Court Opinion

ID: 38313
Source: CourtListenerOpinion
Date Created: 2010-04-25 20:05:59+00
Date Added: 2024-06-11T17:15:57.930045
License: Public Domain

United States Court of Appeals
                                                                Fifth Circuit
                                                               F I L E D
                 UNITED STATES COURT OF APPEALS
                      For the Fifth Circuit                      May 18, 2005

                                                            Charles R. Fulbruge III
                                                                    Clerk
                           No. 04-60286

                ARTIS BOLDEN AND MARILYN BOLDEN,

                                              Plaintiffs-Appellants,

                              VERSUS

                       FRANK BROOKS; ET AL,

                                              Defendants,

                NATIONWIDE MUTUAL INSURANCE CO.,

                                                 Defendant-Appellee.

          Appeal from the United States District Court
            For the Southern District of Mississippi
                           (00-CV-985)

Before DAVIS, SMITH, and DeMOSS, Circuit Judges.

PER CURIAM:*

     Plaintiffs-Appellants Artis and Marilyn Bolden (the “Boldens”)

appeal from the district court’s order denying a motion to remand

their causes of action to state court and subsequent dismissal of

their claims on summary judgment. Finding no error in the district

court’s order and judgment, we affirm.

     *
      Pursuant to 5TH CIR. R. 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this opinion should not be published and is not precedent except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 CIR. R. 47.5.4.
                     Factual and Procedural Background

      Artis Bolden (“Bolden”), a Mississippi resident, was injured

in an automobile accident on September 26, 1997, allegedly caused

by an uninsured driver, Frank Brooks (“Brooks”), also a Mississippi

resident.      Defendant-Appellee     Nationwide    Mutual   Insurance     Co.

(“Nationwide”), a resident of Ohio, then insured the Boldens.              The

Boldens’ policy included uninsured motorist coverage.             The Boldens

alerted Nationwide to the accident, faxing a copy of the accident

report which indicated that Brooks was uninsured.               On October 1,

1997, a Nationwide adjuster met with Bolden and explained the

uninsured motorist bodily injury claim coverage, which was limited

to $300,000.    The adjuster confirmed that Brooks was uninsured.

     After the accident, Bolden received medical treatment and

remained in contact with Nationwide’s adjuster regarding his claim.

On August 14, 1998, the adjuster offered $21,000 to settle the

claim, but Bolden refused, demanding the policy limit of $300,000.

Nationwide twice raised its offer (first to $40,000, and later to

$100,000),     but    the   Boldens   persisted    in   their    refusal   of

settlement.

     On December 1, 1999, the Boldens sued Brooks for negligence

and loss of consortium in Mississippi court.             Brooks failed to

answer, and the state court entered a default judgment against him,

awarding the Boldens $500,000 in compensatory damages and $500,000

                                      2
in punitive damages.        On August 21, 2000, the Boldens notified

Nationwide of the judgment against Brooks and filed a claim for

recovery of that judgment to the extent of the policy limits.                  In

their notification, the Boldens stated that if Nationwide failed to

respond within fifteen working days, the Boldens would assume the

claim was denied and would file an amended complaint against

Nationwide in the earlier action against Brooks.                       Nationwide

responded that it was not bound by the default judgment and renewed

the prior settlement offer of $100,000.

      On December 1, 2000, the Boldens filed an amended complaint in

Mississippi court, repeating the negligence claim against Brooks

verbatim and adding as defendants Nationwide and several Nationwide

agents, all of whom were Mississippi residents. Defendants removed

the   case   to   federal   district    court   on    grounds     of   diversity

jurisdiction,     arguing   the   Nationwide     agents     and   Brooks     were

fraudulently joined. The Boldens moved to remand the case to state

court.   Finding the in-state defendants fraudulently joined, the

district court denied the motion.            After discovery, Nationwide

moved for summary judgment, and the district court granted judgment

for Nationwide.      The court found that the remaining claim for

uninsured    motorist   benefits       was   barred    by   the    statute     of

limitations and that the remaining tort-based claims were not

cognizable under Mississippi law.            The Boldens timely appealed,

challenging only: (1) the denial of remand and (2) the judgment

entered on the claim for uninsured motorist benefits on the grounds

                                       3
that the claim was barred by the applicable statute of limitations

and that the amended complaint did not relate back to the original

complaint filed one year earlier.

                               Discussion

     We review de novo an order denying a motion to remand on the

basis that the non-diverse defendants are fraudulently joined.

Burden v. Gen. Dynamics Corp., 60 F.3d 213, 216 (5th Cir. 1995).

The removing    party   may   show   that   a   non-diverse   defendant   is

fraudulently joined by demonstrating “there is no reasonable basis

for the district court to predict that the plaintiff might be able

to recover” against him. Smallwood v. Illinois Cent. R.R. Co., 385

F.3d 568, 573 (5th Cir. 2004) (en banc).

     In this case, the district court considered separately whether

Brooks, the uninsured driver, and the Nationwide agents were

fraudulently joined.      The court determined no reasonable basis

existed to predict the Boldens might recover against Brooks because

they had previously stated the same claim against him and recovered

an award of damages, and a valid, final judgment was entered on

that claim.    Therefore, the court held the Boldens’ claims against

Brooks were barred by res judicata. With respect to the Nationwide

agents, the district court determined that the Boldens could state

no cognizable claim because the amended complaint only mentioned

the individual defendants in the introductory paragraphs and made

no allegations regarding the defendants or any of their conduct

                                     4
that related to the claims. Accordingly, Brooks and the Nationwide

agents were dismissed, their residencies disregarded in the court’s

subject matter jurisdiction analysis, and the motion for remand

denied.

     After a thorough review of the record and the arguments of

both parties, we agree with the district court’s determination that

the Boldens cannot state cognizable claims against Brooks and the

Nationwide agents.   The judgment against Brooks was a valid, final

judgment under Mississippi law, and is thus res judicata against

the amended complaint that is not altered as to Brooks.   See MISS.

R. CIV. PROC. 55(b) (2005).     A claim against agents, such as

Nationwide’s here, may be stated only where the complaint alleges

“individual wrongdoing.”   Hart v. Bayer Corp., 199 F.3d 239, 247

(5th Cir. 2000) (quoting Turner v. Wilson, 620 So. 2d 545, 548

(Miss. 1993)). Here, the complaint contains no such allegations of

individual wrongdoing and, indeed, excludes the individual agents

from any mention whatsoever other than in the introduction, stating

their residencies.   Thus, the Boldens cannot establish a cause of

action against the Nationwide agents.   See Smallwood, 385 F.3d at

573-74.

     Therefore, we affirm the court’s determination that Brooks and

the Nationwide agents were fraudulently joined and the court’s

denial of the Boldens’ motion to remand.

     This Court reviews the district court’s grant of summary

                                 5
judgment to Nationwide on the ground that the claims were barred by

the applicable statute of limitations de novo, using the same

standard as the district court.        See Tango Transp. v. Healthcare

Fin. Servs. LLC, 322 F.3d 888, 890 (5th Cir. 2003).              Summary

judgment is proper when the “pleadings, depositions, answers to

interrogatories,    and   admissions    on   file,   together   with   the

affidavits, if any, show that there is no genuine issue as to any

material fact and that the moving party is entitled to judgment as

a matter of law.”     FED. R. CIV. P. 56(c); see Celotex Corp. v.

Catrett, 477 U.S. 317, 322-23 (1986); Anderson v. Liberty Lobby,

Inc., 477 U.S. 242, 251-52 (1986).      When making its determination,

the court must draw all justifiable inferences in favor of the

nonmovant.   See Bodenheimer v. PPG Indus., Inc., 5 F.3d 955, 956

(5th Cir. 1993).

     The district court determined that, although the Boldens

stated a claim for uninsured motorist benefits, they failed to file

their claim within the three-year statute of limitations and their

complaint did not relate back to the prior filing against Brooks

alone under Mississippi Rule of Civil Procedure 15(c).          The court

found that the Boldens failed to state a claim of breach of the

duty of good faith and fair dealing under Mississippi law, and that

the claims for bad faith and gross negligence failed as a result of

the untimely filing of the claim for uninsured motorist benefits.

     In Mississippi, a cause of action against an insurer for

                                   6
uninsured   motorist   benefits     is   an   action   on   contract.       See

Employers Mut. Cas. Co. v. Tompkins, 490 So. 2d 897, 906 (Miss.

1986).   Mississippi applies a three-year statute of limitations

period to actions for breach of written contract.              MISS. CODE ANN.

§ 15-1-49; see also Jackson v. State Farm Mut. Auto. Ins. Co., 880

So. 2d 336, 343 (Miss. 2004).       The statute of limitations accrues

when the plaintiff knew or reasonably should have known that the

damages exceeded the insurance limits available from the alleged

tortfeasor. See Jackson, 880 So. 2d at 341 (synthesizing Lawler v.

Gov’t Employees Ins. Co., 569 So. 2d 1151, 1153 (Miss. 1990);

Vaughn v. State Farm Mut. Auto. Ins. Co., 445 So. 2d 224, 226

(Miss. 1984)).      The   Boldens   received     notice     that   Brooks   was

uninsured on October 1, 1997, when they received the accident

report and the Nationwide agent explained to them that Brooks

lacked insurance.      Moreover, in his sworn deposition, Bolden

averred knowledge that Brooks was uninsured as of October 1, 1997.

Thus, the cause of action accrued on that same date.               The Boldens

point to evidence that Nationwide was unsure, as of October 1,

1997, whether Brooks was uninsured.           They argue they were only

notified of Brooks’s lack of insurance when Nationwide made a

settlement offer to Bolden on August 14, 1998.         This argument lacks

merit.   Mississippi’s accrual law does not look to the offer of

settlement as notice of inadequate insurance; instead, it asks when

the Boldens knew or reasonably should have know that Brooks was

                                     7
uninsured.       See Jackson, 880 So. 2d at 341.              In the face of

Bolden’s sworn testimony that he knew, on October 1, 1997, Brooks

was uninsured, the Boldens cannot create a factual dispute as to

whether they knew or should have known Brooks’s insurance status

merely by pointing to Nationwide’s conduct.              The district court

properly determined that the amended complaint, filed on December

1, 2000, was barred by the applicable statute of limitations.

     In addition, the Boldens’ argument that the amended complaint

should relate back to the original complaint filed December 1,

1999, must fail.        The Boldens failed to make the requisite showing

under Mississippi Rule of Civil Procedure 15(c) to permit the

relation back of parties, like Nationwide here, subsequently added

by amendment.       See MISS. R. CIV. PROC. 15(c). Specifically, no

showing   was    made    by   the   Boldens   that,   under   Rule   15(c)(2),

Nationwide “knew or should have know that, but for a mistake

concerning the identity of the proper party, the action would have

been brought” against it.           See id.   The district court correctly

entered judgment for Nationwide on the claim for uninsured motorist

benefits.       Because we so hold, we need not reach Nationwide’s

alternative arguments in support of the district court’s entry of

judgment, raised in response to the Boldens’ appeal.

                                    Conclusion

     After oral argument, having independently reviewed the briefs

and relevant portions of the record, we AFFIRM the district court’s

                                         8
denial of the Boldens’ motion to remand and the entry of judgment

for Nationwide.

AFFIRMED.

                                9