Choctaw, Inc. v. Campbell-Cherry-Harrison-Davis-Dove

Mississippi Supreme Court·Decided August 17, 2006·No. 2006-CA-01621-SCT·Published

Opinion

IN THE SUPREME COURT OF MISSISSIPPI NO. 2006-CA-01621-SCT

CONSOLIDATED WITH

2006-CA-01625-SCT

CHOCTAW, INC., ET AL. v.

CAMPBELL-CHERRY-HARRISON-DAVIS AND DOVE

DATE OF JUDGMENT: 08/17/2006 TRIAL JUDGE: HON. LEE J. HOWARD COURT FROM WHICH APPEALED: NOXUBEE COUNTY CIRCUIT COURT ATTORNEYS FOR APPELLANTS: FRED KRUTZ EDWIN S. GAULT, JR.

DANIEL J. MULHOLLAND

BRIAN BARRY HANNULA

RONALD G. PERESICH

W. MARK EDWARDS

RANDI PERESICH MUELLER

JOHANNA MALBROUGH McMULLAN ATTORNEYS FOR APPELLEES: DEWITT T. HICKS, JR.

WILLIAM THOMAS COOPER

STEVE McCONNICO

NATURE OF THE CASE: CIVIL - OTHER DISPOSITION: AFFIRMED - 10/04/2007 MOTION FOR REHEARING FILED: MANDATE ISSUED:

BEFORE WALLER, P.J., EASLEY AND CARLSON, JJ.

EASLEY, JUSTICE, FOR THE COURT:

PROCEDURAL HISTORY AND FACTS

¶1. On December 30, 2002, Campbell-Cherry-Harrison-Davis-Dove, P.C., (CCHDD), a Texas law firm, filed its original complaints in Baldwin, et al. v. Graco Enterprises, Inc., et al., Cause No. 2002-429, on behalf of 247 plaintiffs, and Prince, et al. v. Pearl River Sand & Gravel Co., Inc., et al., Cause No. 2002-430, on behalf of 4,200 plaintiffs, collectively the “CCHDD Plaintiffs,” in the Circuit Court of Noxubee County, Mississippi, against 131 unrelated defendants for alleged personal injuries suffered by the CCHDD Plaintiffs’ exposure to silica. The lawsuits were filed in the circuit court by the CCHDD Plaintiffs’ Mississippi counsel, William H. Liston, Esq., Liston & Lancaster.1 Amended complaints were filed in the circuit court on March 24, 2003, by Attorney Liston.

¶2. The CCHDD Plaintiffs’ cases were subsequently, successfully removed by the Defendants to the United States District Court for the Southern District of Mississippi. Thereafter, the cases were removed by the United States District Court for the Southern District of Mississippi to the United District Court for the Southern District of Texas, which was handling a multi-district litigation (MDL) docket for silicosis claims, the Honorable Janis Graham Jack, District Court Judge, presiding. The Plaintiffs who were removed to the MDL federal court, including the CCHDD Plaintiffs, objected to the removal based on an alleged lack of subject matter jurisdiction. Judge Jack reserved ruling on the lack of subject matter jurisdiction claim, allowing some initial discovery as to the Plaintiffs’ claims and jurisdiction.

1 Here, CCHDD was defended at trial on the motion for sanctions, as well as in this appeal by the Mississippi law firm Gholson, Hicks & Nichols, P.A.

¶3. After conducting a lengthy evidentiary hearing, Judge Jack concluded that she lacked jurisdiction over most of the lawsuits, including all of the CCHDD Plaintiffs, that had been filed in state court and removed to the MDL federal court. See In re Silica Products Liability Litigation, 398 F. Supp. 2d 563 (S.D. Tex. 2005). Before Judge Jack remanded the CCHDD Plaintiffs to the Mississippi state court on June 30, 2005, for lack of subject matter jurisdiction, she criticized the opinions supporting the silicosis claims, despite her admitted lack of subject matter jurisdiction to render any ruling as to the cases except to remand.

¶4. Once the CCHDD Plaintiffs were remanded to Mississippi state court, CCHDD, on October 14, 2005, filed a motion for determination of status pursuant to this Court’s holding in Harold’s Auto Parts, Inc. v. Mangialardi, 889 So. 2d 493 (Miss. 2004). CCHDD sought the Court’s guidance regarding the then-recent changes in the law as to venue and joinder after Mangialardi. (The CCHDD Plaintiffs filed suit before Mangialardi was decided by this Court.) CCHDD requested guidance on how to handle the severance and transfer of the Plaintiffs’ claims. By agreement between the parties, on an ore tenus motion to the trial court, most of the Plaintiffs’ claims against the Defendants were dismissed without prejudice and each party agreed to bear its own costs.2 The agreed order was entered by the Circuit Court of Noxubee County on December 14, 2005. The agreed order specifically stated:

2

The plaintiffs that remained after the initial dismissal also were subsequently dismissed.

IT IS, THEREFORE, ORDERED AND ADJUDGED that all Defendants be and the same are hereby dismissed without prejudice as to the claims of the Plaintiffs listed in the attached Exhibit “A,” with each party to bear its own costs.

(Emphasis added).

¶5. Despite the agreement to bear their own costs, some of the 131 defendants, on December 19, 2005, filed motions for sanctions in the Circuit Court of Noxubee County, alleging that CCHDD frivolously filed the two suits.3 The Defendants sought sanctions pursuant to the Litigation Accountability Act of 1988, Mississippi Code Annotation Section 11-55-1, et seq. The substance of the Defendants’ allegations was that the CCHDD Plaintiffs lacked any diagnoses to sustain their claims of silica-related disease, and the medical reports submitted by CCHDD were, in effect, a sham. CCHDD filed its response to the allegations. A hearing on the motions for sanctions was held on March 26, 2006, by the circuit court, the Honorable Lee J. Howard, presiding. The circuit court reserved its ruling at the hearing, subsequently entering an order denying the motions for sanctions. On

3 The Defendants did not seek sanctions against the CCHDD Plaintiffs’ local counsel, Liston & Lancaster. Of the 131 original defendants, the defendants/appellees listed in this appeal of the denial of the motions for sanctions are as follows: Choctaw, Inc.; Clark Sand Co., Inc.; Clark Sales & Rentals, Inc.; Clemco Industries Corporation; Custom Aggregates & Grinding, Inc.; Eastern Safety Equipment Co., Inc.; F & S Abrasives, Inc.; Flexco Products, Inc.; Huey Stockstill, Inc.; Humble Sand Co., Inc. d/b/a Humble Sand & Gravel, Inc.; Ingersoll-Rand Company; Lockheed Martin Corporation; Parmelee Industries, Inc.; P.K. Lindsay Company; Precision Packing, Inc. f/k/a Quikrete Materials, Inc.; Standard Equipment Co., Inc.; and Empire Abrasive Equipment Corporation.

July 17, 2006, the circuit court entered its orders denying the Defendants’ motions for sanctions “in its entirety.”

¶6. The Defendants now appeal to this Court. This Court granted the parties’ agreed motion to consolidate the cases for appeal. The dispositive issue that we address on appeal is: whether the trial court erred in denying the Defendants’ motions for sanctions against CCHDD under the Litigation Accountability Act of 1988.4 The Defendants also, alternatively, raise the issue of whether the trial court erred in finding that the record was well-developed and not allowing additional discovery regarding the motions for sanctions.

DISCUSSION

I.

¶7. “Miss. Code Ann. § 11-55-3(a) provides that a claim is without substantial justification when it is ‘frivolous, groundless in fact or in law, or vexatious, as determined by the court.’” 5 Scruggs v. Saterfiel, 693 So. 2d 924, 927 (Miss. 1997). This Court examines whether a claim is frivolous as follows:

4 The Defendants raise numerous assignments of error that all are substantially tied to the discussion of the issue of whether the trial court erred in denying the motions for sanctions.

5 Mississippi Code Annotated Section 11-55-3(a) (Rev. 2002) provides:

"Without substantial justification," when used with reference to any action, claim, defense or appeal, including without limitation any motion, means that it is frivolous, groundless in fact or in law, or vexatious, as determined by the court.

(Emphasis added).

To determine whether a claim is frivolous pursuant to the statute, this Court looks to the definition of "frivolous" found in M.R.C.P. 11. Leaf River Forest Products, Inc. v. Deakle, 661 So. 2d 188, 197 (Miss. 1995). For purposes of Rule 11, a claim is frivolous "only when, objectively speaking, the pleader or movant has no hope of success." Stevens v. Lake, 615 So. 2d 1177, 1184 (Miss. 1993), quoting Tricon Metals & Services, Inc. v. Topp, 537 So. 2d 1331, 1335 (Miss. 1989); Smith v. Malouf, 597 So. 2d 1299, 1303 (Miss.

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