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Stephens v. Progressive Gulf Insurance Co.

United States District Court, N.D. Mississippi, Aberdeen Division

April 17, 2015

LISA BEAM STEPHENS and PAMELA BEAM DRAKE, Wrongful Death Beneficiaries of Truman Edward Beam, Plaintiffs,
v.
PROGRESSIVE GULF INSURANCE COMPANY, Garnishee,
v.
HOLCOMB LOGGING, LLC; DARRYL HOLCOMB; JAMES HOLCOMB; and IC TRUCKING, Defendants.

MEMORANDUM OPINION GRANTING IN PART, DENYING IN PART, AND HOLDING IN ABEYANCE IN PART GARNISHEE'S MOTION FOR SUMMARY JUDGMENT; DENYING PLAINTIFFS' MOTION TO STAY CONSIDERATION OF GARNISHEE'S MOTION FOR SUMMARY JUDGMENT

GLEN H. DAVIDSON, Senior District Judge.

Presently before this Court are the following motions filed by Garnishee Progressive Gulf Insurance Company: a motion for summary judgment [72]; a motion to strike designation of expert [81]; and a motion for extension of time, alternatively, to designate expert [83]. Also before this Court are the following motions filed by Plaintiffs Lisa Beam Stephens and Pamela Beam Drake: a motion for summary judgment [101], a motion to appeal [107] the Magistrate Judge's decision on their motion to compel [86], a motion to expedite hearing and oral argument [108], a motion to stay consideration [113] of Garnishee's motion for summary judgment, and a motion for entry of default [117]. This opinion concerns only Garnishee's motion for summary judgment [72] and Plaintiffs' motion to stay consideration [113] of the same. The Court will rule on the remaining motions at a later date. Upon due consideration, the Court finds as follows.

A. Factual and Procedural Background

Plaintiffs Lisa Beam Stephens and Pamela Beam Drake (collectively, "Plaintiffs"), wrongful death beneficiaries of the Decedent, Truman Edward Beam ("Decedent"), filed suit in the Circuit Court of Itawamba County, Mississippi, against Defendants Darryl Holcomb; James Holcomb; Holcomb Logging, LLC; and IC Trucking (collectively, "Defendants"), alleging that while working as a truck driver for Defendants, Decedent was standing outside the vehicle when he was struck and killed by a loaded log truck operated by Defendant James Holcomb and that Decedent's cause of death "was the wrongful or negligen[t] act or omission of Defendants or by such unsafe machinery owned and operated by Defendants or the failure of Defendants to keep their vehicle under control, failure to maintain a proper lookout for the path of their vehicle, and failure to yield to a pedestrian." Pls.' Am. Compl., State-Ct. R. [26-25] ¶¶ 6-7. After Plaintiffs filed an uncontested motion for summary judgment, the state court granted the motion, finding that "[Decedent] died as a result of injuries sustained, which were proximately caused by the impact of a log track and trailer owned and operated by the Defendants and their agents/employees, and that the death of [Decedent] was proximately caused by the negligence and wrongful actions of the aforesaid Defendants." Order Granting Pls.' Am. Mot. Summ. J., State-Ct. R. [26-20] at 1. After a hearing was held to determine damages, the state court entered a judgment in favor of Plaintiffs against Defendants in the amount of $920, 034.00 plus court costs in the amount of $120.00 and post-judgment interest at the legal rate of 8% per annum. No appeal was taken from the judgment.

Subsequently, Plaintiffs made a proper suggestion for writ of garnishment against Defendants and/or Progressive Gulf Insurance Company ("Garnishee"). Garnishee had not been a party to, nor did it participate in, the state-court proceeding. The writ of garnishment was issued by the Circuit Clerk of Itawamba County, Mississippi, and was served on Garnishee. Garnishee filed its notice of removal within 30 days of receipt of the writ of garnishment, removing the garnishment proceeding to this Court and filing its own separate declaratory judgment action. Garnishee maintains that no insurance coverage exists under Garnishee's policy for the subject incident. Plaintiffs filed a counterclaim asserting fraud as basis of recovery and an amended counter-complaint. Subsequently, Garnishee filed the present motion for summary judgment [72], presenting several arguments attacking the jurisdictional basis of the underlying state-court judgment and challenging the merits of the garnishment action. Plaintiffs have filed a motion to stay [113] consideration of Garnishee's motion for summary judgment.

B. Summary Judgment Standard

Summary judgment "should be rendered if the pleadings, the discovery and disclosure materials on file, and any affidavits show that there is no genuine dispute as to any material fact and that the movant is entitled to judgment as a matter of law." Celotex Corp. v. Catrett, 477 U.S. 317, 322, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986). See FED. R. CIV. P. 56(a); Johnston & Johnston v. Conseco Life Ins. Co., 732 F.3d 555, 561 (5th Cir. 2013). The rule "mandates the entry of summary judgment, after adequate time for discovery and upon motion, against a party who fails to make a sufficient showing to establish the existence of an element essential to that party's case, and on which that party will bear the burden of proof at trial." Celotex Corp., 477 U.S. at 322, 106 S.Ct. 2548.

The party moving for summary judgment bears the initial responsibility of informing the Court of the basis for its motion and identifying those portions of the record it believes demonstrate the absence of a genuine dispute of material fact. See id. at 323, 106 S.Ct. 2548. Under Rule 56(a), the burden then shifts to the nonmovant to "go beyond the pleadings and by... affidavits, or by the depositions, answers to interrogatories, and admissions on file, ' designate specific facts showing that there is a genuine issue for trial.'" Id. at 324, 106 S.Ct. 2548; Littlefield v. Forney Indep. Sch. Dist, 268 F.3d 275, 282 (5th Cir. 2001); Willis v. Roche Biomedical Labs., Inc., 61 F.3d 313, 315 (5th Cir. 1995).

It is axiomatic that in ruling on a motion for summary judgment "[t]he evidence of the nonmovant is to be believed, and all justifiable inferences are to be drawn in his favor." Tolan v. Cotton, ___ U.S. ___, ___, 134 S.Ct. 1861, 1863, 188 L.Ed.2d 895 (2014) (per curiam) (quoting Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 255, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986)); see, e.g., Ard v. Rushing, ___ F.Appx. ___, 2014 WL 7356134, at *4 (5th Cir. Dec. 29, 2014) (per curiam) (quoting United Fire & Cos. Co. v. Hixson Bros., Inc., 453 F.3d 283, 285 (5th Cir. 2006) (on summary judgment, "[w]e view the evidence in the light most favorable to the non-moving party'")). The Court "resolve[s] factual controversies in favor of the nonmoving party, but only where there is an actual controversy, that is, when both parties have submitted evidence of contradictory facts.'" Thomas v. Baldwin, 595 F.Appx. 378, 378 (5th Cir. 2014) (per curiam) (quoting Antoine v. First Student, Inc., 713 F.3d 824, 830 (5th Cir. 2013) (internal quotation marks and citation omitted)). "[T]he nonmoving party cannot defeat summary judgment with conclusory allegations, unsubstantiated assertions, or only a scintilla of evidence.'" Id. at 380 (quoting Hathaway v. Bazany, 507 F.3d 312, 319 (5th Cir. 2007)).

"[A] judge's function' at summary judgment is not to weigh the evidence and determine the truth of the matter but to determine whether there is a genuine issue for trial.'" Cotton, 134 S.Ct. at 1866 (quoting Anderson, 477 U.S. at 249, 106 S.Ct. 2505); see Stewart v. Guzman, 555 F.Appx. 425, 430 (5th Cir. 2014) (per curiam) (citing Vaughn v. Woodforest Bank, 665 F.3d 632, 635 (5th Cir. 2011) (In ruling on a summary judgment motion, "[w]e neither engage in credibility determinations nor weigh the evidence.")). With the foregoing standard in mind, the Court turns to the issues before it.

C. Analysis and Discussion

At the outset, the Court addresses Garnishee's argument that the state-court judgment upon which the garnishment action is based is void as to all Defendants. This affirmative defense, which Garnishee first pled in its answer [3], is urged pursuant to Mississippi Code §11-35-39, which provides: "The garnishee may plead that the judgment under which the writ of garnishment was issued is void, and if his plea be sustained, no judgment shall be rendered against him." Miss. Code Ann. § 11-35-39. See Garnishee's Answer & Aff. Defenses [3] at 4; Garnishee's Mot. Summ. J. [72] at 2. If this Court determines that the state-court judgment is void as to all Defendants, the instant writ of garnishment must be dismissed.

Because this issue presents questions of law, the Court finds that Plaintiffs' motion to stay consideration of Garnishee's motion for summary judgment is not well taken, insofar as it pertains to the legal issues presented by Garnishee's summary-judgment motion.

The determination of whether a state-court judgment is void turns on the application of Mississippi rules of collateral attack and claim preclusion. Because this argument is urged in federal court, our starting point is the Full Faith and Credit Act, 28 U.S.C. § 1738, which provides in pertinent part: "The records and judicial proceedings of any court of any such State... or copies thereof... shall have the same full faith and credit in every court within the United States... as they have by law or usage in the courts of such State... from which they are taken." The Full Faith and Credit Act "embodies concerns of comity and federalism that allow the State to determine, subject to the requirements of the statute and the Due Process Clause, the preclusive effect of judgments in their own courts." A.L.T. Corp. v. Small Bus. Admin., 801 F.2d 1451, 1455 (5th Cir. 1986) (quoting Marrese v. Am, Acad, of Orthopaedic Surgeons, 470 U.S. 373, 380, 105 S.Ct. 1327, 84 L.Ed.2d 274, 281 (1985) (quotation marks omitted)). Thus, "[w]hen a federal court is asked to enforce a state judgment, the rendering state's law determines the preclusive effect of jurisdictional findings contained within the judgment, subject of course to the Due Process Clause." Harper Macleod Solicitors v. Keaty & Keaty, 260 F.3d 389, 396 (5th Cir. 2001). "It has long been established that [28 U.S.C.] § 1738 does not allow federal courts to employ their own rules of res judicata in determining the effect of state judgments. Rather, it goes beyond the common law and commands a federal court to accept the rules chosen by the State from which the judgment is taken.'" A.L.T. Corp., 801 F.2d at 1456-1457 (quoting Marrese, 470 U.S. at 380, 105 S.Ct. 1327) (quotation marks and citation omitted)). Even if on its merits a state-court "judgment intrinsically was wrong, dead wrong... the cherished Congressional policy under 28 U.S.C. § 1738... mandates full faith and credit to judgments to state courts." See Salazar v. U.S. Air Force, 849 F.2d 1542, 1544 (5th Cir. 1988).

However, "these principles of full faith and credit are subject to some... limitations. A major limitation is the caveat that a state court judgment is entitled to its preclusive effect in another forum only if the first court has power to pass on the merits-had jurisdiction, that is, to render judgment.'" A.L.T. Corp., 801 F.2d at 1455 (quoting Underwriters Nat'l Assurance Co. v. N.C. Life & Accident & Health Ins. Guar. Ass n, 455 U.S. 691, 704, 102 S.Ct. 1357, 71 L.Ed.2d 558 (1982) (internal citation and quotation marks omitted)). "This limitation flows directly from the principles underlying the Full Faith and Credit Clause. It is axiomatic that a judgment must be supported by a proper showing of jurisdiction over the subject matter and over the relevant parties.'" Id. (quoting Underwriters Nat'l Assurance Co., 455 U.S. at 704 n.10, 102 S.Ct. 1357). Thus, if the state court clearly lacked jurisdiction over all or part of the state-court proceeding, the federal district court need not accord that state-court judgment full faith and credit. See id. at 1453.

Accordingly, in considering Garnishee's voidness-of-judgmcnt arguments, this Court is required to give the Mississippi judgment rendered by the Circuit Court of Itawamba County- which became final for want of an appeal-the same preclusive effect as the judgment would have in a Mississippi state court. See id. (citing In re Troy Dodson Constr. Co., 993 F.2d 1211, 1214 (5th Cir. 1993); In re Brady, Tex. Mun. Gas Corp., 936 F.2d 212, 217 (5th Cir.), cert, denied, 502 U.S. 1013, ...


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