Stephens et al v. Holcomb Logging, LLC et al
Filing
125
MEMORANDUM OPINION re 124 Order on Motion for Summary Judgment. Signed by Senior Judge Glen H. Davidson on 4/17/15. (rel)
IN THE UNITED STATES DISTRICT COURT
FOR THE NORTHERN DISTRICT OF MISSISSIPPI
ABERDEEN DIVISION
LISA BEAM STEPHENS and
PAMELA BEAM DRAKE,
Wrongful Death Beneficiaries of
Truman Edward Beam
v.
PLAINTIFFS
CIVIL ACTION NO.: I: 13-cv-00244-GHD-DAS
PROGRESSIVE GULF INSURANCE COMPANY
GARNISHEE
v.
HOLCOMB LOGGING, LLC; DARRYL HOLCOMB;
JAMES HOLCOMB; and IC TRUCKING
DEFENDANTS
MEMORANDUM OPINION GRANTING IN PART, DENYING IN PART, AND
HOLDING IN ABEYANCE IN PART GARNISHEE'S MOTION FOR SUMMARY
JUDGMENT; DENYING PLAINTIFFS' MOTION TO STAY CONSIDERATION OF
GARNISHEE'S MOTION FOR SUMMARY JUDGMENT
Presently before this Court are the following motions filed by Garnishee Progressive Gulf
Insurance Company: a motion for summary judgment [72]; a motion to strike designation of
expert [81]; and a motion for extension of time, alternatively, to designate expert [83]. Also
before this Court are the following motions filed by Plaintiffs Lisa Beam Stephens and Pamela
Beam Drake: a motion for summary judgment [101], a motion to appeal [107] the Magistrate
Judge's decision on their motion to compel [86], a motion to expedite hearing and oral argument
[108], a motion to stay consideration [113] of Garnishee's motion for summary judgment, and a
motion for entry of default [117]. This opinion concerns only Garnishee's motion for summary
judgment [72] and Plaintiffs' motion to stay consideration [113] of the same. The Court will rule
on the remaining motions at a later date. Upon due consideration, the Court finds as follows.
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A. Factual and Procedural Background
Plaintiffs Lisa Beam Stephens and Pamela Beam Drake (collectively, "Plaintiffs"),
wrongful death beneficiaries of the Decedent, Truman Edward Beam ("Decedent"), filed suit in
the Circuit Court of Itawamba County, Mississippi, against Defendants Darryl Holcomb; James
Holcomb; Holcomb Logging, LLC; and IC Trucking (collectively, "Defendants"), alleging that
while working as a truck driver for Defendants, Decedent was standing outside the vehicle when
he was struck and killed by a loaded log truck operated by Defendant James Holcomb and that
Decedent's cause of death "was the wrongful or negligen[t] act or omission of Defendants or by
such unsafe machinery owned and operated by Defendants or the failure of Defendants to keep
their vehicle under control, failure to maintain a proper lookout for the path of their vehicle, and
failure to yield to a pedestrian." PIs.' Am. Compi., State-Ct. R. [26-25]
W6-7.
After Plaintiffs
filed an uncontested motion for summary judgment, the state court granted the motion, finding
that "[Decedent] died as a result of injuries sustained, which were proximately caused by the
impact of a log truck and trailer owned and operated by the Defendants and their
agents/employees, and that the death of [Decedent] was proximately caused by the negligence
and wrongful actions of the aforesaid Defendants." Order Granting PIs.' Am. Mot. Summ. J.,
State-Ct. R. [26-20] at 1. After a hearing was held to determine damages, the state court entered
a judgment in favor of Plaintiffs against Defendants in the amount of $920,034.00 plus court
costs in the amount of$120.00 and post-judgment interest at the legal rate of8% per annum. No
appeal was taken from the judgment.
Subsequently, Plaintiffs made a proper suggestion for writ of garnishment against
Defendants and/or Progressive Gulf Insurance Company ("Garnishee"). Garnishee had not been
a party to, nor did it participate in, the state-court proceeding. The writ of garnishment was
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issued by the Circuit Clerk of Itawamba County, Mississippi, and was served on Garnishee.
Garnishee filed its notice of removal within 30 days of receipt of the writ of garnishment,
removing the garnishment proceeding to this Court and filing its own separate declaratory
judgment action.
Garnishee maintains that no insurance coverage exists under Garnishee's
policy for the subject incident. Plaintiffs filed a counterclaim asserting fraud as basis of recovery
and an amended counter-complaint.
Subsequently, Garnishee filed the present motion for
summary judgment [72], presenting several arguments attacking the jurisdictional basis of the
underlying state-court judgment and challenging the merits of the garnishment action. Plaintiffs
have filed a motion to stay [113] consideration of Garnishee's motion for summary judgment.
B. Summary Judgment Standard
Summary judgment "should be rendered if the pleadings, the discovery and disclosure
materials on file, and any affidavits show that there is no genuine dispute as to any material fact
and that the movant is entitled to judgment as a matter of law." Celotex Corp. v. Catrett, 477
U.S. 317, 322,106 S. Ct. 2548, 91 L. Ed. 2d 265 (1986). See FED. R. CIV. P. 56(a); Johnston &
Johnston v. Conseco Life Ins. Co., 732 F.3d 555, 561 (5th Cir. 2013). The rule "mandates the
entry of summary judgment, after adequate time for discovery and upon motion, against a party
who fails to make a sufficient showing to establish the existence of an element essential to that
party's case, and on which that party will bear the burden of proof at trial." Celotex Corp., 477
U.S. at 322, 106 S. Ct. 2548.
The party moving for summary judgment bears the initial responsibility of informing the
Court of the basis for its motion and identifYing those portions of the record it believes
demonstrate the absence of a genuine dispute of material fact. See id. at 323, 106 S. Ct. 2548.
Under Rule 56(a), the burden then shifts to the nonmovant to "go beyond the pleadings and by ..
3
· affidavits, or by the 'depositions, answers to interrogatories, and admissions on file,' designate
'specific facts showing that there is a genuine issue for triaL'" Id. at 324, 106 S. Ct. 2548;
Littlefield v. Forney Indep. Sch. Dist., 268 F.3d 275, 282 (5th Cir. 2001); Willis v. Roche
Biomedical Labs., Inc., 61 F.3d 313,315 (5th Cir. 1995).
It is axiomatic that in ruling on a motion for summary judgment "[t]he evidence of the
nonmovant is to be believed, and all justifiable inferences are to be drawn in his favor." Tolan v.
Cotton, - -
u.s. --, -,
134 S. Ct. 1861, 1863, 188 L. Ed. 2d 895 (2014) (per curiam)
(quoting Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 255, 106 S. Ct. 2505, 91 L. Ed. 2d 202
(1986)); see, e.g., Ard v. Rushing, --- F. App'x ---, 2014 WL 7356134, at *4 (5th Cir. Dec. 29,
2014) (per curiam) (quoting United Fire & Cas. Co. v. Hixson Bros., Inc., 453 F.3d 283,285 (5th
Cir. 2006) (on summary judgment, " '[w]e view the evidence in the light most favorable to the
non-moving party' ")). The Court" 'resolve[s] factual controversies in favor of the nonmoving
party, but only where there is an actual controversy, that is, when both parties have submitted
evidence of contradictory facts.''' Thomas v. Baldwin, 595 F. App'x 378, 378 (5th Cir. 2014)
(per curiam) (quoting Antoine v. First Student, Inc., 713 F.3d 824, 830 (5th Cir. 2013) (internal
quotation marks and citation omitted)). "[T]he nonmoving party cannot defeat summary
judgment with conc1usory allegations, unsubstantiated assertions, or only a scintilla of evidence.'
" Id. at 380 (quoting Hathaway v. Bazany, 507 F.3d 312,319 (5th Cir. 2007)).
"[A] 'judge's function' at summary judgment is not 'to weigh the evidence and determine
the truth of the matter but to determine whether there is a genuine issue for trial.''' Cotton, 134
S. Ct. at 1866 (quoting Anderson, 477 U.S. at 249, 106 S. Ct. 2505); see Stewart v. Guzman, 555
F. App'x 425, 430 (5th Cir. 2014) (per curiam) (citing Vaughn v. Woodforest Bank, 665 F.3d
632, 635 (5th Cir. 2011) (In ruling on a summary judgment motion, "[w]e neither engage in
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credibility detenninations nor weigh the evidence."». With the foregoing standard in mind, the
Court turns to the issues before it.
C. Analysis and Discussion
At the outset, the Court addresses Garnishee's argument that the state-court judgment
upon which the garnishment action is based is void as to all Defendants. This affinnative
defense, which Garnishee first pled in its answer [3], is urged pursuant to Mississippi Code § 11
35-39, which provides: "The garnishee 'may plead that the judgment under which the writ of
garnishment was issued is void, and if his plea be sustained, no judgment shall be rendered
against him." Miss. Code Ann. § 11-35-39. See Garnishee's Answer & Af£ Defenses [3] at 4;
Garnishee's Mot. Summ. J. [72] at 2. If this Court detennines that the state-court judgment'is
void as to all Defendants, the instant writ of garnishment must be dismissed.
Because this issue presents questions of law, the Court finds that Plaintiffs' motion to
stay consideration of Garnishee's motion for summary judgment is not well taken, insofar as it
pertains to the legal issues presented by Garnishee's summary-judgment motion.
The detennination of whether a state-court judgment is void turns on the application of
Mississippi rules of collateral attack and claim preclusion. Because this argument is urged in
federal court, our starting point is the Full Faith and Credit Act, 28 U.S.C. § 1738, which
provides in pertinent part: "The records and judicial proceedings of any court of any such State.
.. or copies thereof ... shall have the same full faith and credit in every court within the United
States ... as they have by law or usage in the courts of such State ... from which they are
taken." The Full Faith and Credit Act "embodies concerns of comity and federalism that allow
the State to detennine, subject to the requirements of the statute and the Due Process Clause, the
preclusive effect ofjudgments in their own courts." A.L.T. Corp. v. Small Bus. Admin., 801 F.2d
5
1451,1455 (5th Cir. 1986) (quoting Marrese v. Am. Acad. of Orthopaedic Surgeons, 470 U.S.
373, 380, 105 S. Ct. 1327, 84 L. Ed. 2d 274, 281 (1985) (quotation marks omitted)). Thus,
"[w]hen a federal court is asked to enforce a state judgment, the rendering state's law determines
the preclusive effect ofjurisdictional findings contained within the judgment, subject of course to
the Due Process Clause." Harper Macleod Solicitors v. Kealy & Kealy, 260 F.3d 389, 396 (5th
Cir. 2001). "'It has long been established that [28 U.S.C.] § 1738 does not allow federal courts
to employ their own rules of res judicata in determining the effect of state judgments. Rather, it
goes beyond the common law and commands a federal court to accept the rules chosen by the
State from which the judgment is taken.''' A.L.T. Corp., 801 F.2d at 1456-1457 (quoting
Marrese, 470 U.S. at 380, 105 S. Ct. 1327) (quotation marks and citation omitted)). Even if on
its merits a state-court 'judgment intrinsically was wrong, dead wrong . . . the cherished
Congressional policy under 28 U.S.C. § 1738 ... mandates full faith and credit to judgments to
state courts." See Salazar v.
u.s. Air Force, 849 F.2d 1542, 1544 (5th Cir. 1988).
However, "these principles of full faith and credit are subject to some ... limitations. A
major limitation is the caveat that a state court judgment is entitled to its preclusive effect in
another forum only if the first court has 'power to pass on the merits-had jurisdiction, that is, to
render judgment.' " A.L.T. Corp., 801 F.2d at 1455 (quoting Underwriters Nat 'I Assurance Co.
v.
N.c. Life & Accident & Health Ins.
Guar. Ass 'n, 455 U.S. 691, 704, 102 S. Ct. 1357, 71 L. Ed.
2d 558 (1982) (internal citation and quotation marks omitted)). "'This limitation flows directly
from the principles underlying the Full Faith and Credit Clause. It is axiomatic that a judgment
must be supported by a proper showing of jurisdiction over the subject matter and over the
relevant parties.' " Id. (quoting Underwriters Nat 'I Assurance Co., 455 U.S. at 704 n.lO, 102 S.
Ct. 1357). Thus, if the state court clearly lacked jurisdiction over all or part of the state-court
6
proceeding, the federal district court need not accord that state-court judgment full faith and
credit. See id. at 1453.
Accordingly, in considering Garnishee's voidness-of-judgment arguments, this Court is
required to give the Mississippi judgment rendered by the Circuit Court of Itawamba Countywhich became final for want of an appeal-the same preclusive effect as the judgment would
have in a Mississippi state court. See id. (citing In re Troy Dodson Constr. Co., 993 F.2d 1211,
1214 (5th Cir. 1993); In re Brady, Tex. Mun. Gas Corp., 936 F.2d 212, 217 (5th Cir.), cert.
denied, 502 U.S. 1013, 112 S. Ct. 657, 116 L. Ed. 2d 748 (1991»; accord Allen v. McCurry, 449
U.S. 90, 96, 101 S. Ct. 411, 66 L. Ed. 2d 308 (1980).1
The Court now examines Garnishee's voidness-of-judgment arguments with respect to
each defendant in turn.
1. State-Court Judgment Against Darryl Holcomb
First, Garnishee argues that the state-court judgment against Darryl Holcomb is void,
because Darryl Holcomb was dead at the time the state-court judgment was entered against him
and no proper substitution of the estate was made while the case was pending. Garnishee further
maintains that no suggestion of death was filed of record, and that although the death was
acknowledged by Plaintiffs' filing of a motion for substitution, no order authorized any form of
1 Although Plaintiffs argue that Garnishee has waived the right to argue voidness of the state-court
judgment by having undisputed knowledge of the action and choosing not to participate in the state-court litigation,
Plaintiffs cite no authority in support of this argument. The Court fmds that this argument is not well taken.
Plaintiffs similarly argue that Garnishee failed to timely raise the voidness-of-judgment argument. As Garnishee
correctly states, it was not involved in the state-court litigation and had no standing to challenge the validity of the
state-court judgment on appeaL Furthermore, Garnishee was only made a party to this action after the writ of
garnishment was filed against it. At that time, Garnishee timely removed this action to federal court, timely pled the
voidness-of-judgment defense in its answer and affIrmative defenses, and then timely reiterated the defense in the
present motion for summary judgment. Thus, Plaintiffs' arguments in this respect are unavailing.
7
substitution.
Accordingly, Garnishee maintains that the judgment against Darryl Holcomb
cannot support the garnishment action against Garnishee.
Plaintiffs argue in response that there was no adjudication of Darryl Holcomb's death
during the state-court action and that the state-court record is devoid of such a finding. Plaintiffs
contend that only hearsay information existed as to the suggested death of Darryl Holcomb.
Plaintiffs further argue that they suggested the death of Darryl Holcomb and made a motion for
substitution as set forth in Rule 25 of the Mississippi Rules of Civil Procedure, but that no
response to their motion for substitution was ever filed by counsel for Darryl Holcomb.
Plaintiffs further argue that their actions preserved the judgment against Darryl Holcomb and
that Garnishee's attempts to introduce into evidence in this case an alleged Certificate of Death is
improper because the same was not entered into evidence in the state-court action. Finally,
Plaintiffs argue that collateral estoppel, res judicata, lack of standing, waiver, and failure to abide
by various rules now prevent Garnishee from collaterally attacking the judgment against Darryl
Holcomb.
Mississippi case law is clear that a court is without jurisdiction to enter a judgment
against a dead person and that such a judgment is void and subject to collateral attack. See Wells
v. Roberson, 209 So. 2d 919, 922 (Miss. 1968) (Mississippi Supreme Court has "consistently ...
ruled" that "a judgment against a dead person is a nullity"); Weis v. Aaron, 21 So. 763, 763
(Miss. 1897) ("[I]t is the settled law in this state that [a judgment against a deceased person] is
absolutely void. And a void judgment may be collaterally assailed."); Tarleton v. Cox, 45 Miss.
430, 1871 WL 3998 (I871) (court's jurisdiction is lacking where judgment is rendered against
dead person); Young v. Pickens, 45 Miss. 553, 1871 WL 4005 (I871) {"A judgment in favor of
8
or against a deceased person is a nullity."); Parker v. Horne, 9 George 215, 1859 WL 3682
(Miss. 1859) ("A judgment against a dead person is a nullity.").
"The [Mississippi] Legislature set out the proper procedure in Mississippi Code [§] 13-3
17, saying that '[s]ubstitution of parties in case of death shall be governed by the Mississippi
Rules of Civil Procedure.'" Harris v. Darby, 17 So. 3d 1076, 1079 (Miss. 2009) (quoting Miss.
Code Ann. § 13-3-17). Furthennore, "a garnishment proceeding is in the nature of a civil action
and is certainly subject to the rule-making power of this Court and the Mississippi Rules of Civil
Procedure the same as any other civil action." First Miss. Nat'/ Bank v. KLH Indus., Inc., 457
So. 2d 1333, 1334 (Miss. 1984). "According to Rule 25 of the Mississippi Rules of Civil
Procedure, upon the death of one party, a 'motion for substitution' must be made 'within ninety
days after the death is suggested' or 'the action shall be dismissed without prejudice.' " Burch v.
Ill. Cent. R.R. Co., 136 So. 3d 1063, 1066-1067 (Miss. 2014) (quoting Miss. R. Civ. P. 25(a)(I)).
"When either of the parties to any personal action shall die before final judgment, the executor or
administrator of such deceased party may prosecute or defend such action, and the court shall
render judgment for or against the executor or administrator." Miss. Code Ann. § 91-7-237.
"Rule 25 of the Mississippi Rules of Civil Procedure ... requir[ es] death to be suggested upon
the record before any dismissal of the suit may be made." Harris, 17 So. 3d at 1081. The filing
of the suggestion of death is what "trigger[s] the ninety-day time requirement set out by [Rule]
25." Id. at 1080.
Taking into account the foregoing case law, this Court reviewed the state-court record
and found the following: In the underlying state-court proceeding, neither party suggested the
death of defendant Darryl Holcomb. On June 10, 2010, Plaintiffs filed a motion to substitute
pursuant to Rule 25 of the Mississippi Rules of Civil Procedure. See PIs.' Mot. Substitute, State
9
Ct. R. [26-69] at 1-2. In that motion, Plaintiffs stated that Darryl Holcomb "died in Itawamba
County, Mississippi after service of process was had upon him in this matter" and that "Plaintiffs
would ask the Court to substitute the Deceased's Wife, Crystal Holcomb, as his personal
representative in this matter," since "no Estate has been opened and no Will [has been] filed for
probate." Id. at 1. That motion was duly served on the opposing party and filed in the Circuit
Court of Itawamba County. See id. at 2. No response was ever filed to the motion. Despite that
the motion to substitute was clearly unopposed, the Circuit Court of Itawamba County never
ruled on the motion and subsequently granted Plaintiffs' motion for summary judgment against
Defendants (including the deceased Darryl Holcomb).
See Order Granting PIs.' Am. Mot.
Summ. J., State-Ct. R. [26-20] at 1. Then, after the state court's summary-judgment ruling but
prior to the hearing to determine damages, Plaintiffs filed a motion for voluntary dismissal of all
claims against Defendants "James Holcomb, individually" and "Crystal Holcomb Short,
individually, although she is not a named Defendant in the above[ -]referenced matter." See PIs.'
Mot. Voluntary Dismissal, State-Ct. R. [26-15] at 1-3.
Subsequently, the Circuit Court of
Itawamba County entered an Order granting that motion and stating in pertinent part: "Any and
all claims against the Defendant, James Holcomb, individually, are hereby dismissed with
prejudice.
Any and all claims which Plaintiffs may have against Crystal Holcomb Short,
individually, are hereby dismissed with prejudice." See Order Granting PIs.' Mot. Voluntary
Dismissal, State-Ct. R. [26-14] at 1. Following the hearing to determine damages, the Circuit
Court of Itawamba County entered judgment against Defendants, including in pertinent part the
deceased Darryl Holcomb. See J., State-Ct. R. [26-9] at 1.
This Court is guided by the historically consistent reasoning of the Mississippi Supreme
Court in these matters, for example, Tarleton v. Cox:
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What does this record prove? Does the record of judgment, that
the court had fully considered the motion, and therefore ordered
that it be sustained, import absolute verity, including the
presumption that the court had passed upon the question of
jurisdiction, or do the previous recitals show affirmatively that the
court did not obtain jurisdiction of the person of the representative
of the deceased? We are of the opinion that this record not only
does not show jurisdiction, but that it appears thereby, that
jurisdiction of the person of the administrator was not obtained ...
. It is not shown that the administrator was, in fact, in court, or that
he had counsel there, nor that notice of the motion was served
upon him, personally or constructively, nor can presumptions of
these facts be indulged in from the record, much less, that scire
facias issued to bring him in. The result is, that the representative
of the deceased was not made a party, and the judgment was
against a dead man.
1871 WL 3998, at *6. Of further guidance to this Court is the Mississippi Supreme Court's
statement in Young v. Pickens that "the fact [of the death1 should have been suggested on the
record, and the case continued in the name of the survivor, as such." 1871 WL 4005, at *2.
Finally, in Owen v. Abraham, 102 So. 2d 372 (Miss. 1958), the Mississippi Supreme Court
meaningfully "struck down as a nullity a decree rendered after the death of the defendant in a
divorce action," explaining:
[Llitigation is not to be carried on by or against any deceased
person. The impossibility of such a thing is apparent however
upon its mere mention. There must be revivors in such suits or
else further proceedings therein amount to nothing. Thus, if a
defendant die during pendency of a suit and there is no revivor or
amendment, but only an unwarranted effort to carry on the suit by
substituting a new party to the suit,-not one claiming by or under
the former defendant,-the proceeding is entirely erroneous.
102 So. 2d at 3 73 (quotation marks and citation omitted).
It is clear to this Court that under Mississippi law, the state-court judgment against Darryl
Holcomb, a deceased individual, is a nUllity, because the state court did not have jurisdiction
over him to enter the judgment. The Circuit Court of Itawamba County never granted the motion
11
to substitute Crystal Holcomb for the deceased defendant Darryl Holcomb, but even if it had,
that court subsequently dismissed with prejudice all claims Plaintiffs may have had against
Crystal Holcomb Short, upon Plaintiffs' own motion to do so. In short, no viable claims existed
against Crystal Holcomb Short at the time the judgment and subsequent writ of garnishment
were entered, and the claims against the deceased Darryl Holcomb are absolutely void under
Mississippi law. Collateral estoppel and res judicata do not save the state-court judgment against
Darryl Holcomb, which had no jurisdictional basis.
2. State-Court Judgment Against James Holcomb
Second, Garnishee argues that the state-court judgment against James Holcomb is void
because the claims against him were voluntarily dismissed with prejudice prior to the state
court's judgment, and thus, that the state court had no personal jurisdiction over him to enter
judgment against him. Garnishee further argues that because James Holcomb was dismissed
from the state-court case with prejudice, there was no longer any case or controversy between
him and the Plaintiffs, and thus, that the state court had no subject-matter jurisdiction over the
claims against him.
Plaintiffs argue in response that James Holcomb was represented throughout the entire
state-court case and that collateral estoppel, res judicata, lack of standing, waiver, and failure to
abide by various rules now prevent Garnishee from collaterally attacking the judgment against
James Holcomb.
In reviewing the state-court record, this Court finds that after the Circuit Court of
Itawamba County granted summary judgment in favor of Plaintiffs against Defendants, but prior
to the hearing to determine damages, Plaintiffs filed a motion for voluntary dismissal of all
claims against Defendants "James Holcomb, individually" and "Crystal Holcomb Short,
12
individually, although she is not a named Defendant in the above[ -]referenced matter." See Pis.'
Mot. Voluntary Dismissal, State-Ct. R. [26-15] at 1-3.
Subsequently, the Circuit Court of
Itawamba County entered an Order granting the motion, stating in pertinent part: "Any and all
claims against the Defendant, James Holcomb, individually, are hereby dismissed with
prejudice."
See Order Granting PIs.' Mot. Voluntary Dismissal, State-Ct. R. [26-14] at 1.
Following the hearing to detennine damages, the Circuit Court of Itawamba County entered a
judgment against Defendants, including in pertinent part "James Holcomb." See J., State-Ct. R.
[26-9] at 1.
The state court's dismissal with prejudice of the claims against James Holcomb was a
"final judgment on the merits" of the claims asserted against James Holcomb. Subsequent to that
dismissal, there was no longer any basis for the state-court's exercise of personal jurisdiction
over James Holcomb or subject-matter jurisdiction over the claims against him, and thus, the
subsequent judgment against James Holcomb was without jurisdictional basis.
See, e.g.,
Andrews v. Dairy Farmers ofAm., Inc., No. 2:11-CV-97-KS-MTP, 2011 WL 5444245, at *16
(S.D. Miss. Nov. 9, 2011) (after court dismissed claims as to particular defendant, there was no
longer a basis for the court's personal jurisdiction over that defendant). Furthennore, "[i]t is
clear that a stipulation of dismissal with prejudice, or, for that matter, a dismissal with prejudice
at any stage of a judicial proceeding, nonnally constitutes a final judgment on the merits which
bars a later suit on the same cause of action." Kaspar Wire Works, Inc. v. Leco Eng 'g & Mach.•
Inc., 575 F.2d 530, 534 (5th Cir. 1978); see Brooks v. Raymond Dugat Co., 336 F.3d 360, 363
(5th Cir. 2003) (holding that plaintiffs voluntary dismissal of all claims with prejudice was final
judgment on merits). As with the judgment against Darryl Holcomb, collateral estoppel and res
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judicata do not save the state-court judgment against James Holcomb, which had no
jurisdictional basis.
3. State-Court Judgment Against Holcomb Logging, LLC
Third, Garnishee argues that the state-court judgment against Holcomb Logging, LLC is
void, because at the time of the subject accident Holcomb Logging, LLC was nonexistent,
having not been organized until October 19, 2007, and thus, Holcomb Logging, LLC could not
have been responsible for any act that caused Decedent's death.
Plaintiffs respond that nothing in the state-court record indicates that the judgment
against Holcomb Logging, LLC is void, as the state-court record does not show whether
Holcomb Logging, LLC was a corporation, natural person, or limited liability company at the
time of Decedent's death. Plaintiffs further maintain that the named insured on the subject
insurance policies remained Darryl Holcomb and IC Trucking, despite Garnishee's purported
knowledge that Holcomb Logging was merged into Holcomb Logging, LLC on October 19,
2007. Finally, Plaintiffs argue that collateral estoppel, res judicata, lack of standing, waiver, and
failure to abide by various rules now prevent Garnishee from collaterally attacking the judgment
against Holcomb Logging, LLC.
Upon review of the state-court record, this Court finds that Plaintiffs filed their statecourt complaint against "Holcomb Logging, LLC," which they alleged was "a [c]orporation
licensed in the State of Mississippi and doing business in Itawamba County, Mississippi" and
that "Defendant, Darryl Holcomb, is the owner and/or employee of Holcomb Logging, LLC ...
." PIs.' Am. Compl., State-Ct. R. [26-25]
~
3. Plaintiffs further alleged that the subject accident
occurred while Decedent was working as a truck driver for Holcomb Logging, LLC, and that
Decedent's cause of death was the negligence of Defendants, including Holcomb Logging, LLC.
14
See id.
~~
6-7. The state-court record also includes a summons return for Darryl Holcomb, agent
for service of process for Holcomb Logging, LLC. See Holcomb Logging, LLC Summons
Return, State-Ct. R. [26-74].
Subsequently, Defendants filed an answer to the complaint.
Plaintiffs next filed an amended complaint [26-25], wherein they alleged that Decedent's
accident occurred while Decedent was working as a truck driver for "Defendant
Corporation(s)/Individuals," including Holcomb Logging, LLC and IC Trucking.
CompI., State-Ct. R. [26-25]
~
PIs.' Am.
6. Plaintiffs then filed a motion for leave to allow Plaintiffs to
name the additional party IC Trucking. Plaintiffs maintained that "the subject vehicles involved
in the accident and the employer agent were titled in the name of or acting on behalf of IC
Trucking, formerly known as Holcomb Logging." See Pis.' Mot. Allow Add'l Named Party,
State-Ct. R. [26-26] at 1.
The state court entered an Order [26-24] granting this motion.
Plaintiffs then filed a motion for summary judgment [26-23] and amended motion for summary
judgment [26-22], wherein they argued that "[Decedent] died as a result of injuries sustained,
which were proximately caused by the impact of a log truck and trailer operated by the
agents/employees of the Defendants, Holcomb Logging, LLC[;] Darryl Holcomb[;] and IC
Trucking." The state court subsequently granted the uncontested summary judgment motions as
to all Defendants, including Holcomb Logging, LLC. See Order Granting Pis.' Am. Mot. Summ.
J. [26-20].
The state court then entered judgment against Defendants, including Holcomb
Logging, LLC.
The Mississippi Secretary of State website indicates that Holcomb Logging, LLC was
created on October 19, 2007, and that Darryl Holcomb was the registered agent. See Miss. Sec'y
of State Website, https://corp.sos.ms.gov/corp/portal/c/page/corpBusinessIdSearchiportal.aspx.
The Mississippi Secretary of State website further indicates that Holcomb Logging, LLC was
15
administratively dissolved on December 5, 2011 (apparently for failing to file the required
annual reports with the Secretary of State). See id. Even though Holcomb Logging, LLC was
administratively dissolved on December 5, 2011-prior to the entry of the Circuit Court of
Itawamba County's judgment against it on August 23, 2013-the limited liability corporation
was nevertheless amenable to the judgment under authority of Mississippi Code § 79-4
14.05(b )(5), which provides that "[ d]issolution of a corporation does not [p]revent
commencement of a proceeding by or against the corporation in its corporate name[.]" Miss.
Code Ann. § 79-4-14.05(b)(5); see Schustz v. Buccaneer, Inc., 850 So. 2d 209, 212 (Miss. Ct.
App. 2003) (plaintiffs properly sued an administratively dissolved corporation due to "the
possible existence of liability insurance that may have been in force" at the time of the subject
incident).
In Mississippi, it is well settled that judgments can be held against dissolved
corporations. See Phillips v. MSM, Inc., No. 3: 12-CV-175-CWR-FKB, 2015 WL 420327 (S.D.
Miss. Feb. 2, 2015); Lionberger v. Southvina Agency, Inc., No. 1:06CV961, 2007 WL 1673537
(S.D. Miss. June 7, 2007); Naugher v. Fox River Tractor Co., 446 F. Supp. 1281, 1283 (D.C.
Miss. 1977); Grenada Ready-Mix Concrete, Inc. v. Watkins, 426 F. Supp. 531,532 (D.C. Miss.
1977); Morris v. Macione, 546 So. 2d 969, 970-72 (Miss. 1989).
"A plain reading of
Mississippi Code [§] 79-4-14.21 specifies that administratively dissolved corporations continue
to exist regarding agreements established prior to dissolution and for the purposes of defending
the corporation in actions stemming from such agreements." Columbus Cheer Co. v. City of
Columbus, 155 So. 3d 744 (Miss. 2014) (citing Miss. Code Ann. § 79-4-14.2 I (e}-(f) (Rev. 2013)
(emphasis added»; see Coulter v. Robertson, 2 Cushm. 278, 1852 WL 14, at *30 (Miss. Err.
App. 1852) ("the obligation of the contracts of a dissolved corporation survives its dissolution").
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Given all of the foregoing, this Court is assured that the state court had jurisdiction over
Holcomb Logging, LLC to enter the judgment against it. Furthermore, no other exception to the
full faith and credit requirement is present in this situation. There is no basis to determine the
state-court judgment against Holcomb Logging, LLC was the result of extrinsic fraud, or that the
judgment was reached without due process oflaw. See Kremer v. Chem. Constr. Corp., 456 U.S.
461,482,102 S. Ct. 1883,72 L. Ed. 2d 262 (1982); Bass v. Hoagland, 172 F.2d 205, 209 (5th
Cir. 1949); Price v. Pereira, --- So. 3d ----, 2014 WL 2583606, at *6 (Miss. Ct. App. June 10,
2014).
This Court notes that under Mississippi law "[t]here can be no assessment of damages
against the employer when no action can be brought against the only negligent party-the
employee."
Crawford Logging, Inc. v. Estate of Irving, 41 So. 3d 687, 690 (Miss. 2010)
(internal quotation marks and citation omitted). The assessment of damages against Holcomb
Logging, LLC occurred at the close of the state-court litigation and is not before this Court.
"The principle of res judicata operates to avoid multiplicity of litigation." Schwartz v. Hynum,
933 So. 2d 1039, 1042 (Miss. Ct. App. 2006) (citing Little v. V & G Welding Supply, Inc., 704
So. 2d 1336, 1337 (Miss. 1997)). "Res judicata bars all issues that might have been (or could
have been) raised and decided in the initial suit, plus all issues that were actually decided in the
first cause of action." Schwartz v. Hynum, 933 So. 2d 1039, 1042 (Miss. Ct. App. 2006)
(quoting Estate ofAnderson v. Deposit Guar. Nat 'I Bank, 674 So. 2d 1254, 1256 (Miss. 1996)).
Due to res judicata, this Court cannot delve into the merits of the judgment against Holcomb
Logging, LLC. For the same reason, the Court cannot consider evidence of a pre-judgment
release of Defendants that was not a part of the state-court record. "[A] decision [that the
jurisdictional prerequisites are met] is conclusive of the jurisdiction of the court. Whether the
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court had the proper evidence before it on which to base such a decision cannot be inquired into
collaterally, for that would be a question of error or no error, which manifestly can be entertained
only in a court sitting to review the proceedings." Cocks v. Simmons, 57 Miss. 183, 1879 WL
4044, at *8 (Miss. 1879). Accordingly, this Court fmds that the state-court judgment against
Holcomb Logging, LLC is valid and entitled to full faith and credit.
4. State-Court Judgment Against IC Trucking
Fourth, Garnishee argues that the state-court judgment against IC Trucking is void for the
following reasons. Garnishee argues that the Plaintiffs' amended state-court complaint, which
added allegations against IC Trucking, did not identify IC Trucking as an independent legal
entity or allege that it was such at the time of the subject accident, but only that Darryl Holcomb
was "doing business as" IC Trucking. Garnishee maintains that these allegations described IC
Trucking as the sole proprietorship of Darryl Holcomb and that the status of IC Trucking as a
party and proper object of a judgment was co-extensive with that of Darryl Holcomb. Finally,
Garnishee maintains that the state-court record and docket reflect that service of process was not
perfected on IC Trucking, and that since service of process is necessary to confer jurisdiction
over the person of a named defendant, the state court lacked jurisdiction over IC Trucking to
enter the judgment against it. Specifically, Garnishee points to the motion for leave to file
amended complaint which contains no certificate of service and to the fact that the amended
complaint was filed before the motion for leave to file the amended complaint. Garnishee
contends that a service of the summons and copy of the amended complaint would have been
required upon IC Trucking pursuant to Rule 4 of the Mississippi Rules of Civil Procedure, and
that the state-court record indicates that no such summons was ever served on IC Trucking as a
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separate entity from Darryl Holcomb. Thus, Garnishee maintains that the judgment against IC
Trucking is void and cannot serve as a basis for the garnishment action against Garnishee.
Plaintiffs respond that certificates of service were not included in Garnishee's initial
forwarding of the state-court record [4], but that certificates of service were included in the
subsequent forwarding of the state-court record [26] and that these certificates of service indicate
that service was effected upon IC Trucking. Plaintiffs further maintain that the state court's
judgment was entered against Darryl Holcomb and IC Trucking, holding them jointly and
severally liable for the judgment-which is itself an adjudication against IC Trucking as a
separate entity. Plaintiffs also maintain that the subject policy sets forth the named insured on
the subject policy as "Darryl Holcomb" and "IC Trucking," and thus that IC Trucking is a
separate and distinct entity from Darryl Holcomb and the judgment is valid against IC Trucking.
Finally, Plaintiffs argue that collateral estoppel, res judicata, lack of standing, waiver, and failure
to abide by various rules now prevent Garnishee from collaterally attacking the judgment against
IC Trucking.
Upon review of the state-court record, this Court finds that Plaintiffs filed an amended
complaint [26-25], wherein they alleged that "at the time of the subject incident, Defendant,
Darryl Holcomb, was also doing business as IC Trucking, and accordingly said IC Trucking may
be served with process by the attorney of record for Defendant, Darryl Holcomb," and further
that the Decedent's accident occurred while the Decedent was working as a truck driver for
"Defendant Corporation(s)/Individuals," including Holcomb Logging, LLC and IC Trucking.
Pis.' Am. Comp1., State-Ct. R. [26-25] mI 3, 6. Plaintiffs subsequently filed a motion for leave to
add the named party IC Trucking. Although Plaintiffs did not use the language "IC Trucking,
LLC," Plaintiffs contended in their motion to allow additional party that "the subject vehicles
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involved in the accident and the employer agent were titled in the name of or acting on behalf of
IC Trucking, formerly known as Holcomb Logging," which Plaintiffs had alleged was a limited
liability company. See PIs.' Mot. Allow Add'l Named Party, State-Ct. R. [26-26] at 1. The state
court entered an Order [26-24] granting that motion. There is no summons return to IC Trucking
in the state-court record, though of course, there is an earlier summons return for Darryl
Holcomb and one for Holcomb Trucking, LLC. Plaintiffs then filed a motion for summary
judgment [26-23] and amended motion for summary judgment [26-22], wherein they argued that
"[Decedent] died as a result of injuries sustained, which were proximately caused by the impact
of a log truck and trailer operated by the agents/employees of the Defendants, Holcomb Logging,
LLC[;] Darryl Holcomb[;] and IC Trucking."
The state court subsequently granted the
uncontested summary judgment motions as to all Defendants, including IC Trucking. See Order
Granting PIs.' Am. Mot. Summ. J., State-Ct. R. [26-20]. The state court then entered judgment
[26-9] against Defendants, including IC Trucking.
The Mississippi Secretary of State website indicates that IC Trucking was a limited
liability company for which Darryl Holcomb was the registered agent, and that although IC
Trucking is now dissolved, it was created on October 19, 2007-the same date as Holcomb
Logging, LLC.
Under Mississippi law, "[t]o obtain personal jurisdiction over an interested party, service
of process is required consistent with either Rule 4 or Rule 81 of the Mississippi Rules of Civil
Procedure." In re Transfer ofStructured Settlement Payment, l30 So. 3d 1108, 1120 (Miss. Ct.
App.20l3). As this Court sees it, there are two ways to look at this issue, either: (1) IC Trucking
can be considered the sole proprietorship of Darryl Holcomb, in which case service of process
was arguably perfected such that the exercise of personal jurisdiction over IC Trucking was
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proper-but in that case the judgment entered against the deceased Darryl Holcomb is similarly
void as to IC Trucking; or (2) IC Trucking, as a limited liability company, was a separate entity
from Darryl Holcomb, in which case service of process was not perfected, the exercise of
personal jurisdiction over IC Trucking was not proper, and the judgment against IC Trucking
fails for lack of personal jurisdiction. Either way, the judgment against IC Trucking is void for
lack of jurisdiction. Accordingly, as with the judgments against Darryl Holcomb and James
Holcomb, collateral estoppel and res judicata do not save the state-court judgment against IC
Trucking, which had no jurisdictional basis.
5. Other Preliminary Issues
Next, the Court examines Garnishee's argument that the dismissal with prejudice of
James Holcomb negated claims against others who. may be vicariously liable. As the Court has
laid out in some detail above, the state court granted Plaintiffs' unopposed summary judgment
motions, finding that "[Decedent] died as a result of injuries sustained, which were proximately
caused by the impact of a log truck and trailer owned and operated by the Defendants and their
agents/employees, and that the death of [Decedent] was proximately caused by the negligence
and wrongful actions of the aforesaid Defendants." Order Granting Pis.' Am. Mot. Summ. J.,
State-Ct. R. [26-20] at 1. Then, prior to the hearing to detennine damages, Plaintiffs filed a
motion for voluntary dismissal of all claims against Defendants "James Holcomb, individually"
and "Crystal Holcomb Short, individually, although she is not a named Defendant in the above[
]referenced matter."
See PIs.' Mot. Voluntary Dismissal, State-Ct. R. [26-15] at 1-3.
Subsequently, the Circuit Court of Itawamba County entered an Order granting that motion and
stating in pertinent part: "Any and all claims against the Defendant, James Holcomb,
individually, are hereby dismissed with prejudice. Any and all claims which Plaintiffs may have
21
against Crystal Holcomb Short, individually, are hereby dismissed with prejudice." See Order
Granting PIs.' Mot. Voluntary Dismissal, State-Ct. R. [26-14] at 1. Following the hearing to
determine damages, the Circuit Court of Itawamba County entered judgment against Defendants,
including in pertinent part James Holcomb. See J., State-Ct. R. [26-9] at 1. As the Court stated
above, James Holcomb was dismissed with prejudice upon Plaintiffs' motion for voluntary
dismissal. This dismissal does not negate any liability on the part of any other party to the state
court case-particularly since Plaintiffs' allegations of negligence were against all Defendants,
not solely James Holcomb. See J & J Timber Co. v. Broome, 932 So. 2d 1, 6-7 (Miss. 2006).
As also detailed above, even if the state-court ruling was erroneous, as long as the jurisdictional
prerequisites were met, this Court must afford the state court judgment against Holcomb
Logging, LLC full faith and credit. Therefore, Garnishee's argument in this respect is not well
taken, and the judgment against Holcomb Logging, LLC that forms a basis for the case sub
judice stands.
6. Merits of Garnishment Action
Having decided the foregoing preliminary Issues, the Court turns to Garnishee's
challenges to the merits of the garnishment action itself. Plaintiffs filed this writ of garnishment
against Garnishee in an attempt to collect under an insurance policy issued by Garnishee.
Garnishee removed the action to this Court, denying that Plaintiffs are entitled to collect under an
insurance policy and maintaining that the subject policy does not provide coverage for the
subject incident. Thus, the issue before this Court is whether the Progressive insurance policy,
issued to Darryl Holcomb and IC Trucking, provides coverage as to the liability of Holcomb
Logging, LLC for the subject incident. The Court is of the opinion that the parties should have
22
an opportunity to provide this Court with briefing specific to this issue prior to the Court issuing
a ruling as to coverage under the subject policy.
D. Conclusion
In sum, Garnishee Progressive Gulf Insurance Company's motion for summary judgment
[72] is GRANTED IN PART, DENIED IN PART, AND HELD IN ABEYANCE IN PART,
specifically as follows:
(1) Garnishee's motion for summary judgment [72] is GRANTED, insofar as the
judgment of the Circuit Court of Itawamba County, Mississippi is void as to
Defendants Darryl Holcomb, James Holcomb, and IC Trucking;
(2) The claims against Defendants Darryl Holcomb, James Holcomb, and IC Trucking
are hereby DISMISSED, and the same are DISMISSED AS PARTIES to the action;
(3) Garnishee's motion for summary judgment [72] is DENIED, insofar as the judgment
of the Circuit Court of Itawamba County, Mississippi as to Defendant Holcomb
Logging, LLC is valid and entitled to full faith and credit;
(4) Garnishee's motion for summary judgment [72] is HELD IN ABEYANCE with
respect to the other issues raised concerning insurance coverage until such time as the
parties have fully briefed the issue of whether the subject insurance policy provides
liability coverage for Holcomb Logging, LLC for the subject incident; and
(5) Plaintiffs' motion to stay consideration [113] of Garnishee's motion for summary
judgment [72] is not well taken and is thus DENIED.
The Court hereby gives the parties an opportunity to submit briefing solely relating to the
issue of whether the subject insurance policy provides liability coverage for Holcomb Logging,
LLC for the subject incident. Garnishee and Defendant Holcomb Logging, LLC may submit any
23
such briefing within twenty (20) days of the date of this memorandum opinion and order.
Plaintiffs may submit any responsive briefing within ten (10) days of Garnishee's and/or
Defendant Holcomb Logging, LLC's submission.
eft Ji y~
An order in accg.{dance with this opinion shall issue this day.
THIS,the /J::OfApril,2015.
SENIOR U.S. DISTRICT JUDGE
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