United States District Court, S.D. Mississippi, Southern Division
STONE MOUNTAIN ACCESS SYSTEMS, INC. PLAINTIFF
SOUTHERN RECYCLING, LLC, JOHN DOES 1 THROUGH 30, AND TRAVELERS PROPERTY CASUALTY COMPANY OF AMERICA DEFENDANTS
OPINION AND ORDER GRANTING IN PART AND DENYING IN PART
DEFENDANT SOUTHERN RECYCLING, LLC'S MOTION  FOR
SUMMARY JUDGMENT AND DENYING PLAINTIFF STONE MOUNTAIN ACCESS
SYSTEMS, INC.'S SECOND MOTION  FOR SUMMARY
SULEYMAN OZERDEN UNITED STATES DISTRICT JUDGE.
THE COURT are Defendant Southern Recycling, LLC's Motion
 for Summary Judgment and Plaintiff Stone Mountain
Access Systems, Inc.'s Second Motion  for Summary
Judgment. These Motions are fully briefed. After review of
the Motions, the Responses, the related pleadings, the record
as a whole, and relevant legal authority, the Court finds
that Defendant Southern Recycling, LLC's Motion 
should be granted in part as to Plaintiff's negligence
per se claim, and denied in part as to Plaintiff's claims
for negligence, conversion, and punitive damages/gross
negligence. Plaintiff's Second Motion  for Partial
Summary Judgement on the issue of negligence per se should be
Facts and Relevant Procedural History
matter arises out of a dispute surrounding Defendant Southern
Recycling, LLC's (“Southern Recycling”)
purchase of metal scaffolding that had previously been in the
inventory of Plaintiff Stone Mountain Access Systems, Inc.
(“Plaintiff”). Compl. [1-2] at 4. Plaintiff Stone
Mountain is a corporation “engaged in the business of
leasing metal scaffolding, access systems, and other hardware
and equipment, ” Am. Compl.  at 2, while Southern
Recycling is a company that “buys scrap metal for the
purpose of recycling, ” Def. Mem. in Supp. Summ. J.
 at 3.
17, 2016, Plaintiff filed a Complaint in the Circuit Court of
Harrison County, Mississippi, First Judicial District,
against Defendants Southern Recycling, Letroy Deandre Brooks
(“Brooks”), Darryl Maurice Raymond
(“Raymond”), and John Doe Defendants. Plaintiff
alleged that from January 2013 through January 2015, its
former employees, Brooks and Raymond, engaged in a scheme
with Southern Recycling wherein Brooks and Raymond would take
Plaintiff's scaffolding without Plaintiff's
“authority or consent, ” and sell it as scrap
metal to Southern Recycling for cash. Id. at 5-6.
Plaintiff asserted that through over 50 transactions,
Southern Recycling purchased more than 134, 000 pounds of
scaffolding “at a fraction of its then current market
value as material usable for its original economic
purpose.” Id. at 6. The Complaint advanced
claims for negligence, negligence per se, negligent receipt
of stolen or embezzled property, conversion, and gross
negligence, id. at 7-11, and sought damages in
excess of $250, 000.00, plus punitive damages, costs, and
attorneys' fees, id. at 11.
Recycling removed the case to this Court on June 7, 2016,
invoking diversity jurisdiction. Notice of Removal  at
1-3. On June 28, 2016, Plaintiff filed a Motion  to Remand
on grounds that diversity jurisdiction was lacking because
Plaintiff as well as Defendants Brooks and Raymond were all
citizens of Mississippi. The Court entered an Order  on
October 25, 2016, denying remand and dismissing Brooks and
Raymond, finding that they were not proper parties to defeat
diversity jurisdiction because the record reflected that
Plaintiff did not intend to actually pursue claims against
them in this case. Order  at 1-9.
December 13, 2016, Plaintiff filed an Amended Complaint 
advancing claims against Southern Recycling and Defendant
Travelers Property Casualty Company of America
(“Travelers”) for: (1) negligence; (2) negligence
per se; (3) negligent receipt of stolen or embezzled
property; (3) conversion; (4) gross negligence; (5) negligent
hiring, supervision, training, control, and retention; (6)
seeking a declaration of coverage by Travelers; and (7) bad
faith breach of contract by Travelers. Am. Compl.  at
5-14. The Amended Complaint seeks damages in excess of $250,
000.00, plus punitive damages, costs, and attorneys'
fees. Id. at 14. By Agreed Order  dated July
25, 2017, Travelers was dismissed.
Southern Recycling's Motion  for Summary
Recycling's Motion , filed on October 27, 2017,
contends that summary judgment is proper because Plaintiff
has “presented only speculative and unsubstantiated
evidence of its claimed damages.” Mot. Summ. J. 
at 1. In the alternative, Southern Recycling asserts that
partial summary judgment is appropriate on Plaintiff's
claims for conversion, negligence per se, and punitive
damages/gross negligence, as Plaintiff has produced
insufficient evidence to support these claims. Id.
Response  maintains that sufficient evidence was
produced and that all claims should be allowed to advance to
trial. Resp. in Opp'n  at 1. Plaintiff argues that
it has evidence that it suffered damages of at least $18,
872.87, which is the amount Defendant paid as the scrap metal
value of Plaintiff's stolen scaffolding. Mem.  at 2.
Plaintiff further asserts that some of its “equipment
was comprised of aluminum tubes, bars, and rods” and
that some materials “were used in the maintenance of
railroads, [and] were used to construct communication and
power distribution towers and facilities” all of which
fall within the class of regulated metals set forth in
Mississippi's scrap metal statute, Mississippi Code
§ 97-17-71. Id. at 3.
Plaintiff's Second Motion  for Partial Summary
November 2, 2017, Plaintiff filed its Second Motion  for
Partial Summary Judgment on its claim of negligence per se.
Mot.  at 1-2. Plaintiff posits that Southern Recycling
failed to comply with the mandatory requirements of
Mississippi Code § 97-17-71 by not keeping accurate
records and by paying cash for the scaffolding, which
proximately caused Plaintiff's damages. Mem.  at
1-2, 14. Plaintiff maintains that Southern Recycling also
failed to adhere to requirements placed upon scrap metal
dealers under “City of Gulfport Ordinance No. 2560,
§ 3, 10-16-07.” Id. at 10-12.
Response , Southern Recycling contends that because the
Amended Complaint  did not allege a violation of the City
of Gulfport's Ordinance, Plaintiff cannot rely on it to
support a negligence per se claim. Mem  at 11-12.
Further, Southern Recycling takes the position that the
purchases of scaffolding did not fall within the reporting
requirements for “metal property” as set forth in
Mississippi's scrap metal statute. Id. at 6-17.
Summary Judgment Standard
judgment is appropriate when there is no genuine issue as to
any material fact, and the moving party is entitled to
judgment as a matter of law.” Cox v. Wal-Mart
Stores E., L.P., 755 F.3d 231, 233 (5th Cir. 2014);
see Fed. R. Civ. P. 56(a). In deciding a motion for
summary judgment, a court “view[s] the evidence and
draw[s] reasonable inferences in the light most favorable to
the nonmoving party.” Hemphill v. State Farm Mut.
Auto. Ins. Co., 805 F.3d 535, 538 (5th Cir. 2015)
(quoting Cox, 755 F.3d at 233); Maddox v.
Townsend & Sons, Inc., 639 F.3d 214, 216 (5th Cir.
2011). Before it can determine that there is no genuine issue
for trial, a court must be satisfied that “the record
taken as a whole could not lead a rational trier of fact to
find for the non-moving party.” Matsushita Elec.
Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 587
(1986). If the movant carries this burden, “the
nonmovant must go beyond the pleadings and designate specific
facts showing that there is a genuine issue for trial.”
Little v. Liquid Air Corp., 37 F.3d 1069, 1075 (5th
Cir. 1994) (en banc); see also Lujan v. National Wildlife
Federation, 497 U.S. 871, 888 (1990) (the nonmovant must
set forth specific facts to contradict the specific facts set
forth by the movant, general averments are not sufficient).
rebut a properly supported motion for summary judgment, the
opposing party must show, with “significant probative
evidence, ” that there exists a genuine issue of
material fact. Hamilton v. Segue Software, Inc., 232
F.3d 473, 477 (5th Cir. 2000). “A genuine dispute of
material fact means that evidence is such that a reasonable
jury could return a verdict for the nonmoving party.”
Royal v. CCC&R Tres Arboles, LLC, 736 F.3d 396,
400 (5th Cir. 2013) (quotation omitted). An actual
controversy exists “when both parties have submitted
evidence of contradictory facts.” Salazar-Limon v.
Houston, 826 F.3d 272, 277 (5th Cir. 2016) (quotation
Mississippi Code § 97-17-71
gravamen of this dispute is that over the course of two
years, two of Plaintiff's former employees removed
scaffolding and other miscellaneous materials and took them
to Southern Recycling to sell as scrap metal. Southern
Recycling purchased the scaffolding and materials and
remitted payment to the former employees in cash. Although it
is undisputed that Southern Recycling paid in cash, a genuine
issue of material fact does exist as to whether the items
were actually stolen from Plaintiff, and, if so, whether
Southern Recycling knew or should have known they were
stolen. Since the Court cannot make a factual determination
as to whether the materials were stolen, it likewise cannot
address the parties' legal arguments unless that factual
dispute is not material to resolution of the legal issues
advanced in the parties' competing summary judgment
review of Mississippi Code § 97-17-71 reflects that a
number of its provisions apply to materials purchased by a
scrap dealer whether those materials were stolen or not.
See Metal Mgmt. Miss. v. Barbour, No. 3:08cv431,
2008 WL 3842979, at *1-2 (S.D.Miss. 2008) (finding that this
statute requires certain acts to be performed by scrap metal
dealers to deter metal theft).
Mississippi Code § 97-17-71(2) requires that a scrap
metal dealer or other purchaser shall, for a period of two
years, keep an accurate and legible record containing the
following information for each purchase transaction:
(a) The name, address and age of the person from whom the
metal property is purchased as obtained from the seller's
personal identification card;
(b) The date and place of each acquisition of the metal
(c) The weight, quantity or volume and a general physical
description of the type of metal property, such as wire,
tubing, extrusions or casting, ...