assist[ing] in effecting settle-
       ments and obtaining the attendance of witnesses.”
              There is no genuine dispute of material fact about Moore’s
       lack of cooperation in the litigation against her. Moore failed to
       appear for her scheduled deposition repeatedly and for a prolonged
       period—despite four court orders and Nautilus’ offer to pay her
       travel expenses. That Moore or her counsel participated in certain
       aspects of the state court litigation is insufficient to create a genuine
       dispute of material fact as to whether Moore failed to cooperate
       with respect to her deposition—a key component of the litigation
       which led to the entry of the default judgment. The state court
       explained that Moore “ha[d] repeatedly failed and refused to appear
       for deposition testimony in direct contempt of multiple Orders of
       this Court, leaving the Court with no recourse other than to enter
       a default judgment against her.”
             Accordingly, Moore did not satisfy the terms of the insur-
       ance policy and Nautilus does not owe coverage to Moore for the
       judgment obtained by Bolden.
              AFFIRMED.