Nolley v. Littlejohn et al

Filing 33

ORDER denying 19 Motion to Remand to State Court. Signed by District Judge Michael P. Mills on 1/9/2017. (lpm)

IN THE UNITED STATES DISTRICT COURT
FOR THE NORTHERN DISTRICT OF MISSISSIPPI
OXFORD DIVISION
KENNY NOLLEY

PLAINTIFF

v.

Civil Action No.: 3:16-cv-00122-MPM-JMV

ROBIN C. LITTLEJOHN, et al.

DEFENDANTS
ORDER

This cause comes before the Court on plaintiff Kenny Nolley’s (“Nolley”) Motion to
Remand [19]. This case began as a simple negligence action arising from an automobile accident
between Nolley and Robin Littlejohn (“Littlejohn”). However, the scope of the litigation has
since grown, and the parties have succeeded in making the action much more complicated
through procedural maneuvers in both state and federal court. Nevertheless, the Court has
considered the parties’ submissions, along with relevant case law and evidence, and is now
prepared to rule.
I.

Factual and Procedural Background

On March 6, 2013, Kenny Nolley and Robin Littlejohn were involved in an automobile
accident on Highway 15 in Union County, Mississippi, when Littlejohn “slammed into the rear
of [Nolley’s] vehicle.” At the time of the accident, Littlejohn was insured by Viking Insurance
Company of Wisconsin (“Viking”), and Nolley was insured by GuideOne Mutual Insurance
Company (“GuideOne”).
On September 11, 2015, Nolley filed suit against Littlejohn in the Circuit Court of Union
County, Mississippi, asserting causes of action for negligence and negligence per se.
Importantly, at the time he initially filed the case, Nolley did not name Viking or GuideOne as
defendants in the action. Upon Littlejohn’s failure to appear or respond in that action, an entry

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of default was entered against her. Thereafter, on November 19, 2015, the circuit court held a
hearing as to the proper amount of damages to be assessed. Although Littlejohn was provided
notice of the hearing, she failed to appear. After the hearing, the circuit court issued a default
judgment against Littlejohn “for the principal and prejudgment interest, in the sum of
$150,000.00, plus interest at the rate of 8% annually from the entering of this judgment, plus
attorney’s fees of $150,000.00, and all costs of this cause expended.”
Shortly thereafter, Littlejohn obtained counsel who immediately entered an appearance
and filed a motion to set aside the entry of default and default judgment. In that motion,
Littlejohn argues that the judgment should be set aside because it is not supported by credible
evidence. Littlejohn emphasizes that Nolley’s damage evaluation sheet, which was introduced at
the hearing, shows “that he only incurred approximately $4,200.00 in medical expenses and a
vast majority of that amount was chiropractic care.” Littlejohn also highlights that “[Nolley’s]
Motion for Default Judgment only sought damages in the amount of $33,493.00 plus interest.”
Littlejohn additionally asserts that the circuit court’s award of $150,000.00 for attorney’s fees is
grossly excessive, as Nolley only sought $8,333.00 in attorney’s fees and the transcript from the
hearing lacks any testimony whatsoever as to the fees actually incurred. Littlejohn also
highlights the fact that, prior to filing suit, Nolley’s counsel had been in contact with Viking—
Littlejohn’s insurer—concerning the claim. Littlejohn avers that since Nolley’s counsel had
been in contact with Viking, he should have provided the company with a “courtesy copy of the
Complaint” instead of obtaining a default judgment against Littlejohn without Viking’s
knowledge of the suit.
While Littlejohn’s motion was pending, Viking filed a separate action against Littlejohn
and Nolley in the Chancery Court of Union County, Mississippi, on January 11, 2016. In that

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action, Viking sought a declaratory judgment regarding its rights and obligations in regard to the
default judgment “due to [Littlejohn’s] material breach of the insurance policy’s provision
requiring the immediate notification of suit and any notification of subsequent relevant
pleadings.” Viking also sought a declaration relieving it of any obligation to pay Nolley under
the judgment “as a consequence of his failure to notify [Viking] of his efforts and attempt to
secure a Default Judgment against Littlejohn . . .”
Returning to the original circuit court action, a hearing on Littlejohn’s motion to set aside
the default judgment was held on April 18, 2016. According to Nolley, Judge Kelly Luther—the
circuit court judge— orally “den[ied] the motion in part and allow[ed] liability to stand, while
granting the motion in part and requiring a trial on damages.” However, an order to that effect
was not entered on the circuit court’s docket. In fact, an order was never entered on the court’s
docket reflecting Judge Luther’s purported oral ruling.
On May 25, 2016, Nolley filed an amended complaint, adding Viking and GuideOne—
his insurer—as parties to the action. In the amended complaint, he requests a “declaration of
rights and coverage as to Defendants Viking Insurance Company and GuideOne Mutual
Insurance Company[.]” He asserts that Viking should be forced to pay the limit of its policy
with Littlejohn and that GuideOne should be held liable for the remaining amount of the
judgment under the underinsured motorist portion of his policy. Nolley also repeated verbatim
his claims against Littlejohn.1

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The Court notes that Viking has filed a separate motion to dismiss, arguing that, in filing his
amended complaint, Nolley incorrectly referred to it as “Sentry Insurance Group d/b/a Viking
Insurance Company of Wisconsin.” Specifically, in its motion, Viking asserts that it “is not a
‘d/b/a’ of Sentry Insurance Group.” Rather, it states that “Viking is a wholly owned subsidiary
of Sentry Insurance, a Mutual company.” The Court will take up the motion concerning that
issue in due course; however, for the purposes of this motion, the Court will simply refer to the
company as “Viking.”
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Thereafter, on June 23, 2016, GuideOne removed the action to this Court, asserting
diversity jurisdiction as the basis for this Court’s jurisdiction over the case. It is undisputed that
both Nolley and Littlejohn are Mississippi citizens and that both Viking and GuideOne are
foreign citizens for jurisdictional purposes. Due to the appearance that complete diversity was
clearly lacking because both Nolley and Littlejohn are Mississippi citizens, this Court issued a
show cause order, instructing GuideOne to explain why the case should not be remanded due to
lack of complete diversity. In its response to the Court’s order, GuideOne asserted that “[p]er
Fifth Circuit legal authority, Robin Littlejohn, as [an] in-state tortfeasor, does not defeat diversity
jurisdiction where Kenny Nolley has already obtained a $300,000 default judgment against
Littlejohn. Therefore the Mississippi citizenship of Littlejohn should be disregarded for
[diversity of citizenship analysis purposes].” Thus, GuideOne’s argument hinges on the fact that
the default judgment Nolley obtained against Littlejohn is still binding due to the fact that the
circuit court never entered an order on its docket setting aside the judgment as to damages.
In response to GuideOne’s arguments, Nolley asserts that an order setting aside the
default as to damages “was circulating but had not yet been forwarded to Judge Luther for his
signature. The reason for this was a discussion taking place amongst counsel concerning the
possibility of allowing the entire default to be set aside in exchange for Viking agreeing to
provide coverage for any liability that was determined through a hearing of this matter.”
However, he argues that the oral ruling setting aside the judgment was nevertheless binding and
that the default judgment is thus no longer valid.
On July 20, 2016, Nolley filed the present motion to remand. In his motion, he makes
largely the same assertions—namely, that the default judgment is no longer valid because Judge
Luther orally ordered that the default judgment be set aside as to damages and simply failed to

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enter an order to that effect due to a potential agreement between the parties to set aside the
entire judgment. Therefore, Nolley asserts that the default judgment was set aside and his
citizenship should therefore be considered in this Court’s jurisdictional analysis, destroying
complete diversity and making remand proper. GuideOne responded in opposition, asserting that
the state court default judgment remains valid due to the fact that no order setting it aside was
entered on the docket and, thus, that Nolley’s citizenship should be disregarded according to
Fifth Circuit precedent.
Upon due consideration of the submissions of the parties, relevant authorities, and
evidence, the Court finds that Nolley’s motion should be denied.
II.

Remand Standard

“[F]ederal courts are courts of limited jurisdiction, having ‘only the authority endowed by
the Constitution and that conferred by Congress.’” Halmekangas v. State Farm Fire and Cas.
Co., 603 F.3d 290, 292 (5th Cir. 2010) (quoting Epps v. Bexar-Medina-Atascosa Counties Water
Improvement Dist. No. 1, 665 F.2d 594, 595 (5th Cir. 1982)). The Judiciary Act of 1789
provides that “any civil action brought in a State court of which the district courts of the United
States have original jurisdiction, may be removed by the defendant or the defendants, to the
district court of the United States for the district and division embracing the place where such
action is pending.” 28 U.S.C. § 1441(a).
Upon removal, a plaintiff may move to remand the action to state court, and “[i]f it
appears that the district courts lacks subject matter jurisdiction, the case shall be remanded.” 28
U.S.C. § 1447(c). The Fifth Circuit has held that “removal statutes are to be construed strictly
against removal and for remand.” Eastus v. Blue Bell Creameries, L.P., 97 F.3d 100, 106 (5th
Cir. 1996) (citing Shamrock Oil & Gas Corp. v. Sheets, 313 U.S. 100, 108-09, 61 S.Ct. 868, 872,

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85 L.Ed. 1214 (1941)). Moreover, “[a]ny ambiguities are construed against removal.” Manguno
v. Prudential Prop. & Cas. Ins. Co., 276 F.3d 720, 723 (5th Cir. 2002) (citing Acuna v. Brown &
Root, Inc., 200 F.3d 335, 339 (5th Cir. 2000)). Furthermore, “[t]he removing party bears the
burden of establishing that federal jurisdiction exists.” De Aguilar v. Boeing Co., 47 F.3d 1404,
1408 (5th Cir. 1995) (citing Gaitor v. Peninsular & Occidental Steamship Co., 287 F.2d 252,
253-54 (5th Cir. 1961)).
III.

Discussion

Applying this standard, as the removing party, GuideOne bears the burden of establishing
federal jurisdiction. In its notice of removal, GuideOne stated that diversity jurisdiction provides
the basis for this Court’s jurisdiction. Thus, the Court begins its analysis with 28 U.S.C. §
1332—the diversity jurisdiction statute. In pertinent part, it provides:
The district courts shall have original jurisdiction of all civil actions where the
matter in controversy exceeds the sum or value of $75,000, exclusive of interest
and costs, and is between-- citizens of different states . . .”
28 U.S.C. § 1332 (a)(1). Moreover, “[d]efendants may remove an action on the basis of
diversity of citizenship if there is complete diversity between all named plaintiffs and all named
defendants[.]” Lincoln Prop. Co. v. Roche, 546 U.S. 81, 84, 126 S.Ct. 606, 163 L.Ed.2d 415
(2005).
In the case at bar, because the amount in controversy requirement is undoubtedly
satisfied, the critical inquiry is whether complete diversity exists. As previously stated, it is
undisputed that while Viking and GuideOne are both foreign citizens, both Nolley and Littlejohn
are Mississippi citizens. Therefore, upon first glance, it appears that complete diversity is
lacking. However, GuideOne argues that because Nolley secured a default judgment against
Littlejohn in state court—and that judgment is still binding—Fifth Circuit precedent requires that

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the Court disregard Littlejohn’s citizenship for diversity purposes. In opposition, Nolley argues
that the default judgment was set aside by Judge Luther, making his citizenship relevant to the
diversity jurisdiction analysis and destroying complete diversity.
In this Court’s view, there are two crucial questions that it must decide: (1) the effect of
Judge Luther’s purported oral ruling which has never been reduced to a written order and (2) if
the Court finds that the default judgment remains valid, the effect of a default judgment on the
improper joinder analysis.
Regarding the effect of the purported oral ruling, the Court notes that although Nolley’s
amended state court complaint alleged that Judge Luther orally “den[ied] the motion [to set
aside the default judgment] in part and allow[ed] liability to stand, while granting the motion in
part and requiring a trial on damages[,]” Nolley has failed to provide the Court with a copy of the
transcript from the hearing. Moreover, it is undisputed that a written order setting aside the
default judgment was never entered on the circuit court docket.
The Court notes that “[a] case removed from state court simply comes into the federal
system in the same condition in which it left the state system.” Matter of Meyerland Co., 960
F.2d 512, 520 (5th Cir. 1992) (citing Granny Goose Foods, Inc. v. Brotherhood of Teamsters,
Etc., 415 U.S. 423, 435-36, 94 S.Ct. 1113, 39 L.Ed.2d 435 (1974)). “For instance, if the notice
of appeal was adequate in the state court system, it should be deemed adequate when it enters the
federal courts, regardless of whether the state technical requirements for notice of appeal differ
from the federal.” Id.
In the case at bar, the Court finds that, at the time the case was removed from state court,
the default judgment was still valid and binding because Judge Luther’s oral ruling alone,
without a written order, was not a final judgment. Rule 58 of the Mississippi Rules of Civil

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Procedure provides that “[a] judgment shall be effective only when entered as provided in
M.R.C.P. 79(a).” MISS. R. CIV. P. 58 (emphasis added). And Rule 79(a) provides:
The clerk shall keep a book known as the “general docket” of such form and style
as is required by law and shall enter therein each civil action to which these rules
are made applicable. The file number of each action shall be noted on each page
of the docket whereon an entry of the action is made. All papers filed with the
clerk, all process issued and returns made thereon, all appearances, order,
verdicts, and judgment shall be noted in this general docket on the page assigned
to the action and shall be marked with its file number.
MISS. R. CIV. P. 79(a). Thus, reading these rules together, a judgment becomes effective only
when it is entered in the general docket. Moreover, the Court notes that the Mississippi Supreme
Court has held that “[t]hough previously a circuit judge could render a binding oral judgment at a
trial conclusion, the Court later made the rule uniform, finding that the ‘date of rendition of the
judgment of the circuit court in term time, as well as in vacation, is the date when the judgment is
signed by the judge and filed with the clerk for entry on the minutes.’” Banks v. Banks, 511
So.2d 933, 934-35 (Miss. 1987) (quoting Jackson v. Schwartz, 240 So.2d 60, 61-62 (Miss.
1970)) (emphasis added) (additional internal citations omitted); see also Cleveland Nursing
Rehab., LLC v. Estate of Gully, __ So.3d __, 2016 WL 6125438, at *4 (Miss. 2016) (holding that
circuit court did not err in finding that there was no final judgment when judgment had not been
entered in compliance with Rule 79(a)). Here, it is undisputed that a written order setting aside
the default judgment was never entered, as shown by the absence of such an entry on the copy of
the circuit court docket provided to the Court. Therefore, relying on the aforementioned
precedent, the Court finds that Judge Luther’s purported oral ruling partially setting aside the

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default judgment was not a final judgment. Thus, the default judgment was not set aside and
remains in effect.2
Having held that the default judgment remains valid, the Court now turns to the effect of
that judgment on the diversity jurisdiction analysis. Again, GuideOne asserts that because
Nolley has secured a default judgment against Littlejohn, her citizenship should be disregarded
due to improper joinder.
The Fifth Circuit has held that a removing party can establish improper joinder—making
it appropriate to disregard the improperly joined party’s citizenship for diversity purposes—in
two ways: “(1) actual fraud in the pleading of jurisdictional facts, or (2) inability of the plaintiff
to establish a cause of action against the non-diverse party in state court.” Smallwood v. Ill.
Cent. R.R. Co., 385 F.3d 568, 573 (5th Cir. 2004) (quoting Travis v. Irby, 326 F.2d 644, 646-47
(5th Cir. 2003)). Here, GuideOne argues that the second option is satisfied because Nolley
cannot establish a cause of action against Littlejohn because he has already secured a default
judgment against her for the same claims. Under the second method of establishing fraudulent
joinder, “we must determine whether there is any reasonable basis for predicting that [Nolley]
might be able to establish [Littlejohn’s] liability on the pleaded claims in state court.” Travis,
326 F.3d 644, 647 (5th Cir. 2003) (quoting Griggs v. State Farm Lloyds, 181 F.3d 694, 698 (5th
Cir. 1999)) (emphasis previously added).
The Fifth Circuit considered the fraudulent joinder issue in the default judgment context
in Bolden v. Brooks, 138 F. App’x 601 (5th Cir. 2005). There, the plaintiffs, Artis and Marilyn
Bolden (“the Boldens”) and Frank Brooks (“Brooks”) were involved in an automobile accident,

2

The Court notes that the result would be the same under Rule 58 the Federal Rules of Civil
Procedure, which states that a judgment’s time of entry is “when the judgment is entered in the
civil docket[.]” FED. R. CIV. P. 58(c).
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which was allegedly caused by Brooks’ negligence. Id. at 602. It was undisputed that the
Boldens and Brooks were Mississippi citizens. Id. Because Brooks was an uninsured motorist,
the Boldens attempted to recover from their insurance company, Nationwide Mutual Insurance
Company (“Nationwide”), under the uninsured motorist coverage portion of their policy. Id.
Unable to reach an agreement with Nationwide, the Boldens sued Brooks in state court for
negligence and loss of consortium. Id. After Brooks failed to respond, the state court entered a
default judgment against him, awarding $500,000 in compensatory damages and $500,000 in
punitive damages to the Boldens. Id. After Nationwide still refused to pay the Boldens, arguing
that it was not bound by the judgment, the Boldens “filed an amended complaint in Mississippi
court, repeating the negligence claim against Brooks verbatim and adding as defendants
Nationwide and several Nationwide agents, all of whom were Mississippi residents.” Id. at 603.
Nationwide then removed the case to the United States District Court for the Southern District of
Mississippi, arguing that Brooks and the Nationwide agents were fraudulently joined and, thus,
diversity jurisdiction was proper. Id. Ruling upon the Boldens’ motion to remand, the district
court held that Brooks was fraudulently joined and denied their request, finding that “no
reasonable basis existed to predict the Boldens might recover against Brooks because they had
previously stated the same claim against him and recovered an award of damages, and a valid,
final judgment was entered on that claim.” Id.3 The case was later dismissed on summary
judgment and the Boldens appealed, among other things, the district court’s denial of their
remand motion. Id.
On review, the Fifth Circuit affirmed the district court’s denial of the remand motion,
holding that because the Boldens had already obtained a default judgment against Brooks on the
3

The district court also held that the Nationwide agents were fraudulently joined; however, that
analysis is not relevant to the motion presently before this Court.
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same claims, there was no reasonable basis upon which the Boldens would be able to establish a
claim against Brooks. Id. Specifically, the Fifth Circuit held that “we agreed with the district
court’s determination that the Boldens cannot state cognizable claims against Brooks. . . The
judgment against Brooks was a valid, final judgment under Mississippi law, and is thus res
judicata against the amended complaint that is not altered as to Brooks.” Id.
Due to the strikingly similar facts of the case at bar and Bolden, the Court finds that the
Bolden court’s reasoning should be applied here. That is, because Nolley has already obtained a
default judgment against Littlejohn, which currently remains in effect, and his amended
complaint recites the exact same claims against Littlejohn, the Court finds that there is no
reasonable basis to predict that Nolley could recover against Littlejohn, as the claims are subject
to res judicata. The Court thus finds that Littlejohn was improperly joined in this matter and that
her citizenship should be disregarded for diversity jurisdiction purposes. Accordingly, the
complete diversity requirement is satisfied and, as a result, Nolley’s motion to remand should be
denied.
IV.

Conclusion

For the foregoing reasons, the Court finds that Nolley’s motion is not well taken.
Accordingly, it is hereby, ORDERED that Nolley’s Motion to Remand [19] is DENIED.
SO ORDERED, this the 9th day of January, 2017.

/s/ MICHAEL P. MILLS
UNITED STATES DISTRICT JUDGE
NORTHERN DISTRICT OF MISSISSIPPI

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