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Nolley v. Littlejohn

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

January 9, 2017




         This cause comes before the Court on plaintiff Kenny Nolley's (“Nolley”) Motion to Remand [19]. This case began as a simple negligence action arising from an automobile accident between Nolley and Robin Littlejohn (“Littlejohn”). However, the scope of the litigation has since grown, and the parties have succeeded in making the action much more complicated through procedural maneuvers in both state and federal court. Nevertheless, the Court has considered the parties' submissions, along with relevant case law and evidence, and is now prepared to rule.

         I. Factual and Procedural Background

         On March 6, 2013, Kenny Nolley and Robin Littlejohn were involved in an automobile accident on Highway 15 in Union County, Mississippi, when Littlejohn “slammed into the rear of [Nolley's] vehicle.” At the time of the accident, Littlejohn was insured by Viking Insurance Company of Wisconsin (“Viking”), and Nolley was insured by GuideOne Mutual Insurance Company (“GuideOne”).

         On September 11, 2015, Nolley filed suit against Littlejohn in the Circuit Court of Union County, Mississippi, asserting causes of action for negligence and negligence per se. Importantly, at the time he initially filed the case, Nolley did not name Viking or GuideOne as defendants in the action. Upon Littlejohn's failure to appear or respond in that action, an entry of default was entered against her. Thereafter, on November 19, 2015, the circuit court held a hearing as to the proper amount of damages to be assessed. Although Littlejohn was provided notice of the hearing, she failed to appear. After the hearing, the circuit court issued a default judgment against Littlejohn “for the principal and prejudgment interest, in the sum of $150, 000.00, plus interest at the rate of 8% annually from the entering of this judgment, plus attorney's fees of $150, 000.00, and all costs of this cause expended.”

         Shortly thereafter, Littlejohn obtained counsel who immediately entered an appearance and filed a motion to set aside the entry of default and default judgment. In that motion, Littlejohn argues that the judgment should be set aside because it is not supported by credible evidence. Littlejohn emphasizes that Nolley's damage evaluation sheet, which was introduced at the hearing, shows “that he only incurred approximately $4, 200.00 in medical expenses and a vast majority of that amount was chiropractic care.” Littlejohn also highlights that “[Nolley's] Motion for Default Judgment only sought damages in the amount of $33, 493.00 plus interest.” Littlejohn additionally asserts that the circuit court's award of $150, 000.00 for attorney's fees is grossly excessive, as Nolley only sought $8, 333.00 in attorney's fees and the transcript from the hearing lacks any testimony whatsoever as to the fees actually incurred. Littlejohn also highlights the fact that, prior to filing suit, Nolley's counsel had been in contact with Viking- Littlejohn's insurer-concerning the claim. Littlejohn avers that since Nolley's counsel had been in contact with Viking, he should have provided the company with a “courtesy copy of the Complaint” instead of obtaining a default judgment against Littlejohn without Viking's knowledge of the suit.

         While Littlejohn's motion was pending, Viking filed a separate action against Littlejohn and Nolley in the Chancery Court of Union County, Mississippi, on January 11, 2016. In that action, Viking sought a declaratory judgment regarding its rights and obligations in regard to the default judgment “due to [Littlejohn's] material breach of the insurance policy's provision requiring the immediate notification of suit and any notification of subsequent relevant pleadings.” Viking also sought a declaration relieving it of any obligation to pay Nolley under the judgment “as a consequence of his failure to notify [Viking] of his efforts and attempt to secure a Default Judgment against Littlejohn . . .”

         Returning to the original circuit court action, a hearing on Littlejohn's motion to set aside the default judgment was held on April 18, 2016. According to Nolley, Judge Kelly Luther-the circuit court judge- orally “den[ied] the motion in part and allow[ed] liability to stand, while granting the motion in part and requiring a trial on damages.” However, an order to that effect was not entered on the circuit court's docket. In fact, an order was never entered on the court's docket reflecting Judge Luther's purported oral ruling.

         On May 25, 2016, Nolley filed an amended complaint, adding Viking and GuideOne- his insurer-as parties to the action. In the amended complaint, he requests a “declaration of rights and coverage as to Defendants Viking Insurance Company and GuideOne Mutual Insurance Company[.]” He asserts that Viking should be forced to pay the limit of its policy with Littlejohn and that GuideOne should be held liable for the remaining amount of the judgment under the underinsured motorist portion of his policy. Nolley also repeated verbatim his claims against Littlejohn.[1]

         Thereafter, on June 23, 2016, GuideOne removed the action to this Court, asserting diversity jurisdiction as the basis for this Court's jurisdiction over the case. It is undisputed that both Nolley and Littlejohn are Mississippi citizens and that both Viking and GuideOne are foreign citizens for jurisdictional purposes. Due to the appearance that complete diversity was clearly lacking because both Nolley and Littlejohn are Mississippi citizens, this Court issued a show cause order, instructing GuideOne to explain why the case should not be remanded due to lack of complete diversity. In its response to the Court's order, GuideOne asserted that “[p]er Fifth Circuit legal authority, Robin Littlejohn, as [an] in-state tortfeasor, does not defeat diversity jurisdiction where Kenny Nolley has already obtained a $300, 000 default judgment against Littlejohn. Therefore the Mississippi citizenship of Littlejohn should be disregarded for [diversity of citizenship analysis purposes].” Thus, GuideOne's argument hinges on the fact that the default judgment Nolley obtained against Littlejohn is still binding due to the fact that the circuit court never entered an order on its docket setting aside the judgment as to damages.

         In response to GuideOne's arguments, Nolley asserts that an order setting aside the default as to damages “was circulating but had not yet been forwarded to Judge Luther for his signature. The reason for this was a discussion taking place amongst counsel concerning the possibility of allowing the entire default to be set aside in exchange for Viking agreeing to provide coverage for any liability that was determined through a hearing of this matter.” However, he argues that the oral ruling setting aside the judgment was nevertheless binding and that the default judgment is thus no longer valid.

         On July 20, 2016, Nolley filed the present motion to remand. In his motion, he makes largely the same assertions-namely, that the default judgment is no longer valid because Judge Luther orally ordered that the default judgment be set aside as to damages and simply failed to enter an order to that effect due to a potential agreement between the parties to set aside the entire judgment. Therefore, Nolley asserts that the default judgment was set aside and his citizenship should therefore be considered in this Court's jurisdictional analysis, destroying complete diversity and making remand proper. GuideOne responded in opposition, asserting that the state court default judgment remains valid due to the fact that no order setting it aside was entered on the docket and, thus, that Nolley's citizenship should be disregarded according to Fifth Circuit precedent.

         Upon due consideration of the submissions of the parties, relevant authorities, and evidence, the Court finds that Nolley's motion should be denied.

         II. ...

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