United States District Court, N.D. Mississippi, Oxford Division
B. BIGGERS, JR. UNITED STATES DISTRICT JUDGE.
matter is before the court on motion of the plaintiff to
designate Tennessee Farmers Mutual Insurance Company
(hereinafter “TFMIC”), one of his two
underinsured motorist carriers, as a nominal party for the
purposes of determining whether diversity of citizenship
exists in this case. For the reasons discussed below, the
motion will be granted.
negligence action was originally filed in this court,
premised on diversity jurisdiction, by plaintiff, a Tennessee
citizen, against three alleged tortfeasors: one a citizen of
Mississippi and two citizens of Texas, who plaintiff claimed
were responsible for an automobile accident occurring in
Mississippi. The two Texas defendants have since been
October 19, 2017, plaintiff moved, without opposition, to
amend his complaint to add his two underinsured motorist
carriers as defendants and to seek recovery from them
pursuant to the policies. The plaintiff alleged complete
diversity among the parties and the amendment was allowed. It
was subsequently confirmed, however, that one of the two
underinsured motorist carriers, TFMIC, is not diverse (both
the plaintiff and TFMIC are citizens of Tennessee).
learning this information, the magistrate judge directed the
parties to brief whether the TFMIC's joinder destroyed
federal jurisdiction. In response, plaintiff's counsel
filed the instant motion arguing that TFMIC was improperly
added as a named party and that, in any event, it is merely a
nominal party, whose citizenship should be ignored.
support of its motion, plaintiff argues that the substantive
law of Tennessee governs the rights of parties to the TFMIC
underinsured motorist policy, and under the governing
Any insured intending to rely on the coverage required by
this part shall, if any action is instituted against the
owner and operator of an uninsured motor vehicle,
serve a copy of the process upon the
insurance company issuing the policy in the manner prescribed
by law, as though the insurance company were a party
defendant. The company shall thereafter have the right to
file pleadings and take other action allowable by law in the
name of the owner and operator of the uninsured motor vehicle
or in its own name; provided, that nothing in this subsection
(a) shall prevent the owner or operator from employing
counsel of the owner's own choice; and provided, further,
that the evidence of service upon the insurance carrier shall
not be made a part of the record.
Tenn. Code Ann. § 56-7-1206(a) (footnote added).
in response, states that it is in agreement that Tennessee
law governs on the issue of the rights and liabilities of the
parties to the subject underinsured motorist policy, and that
it is merely a nominal party under Tennessee law. In the next
breath, however, TFMIC asserts that it does not agree that it
is merely a nominal party if any right it might have under
the Tennessee statute to participate in the litigation of
this action is abridged by such denomination. Though TFMIC
offers no authority in support thereof, it suggests that in
the event this court finds TFMIC a mere nominal party, it
also holds that the denomination of nominal status will have
no effect on any rights TFMIC may otherwise have under the
Tennessee statute referenced above.
the close of briefing on the instant motion, the court held a
telephonic conference on the record wherein TFMIC represented
that while it intends, pursuant to the Tennessee statute, to
participate in the trial of this case, it will do so only in
the name of the tortfeasor (not its own name), and it does
not intend to act as primary counsel for the tortfeasor.
After the conference, the parties entered a joint stipulation
of dismissal of TFMIC as a named party
federal court jurisdiction is based on diversity of
citizenship, it is only the citizenship of real parties in
interest, and not nominal parties, that is of concern.
Navarro Savings Association v. Lee, 446 U.S. 458,
461 (1980). In order to ascertain who is a real party in
interest, a federal court sitting in diversity applies the
choice-of-law principles of the forum state. Ellis v.
Trustmark Builders, Inc., 625 F.3d 222, 225 (5th Cir.
2010). The law of the forum in the instant case, Mississippi,
directs the court to look to the law of the state with the
most contacts, or center of gravity, on matters governed by
or arising from contract. Williamson Pounders Architects
PC v. Tunica Cnty., Miss., 597 F.3d 292, 296 (5th Cir.
2010) (quoting Boardman v. United Servs. Auto
Ass'n, 470 So.2d 1024, 1031 (Miss. 1985)). Based on
this approach, a number of factors are considered, including:
(1) the place of contracting; (2) the place of negotiation of
the contract; (3) the place of performance of the contract;
(4) the location of the subject matter of the contract; and
(5) the domicile, resident, nationality, place of
incorporation, and place of business of the parties.
Boardman, 470 So.2d at 1032; see also Hartford
Underwriters Ins. Co. v. Foundation Health Servs.
Inc., 524 F.3d 588, 595 (5th Cir. 2008); Ingalls
Shipbuilding v. Fed. Ins. Co., 410 F.3d 214, 230-33 (5th
instant case, the rights and obligations of the parties at
issue arise under the TFMIC underinsured motorist policy, and
it is undisputed that the policy was negotiated in Tennessee,
entered into in Tennessee, is between Tennessee citizens and
reflects, itself, that Tennessee law will govern the rights
and obligations of the parties thereunder. The conclusion
that Tennessee substantive law applies is further supported
by several decisions of the Supreme Court of Mississippi,
which reached similar results under facts like those in the
instant case. See, e.g., Lowe v. State Farm Mut. Auto.
Ins. Co., 463 Fed.Appx. 408, 409-12 (5th Cir. 2012)
(finding that Tennessee law applies under facts nearly
identical to the current suit); Owens v. Miss. Farm
Bureau Cas. Ins. Co.,910 So.2d 1065, 1069-72 (Miss.
2005) (finding that Tennessee law applies under similar
facts); O'Rourke v. Colonial Ins. Co. of Cal.,624 So.2d 84, 85-88 (Miss. 1993) (finding that Tennessee law
applies under facts nearly identical to the current ...