Tolbert v. Hindman et al

Filing 49

ORDER denying 17 Motion for Reconsideration re 12 Order on Motion to Remand to State Court. Signed by District Judge Michael P. Mills on 3/10/16. (jtm)

IN THE UNITED STATES DISTRICT COURT
FOR THE NORTHERN DISTRICT OF MISSISSIPPI
OXFORD DIVISION
KATIE TOLBERT

PLAINTIFF

v.

Civil Action No.: 3:15-cv-0042-MPM-SAA

KYNLI HINDMAN and STATE
FARM MUTUAL AUTOMOBILE
INSURANCE CO.

DEFENDANTS

ORDER DENYING MOTION TO RECONSIDER ORDER
GRANTING IN PART AND DENYING IN PART MOTION TO
REMAND TO STATE COURT [171
This matter comes before the Court for consideration on the Motion to Reconsider Order

Granting in Part and Denying in Part Motion to Remand to State Court [17] (together with the
Memorandum in Support [18], the "Motion") filed by Katie Tolbert (the "Plaintiff').

The

Motion was filed on July 15, 2015, and on August 4, 2015, defendant State Farm Mutual
Automobile Insurance Company ("State Farm") filed its Response in Opposition to Plaintiff's

Motion to Reconsider [26] (together with the Memorandum in Support [27], the "Response").
On August 5, 2015 , Plaintiff filed her Reply to State Farm 's Response [28] (the "Reply"). The
Court has considered the Motion, Response, and Reply, as well as relevant case and statutory
law, and concluded that no hearing on the matter is necessary and that the Motion is due to be
denied.
I.

FACTUAL BACKGROUND

Plaintiff filed this suit in the Circuit Court of Panola County, alleging negligence against
defendant Kynli Hindman, a resident of Mississippi, and breach of an uninsured motorist
contract and bad faith against State Farm. These claims arise from a car accident involving
Plaintiff and Hindman which occurred in Panola County, Mississippi on July 13, 2014. Plaintiff
contends that Hindman failed to yield at the intersection of Highway 278 and Central Academy

road, causmg a collision between the two vehicles. Plaintiff claims that as a result of the
accident, she suffered personal injuries including lost wages, medical expenses of $7,967.49,
pain and suffering, and property damages to her automobile. Additionally, Plaintiff alleges that
Hindman was operating an uninsured motor vehicle, causing Plaintiff to seek reimbursement
through her uninsured motor vehicle coverage. However, State Farm, Plaintiffs insurer, denied
her claim on the grounds that she did not have such coverage at the time of the accident.
As a result of these events, Plaintiff seeks $50,000 in compensatory damages against both
defendants, and $500,000 in punitive damages against State Farm for alleged "malicious and bad
faith breach." [1]. Plaintiff and Hindman are residents of Panola County, Mississippi, and State
Farm is incorporated in Illinois, with its principal place of business also located in Illinois.
State Farm removed this action to this court pursuant to 28 U.S.C. § 1441. State Farm"
asserted that Plaintiffs claims met the amount in controversy requirement under § 13 32( a)
because she is seeking $50,000 in compensatory damages and $500,000 in punitive damages.
Further, State Farm asserted that claims against the two defendants were fraudulently misjoined
under Mississippi Rules of Civil Procedure 20 because the claims did not arise out of a distinct
litigable event and do not share common questions of law. Thus State Farm moved to sever the
claims, leaving claims against State Farm in federal court and remanding the claims against
Hindman to the Mississippi Circuit Court. In response, Plaintiff filed a motion to remand all
claims to state court, arguing that State Farm has not met its burden of proving that Plaintiff
fraudulently or improperly misjoined Hindman as a defendant.
Through the Order Granting in Part and Denying in Part Plaintiff's Motion to Remand to
State Court [12] (the "Order"), this Court determined that State Farm had in fact met its burden

of proof in showing an improper or egregious misjoinder. As stated in the Order, Mississippi

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case law dictated that a claim of negligence against a defendant automobile driver, and claims
against an insurer for breach of contract and bad faith involve distinct litigable events that
involve different factual and legal issues. Hegwood v. Williamson, 949 So.2d 728, 731 (Miss.
2007); [12, Pg. 5]. Further, "the appropriateness for joinder decreases as the need for additional
proof increases." !d. at 730. This Court noted that Plaintiff will have to prove negligence against
Hindman, and breach of contract and bad faith claims against State Farm. Thus, the legal and
factual issues surrounding these claims will undoubtedly involve different witnesses and
evidence.
Furthermore, the Court determined that the joinder of defendants Hindman and State
Farm would also run contrary to Rule 411 of the Mississippi Rules of Evidence. Walker, 2014
WL 670216 at *6. Under Rule 411 , "evidence that a person was or was not insured against
liability is not admissible upon the issue whether he acted negligently or wrongfully. "
Mississippi Rules of Evidence 411 . Thus, "a driver defending against negligence claims would
be prejudiced by the jury's knowledge of his or her coverage or lack thereof when it decided
issues of liability and damages." Hegwood, 949 So.2d at 731 . Similarly, joinder of the two
defendants would expose a jury to evidence that defendant Hindman did or did not possess
insurance coverage at the time of the accident. This court determined that because the joinder of
Hindman and State Farm fell outside the boundaries for joinder under Mississippi law, Hindman
was fraudulent misjoined as a defendant. Turning to Rule 21 of the Federal Rules of Civil
Procedure, the Court considered the effect of remanding the action against Hindman, but
retaining jurisdiction over the suit against State Farm. As stated in United States v. 0 'Ne il, 709
F.2d 361,368 (5th Cir. 1983),
Severance under Rule 21 creates two separate actions or suits where previously
there was but one. Where a single claim is severed out of a suit, it proceeds as a
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discrete, independent action, and a court may render a final, appealable judgment
in either one of the resulting two actions notwithstanding the continued existence
of unresolved claims in the others.
Given that the Plaintiff and Hindman are both Mississippi residents, this Court does not
have federal diversity jurisdiction over them. Accordingly, through the Order, Plaintiffs claims
against Hindman were severed from the claim against State Farm, and Plaintiffs Motion to
Remand was granted in regards to her claims against Hindman, and denied in regards to the
claims against State Farm.

II.

CONCLUSIONS OF LAW

Plaintiff brings the present Motion, requesting that the Court reconsider the Order and
remand the entire case to state court. The crux of the Plaintiffs request rests on the argument that
State Farm' s own insurance policy requires that an uninsured motorist be joined to any action.
[12]. Based on the Plaintiffs reading of the insurance policy in question, she was required as a
condition precedent to file suit in state court as the federal court would not have jurisdiction.
Plaintiff further contends that although the policy language is contrary to Mississippi law, State
Farm should still be estopped from arguing misjoinder under Rule 20(a) of the Mississippi Rules
of Civil Procedure, when they themselves purportedly require such joinder. State Farm responds
by contending that Plaintiff misunderstands the difference between "a typical action for
uninsured motorist ("UM") benefits and the bad faith action presently before this Court." [26].
State Farm maintains that the policy provision brought into question by the Plaintiff
"unambiguously applied to a typical UM action and not to a bad faith suit, there is no basis for
estoppel, and the Court cannot enforce a contract provision that is contrary to Mississippi law."
[27, Pg. 2].

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The Plaintiffs briefing on the Motion is minimal, leaving some question as to under what
legal theory she proceeds. Plaintiff appears to argue that because the Defendant' s insurance
contracts purportedly require joinder of defendant-parties, the Plaintiffs Motion to Remand
should have been granted in its entirety and the Court should have declined to sever the suit
against Hindman and State Farm. Further, despite resting her entire argument on only two, brief,
portions of the Defendant' s insurance contracts, Plaintiff claims that those same provisions are
contrary to Mississippi law. For the following reasons, the Court is not persuaded by Plaintiffs
arguments.
First, nothing in the Plaintiffs Motion or briefing has convinced the Court that the legal
analysis conducted in the Order in question was incorrect. In fact, Plaintiff does not even appear
to contest the legal analysis, or even challenge the applicability of Hegwood (wherein the
Mississippi Supreme Court held that a claim of negligence against a defendant automobile
driver, and claims against an insurer for breach of contract and bad faith involve distinct litigable
events that involve different factual and legal issues). Nor does the Plaintiff appear to dispute
that proving negligence against Hindman, and breach of contract and bad faith against State
Farm, would require separate evidence and witnesses. There is also no protest as to the Court's
prior conclusion that, as between Plaintiff and Hindman there is no diversity of citizenship, but
that such diversity is met as between Plaintiff and State Farm. In short, Plaintiff makes no
argument against the Court' s prior finding that joinder of defendants was legally inappropriate or
incorrect. As such, the Court is in no way convinced that its prior conclusions and Order are due
to be amended or undone .
Second, as for the argument that Defendant should be held to contract language - which
the Plaintiff unequivocally proclaims is contrary to Mississippi law - the Court is similarly

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.unpersuaded. Without determining whether or not the contract language in question is contrary
to state law, the fact remains that State Farm's contract provisions cannot unilaterally change the
rules and boundaries of this Court's jurisdiction. The Court is of the firm opinion that the legal
analysis finding misjoinder of parties requiring the severing of claims and the remand of the
claims against Hindman while maintaining jurisdiction over claims against State Farm, is correct.
Language drafted by State Farm cannot magically usurp or override the proper allocation of
claims and jurisdiction.

Further, insofar as a contract provision contravenes state law, that

provision may not be enforced. Panasonic Co. , Div. of Matsushita Elec. Corp. of Am. v. Zinn,
903 F.2d 1039, 1041 (5th Cir. 1990) (holding that "[w]here the subject matter of the contract is
legal, but the contract contains an illegal provision that is not an essential feature of the
agreement, the illegal provision may be severed and the valid portion of the contract enforced.");

Carlo Corp. v. Casino Magic of Louisiana, Corp., 26 F. Supp. 2d 904, 907 (S.D. Miss. 1998)
(holding that Mississippi has "long followed the rule that the courts must enforce contracts as
they are written, unless such enforcement is contrary to law or public policy."); Smith v. Simon,
224 So.2d 565 , 566 (Miss. 1969) (holding that "[t]here is no doubt that the courts have the duty
and the power to declare void and unenforceable contracts made in violation of law or in
contravention of the public policy of the state."). Accordingly, the Plaintiff makes no headway
by resting the entirety of her argument on a contract provision which she herself declares to be
against state law. Assuming, arguendo, that the provision in question does in fact contravene
state law, the remedy would not be to enforce the provision and grant remand when it would
otherwise be improper to do so.

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III.

CONCLUSION

Upon consideration of the Motion, Response and Reply, the Court reaches the conclusion
that the Order properly remanded certain claims to the state court, while maintaining jurisdiction
over those claims related to State Farm. For the reasons set forth in the Order, and repeated
above, this Court found that the parties were fraudulently misjoined as defined by Rule 20 of the
Mississippi Rule of Civil Procedure. Tri-Miss Servs., Inc. v. Fairley, No. 2: 12CV152 2012 WL
5611058 (N.D. Miss. 2012) (holding that "to determine if a party has been fraudulently
misjoined, the court applied Rule 20 of the Mississippi Rules of Civil Procedure."). This Court
further found that the joinder of Defendants ran contrary to Rule 411 of the Mississippi Rules of
Evidence. With the joinder of Hindman and State Farm clearly falling outside the boundaries for
joinder under Mississippi state law, this Court could reach no other conclusion but that Hindman
was fraudulently misjoined as a defendant. As such, Rule 21 of the Federal Rules of Civil
Procedure definitively required the creation of two separate suits, with claims against Hindman
being remanded to state court. No arguments raised in the Motion give the Court pause to doubt
the correctness and appropriateness of its prior ruling. Accordingly, it is hereby
ORDERED that the Motion to Reconsider Order Granting in Part and Denying in Part the
Motion to Remand [17] is DENIED.
SO ORDERED this the

t0~

day of March, 2016.

UNITED STATES DISTRICT COURT
NORTHERN DISTRICT OF MISSISSIPPI

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