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Mihelic v. Clay & Land Insurance, Inc.

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

March 30, 2017

ANDREA MIHELIC, INDIVIDUALLY; MOST VALUABLE PERSONNEL, LLC; AND UNKNOWN PLAINTIFFS SIMILARLY SITUATED, JOHN DOES 1-10 PLAINTIFFS
v.
CLAY AND LAND INSURANCE, INC.; CLAY AND WRIGHT INSURANCE, INC.; LOUIS G. CLAY, JR., INDIVIDUALLY; JO BETH GLASSCO, INDIVIDUALLY; DEBBIE McNEAL, INDIVIDUALLY; AND JOHN DOES 1-10 DEFENDANTS

          MEMORANDUM OPINION

          NEAL B. BIGGERS, JR., UNITED STATES DISTRICT JUDGE

         This cause comes before the court upon the defendants' motions to dismiss for failure to state a claim pursuant to Federal Rule of Civil Procedure 12(b)(6). Upon due consideration of the motion, response, and applicable authority, the court is ready to rule.

         Factual and Procedural Background

         Plaintiff, Most Valuable Personnel, LLC, (“MVP”) is a staffing company owned by plaintiff Andrea Mihelic which provides seasonal workers for clients in Mississippi and Tennessee. Defendant Clay and Wright Insurance, Inc., through its agent, defendant Debbie McNeal, worked with MVP to procure worker's compensation insurance. The plaintiffs filed a previous lawsuit on October 16, 2013, in this court against Clay and Wright and McNeal, as well as Travelers Insurance and Liberty Mutual Insurance, who were later dismissed. See Most Valuable Personnel, LLC, and Andrea Mihelic, Individually v. Clay and Wright Insurance, Inc., and Debbie McNeal, Individually, No. 3:13-cv-00252-MPM-DAS (N.D. Miss. 2013) (“Prior Action”). The Second Amended Complaint in the Prior Action alleges claims for “civil fraud, intentional misrepresentation of material facts, negligent misrepresentation of material facts, willful and intentional breach of contract, breach of fiduciary duty, bad faith insurance, willful and intentional infliction of emotional distress, negligent infliction of emotional distress, simple negligence, gross negligence evidencing an intentional or reckless disregard for the reasonably foreseeable injuries to Plaintiffs, liability of principles under the theory of respondeat superior, tortious interference with a business relationship, compensatory damages, punitive damages, attorney fees and all costs herein.” [Prior Action, Doc. No. 53]. These allegations surrounded a premium advance for MVP's worker's compensation insurance policy.

         The Prior Action settled on the eve of trial, which was set to begin on April 11, 2016, when the plaintiffs accepted an offer of judgment in the amount of $40, 000.00. [Prior Action, Doc. No. 263]. On May 12, 2016, the District Court entered an Agreed Order of Dismissal in the Prior Action which provides:

That the Offer of Judgment made by Defendants, Clay and Wright Insurance, Inc., and Debbie McNeal pursuant to FRCP Rule 68 to Plaintiffs Most Valuable Personnel, LLC, and Andrea Mihelic, which was accepted on April 1, 2016, pursuant to the Acceptance of Offer of Judgment (Doc. 263) has been satisfied and is hereby settled. Accordingly, the Court hereby dismisses this matter with prejudice.

[Prior Action, Doc. No. 265]. Despite this final judgment entered with prejudice, the plaintiffs filed the instant action a mere nine days later in this court alleging RICO violations for “illegal rebating.” The plaintiffs sued additional defendants who are in privity with the defendants in the Prior Action, as addressed below.

         Standard of Review

         “To survive a motion to dismiss, a complaint must contain sufficient factual matter, accepted as true, to ‘state a claim to relief that is plausible on its face.'” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (citing Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 570 (2007)). “A claim has facial plausibility when the plaintiff pleads factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged.” Id.

         “Motions to dismiss under Rule 12(b)(6) are viewed with disfavor and are rarely granted.” Lormand v. U.S. Unwired, Inc., 565 F.3d 228, 232-33 (5th Cir. 2009). A court must accept all well-pleaded facts as true and must draw all reasonable inferences in favor of the plaintiff. Id. But the court is not bound to accept as true legal conclusions couched as factual allegations. Iqbal, 556 U.S. at 678.

         A legally sufficient complaint must establish more than a “sheer possibility” that the plaintiff's claim is true. Id. It need not contain detailed factual allegations, but it must go beyond labels, legal conclusions, or formulaic recitations of the elements of a cause of action. Twombly, 550 U.S. at 555. In other words, the face of the complaint must contain enough factual matter to raise a reasonable expectation that discovery will reveal evidence of each element of the plaintiff's claim. Lormand, 565 F.3d at 255-57. If there are insufficient factual allegations to raise a right to relief above the speculative level or if it is apparent from the face of the complaint that there is an insuperable bar to relief, the claim must be dismissed. Twombly, 550 U.S. at 555; Jones v. Bock, 549 U.S. 199, 215 (2007); Carbe v. Lappin, 492 F.3d 325, 328 & n.9 (5th Cir. 2007).

         In ruling on a Rule 12(b)(6) motion to dismiss, the court generally may not look beyond the pleadings. Cinel v. Connick, 15 F.3d 1338, 1341 (5th Cir. 1994). Matters of public record and matters of which the court may take judicial notice as well as documents attached to the complaint are exceptions. Id. at 1343 n.6; Lovelace v. Software Spectrum, Inc., 78 F.3d 1015, 1017 (5th Cir. 1996). Further, “[d]ocuments that a defendant attaches to a motion to dismiss are considered part of the pleadings if they are referred to in the plaintiff's complaint and are central to [the] claim.” Causey v. Sewell Cadillac-Chevrolet, Inc., 394 F.3d 285, 288 (5th Cir. 2001).

         Analysis

         The defendants assert that the plaintiffs' instant RICO complaint is barred by the doctrine of res judicata. Under this doctrine, once a judgment is rendered by a court of competent jurisdiction, the judgment is considered the full measure of relief between the same parties, and those in privity with them, on the same claim or cause of action. Kaspar Wire Works, Inc. v. Leco Engineering and Machine, Inc., 575 F.2d 530, 535 (5th Cir. 1978). The doctrine of res judicata, as applied in federal courts, “bars all claims that were or could have been advanced in support of the cause of action on the occasion of its former adjudication . . . not merely those that were adjudicated.” Uithoven v. U.S. Army Corps of Engineers, 884 F.2d 844, 847 (5th Cir. 1989). The purpose of the doctrine is “to avoid multiple ...


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