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United States v. Dawn Properties, Inc.

United States District Court, S.D. Mississippi, Southern Division

November 26, 2014

UNITED STATES OF AMERICA, PLAINTIFF
v.
DAWN PROPERTIES, INC.; SOUTHERN CROSS CONSTRUCTION COMPANY, INC.; RIDGELAND CONSTRUCTION ONE, LLC; THE BEACH CLUB, LLC; THE BEACH CLUB II, LLC; THE BELMONT OF LAMAR, LLC; GRAND BISCAYNE APTS., LLC; SEAINN, LLC, DEFENDANTS/ THIRD-PARTY PLAINTIFFS AND SUMMER MISS, LLC; 14510 LEMONYE BOULEVARD, LLC; LEXINGTON MILL MISSISSIPPI OWNER, LLC; INN BY THE SEA HOME OWNERS ASSOCIATION, INC., RULE 19 DEFENDANTS
v.
GREG STEWART; NOSIDAM, LLC, D/B/A MADISON HOMES; GERALD JAMES HOPKINS; HARRY BAKER SMITH ARCHITECTS II, LLC; DRACE CONSTRUCTION CORP.; CITY OF RIDGELAND, MISSISSIPPI; CITY OF LONG BEACH MISSISSIPPI; CITY OF HATTIESBURG, MISSISSIPPI; JACKSON COUNTY, MISSISSIPPI; HARRISON COUNTY, MISSISSIPPI; and JOHN DOES 1-100, THIRD-PARTY DEFENDANTS

Page 956

For United States of America, Plaintiff: Pshon Barrett, LEAD ATTORNEY, U.S. ATTORNEY'S OFFICE - Jackson, Jackson, MS; Julie Jackson Allen, U.S. DEPARTMENT OF JUSTICE, Washington, DC; Kinara Ann Flagg - Fed Gov, U.S. DEPT. OF JUSTICE - Civil Rights Division, Washington, DC; Mazen Mohammed Basrawi, U.S. DEPARTMENT OF JUSTICE, Washington, DC; Michael S. Maurer, U.S. DEPARTMENT OF JUSTICE-Housing & Civil Enforcement Sect, Civil Rights Division, Washington, DC.

For Dawn Properties, Inc., Southern Cross Construction Company, Inc., Beach Club, LLC, Beach Club II, LLC, Belmont of Lamar, LLC, Grand Biscayne Apts., LLC, Seainn, LLC, Defendants: Nicholas V. Wiser, LEAD ATTORNEY, Russell Scott Manning, BYRD & WISER, Biloxi, MS.

For Ridgeland Construction One, LLC, Defendant, Third Party Plaintiff: Nicholas V. Wiser, LEAD ATTORNEY, BYRD & WISER, Biloxi, MS; Stephanie Gee Beaver, LEAD ATTORNEY, DANIEL, COKER, HORTON & BELL - Gulfport, Gulfport, MS; Fred A. Schwartz - PHV, PRO HAC VICE, KOPELOWITZ OSTROW, PA, Boca Raton, FL; Samantha Tesser Haimo - PHV, PRO HAC VICE, KOPELOWITZ OSTROW, PA - Fort Lauderdale, Fort Lauderdale, FL.

For Summer Miss, LLC, Rule 19 Defendant, Lexington Mill Mississippi Owner, LLC, Rule 19 Defendant, Defendant: Robert B. Ireland , III, LEAD ATTORNEY, WATKINS & EAGER, Jackson, MS; William Abram Orlansky, WATKINS & EAGER, PLLC, Jackson, MS.

For 14510 Lemoyne Boulevard, LLC, Rule 19 Defendant, Defendant: David E. Gevertz - PHV, PRO HAC VICE, BAKER, DONELSON, BEARMAN, CALDWELL & BERKOWITZ, - Atlanta, Atlanta, GA; Alan Lee Smith, BAKER, DONELSON, BEARMAN, CALDWELL & BERKOWITZ, PC, Jackson, MS.

For Inn by the Sea Home Owners Association, Inc., Rule 19 Defendant, Defendant: Jack Robinson Dodson , III, LEAD ATTORNEY, BRADLEY ARANT BOULT CUMMINGS, LLP - Jackson, Jackson, MS; David R. Cordell - PHV, PRO HAC VICE, CONNER & WINTERS, LLP, Tulsa, OK.

For 14510 Lemoyne Boulevard, LLC, Rule 19 Defendant, Cross Claimant: Alan Lee Smith, BAKER, DONELSON, BEARMAN, CALDWELL & BERKOWITZ, PC, Jackson, MS.

For Grand Biscayne Apts., LLC, Cross Defendant: Nicholas V. Wiser, LEAD ATTORNEY, Russell Scott Manning, BYRD & WISER, Biloxi, MS.

For Beach Club, LLC, Dawn Properties, Inc., Beach Club II, LLC, Grand Biscayne Apts., LLC, Belmont of Lamar, LLC, Southern Cross Construction Company, Inc., Seainn, LLC, Third Party Plaintiff: Nicholas V. Wiser, LEAD ATTORNEY, Russell Scott Manning, BYRD & WISER, Biloxi, MS.

OPINION

LOUIS GUIROLA, JR., CHIEF UNITED STATES DISTRICT JUDGE.

Page 957

ORDER (1) GRANTING MOTIONS TO DISMISS THIRD-PARTY COMPLAINT FILED BY THIRD-PARTY DEFENDANTS AND DISMISSING ALL THIRD-PARTY DEFENDANTS; (2) DENYING MOTION FOR JOINDER FILED BY THIRD-PARTY PLAINTIFFS; AND (3) DENYING AS MOOT JOINT MOTION TO STAY PROCEEDINGS

BEFORE THE COURT are the following Motions to Dismiss filed by Thirdparty Defendants pursuant to Federal Rule of Civil Procedure 12(b)(6): [70] Motion to Dismiss filed by Greg Stewart and Nosidam, LLC; [76] Motion to Dismiss filed by City of Ridgeland, Mississippi; [80] Motion to Dismiss filed by Harrison County, Mississippi; [85] Motion to Dismiss filed by Jackson County, Mississippi; [94] Motion to Dismiss filed by Drace Construction Corp.; [110] Motion to Dismiss filed by City of Hattiesburg, Mississippi; and [134] Motion to Dismiss filed by Harry Baker Smith Architects, II, LLC. These Third-party Defendants ask the Court to dismiss the Third-party Complaint filed against them by Defendants/Third-party Plaintiffs Dawn Properties, Inc.; Southern Cross Construction Company, Inc.; The Beach Club, LLC; the Beach Club II, LLC; The Belmont of Lamar, LLC; Grand Biscayne Apts., LLC; and SeaInn, LLC (" Defendants" or " Third-party Plaintiffs" ).

Also before the Court is the [126] Motion for Joinder in which the Defendants/Third-party Plaintiffs, anticipating that the Court may grant the Motions to Dismiss, seek to join the Third-party Defendants

Page 958

pursuant to Federal Rule of Civil Procedure 19, or, alternatively, Rule 20.

The Court has considered the submissions of the parties and the applicable law and finds that the Motions to Dismiss should be granted because (1) there is no right to indemnity or contribution under the federal laws at issue; (2) any state law indemnity claim is preempted by federal law; (3) Mississippi law does not allow for contribution claims against the Third-party Defendants; and, (4) regardless, any state law claim for contribution is preempted by federal law. The claims against the cities and counties should be dismissed for the additional reason that they owed no duty to the Third-party Plaintiffs. The Court finds that the claims against the remaining Third-party Defendants, Gerald James Hopkins and the City of Long Beach, should be dismissed sua sponte.[1] The Court likewise dismisses sua sponte the claims against

Page 959

Gerald James Hopkins and the City of Ridgeland asserted by Third-party Plaintiff Ridgeland Construction One, LLC (" Ridgeland Construction" ) in its [154] Third-party Complaint filed on November 21, 2014.[2]

Furthermore, the Court is of the opinion that joinder pursuant to Rule 19 is unwarranted because the Court can accord complete relief among the United States and the current Defendants without the presence of the Third-party Defendants. The current Defendants cannot use Rule 20 to join additional parties as defendants.

The Court denies as moot the [83] Joint Motion to Stay Proceedings filed by Third-party Defendants Greg Stewart, Nosidam, LLC, and City of Ridgeland.

Background

The United States filed this action against Defendants Dawn Properties, Inc.; Southern Cross Construction Company, Inc.; Ridgeland Construction One, LLC; The Beach Club, LLC; the Beach Club II, LLC; The Belmont of Lamar, LLC; Grand Biscayne Apts., LLC; and SeaInn, LLC. The United States alleges that the Defendants were the owners, developers, and builders of several local residential apartment complexes and seeks to hold ...


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