GREENWICH INSURANCE COMPANY; INDIAN HARBOR INSURANCE COMPANY, Plaintiffs-Counter Defendants - Appellees
CAPSCO INDUSTRIES, INCORPORATED, Defendant-Appellee GROUND CONTROL, L.L.C., Defendant-Counter Claimant - Appellant
from the United States District Court for the Southern
District of Mississippi
HIGGINBOTHAM, SMITH, and SOUTHWICK, Circuit Judges.
H. SOUTHWICK, Circuit Judge.
Mississippi state court, a subcontractor was held to be
liable to a company with which it had contracted for what the
latter had expended for labor and materials on a construction
project. The subcontractor's liability insurers
successfully sought a declaration in federal court that it
did not owe a duty to indemnify. We AFFIRM.
AND PROCEDURAL BACKGROUND
Industries, Inc. was a subcontractor on the construction of a
casino called the Margaritaville Spa and Hotel in Biloxi,
Mississippi. In December 2007, Capsco subcontracted with
Ground Control to install water, sewage, and storm-drain
lines. Ground Control was terminated from the project by the
general contractor in October 2008 "for alleged safety
violations and failed drug tests of its employees."
Ground Control, LLC v. Capsco Indus., Inc.
(Ground Control I), 120 So.3d 365, 367 (Miss. 2013).
In August 2009, Ground Control filed suit in Mississippi
state court against multiple parties, including Capsco,
seeking payment for its work on the project. Id. The
claims were dismissed on summary judgment based on the trial
court's legal conclusion that because neither party had
obtained the required certificates of responsibility from the
State Board of Public Contractors, the parties' contract
was void. Id. The Mississippi Supreme Court agreed
the contract was void but reversed and remanded for further
proceedings based solely on theories of unjust enrichment and
quantum meruit. Id.
2014, while the state-court case was on remand, Capsco's
liability insurers, Greenwich Insurance Company and Indian
Harbor Insurance Company, filed a complaint for declaratory
judgment in the United States District Court for the Southern
District of Mississippi, seeking a declaration that they did
not owe a defense or indemnity to Capsco regarding Ground
Control's suit. The Defendants were Ground Control,
Capsco, the general contractor, and the casino owner. The
latter two parties were voluntarily dismissed in April 2017.
Ground Control counterclaimed for coverage of its claims
against Capsco. The two insurers and Ground Control each
moved for summary judgment regarding indemnification. The
district court dismissed the motions without prejudice and
stayed proceedings until the state-court litigation ended.
state court, a jury awarded Ground Control over $825, 000 in
damages against Capsco. On appeal, the Mississippi Supreme
Court this time ordered the parties either to accept a
remittitur that would reduce the award to $199, 096 or to
proceed to a new trial. Ground Control, LLC v. Capsco
Indus., Inc. (Ground Control II), 214 So.3d
232, 246-47 (Miss. 2017). With a second trial in state court
in the offing, the federal district court partially lifted
the stay to allow resolution of the existence of a duty to
defend. Each party moved for summary judgment. In August
2017, the district court held the two insurers did not owe
Capsco a duty to defend. The parties later accepted the
remittitur, and the state trial court entered final judgment
in October 2017.
final judgment was entered in state court, the district court
lifted the stay on the indemnification issue. Each party
again moved for summary judgment. In December 2017, the
district court held that no indemnification was due, and it
entered final judgment. Ground Control timely appealed.
Ground Control acknowledges in its briefing that it had no
evidence that would support indemnity during the period of
Indian Harbor's policy. Thus, its claim here as to a duty
to indemnify solely applies to Greenwich. Ground Control also
has moved to vacate the judgment and dismiss the case without
prejudice for lack of subject matter and personal
jurisdiction. A panel of the court ordered the motion to be
carried with the case.
Jurisdiction and Controlling Law
first examine our jurisdiction. Diversity has been the
purported basis for jurisdiction. Our initial examination of
the appellate record made us unsure if complete diversity
existed. That was because the citizenship at the time of suit
of the members of Ground Control, a limited liability
company, was unclear. The citizenship of an LLC is determined
by the citizenship of each of its members. Settlement
Funding, L.L.C. v. Rapid Settlements, Ltd., 851 F.3d
530, 536 (5th Cir. 2017). Further, it is the citizenship of
the parties when suit is filed that controls. Grupo
Dataflux v. Atlas Glob. Grp., L.P., 541 U.S. 567, 569-70
this court raised the issue with the parties, the two
insurers filed in the record on appeal an amended complaint
in which they alleged that all of Ground Control's
members were citizens of Alabama at the time suit was filed.
If true, that would establish complete diversity. Although
Ground Control initially responded to our raising the issue
by moving to vacate and dismiss for lack of subject matter
jurisdiction, its members later filed affidavits in this
court in which they affirmed their Alabama citizenship the
day this suit began. We take judicial notice of these facts.
See Fed. R. Evid. 201(b)-(c), 1101(a)-(b). Diversity
jurisdiction has existed from the start of this suit.
Ground Control argues we should vacate the district
court's order and dismiss the case because the district
court lacked personal jurisdiction over Capsco. This contention
is rejected. "Personal jurisdiction is an individual
right that is subject to waiver" by making a general
appearance in the district court. Patin v. Thoroughbred
Power Boats, Inc., 294 F.3d 640, 655 n.20 (5th Cir.
2002). Ground Control cannot challenge ...