Auto Parts Manufacturing Mississippi Inc. v. King Construction of Houston, LLC

235 F. Supp. 3d 794, 2016 U.S. Dist. LEXIS 140156, 2016 WL 5869565
CourtDistrict Court, N.D. Mississippi
DecidedOctober 6, 2016
DocketCIVIL ACTION NO. 1:11-cv-00251-GHD-SAA
StatusPublished

This text of 235 F. Supp. 3d 794 (Auto Parts Manufacturing Mississippi Inc. v. King Construction of Houston, LLC) is published on Counsel Stack Legal Research, covering District Court, N.D. Mississippi primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Auto Parts Manufacturing Mississippi Inc. v. King Construction of Houston, LLC, 235 F. Supp. 3d 794, 2016 U.S. Dist. LEXIS 140156, 2016 WL 5869565 (N.D. Miss. 2016).

Opinion

MEMORANDUM OPINION GRANTING PLAINTIFF AUTO PARTS MANUFACTURING MISSISSIPPI, INC.’S MOTION FOR ENFORCEMENT OF PERMANENT INJUNCTION

Glen H. Davidson, SENIOR, UNITED STATES DISTRICT JUDGE

Presently before the Court is Plaintiff Auto Parts Manufacturing Mississippi, Inc. [796]*796(“APMM’O’s1 motion for enforcement of the Court’s injunction against Defendant Kohn Law Group, Inc. (“Kohn Law Group”)2 [282], The Court held an eviden-tiary hearing on the motion on August 23, 2016 and allowed post-hearing briefing on the motion. Upon due consideration of the motion, response, reply, corresponding briefing, testimony and evidence, and post-hearing briefing, the Court finds that Kohn Law Group has violated this Court’s permanent injunction by pursuing litigation against APMM in the United States District Court for the Central District of California in the case styled Kohn Law Group Inc. v. Auto Parts Manufacturing Mississippi Inc., et al, No. 2:12-cv-08063-MWF-MRW (C.D. Calif. 2012). The reasoning for this decision is set forth below.

I. Factual and Procedural History

Although this complex interpleader action has been closed by reason of settlement since October 20, 2014, the Court finds it necessary to set forth the factual and procedural background, as the same has a bearing on this Court’s determination with regard to the case now pending in the United States District Court for the Central Distinct of California.

APMM entered into a contract with Noatex Corporation (“Noatex”) for Noatex to construct an auto parts manufacturing facility in Guntown, Lee County, Mississippi, near Toyota Motor Manufacturing, Mississippi, Inc. in Blue Springs, Mississippi. Noatex subcontracted with King Construction of Houston, LLC (“King Construction”), a Mississippi limited liability company, to provide some materials and labor for the construction.

In the case sub judice, Noatex alleged that APMM owed it money for goods and services that Noatex provided to APMM under the contract. Noatex questioned some of the invoices submitted to it by King Construction pertaining to the subcontract work. In response to this billing dispute between Noatex and King Construction, King Construction notified APMM on September 23, 2011, pursuant to Mississippi’s “Stop Notice” Statute, Mississippi Code § 85-7-181, that Noatex owed King Construction $260,410.15 and that King Construction was filing a “Laborer’s and Materialman’s Lien and Stop Notice” in the Chancery Court of Lee County, Mississippi. The stop notice bound the disputed funds in APMM’s hands to secure invoice claims that Noatex allegedly owed to King Construction. See Miss. Code Ann, § 85-7-181 (“[T]he amount that may be due ... shall be bound in the hands of such owner for the payment in full .... ”). King Construction’s filing of the stop notice in the lis pendens record of the chancery court had the effect of establishing King Construction’s lien priority over the property that was the subject of the dispute. See id. § 85-7-197. APMM later deposited the $260,410.15 in the registry of the Chancery Court of Lee County.

The dispute resulted in three lawsuits, one of which was the case sub judice.3 [797]*797APMM originally filed this action in the Chancery Court of Lee County to determine ownership of the disputed funds subject to King Construction’s stop notice, naming both Noatex and King Construction as defendants. In December of 2011, Noatex removed this action to this Court. APMM deposited the money into the Court registry and filed an amended complaint in interpleader [135] naming Kohn Law Group as an additional defendant. APMM then filed a motion to discharge itself as a disinterested stakeholder in the action.

On March 3, 2014, this Court entered an Order [236] and memorandum opinion [237] finding that the action was a 28 U.S.C. § 1335 interpleader in which three parties claimed entitlement to the fund: King Construction on one side and Noatex and Kohn Law Group on the other side. The Court discharged APMM as a disinterested stakeholder in the interpleader action and ordered that King Construction, Noatex, and Kohn Law Group were “enjoined from filing any proceedings against APMM relating to the interpleader fund without an order of this Court allowing the same.” See Ct.’s Order Granting APMM’s Mot. Dismiss or Discharge PI. [236] at 1.

Defendants Noatex and Kohn Law Group filed motions to dismiss Kohn Law Group, and this Court granted those motions insofar as the same requested the dismissal of Kohn Law Group as a claimant to the interpleader fund, finding that APMM failed to plead facts that would plausibly show an existing conflict between Kohn Law Group and any other claimant. The Court noted in the memorandum opinion [244] relative to the same that Kohn Law Group had already brought the action in the United States District Court for the Central District of California to enforce its asserted lien against Noatex in the event that this Court found that Noatex had rights in the interpleader fund. See Auto Parts Mfg. Miss., Inc. v. King Constr. of Houston, L.L.C., 782 F.3d 186, 192 (5th Cir.), cert. denied sub nom. Noatex Corp. v. Auto Parts Mfg. Miss. Inc., — U.S. -, 136 S.Ct. 330, 193 L.Ed.2d 230 (2015). Subsequently, the parties entered into an agreement to settle the dispute. Under the terms of the settlement agreement, which is attached and made part of the public record of the case sub judice, see Settlement Agreement & Mutual Release [263-1], the interpleader fund was disbursed as follows: not less than $109,750.00 to King Construction and not less than $150,660.15 to Noatex with any additional funds in the registry to be distributed equally between King Construction and Noatex. See id. at 6 ¶¶ 2-3 With this factual and procedural background in mind, the Court turns to the legal standards governing the issues before it.

II. The Interplay of Interpleader, Permanent Injunctions, and Civil Contempt

Interpleader offers a procedural protection for the stakeholder willing to deposit [798]*798the amount into the court registry from the expenses and risks of defending the action; the idea is that the stakeholder gives up the money and allows those among whom the dispute really exists to fight it out at their own expense and in turn the stakeholder is shielded from the liability of defending multiple possible lawsuits. See Tittle v. Enron Corp., 463 F.3d 410, 423 (5th Cir. 2006) (“The legislative purpose of an interpleader action is to remedy the problems posed by multiple claimants to a single fund, and to protect a stakeholder from the possibility of multiple claims on a single fund.”); Wausau Ins. Cos. v. Gifford, 954 F.2d 1098, 1100 (5th Cir. 1992); Corrigan Dispatch Co. v. Casa Guzman, S.A., 696 F.2d 359, 364 (5th Cir. 1983).

The Court “has broad powers in an interpleader action.”

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Bluebook (online)
235 F. Supp. 3d 794, 2016 U.S. Dist. LEXIS 140156, 2016 WL 5869565, Counsel Stack Legal Research, https://law.counselstack.com/opinion/auto-parts-manufacturing-mississippi-inc-v-king-construction-of-houston-msnd-2016.